Why India needs to improve generation capacity

It is expected that India will see foreign participation in the development and financing of generation and transmission assets.

The most diversified in the world, India’s power sector is undergoing a remarkable change. Growth of cities, electrification of villages, development of new industries, expansion of existing ones, increased utilisation of air conditioning, growth in the electric vehicle market, are some of the factors that contribute to the increase in electricity demand in India. With continuous fiscal growth and the Government of India’s centre of interest on securing power for all, the power generation and capacity addition in the country has expedited, making India the world’s third largest producer of electricity today.

Our country has an installed power generating capacity of 356.100 GW as of 31st March 2019 and over the last five years, India put up a 99.21 GW of additional capacity, generating 1.2 trillion units of electricity each year. India’s total population is 1.37 billion out of which 85 percent of people have access to electricity, according to reports the gross electricity consumption was 1,149 kWh per capita in the year 2017-18. Hence, it is clear that India is aspiring to generate ambitiously.

• The Indian power sector has had eventful developments in not only generation and transmission capacity addition, but also from the distribution reforms aspect. Moreover, the Indian government also looked at customer perspectives and to better the standard of living for the people living far below the poverty line. It continues its reform, policy and regulatory process for improvement in efficiency in various aspects of power supply such as:
• The government’s move to introduce 100 percent FDI (Foreign Direct Investment) under the automatic route in power exchanges provides an online platform for trading in electricity, has naturally boosted it. A report by the Indian Brand Equity Foundation (IBEF) quoted that between April 2000 and June 2018, FDI (foreign direct investment) inflows in the power sector reached $14.18 billion, accounting for 3.64 percent of the total FDI drawn by the country.
• In order to achieve the universal household electrification in the country, the Government of India launched the ‘Pradhan Mantri Sahaj Bijli Har Ghar Yojana (SAUBHAGYA Scheme)’ that lead to a phenomenal result with 99.93 percent of the 26.04 million households targeted under the scheme being provided with electricity connections as on 31st March. The ₹ 16,320 crore Saubhagya scheme funds the cost of last-mile connectivity to ‘willing households’.
• Under UDAY scheme for financial and operational improvement of Discoms, bonds have been issued by various States for a total amount of ₹ 2,321.6 billion. The Ministry of New and Renewable Energy (MNRE) launched competitive bidding for procurement of power from wind projects and so far, bidding for more than 6,000 MW has taken place in four phases. Clearly, the reason India is able to generate capacity of power plant is because of the sources – about 65 percent of the electricity consumed in India is generated by thermal power plant. The industry did see a slight turbulence in the year 2018 including shortage of coal supply and inability of state discoms to clear their dues. But year 2019 saw some respite with thermal power plants rising for a fourth successive month in February to 26 million tonnes.

Renewable energy, in contrast, is more economical to install and commission than thermal-based power, besides enabling growth and environmental conservation. While the government has taken many laudable steps towards a greener future, India has already achieved 23 GW of solar installations with another 40 GW of solar power being at different stages of bidding and installation. Also, India is the third largest solar power market in the world after China and the US.

India’s rapid growth over the past decade has increased power demand and to balance the same in a tropical country like India, it is important to balance the ecosystem through developing technologies which are economically viable to harness the abundant solar energy. With the robust outlook of the sector,