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 Contents
CURRENT STATUS – POWER INFRASTRUCTURE IN INDIA . 3

GROWTH EXPECTED ................................................................

........................................ 3

Generation ................................................................................................
...................................... 3

Transmission & Distribution ................................................................

............................................ 4

INVESTMENT EXPECTED ................................................................

................................ 4

PRESENT POWER GENERA

GENERATION MIX ..........................................
................................ 5

Wind Power ................................................................................................

.................................... 6

Hydro Power ................................................................................................

................................... 7

Nuclear Power................................................................................................
................................. 7

KEY CONCERNS ................................................................

................................................... 7

Dependence on Thermal Sources Especially Coal ............................................

................................ 8

Land Acquisition and Clearance................................................................

....................................... 8

Poor Coordination between T &D and Generation Projects ............................ 8

FUTURE PROSPECT ................................................................

........................................... 8

SOURCES USED ................................................................

................................................... 9

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Current Status – Power Infrastructure in India

India has an installed power generation capacity of 156 GW as on Dec 2009 - fifth largest in the world.
The country generated a total of 723.8 billion KWh in FY 2008 – 09 to meet the demand of 777 billion
KWh. The country is clearly a power deficit economy. The graph below compares the supply and demand
of power in India for past five years:

Figure 1: Supply and Demand of Power in India during 2004 – 09

690.6 737.1 777

800 591.4 631.6 664.7 691
624.5
578.8
548.1
Billion KWh

600

400

200

0
2004
2004-05 2005-06 2006-07 2007-08 2008-09

Power Demand Power Supply

Source: Ministry of Power, India

The power deficit in the country has been to the tune of 11

11.9 percent during 2008-09. It is noteworthy
here that the power demand mentioned accounts only for the demand fr from the electrified areas of the
country. The country has about 80,000
0,000 villages that are yet to be electrified.. Further, the mentioned deficit
does not take into account the latent demand (the electricity demand that could not be realized due to
load shedding).

“…….Central
Central Electricity Authority has projected energy shortage of 9.3% and peak power shortages of
12.6% in 2009-10……”

Bharatsinh Solanki, Union Minister of State for Power,

Power Jul 2009

Growth Expected

Generation
With the current electricity supply of 691 billion KWh, the per capita electricity consumption for India
stands at about 601 KWh. This is dismal as compared to world average of 2,300 KWh. The Ministry of
Power aims to achieve per capital electricity consum
consumption
ption of 1,000 KWh by 2012. This would require
about 1,150 billion KWh electricity generation per annum or about 2 2300 GW installed generation capacity.
Further, the Ministry of Power plans to increase the installed capacity to 330 GW by 2017.

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Under the current 11th five year plan (FY 07
07-12), the Ministry of Power India envisioned an addition in
th
generation capacity by 80
Current Status on 11 Plan GW. Of this, a total of 12.7
GW capacity had been
Planned Capacity Complete by To be Completed
commissioned by Mar 2009.
Addition (GW) 2009 (GW) by 2012 (GW)
Rest 67.3 GW generation
capacity is expected to be
80 12.7 67.3
added by Mar 2012.
Considering the performance
during first two years of the
plan, it is likely that the
government would not be able to meet the target by 2012.

The graph below shows the break-up up of ownership of the generation capacity as planned to be added
during the current five year plan:

Figure 2: Break-up
up of Generation Capacity to be Added during FY 2007 – 12

Of the total 80 GW
26% capacity addition
42% planned, majority 42
percent would be
centre owned.
32%

Centre Owned State Owned Private

Source: Ministry of Power, India

Transmission & Distribution

Along with ambitious growth plans for power generation, the Ministry of Power plans to make similar
investments in transmission and distribution sectors. The Ministry of Power plans to set up an integrated
National Power Grid during the current five year plan with about 37,700 MW of inter
inter-regional
regional power
transfer capacity. Currently, the inter
inter-regional power transfer capacity is 20,750 MW. Also, Power Grid
Gri
Corporation
orporation of India Limited, the nodal transmission organization of the country, has developed
develop an
additional transmission line of 38,000 cKm during the current five year plan by Mar 2009. Further, projects
for additional 6,850 cKm transmission line are und
under
er evaluation for investment approval. These projects
are also expected to be completed during the current five year plan.

