With a production of 1,052 terra watt hour (TWh), India is the fourth-largest producer and fourth-largest consumer of electricity in the world. It also has fifth-largest installed capacity in the world.
Electricity production in India (excluding captive generation) stood at 967 TWh during FY14. The production expanded at a compound annual growth rate (CAGR) of 5.6 per cent during FY07-14. India's installed power generation capacity increased at a CAGR of 10.6 per cent during FY09-14 to touch 245.39 GW.
The Government of India targets capacity addition of 88.5 gigawatts (GW) under the 12th Five-Year Plan (2012-17) and around 100 GW under the 13th Five-Year Plan (2017-2022). Investments of around US$ 223.9 billion are planned for the power sector during the 12th Five-Year Plan. The Government has liberalised foreign direct investment (FDI) policy for power trading exchanges and has reduced excise duties by two per cent on capital goods import in the interim budget of 2014-15. It has also extended tax holiday till March 2017 under the Union Budget 2014-15.
Demand for electricity is expected to increase at a CAGR of nine per cent to 1,915 TWh over FY07-22. The government is keen on promotion of hydro, renewable and gas-based projects, as well as adoption of clean coal technology. Renewable energy is fast emerging as a major source of power. Renewable energy capacity additions to 41 GW are planned till 2017 to meet the growing energy demand. The installed capacity reached 32.2 GW as on March 2014. Wind energy is estimated to contribute 15 GW, followed by solar power at 10 GW.