Indian Power sector: Huge Opportunity

There is an opportunity across renewables and transmission but resolution of stressed assets and successful implementation of UDAY is critical.

- Manish Aggarwal

Power is crucial to India’s growth story. And, to take India forward on a growth trajectory, the government continues to initiate various supportive policy interventions and sector reforms. Currently, the power sector is at a crucial juncture with various key initiatives undertaken by the government this year across the entire value chain. Nonetheless, resolution of stressed assets remains one of the key pain points which need to be addressed at an urgent basis.

The country’s electricity deficit declined from 1.6 per cent to 0.5 per cent from January–October 2016 and the peak power deficit also witnessed a decline from 1.7 per cent to about 1 per cent. There was an overall addition in power generation capacity by about 24 GW thereby, increasing the overall installed capacity to 308 GW. Coal and gas based capacity rose by 13.5 GW and 0.6 GW, respectively while nuclear and hydro-based capacity saw a rise by 1 GW and 0.5 GW.

There has been a significant growth in the renewable energy space in 2016 with a capacity addition of 8.5 GW. India touched the 1 GW mark in the solar rooftop sector for the first time ever this year which is indeed a significant achievement. This is in line with the government’s efforts to boost the renewable energy sector with a concerted focus on solar power.

The plant load factor of coal and lignite based power plants witnessed a decline from 63.2 per cent in January 2016 to 60.1 per cent.

Insufficient transmission capacity and slower growth in capacity addition in the past have restricted flow of electricity in the country. The government stepped up efforts to expand the transmission line network during Jan - Oct 2016 by about 14,800 MW or approximately 21,489 kms.