{"id":703,"date":"2024-11-16T07:17:28","date_gmt":"2024-11-16T07:17:28","guid":{"rendered":"https:\/\/www.nextias.com\/blog\/?p=703"},"modified":"2024-11-17T06:10:44","modified_gmt":"2024-11-17T06:10:44","slug":"power-sector","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/blog\/power-sector\/","title":{"rendered":"Power Sector: Facts, Issues, Government Policies &amp; Way Forward"},"content":{"rendered":"\n<p><p style=\"margin-top: -20px;\"><br><em>The <a href=\"https:\/\/www.investindia.gov.in\/sector\/thermal-power\" target=\"_blank\" rel=\"noopener\"><strong>Power Sector<\/strong><\/a> is really important for a country&#8217;s development and well-being. In India, having a good power infrastructure is <strong>crucial for the economy to grow<\/strong>. The goal is to make sure <strong>everyone can sustainably afford electricity<\/strong>. This article aims to provide a comprehensive overview of Power Sector and It&#8217;s Facts, Issues, Government Policies, &amp; Way Forward.<br><\/em><br>The<strong> Ministry of Power <\/strong>has been working hard to make sure there is enough electricity for everyone by connecting the whole country with a national grid, improving the distribution network, and making sure every household has access to electricity.<\/p><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_56_1 counter-hierarchy ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.nextias.com\/blog\/power-sector\/#Important_Facts_about_Indias_Power_Sector\" title=\"Important Facts about India&#8217;s Power Sector\">Important Facts about India&#8217;s Power Sector<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.nextias.com\/blog\/power-sector\/#Systemic_Issues_in_Indias_Power_Sector\" title=\"Systemic Issues in India&#8217;s Power Sector\">Systemic Issues in India&#8217;s Power Sector<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.nextias.com\/blog\/power-sector\/#Government_Policies_Initiatives_Related_to_Power_Sector_in_India\" title=\"Government Policies &amp; Initiatives Related to Power Sector in India\">Government Policies &amp; Initiatives Related to Power Sector in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.nextias.com\/blog\/power-sector\/#The_Solution_to_Issues_Faced_by_the_Power_Sector_in_India\" title=\"The Solution to Issues Faced by the Power Sector in India\">The Solution to Issues Faced by the Power Sector in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.nextias.com\/blog\/power-sector\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<\/p>\n\n\n\n<p>India has a diverse mix of power sources, including <strong>coal, natural gas, oil, hydro, nuclear power, wind, solar, and even agricultural and domestic waste.<\/strong> The demand for electricity in the country is increasing rapidly, and more power plants need to be built to meet this demand.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-fd644a5b854eb9ac60dafc3529d03af9\" style=\"color:#015aa7\"><span class=\"ez-toc-section\" id=\"Important_Facts_about_Indias_Power_Sector\"><\/span><strong>Important Facts about India&#8217;s Power Sector<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>India is the third-largest producer and consumer of electricity worldwide, with an installed power capacity of 442.85 GW as of April 30, 2024.<\/li>\n\n\n\n<li>Growing population along with increasing electrification and per-capita usage will provide further impetus. Power consumption in India in FY23 logged a 9.5% growth to 1,503.65 billion units (BU).<\/li>\n\n\n\n<li>India has committed to augment non fossil fuel based installed electricity generation capacity to over 5,00,000 MW by 2031-32.<\/li>\n\n\n\n<li>100% FDI allowed in the power sector has boosted FDI inflow in this sector.<\/li>\n\n\n\n<li>Schemes such as Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY) and Integrated Power Development Scheme (IPDS) are expected to augment electrification across the country.\u200b<\/li>\n\n\n\n<li><strong>Cabinet approves PM-Surya Ghar:<\/strong> <a href=\"https:\/\/www.nextias.com\/beyond-classroom\/pm-surya-ghar-yojana\" data-type=\"link\" data-id=\"https:\/\/www.nextias.com\/beyond-classroom\/pm-surya-ghar-yojana\"><strong>Muft Bijli Yojana<\/strong><\/a> for installing rooftop solar in One Crore households.