Size

• India has the fifth largest electricity generation capacity in the world.
• Coal Fired plants constitute 57% of the installed generation capacity, followed by 25% from Hydro  power, 10% gas based, 3% from nuclear energy and 5% from renewable sources.

Structure

• As of now the Public Sector plays a major role in the power generation, transmission and distribution.
• The participation of the Private Sector is increasing rapidly in the power generation and distribution.

Policy

• 100% FDI permitted in Generation, Transmission & Distribution - the Government is keen to draw private investment into the sector.
• Incentives: Income Tax holiday for a block of 10 years in the first 15 years of operation; waiver of capital goods import duties on mega power projects(above 1000 MW generation capacity).

Outlook & Potential

• Over 90000 MW of new generation capacity is required in the next seven years.
  • A corresponding investment is required in transmission and distribution networks.
• Power costs need to be reduced from the current high of 8-10 cents/unit by a combination of lower AT&C losses, increased generation efficiencies and added low cost generating capacity.
• Large demand-supply gap: All India average energy shortfall of 7% and peak demand shortfall of 12%.
• The implementation of key reform is likely to foster growth in all segments:
  • unbundling of vertically integrated SEBs.
  • "Open access" to transmission and distribution network.
  • distribution circles to be privatized.
  • Traffic reforms by regulatory authorities.
• Opportunities in generation for :
  • Coal based plants at pithead or coastal locations(imported coal)
  • Natural gas/ CNG based turbines at load centres or near gas terminals.
  • Hydro  power potential of 150,000 MW is untapped as assessed by the government of India.
  • Renovation, modernization, up-rating and life extension of old thermal and hydro power plants.