India is the fifth largest producer and consumer of electricity in the world after US, China, Japan and Russia. Electricity production in India (excluding captive generation) stood at 811.1 TWh in 2010-11. Power is one of the key sectors attracting foreign direct investment (FDI) inflows into India; inflows recorded a compound annual growth rate (CAGR) of 70 per cent during FY06-FY11. Growing population, increasing penetration and per-capita usage has further provided the impetus, in addition to the expansion in industrial activity, to boost electricity generation.
Growing environmental concerns, geographical advantages, and rising hydrocarbons costs have favoured the pitch for renewable energy, primarily wind energy, solar photovoltaic energy, biomass power, and mini-hydro plants. With a large swathe of rivers and water bodies, India has enormous potential for hydro power; estimates put the figure at about 84,000 mega watt (MW) of which only 25 per cent has been harnessed till date. Nuclear energy is a critical component of India’s future power policy. In 2010, the country had 20 operational nuclear power plants with five others under construction. India also has one of the world’s largest reserves of thorium.
Major investments earmarked by public as well as private companies across the value chain to install large capacity additions - 100 giga watt (GW); targeted in the 12th and 13th Five-Year Plans. Power is one of the key sectors attracting FDI inflows into India. The FDI inflows into the sector increased from US$ 87 million to US$ 1,252 million during FY06-FY11. The sector has witnessed a total of 35 mergers and acquisitions (M&A) deals since 2010.
India’s installed power generation capacity was 173.6 GW at the end of 2010-11. India is set to become a global manufacturing hub with investments across the value chain. About 82 GW worth of generation capacity is set to be added during FY11-FY15; future investments will benefit from strong demand fundamentals, policy support, and increasing government focus on infrastructure.
Sectoral Presentation (November 2011)
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