<\/li>\n\n\n\n<li>As per the National Infrastructure Pipeline 2019-25, energy sector projects accounted for the highest share (24%) out of the total expected capital expenditure of Rs. 111 lakh crore (US$ 1.4 trillion).\u200b<\/li>\n\n\n\n<li>Total FDI inflows in the power sector reached US$ 18.28 billion between April 2000-March 2024.\u200b<\/li>\n\n\n\n<li>India\u2019s power sector is expected to attract investment worth Rs. 17 lakh crore (US$ 205.31 billion) in next 5-7 years.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-f6f32f4648dc69881d58276055d0ad4f\" style=\"color:#015aa7\"><span class=\"ez-toc-section\" id=\"Systemic_Issues_in_Indias_Power_Sector\"><\/span><strong>Systemic Issues in India&#8217;s Power Sector<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table class=\"has-cyan-bluish-gray-background-color has-background has-fixed-layout\"><tbody><tr><td><strong>Issues with Electricity Generation in the Power Sector<\/strong><br>&#8211; <strong>High cost of fuel:<\/strong> coal extraction from state-run Coal India has been hindered by delays in environmental clearances, land acquisition issues, and inadequate investment in advanced technologies.<br>&#8211; <strong>Dependency on Imported Coals:<\/strong> Power companies often have to rely on costly coal imports despite having abundant coal reserves.<br>&#8211; <strong>High Contribution from Non-renewable Resources:<\/strong> Around 80% of India&#8217;s power generation relies on thermal power derived from fossil fuels like coal, natural gas, and diesel.<br>&#8211; <strong>Aged Power Plants:<\/strong> Many power plants in India are old and inefficient leading to inefficiencies.<\/td><\/tr><tr><td><strong>Issues with Transmission and Distribution in Power Sector <br><\/strong>&#8211; <strong>Uneconomical subsidies:<\/strong> Tariffs have not been increased enough to cover the costs of subsidies in the agricultural sector.<br>&#8211;<strong> High AT&amp;C losses:<\/strong> Electricity distributors (discoms) face high aggregate technical and commercial (AT&amp;C) losses, with some states experiencing losses as high as 40%, while the <strong>national average is 27%.<\/strong><br>&#8211; <strong>Lack of private sector investment:<\/strong> Poor financial health of discoms has discouraged new investments in the electricity sector, especially from the private sector.<br>&#8211; <strong>Inadequate Competitiveness:<\/strong> High industrial\/commercial tariffs and the cross-subsidy regime have affected the competitiveness of the industrial and commercial sectors.<br>&#8211; <strong>Poor revenue realization:<\/strong> The wide gap between the average cost of supply and revenue realized has led to outstanding dues of discoms.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-e6e0cb3e2c87f005e016abdd56835c58\" style=\"color:#015aa7\"><span class=\"ez-toc-section\" id=\"Government_Policies_Initiatives_Related_to_Power_Sector_in_India\"><\/span><strong>Government Policies &amp; Initiatives Related to Power Sector in India<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>In the Union Budget 2022-23, the Indian government allocated Rs. 7,327 crores for the solar power sector, including grid, off-grid, and <a href=\"https:\/\/www.nextias.com\/current-affairs\/04-02-2023\/pm-kusum-scheme#:~:text=The%20deadline%20for%20The%20Pradhan,2026%20due%20to%20Covid%2D%2019.\"><strong>PM-KUSUM projects<\/strong><\/a>.<\/li>\n\n\n\n<li><strong>Sovereign green bonds<\/strong> were announced in the Union Budget 2022-23, and infrastructure status was given to energy storage systems, including grid-scale battery systems.<\/li>\n\n\n\n<li>The <strong>Green Energy Corridor projects<\/strong> aim to facilitate renewable power evacuation and reshape the grid. As of October 2022, 8,651 km of intra-state transmission lines and 19,558 MVA intra-state substations have been constructed.<\/li>\n\n\n\n<li>The <strong>Ministry of New and Renewable Energy<\/strong> developed a <strong>National Portal<\/strong> to encourage rooftop solar (RTS) across the country, allowing residential consumers to apply for rooftop solar without waiting for Discom (electricity distribution company) approval.