Investment Expected

With the current focus of the Government of India on development of power infrastructure, it is estimated
that a total of about USD 167 billion ((INR 7,500 billion) would be invested on this sector during next five
years. Of this, about USD 107 billion ((INR 4,800 billion) would be invested on power generation and rest
on transmission and distribution. The graph below presents break
break-up
up of this investment on power
generation and transmission & distribution:

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 Figure 3: Investment Expected on Power Sector by 2014

107

60

USD billion
Generation T&D

Source: Ministry of Power, India

Private sector is expected to make significant contribution in planned development of power

infrastructure in the country. It is estimated that an investment of about USD 53 billion (INR
INR 2,400 billion)
billion
would come from
rom private investors
Role of Private Players
by 2014. Further, of the total
Expected Private Investment Private-owned Installed planned installed capacity of 330
by 2014 Capacity by 2017 GW by 2017, about
30 percent is expected to be
USD 53 billion 100 GW owned by private investors. In this
pursuit, the Ministry of Power has
envisaged 13 coal-fired
coal Ultra
Mega Power Plants (UMPPs) to
be awarded to private players on the he basis of competitive bidding. These projects would have a capacity
of 4 GW each. So far, one such project has been awarded to Tata Power, while three to Reliance power –
both private players.

th
In the 11 five year plan (FY 07-12),
12), the Ministry of Power allotted about USD 12.2 billion (INR
( 550 billion)
to Power Grid Corporation of India
Investment on T&D by PGCIL (approxapprox USD billion) Limited (PGCIL) for development
of power infrastructure in the
Allotment for Invested by Target for To be Invested country. Of this, about USD 3.3
th
11 Plan Mar 2009 2009-10 during 2010-12 billion (INR 150 billion) has
already been invested by Mar
12.2 3.3 2.6 6.3
2009. PGCIL plans to invest
additional about USD 2.6 billion
(INR 115 billion)) during the year
2009-10. Remaining allocation of
USD 6.3 billion (INR 285 billion) would be invested during FY 2010 – 12. Further, the Ministry of Power
plans to invest USD 53.3 billion (INR
INR 2,400 billion
billion) on transmission during 2012 – 17.

Present
esent Power Generation Mix

In spite of noticeable growth in wind, solar, and nuclear fired generation plants, coal remains the preferred
choice as fuel for power generation in India. The power generation mix of the country is heavily
dependent on conventional thermal sources – especially coal that accounts for over 53 percent of the

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total generation. Thermal sources (including coal, gas, and oil) account for 64 percent of the total
generation capacity of the country. The graph below shows the power generation mix of the country as on
Dec 2009:

Figure 4: Power Generation Mix of India as on Dec 2009

Thermal sources (Coal,

Gas, and Oil) account for
52% about 65 percent of
11%
generation mix.
1%
24%

10%
2%
Coal Gas Oil Hydro Nuclear RES

Renewable Energy Sources(RES) include S

Small Hydro Project, Biomass, Urban
rban & Industrial Water Project, and Wind Energy

Source: Ministry of Power, India

Wind Power
India had an installed capacity of wind based power generation of 10.2 GW by Mar 2009. However, the
annual addition of wind based capacity has been decreasing since FY 2006
2006-07.
07. The graph below shows
show
the annual addition of wind based capacity during last ffive years:

Figure 5: Addition of Wind Based Generation Capacity during 2004

2004-09

1,742 1,663
1,716
1,485

1,112
MW

2004
2004-05 2005-06 2006-07 2007-08 2008-09

Source: Wind Power India

The decreasing trend in wind power addition in the country casts some serious doubts on the prospects
of wind energy being a ‘power source of the future’ for India. However, the industry players still have
pegged high hopes on the prospects of wind energy in the country. Wind turbines and other equipment
suppliers (such as Siemens) have been seen strengthening their wind product portfolios in the country.

