India’s Power Generation


  • While 99.5 per cent of India’s villages are considered electrified, a fifth of the country’s population still awaits an electricity connection and many more suffer due to poor power supply. Hence, the government has moved beyond village electrification to 24×7 power for all by 2022.

What is the new plan?

  • The central government has set out an ambitious goal by focusing on household electrification and reliable power supply.
  • As per the Ministry of Power statistics, 43 million Indian households are yet to be electrified.
  • In order to achieve the target by 2022, India needs to increase the rate of household electrification by at least four times.

What is India’s status of power?

  • India has the fifth largest power generation capacity in the world.
  • The country ranks third globally in terms of electricity production.
  • Electricity production in India reached 584.22 Billion Units (BU) during April-September 2016.

How important is Power generation for India?

  • Power is one of the most critical components of infrastructure crucial for the economic growth and welfare of nations.
  • The existence and development of adequate infrastructure is essential for sustained growth of the Indian economy.
  • India ranks third among 40 countries in EY’s Renewable Energy Country Attractiveness Index, on back of strong focus by the government on promoting renewable energy and implementation of projects in a time bound manner.
  • India has moved up 73 spots to rank 26th in the World Bank’s list of electricity accessibility in 2017.

What is India’s 12th year plan for power generation?

  • As per the 12th Five Year Plan, India is targeting a total of 88.5 GW of power capacity addition by 2017, of which, 72.3 GW constitutes thermal power, 10.8 GW hydro and 5.3 GW nuclear.

Power generation of India:

State sectorCentral sectorPrivate sector
Installed capacityShareInstalled capacityshareInstalled capacityshare


Current situation of various sources of power generation in India:

Types of power plantsInstalled capacity (MW)Percentage share
Thermal power15384868.14
Hydro power3962317.55
Nuclear power47802.12
Renewable source of energy2754212.20
Total energy225793100.00


What are the major sources of power generations in India?

The major Source of Power Generation in India are:

  • Coal, Natural Oil (Diesel Oil), Gas are the sources for Thermal Power generation.
  • Atomic Minerals are the sources for Atomic Power generation.
  • Water is the source for Hydel Power generation.
  • Wind is the source for Wind Energy generation.
  • Sun is the source of Solar energy.
  • Wood is used as Fuel and energy.
  • Bio Gas is used for Bio Gas based energy
  • Urban Waste – Urban waste energy
  • Waves for Waves or tidal Power generation.
  • Geo-thermal Sources for Geo-thermal en­ergy production.

What are the problems with India’s power sector?

  • Inadequate last mile connectivity is the main problem to supply electricity for all users.
  • Due to lack of last-mile link-up with all electricity consumers and reliable power supply (to exceed 99%), many consumers depend on Diesel Generator sets using costly diesel oil for meeting unavoidable power requirements.
  • Government giveaways such as free electricity for farmers, partly to curry political favor, have depleted the cash reserves of state-run electricity-distribution system. This has financially crippled the distribution network, and its ability to pay for power to meet the demand.
  • The residential building sector is one of the largest consumers of electricity in India. Continuous urbanization and the growth of population result in increasing power consumption in buildings.
  • New project management and execution, ensuring availability of fuel quantities and qualities, lack of initiative to develop large coal and natural gas resources available in India are major problems.
  • Land acquisition, environmental clearances at state and central government level, and training of skilled manpower to prevent talent shortages for operating latest technology plants adds to it.
  • Shortages of fuel: despite abundant reserves of coal, India is facing a severe shortage of coal. The country isn’t producing enough to feed its power plants.
  • India’s monopoly coal producer, state-controlled Coal India, is constrained by primitive mining techniques and is rife with theft and corruption; Coal India has consistently missed production targets and growth targets.
  • Poor pipeline connectivity and infrastructure to harness India’s abundant coal bed methane and shale gas potential.
  • The giant new offshore natural gas field has delivered less fuel than projected. India faces a shortage of natural gas.
  • Hydroelectric power projects in India’s mountainous north and north east regions have been slowed down by ecological, environmental and rehabilitation controversies, coupled with public interest litigations.

What should be done?

  • The distribution companies should focus on providing uninterrupted power supply to all the consumers who are using costly Diesel Generator set’s power.
  • This should be achieved by laying separate buried power cables (not to be effected by rain and winds) for emergency power supply in addition to the normal supply lines.
  • Emergency supply power line shall supply power when the normal power supply line is not working.
  • Emergency power supply would be charged at higher price without any subsidy but less than the generation cost from diesel oil.
  • Nearly 80 billion KWh electricity is generated annually in India by Diesel Generator sets, which are consuming nearly 15 million tons of diesel oil.
  • Demand build up measures can be initiated to consume the cheaper electricity (average price Rs 2.5 per kWhr at generator’s supply point) available from the grid instead of running the coal/gas/oil fired captive power plants in various electricity intensive industries.

What are new government’s initiative for power generation for India?

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:

  • The Ministry of Power has taken various measures to achieve its aim of providing 24X7 affordable and environment friendly ‘Power for All’ by 2019, which includes preparation of state specific action plans, and implementation of Green Energy Corridor for transmission of renewable energy, among other measures.
  • India has become an associate member of the International Energy Agency (IEA), which makes the Paris-based body more significant, indicating India’s growing status in playing an important role in the global energy dialogue.
  • The Government of India plans to auction coal blocks for commercial mining by the end of December 2017, which would end the monopoly of state-run firms in coal mining and help in achieving the country’s target of producing 1 billion tonnes of coal by 2020.
  • The Cabinet Committee on Economic Affairs (CCEA) has approved a new coal linkage policy, aimed at providing necessary supply of fuel to power plants through reverse auction
  • The Government of India has announced plans to implement a US$ 238 million National Mission on advanced ultra-supercritical technologies for cleaner coal utilization.
  • The Cabinet Committee on Economic Affairs (CCEA) has approved the enhancement of capacity of the Scheme for Development of Solar Parks and Ultra Mega Solar Power Projects from 20,000 megawatt (MW) to 40,000 MW, which will ensure setting up of at least 50 solar parks each with a capacity of 500 MW and above in various parts of the country.
  • The Union Cabinet, Government of India has given its ex-post facto approval for signing of a Memorandum of Understanding (MoU) on Renewable Energy between India and Portugal, which will help strengthen the bilateral cooperation between the two countries.
  • The Ministry of New and Renewable Energy plans to introduce a fixed-cost component to the tariff for electricity generated from renewable energy sources like solar or wind, in a bid to promote a green economy.
  • The Union Cabinet has approved the ratification of International Solar Alliance’s (ISA) framework agreement by India, which will provide India a platform to showcase its solar programmes, and put it in a leadership role in climate and renewable energy issues globally.

The way ahead

  • The Indian power sector has a venture potential of Rs 15 trillion (US$ 225 billion) in the next 4–5 years, thereby providing immense opportunities in power generation, distribution, transmission, and equipment.
  • 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 24×7 electricity for residential, industrial, commercial and agriculture use.
  • The government has electrified 13,000 villages so far out of the total 18,452 villages and is targeting electrification of all villages by 2019, within the targeted 1,000 days.
  • The Government of India is taking a number of steps and initiatives like 10-year tax exemption for solar energy projects, etc., in order to achieve India’s ambitious renewable energy targets of adding 175 GW of renewable energy, including addition of 100 GW of solar power, by the year 2022.
  • The government has also sought to restart the stalled hydro power projects and increase the wind energy production target to 60 GW by 2022 from the current 20 GW.
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