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July, 2012


India being one of the fastest growing economies with ever increasing demand represents an attractive destination for the power industry. The Indian power sector, will add nearly 45,000 megawatt (MW) to its total installed capacity by 2013-14, to the existing production, according to a RNCOS research report, 'Indian Power Sector Analysis.'

Renewable energy is the new keyword in Indian power sector and most of the public and private players are coming up with plans to tap the potential market, on back of favourable government policies and initiatives. To tap the underlying potential, the States are focussing on those aspects of energy, in which they have an edge, such as solar power, wind power, hydro power etc.

India has been one of the top performing clean energy economies in the 21st century, registering the fifth highest five-year rate of investment growth and eighth highest in installed renewable energy capacity, according to a research report released by The Pew Charitable Trusts.

According to RNCOS research report titled, 'Indian Solar Energy Market Analysis', the country portrays unlimited growth potential for solar photovoltaic (PV) industry in future. India is endowed with vast potential of solar energy and is quickly developing itself as a major manufacturing hub for solar power plants. Besides, it is expected that, the annual PV-installed capacity will grow at a compound annual growth rate (CAGR) of around 49.5 per cent during 2010-2014 to reach 1,500 MW by end of 2014.

Market/ Industry Size

The foreign direct investment (FDI) received in the Indian power sector during April 2000 to May 2012 stood at US$ 7,399 million, according to statistics released by the Department of Industrial Policy and Promotion (DIPP).

India energy exchange (IEX) witnessed a record trading figure of renewable energy certificates (RECs) in June 2012. RECs are generation based certificates issued to the power producers using renewable source of energy like solar, wind, hydro and biomass.

Recent Trends and Investments

  • Madhucon Projects plans to set up its first overseas power project in Indonesia. The company has signed a Power Purchase Agreement (PPA) with the Government of Indonesia's electrical body PT PLN (Ltd), to build a 300 MW coal-fired steam power plant at Dawas in South Sumatra
  • Nava Bharat Ventures Ltd has commenced work on its two 150 MW power plants in Zambia. The company plans to invest up to US$ 750 million in the thermal power plant and coal mining activity, as per G R K Prasad, Executive Director, Nava Bharat Ventures
  • The Union Ministry of Science and Technology has selected three consortia that will receive a grant of Rs 125 crore (US$ 22.60 million) from the Centre. The funding will be for over five years, under the Indo-US Joint Clean Energy Research and Development Centre
  • The European Business and Technology Centre (EBTC) plans to initiate a pilot project to demonstrate 'smart city concept' at the industrial town of Haldia in West Bengal. "The Copanhagen Cleantech Cluster and EBTC will together work to identify projects, undertake their execution, and facilitate research and innovation related to green technology initiatives in the energy and environment sectors," according to Poul V Jensen, Director, EBTC
  • Power Exchange India Ltd (PXIL) has signed a memorandum of understanding (MoU) with Korea Power Exchange (KPX) to work together in overseas markets

Domestic Investments

  • CESC Ltd has acquired two hydroelectric power projects, Pachi Hydro Power Projects Ltd and Papu Hydro Power Projects Ltd, of India Bulls Group totaling 146 MW in Arunachal Pradesh
  • Essar Energy Plc has signed its first PPA with Noida Power Company Ltd for 240 MW of contracted capacity from Essar Energy's 600 MW coal-fired Tori II power station, which is under construction in Jharkhand
  • Bharat Heavy Electricals Ltd (BHEL) has commissioned the first 500 MW unit at National Thermal Power Corporation's (NTPC) Rihand Super Thermal Power Station (STPS) stage III in Uttar Pradesh Anu Solar Pvt Ltd, a leading manufacturer and seller of solar products, will open 2,000 stores across India on franchisee basis. The company plans to make at least 20 stores operational by the end of 2012 Tata Power's installed capacity rose to 6,099 MW, after its second unit at the Mundra ultra mega power project (UMPP) in Gujarat was synchronised with the grid
  • Ruchi Soya Industries Ltd and Thermax Ltd have signed MoU to set up one MW fluidised bed biomass gasification plant, laying the foundation for large-scale commercialisation of biomass power in India