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Hydro Power
Hydro energy is the second most utilized resource (after thermal sources) for power generation in the
country. As on Mar 2009, total install
installed
ed hydro power capacity in the country was 36.9 GW. Also, a
significant hydro power capacity was being added in the country each year until 2007
2007-08.
08. However,
during 2008-09, there was a decrease in hydro capacity addition – apparently an impact of global
economic
conomic crisis. The graph below presents yearly addition of hydro power capacity in the country during
last five years.

Figure 6: Addition of Hydro Power Generation Capacity during 2004

2004-09

2,364 2,456

1,736
1,000
1,041
MW

2004-05 2005-06 2006-07 2007-08 2008-09

Source: Central Electricity Authority,

Authority Business Standard

In spite of a lean year in 2008-09,

09, hydro power would still be considered as an alternate
e to thermal
sources for power generation in the country.

Nuclear Power
The addition of nuclear power capacity in India has been sporadic so far. The country as on Mar 2009,
had nuclear power capacity of about 4 GW. However, with the recent success made by the Government
of India in securing the Nuclear Suppliers' Group agreement and Civil nuclear cooperation agreements
with some countries includingg the USA, significant action is expected in nuclear power space in the
coming years.

Nuclear Power Corporation of India Limited (NPCIL) has firmly proposed nuclear power projects of
capacity 25 GW by 2017. This suggests that nuclear power would play a si
significant
gnificant role in the country’s
goal to attain self-sufficiency
sufficiency in power.

Key Concerns

Even after continuous reforms in the power sector,, it still suffers from various problems that effectively
hinder the desired growth of the sector. The effect of these problems can be seen on the planned vis-à-vis
vis achievement statistics for last five Five
Five-Year Plans as shown in the graph below:

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Figure 7: Planned Vis-à-vis
vis Achievement for Plan VI to Plan X

45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
Plan VI Plan VII Plan VIII Plan IX Plan X

Target Achievement

Source: Planning Commission of India

Some of the key issues that power sector in India is facing are:

Dependence on Thermal Sources Especially Coal

The present generation mix in India is heavily dependent on coal. The trend would lead to a supply
constraint of coal in the country.. The signs of the same have started emerging, lately. To deal with the
situation, new private players in power sector such as Reliance Power, Tata Power have started exploring
international sources of coal supply. These sources include countries in South Asia,

Further,
er, to ensure a seamless supply of coal to the power plants the country needs strong railway as well
as port infrastructure. The existing state of infrastructure in India (especially port) does not seem
adequate to meet these requirements.

Land Acquisition and Clearance

The growth in power sector is also marred due to problems pertaining to land acquisition in the country.
Although, there are rules in place for asking the land
land-owner
owner to sell or handover the land for public interest,
still the procedures involved are lengthy. The process, in many cases, has caused lengthy project delays.

Poor Coordination between T &D and Generation Projects

A continuous lack of synchronization in T&D projects and generation projects has resulted into constraints
in power evacuation. Factors responsible for this are both technical and commercial. Some of the key
reasons responsible for include:

• Inadequate investment on
n development of transmission and distribution infrastructure
• Improper project management and execution

Future Prospect

The Indian power sector would see an investment of about USD 250 billion (approximately
approximately INR 12,500
billion) by 2017. This investment would be made to meet the following objectives:

• To increase the generation capacity from current level of 156 GW to 330 GW by the mentioned
period

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 • To strengthen and expand all the five transmission systems of the country
• To pursue rural electrification in the country

During the period of next eight years, the percentage share of nuclear energy and wind energy in the
power generation mix of the country would increase considerably. The growth in percentage share of
hydro energy would also be observed to some smaller extent. However, thermal energy would continue to
dominate the power generation mix of the country.

Sources Used

Ministry of Power, Government of India

Central Electricity Authority

Planning Commission of India

Committee of Infrastructure

Wind Power India

Power Grid Corporation of India Limited

Business Standard

LiveMint

The Economic Times

Energy Information Administration

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