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India is the third-largest producer and second-largest consumer of electricity in the world and had an installed power capacity of 373.43 GW as of October 2020.

Indian Power Sector Analysis

    Last updated on May, 7 2021

India is the third largest producer and second largest consumer of electricity in the world and had an installed power capacity of 377.26 GW as of January 2021. Electricity production reached 1,252.61 billion units (BU) in FY20. India was ranked fifth in wind power, fifth in solar power and fourth in renewable power installed capacity, as of 2019. India’s rank jumped to 22 in 2019 from 137 in 2014 on World Bank’s Ease of Doing Business - "Getting Electricity" rankings.

Renewable energy is fast emerging as a major source of power in India. The Government of India has set a target to install 227 GW of renewable energy capacity by FY22. As of June 2019, the Government launched US$ 5 billion of transmission-line tenders in phases and has set a target of 175 GW by 2022.

In FY20, total thermal installed capacity in the country stood at 231.32 GW. Renewable, hydro and nuclear energy installed capacity totalled 89.22 GW, 45.69 GW and 6.78 GW, respectively. The Government plans to double the share of installed electricity generation capacity of renewable energy to 40% by 2030. India has also raised the solar power generation capacity addition target by five times to 114 GW by 2022. The Government is preparing a 'rent a roof' policy for supporting its target of generating 40 GW of power through solar rooftop projects by 2022. The peak power demand in the country stood at 170.83 GW in FY20.

All the states and union territories were on board to fulfil the Government’s vision of ensuring 24x7 affordable and quality power for all by March 2019. India achieved 100% household electrification by March 31, 2019, as envisaged under the Saubhagya scheme. More than 26.2 million households have been electrified under Saubhagya scheme.

Under the Union Budget 2021-22, the government has allocated Rs. 15,322 crore (US$ 2.11 billion) for the Ministry of Power and Rs. 5,753 crore (US$ 794.53 million) for the Ministry of New and Renewable Energy. Under the Union Budget 2021-22, the government has allocated Rs. 300 crore (US$ 41.42 million) to increase capacity of the Green Energy Corridor Project, along with Rs. 1,100 crore (US$ 151.90 million) for wind and Rs. 2,369.13 crore (US$ 327.15 million) for solar power projects. The Union Budget 2021-22 has allocated Rs. 5,300 crore (US$ 731.75 million) to the Integrated Power Development Scheme (IDPS) and Rs. 3,600 crore (US$ 497.03 million) towards the Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY).

In the current decade (2020-2029), the Indian electricity sector is likely to witness a major transformation with respect to demand growth, energy mix and market operations.

The Cabinet Committee on Economic Affairs (CCEA) has approved commercial coal mining for private sector and the methodology of allocating coal mines via auction and allotment, thereby prioritising transparency, ease of doing business and ensuring the use of natural resources for national development.

India aims to reduce emissions intensity of its gross domestic product (GDP) by 33% to 35% by 2030 from 2005 levels and increase the share of non-fossil fuels to 40% of the total electricity generation capacity.

Total FDI inflow in the power sector reached US$ 15.23 billion between April 2000 to September 2020, accounting for 3% of the total FDI inflow in India.

Indian Power Industry Report (February, 2021)
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