INDIAN POWER INDUSTRY

 History 

The Indian Power Industry plays a critical role in the economic progress of the country and has to be emphasized. Before Independence British controlled the Indian power industry firmly. Then due to legal and policy framework it was conducive to private ownership, with not much regulation with regard to operational safety. The country was faced with capacity restraint after Independence immediately. India adopted socialist structure for economic growth and all major industries were controlled by public sector enterprises.

In 1970’s India nationalized most of its energy assets, as it was committed to social goals. By 1980’s the Indian economy felt the importance of socialist agenda and followed it since independence. Serious deterioration has been faced by the Union government as part of its policy of economic liberalization with public finance and balance of payment crisis, allowed greater investment by private sector in the power industry. Power falls in the Concurrent List (List III of the Seventh Schedule to the Constitution of India) as a matter of legislative and executive competence. The Union government passed several laws Understanding the critical part played by the power industry, and restructured the Power Industry to gear it up to meet the challenges posed to the Indian economy post Liberalization.

 Electricity Bill 2001 

The Indian government passed the Electricity Bill 2001.The Bill seeks to Consolidate and rationalize existing laws. To solve such issues of developing industry including regulation, power trading, non discriminatory open access, choice of dispensing with vertically integrated state enterprises and encouraging private enterprise.

Energy Conservation Act 2001 

The Act was formed by the Indian government to facilitate stringent steps to ensure the efficient use of energy and its conservation. Even the Bureau of Energy Efficiency has been set up to monitor and regulate the Power Industry according to the provisions of the act.

The Indian power industry derives its funds and financing from the government and some private players that have entered the market recently like from World Bank, public issues and other global funds. The Power Ministry of India has set up Power Finance Corporation of India that is mainly responsible for the financing of the power sector in India. The corporation provides finance to major power projects in India for power generation and conversion, distribution and supply of power in India. There is also one body called Power Finance Corporation (PFC) Ltd India which takes care of the installation of any new power projects as well as renovation of an existing power project in India. PFC is an association for central electricity authority and the ministry of power facilitates the development in infrastructure of the power sector in India. They also take care of constructing mega power projects that will answer to the power shortage in various states through power transmission through regional and national power grids.

 Size of the industry 

The total installed capacity of power in India is calculated to be 145,554.97 mega watts, out of which 75,837.93 mega watts (52.5%) is from States, 48,470.99 mega watt (34%) from Centre, and 21,246.05 mega watt (13.5%) is from Private sector initiatives.

• The Generation capacity of power is 141 GW; 663 billion units produced (1 unit = 1kwh)-during the year January 2008 and the CAGR(Capital Accumulated growth Rate) is of 5% over the last 5 years.
• India has turned itself into the fifth largest electricity generation capacity in the world with Low per capita consumption at 631 units; less than half of China.
• The Transmission & Distribution network of power is 6.6 million circuit km which accounts for the third largest in the world
• All over India Coal fired plants constitute 54% of the installed generation capacity, followed by 25% from hydel power, 10% gas based, 3% from nuclear energy and 8% from renewable sources.

Year Target Achievement % of Target % growth 2005-06 621.50 617.51 99.4 5.1 2006-07 623.00 662.4 99.9 7.3 2007-08 710.00 704.5 99.2 6.3 2008-09 774.09 723.8 93.47 2.74 2009-10 591.40 573.0 96.81 16.17

 Domestic and Export Share 

The market research firm RNCOS (2008) has researched and set up a report on “Indian Power Sector Analysis” which found that more than 64% of India’s total installed capacity is contributed by thermal power. The research signifies that there is a huge jump in unit size and steam parameters will result in higher efficiencies and better economics for the Indian power sector. According to regional contributions the western region accounts for largest share (30.09%) of the installed power in India followed by Southern region with 27.76%. Cause of concern remains the unbalanced growth for the Indian power sector. Only about 56% of households have access to electricity, with the rural access being 44% and urban access about 82%. The dominant region is the southern region in renewable energy source accounting for more than 57% of the total renewable energy installed capacity.

 Top leading Companies 

• National Thermal Power Corporation (NTPC)
• National Hydro Electric Corporation (NHEC)
• Power Finance Corporation of India (PFCI)
• Nuclear Power Corporation of India Limited
• North Eastern Electric Power Corporation (NEEPC)
• Rural Electrification Corporation (REC)
• Damodar Valley Corporation (DVC)
• Bhakra Beas Management Board (BBMB)
• Tehri Hydro Development Corporation (THDC)
• Satluj Jal Vidyut Nigam (SJVN)
• Power Grid Corporation of India Ltd (Power Grid India)
• Power Trading Corporation (PTC)
• Bureau of Energy Efficiency (BEE)