<\/li>\n\n\n\n<li>The <strong>Production Linked Incentive Scheme<\/strong> (Tranche II) for high-efficiency solar PV modules, with an outlay of Rs. 19,500 crores, was approved and launched.<\/li>\n\n\n\n<li><strong>Energy-saving initiatives <\/strong>have been implemented, with the distribution of LED bulbs, tube lights, and energy-efficient fans, resulting in significant savings in electricity consumption.<\/li>\n\n\n\n<li>The deployment of smart meters under the <strong>National Smart Grid Mission (NSGM)<\/strong> has exceeded 51.62 lakhs.<\/li>\n\n\n\n<li><strong>Electrification efforts<\/strong> are supported by schemes like SAUBHAGYA Scheme, Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY), Ujwal DISCOM Assurance Yojana (UDAY), and Integrated Power Development Scheme (IPDS).<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-6b20a157e5a649a0d98e0c487be66a38\" style=\"color:#015aa7\"><span class=\"ez-toc-section\" id=\"The_Solution_to_Issues_Faced_by_the_Power_Sector_in_India\"><\/span><strong>The Solution to Issues Faced by the Power Sector in India<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Reforms in subsidies<\/strong>, such as providing direct subsidies per acre of land through Direct Benefit Transfer (DBT) for agriculture, could be considered.<\/li>\n\n\n\n<li>The<strong> KUSUM scheme<\/strong>, promoting the use of solar pumps in agriculture and enabling local discoms to buy surplus power from farmers, offers an alternative to the power subsidy model.<\/li>\n\n\n\n<li>Effective enforcement of <strong>cross-subsidy rationalization<\/strong> is necessary.<\/li>\n\n\n\n<li>The government should actively <strong>promote cross-border electricity <\/strong>trade to utilize existing and upcoming generation assets.<\/li>\n\n\n\n<li>To manage power demand, <strong>100% metering-net metering, smart meters, and metering of electricity <\/strong>supplied to agriculture need to be introduced.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-d0adc4bd9eb2e9b9b187dc32f0e06642\" style=\"color:#015aa7\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Indian power sector is poised for a remarkable transformation throughout the current decade (2020-2029) as it experiences substantial shifts in demand growth, energy sources, and market dynamics.<\/p>\n\n\n\n<p>The Ministry of Power is actively working towards replacing coal-based energy generation with renewable sources in 81 thermal units by 2026, with the overarching objective of achieving India&#8217;s impressive 500 GW renewable energy target. <br><br>These initiatives signify a determined commitment towards a more sustainable and resilient energy future for the nation.<\/p>\n\n\n\n<p><strong>Source:<\/strong> <a href=\"https:\/\/www.ibef.org\/industry\/power-sector-india\" data-type=\"link\" data-id=\"https:\/\/www.ibef.org\/industry\/power-sector-india\" target=\"_blank\" rel=\"noopener\"><strong>Power Sector in India<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Power Sector is really important for a country&#8217;s development and well-being.<\/p>\n","protected":false},"author":9,"featured_media":4532,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[62],"tags":[72],"class_list":["post-703","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-indian-economy","tag-gs-3"],"_links":{"self":[{"href":"https:\/\/www.nextias.com\/blog\/wp-json\/wp\/v2\/posts\/703","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/blog\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/blog\/wp-json\/wp\/v2\/comments?post=703"}],"version-history":[{"count":12,"href":"https:\/\/www.nextias.com\/blog\/wp-json\/wp\/v2\/posts\/703\/revisions"}],"predecessor-version":[{"id":13731,"href":"https:\/\/www.nextias.com\/blog\/wp-json\/wp\/v2\/posts\/703\/revisions\/13731"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/blog\/wp-json\/wp\/v2\/media\/4532"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/blog\/wp-json\/wp\/v2\/media?parent=703"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/blog\/wp-json\/wp\/v2\/categories?post=703"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/blog\/wp-json\/wp\/v2\/tags?post=703"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}