ENERGY

An Industry Analysis by PEC

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 Table of Contents

1. Overview…………………………………….………..3
2. C.A.G.R/ Contribution to GDP………….……4
3. Market Share and leaders in India…….…6
4. Growth driver/ Strategies…………….………9
5. Government Initiatives………………………..11
6. Limitations…………………………………………...12
7. Recent Developments and Road ahead...14

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 Overview

India's energy sector is one of the most diversified in the world. Sources of power generation
range from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power
to viable non-conventional sources such as wind, solar, and agricultural and domestic waste.

• India accounts for approximately 4 per cent of the total global electricity generation and
contributes 4.43 per cent to the global renewable generation capacity

• The International Energy Agency’s World Energy Outlook projects a growth of renewable
energy supply to 4,550 GW in 2040 on a global basis

• As of February 2018, total renewable1 power generation installed capacity in the country stood
at 107.81 GW, which is 32.26 per cent of the total installed capacity of 334.15 GW

• A hydro power revival policy is underway which amongst others is likely to include the
classification of all hydro power projects as renewable energy

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 C.A.G.R. and Contribution to GDP

India has the fifth largest power generation capacity in the world. The country ranks third
globally in terms of electricity production. In May 2018, India ranked 4th in the Asia Pacific
region out of 25 nations on an index that measures their overall power. Electricity production
in India reached 1,201.543 Billion Units (BU) during FY18.

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Renewable energy is fast emerging as a major source of power in India. Wind energy is the
largest source of renewable energy in India, accounting for 49.33 per cent of total installed
capacity (69.02 GW). There are plans to double wind power generation capacity to 60 GW by
2022. India has also raised the solar power generation capacity addition target by five times to
100 GW by 2022.All the states and union territories of India are on board to fulfil the
Government of India's vision of ensuring 24x7 affordable and quality power for all by March
2019.The current GDP share from this sector stands to be 2.46% in FY 17-18.

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 Market Share and Leader In India

Indian power sector is undergoing a significant change that has redefined the industry outlook.
Sustained economic growth continues to drive electricity demand in India. The Government of
India’s focus on attaining ‘Power for all’ has accelerated capacity addition in the country. At the
same time, the competitive intensity is increasing at both the market and supply sides (fuel,
logistics, finances, and manpower).
Total installed capacity of power stations in India stood at 343.79 Gigawatt (GW) as on April,
2018.
Let’s look at a few major players:

Jaiprakash Power Ventures Ltd

Jaiprakash Power Ventures Ltd was incorporated on Dec 21, 1994. The company is part of
Jaypee Group- India’s leading infrastructure conglomerate. The company is implementing,
developing and operating power projects in India.

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JSW Energy Limited

JSW Energy Ltd was founded in the year 1994. It is headquartered in Mumbai, India. It is
offering a range of products including Electricity Generation, Hydroelectricity, Mining, Power
Plant Equipment, transmission etc.

NHPC Ltd

NHPC Ltd was founded in the year 1975. It is headquartered in Faridabad India. The product
range includes electricity generation and energy trading.

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NTPC Ltd

NTPC Ltd was founded in the year 1975. It is headquartered in NTPC Bhawan, Lodhi Road, New
Delhi. Its service range includes electricity generation & distribution, natural gas exploration,
distribution, and transportation. The company has also ventured into oil and gas exploration
and coal mining activities

Reliance Industries Ltd

Reliance Industries Ltd was founded in the year 1955. It was founded by Dhirubhai Ambani. It is
headquartered in Mumbai, Maharashtra. The company’s product range includes petroleum,
natural gas, textile, retail, telecommunication, and media.

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 Growth Drivers and Strategies

Indian power sector is undergoing a significant change that has redefined the industry outlook.
Sustained economic growth continues to drive electricity demand in India. The Government of
India’s focus on attaining ‘Power for all’ has accelerated capacity addition in the country. At the
same time, the competitive intensity is increasing at both the market and supply sides (fuel,
logistics, finances, and manpower.

• Energy Efficiency Services Ltd (EESL) has raised US$ 454 million from Global Environment
Facility (GEF) for its energy-efficiency projects in an attempt to boost India's move towards
becoming a low carbon economy.

• IL&FS Financial Services Ltd has partnered with Jammu and Kashmir (J&K) Bank Ltd to
finance nine hydropower projects in J&K with a total capacity of 2,000 MW, which require
financing of around Rs 20,000 crore (US$ 3.12 billion).

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• Sterlite Power has won one of the largest 1,800 km power transmission project worth US$
800 million in Brazil, the company's third project in Brazil and the largest ever project won by
an Indian company in Latin America.

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 Government initiatives

The Government of India has identified power sector as a key sector of focus so as to promote
sustained industrial growth. Some initiatives by the Government of India to boost the Indian
power sector:

• Initiatives taken by the Energy Efficiency Services (EESL) have resulted in energy
savings of 37 billion kWh and reduction in greenhouse gas (GHG) emissions by 30
million tonnes.

• The Union and state governments have agreed to implement the Direct Benefit
Transfer (DBT) scheme in the electricity sector for better targeting of subsidies,
according to Mr Raj Kumar Singh, Minister of State for Power (Independent Charge).

• The Government of India approved National Policy on Biofuels – 2018, the expected
benefits of this policy are health benefits, cleaner environment, employment
generation, reduced import dependency, boost to infrastructural investment in rural
areas and additional income to farmers.

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 Limitations

Given the technical limitations of operating below the threshold level, India’s coal-fuelled
power projects that are facing low capacity utilization due to muted demand are trying to
prevent damage to the equipment while running them.

In a bid to tamp down pollution, India’s government in December 2015 notified the country’s
coal generators they would need to meet—for the first time—new emissions limits for
nitrogen oxides (NOx), sulfur dioxide (SO2), and mercury, as well as tightened limits for
particulate matter (PM) and water consumption.

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 Recent Developments and Road Ahead

The Government of India has released its roadmap to achieve 175 GW capacity in renewable
energy by 2022, which includes 100 GW of solar power and 60 GW of wind power. The Union
Government of India is preparing a 'rent a roof' policy for supporting its target of generating 40
gigawatts (GW) of power through solar rooftop projects by 2022.

Coal-based power generation capacity in India, which currently stands at 192 GW is expected to
reach 330-441 GW by 2040.

The 2026 forecast for India's non-hydro renewable energy capacity has been increased to 155
GW from 130 GW on the back of more than expected solar installation rates and successful
wind energy auctions.

India could become the world's first country to use LEDs for all lighting needs by 2019, thereby
saving Rs 40,000 crore (US$ 6.23 billion) on an annual basis.

The government’s immediate goal is to generate two trillion units (kilowatt hours) of energy by
2019. This means doubling the current production capacity to provide 24x7electricity for
residential, industrial, commercial and agriculture use.

Exchange Rate Used: INR 1 = US$ 0.0155 as on FY2018

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 Sources

• BP p.l.c., BP Statistical Review of World Energy, London, United Kingdom, June 2018
• International Energy Agency Energy Balances of Non-OECD Countries, Paris, France, 2018
• InternationalEnergyAgency EnergyBalancesofOECD Countries,Paris,France,2018
• UN Population Division, World Population Prospects: The 2017 Revision, New York,
United States, 2018
• IBEF annual reports FY17-18
• Economic times annual industry review

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