AN ANALYSIS OF

GROWTH, CHALLENGES
AND FUTURE PROSPECTS

Name: Ankush Kumar

Sap Id : 500118243
Course : MBA(power management)
INTRODUCTION

Power is among the most critical components of infrastructure, crucial

for the economic growth and welfare of nations. The existence and
development of adequate power infrastructure is essential for
sustained growth of the Indian economy. The fundamental principle of
India’s power industry has been to provide universal access to
affordable power in a sustainable way. The Ministry of Power has
made significant efforts over the past few years to turn the country
from one with a power shortage to one with a surplus by establishing a
single national grid, fortifying the distribution network, and achieving
universal household electrification.
India’s power sector is one of the most diversified in the world.
Sources of power generation range from conventional sources such as
coal, lignite, natural gas, oil, hydro and nuclear power, to viable non-
conventional sources such as wind, solar, agricultural, and domestic
waste. Electricity demand in the country has increased rapidly and is
expected to rise further in the years to come. In order to meet the
increasing demand for electricity in the country, massive addition to
the installed generating capacity is required.
EVOLUTION OF INDIAN POWER SECTOR
MARKET SIZE

India is the third-largest producer and consumer of electricity worldwide, with an installed
power capacity of 429.96 GW as of January 31, 2024.
As of January 31, 2024, India’s installed renewable energy capacity (including hydro) stood
at 182.05 GW, representing 42.3% of the overall installed power capacity. As of April 30,
2024, Solar energy contributed 82.63 GW, followed by 46.16 GW from wind power, 10.35
GW from biomass, 5.00 GW from small hydropower, 0.59 from waste to energy, and 46.93
GW from hydropower.
The non-hydro renewable energy capacity addition stood at 15.27 GW in FY23, up from
14.07 GW in FY22.
India's power generation witnessed its highest growth rate in over 30 years in FY23. Power
generation in India increased by 6.80% to 1,452.43 billion kilowatt-hours (kWh) as of
January 2024. According to data from the Ministry of Power, India's power consumption
stood at 1,503.65 BU in April 2023.
The peak power demand in the country stood at 243.27 GW in January 2024.
The coal plants registered a PLF of 73.7% for the first nine-months period in FY23 compared
to 68.5% in FY22 for the same period.
Thermal power plant load is estimated to improve by 63% in FY24, fueled by strong demand
growth along with subdued capacity addition in the sector.
Overview of Indian
Power sector in 2023
• Key Highlights:
Total Installed Capacity (2023): • Coal Dominance :Despite the rapid growth in renewable energy , coal
still accounts for more than half of the total installed capacity .This is
Total Capacity: Approximately 410 GW due its established role in providing reliable and continuous power,
which is critical for industrial and urban centres.
1.COAL: • Renewable Energy growth: The significant increase in renewable
• Installed capacity: 220-230 GW energy capacity is a result of strong policy support, including
subsidies, renewable purchase obligations(RPOs),and the push for
• % of Total capacity: 55% achieving the nationally Determined Contributions(NDCs)under the
2.Renewable Energy: Paris agreement.
• Installed Capacity:170-180 GW • Grid Challenges: with the increase in renewable energy , the Indian
• % of total Capacity:40-45% grid faces challenges related to integration , such as managing the
Components: intermittency of solar and wind power .efforts are underway to
modernize the grid and enhance its capability to handle a higher share
Solar Power- 70GW of renewables.
Wind Power- 45 GW
• Distribution sector Reforms: The distribution sector , which has
Hydropower- 50 GW historically been the weakest link in India’s power value chain
Bio-mass- 50 GW ,continues to undergo reforms aimed at improving financial health and
reducing losses.
 Grid Modernization and Smart
Grids

2023 STATUS:
Current Grid Infrastructure: - The Indian grid is one of the largest in the world, but it faces challenges
such as high transmission and distribution (T&D) losses, frequent outages, and issues with grid stability,
especially in rural areas.
T&D Losses: Estimated at around 20-22%, which is relatively high compared to global standards, leading to
inefficiencies in power delivery.
Grid Integration Issues: The variability of renewable energy (especially solar and wind) poses challenges
for grid integration, requiring better grid management and balancing.
Initial Steps Toward Modernization: Ongoing projects to reduce T&D losses, enhance grid reliability, and
introduce basic smart grid technologies.
Smart Meters: Deployment of smart meters in urban areas to improve billing accuracy and reduce power
theft.
Pilot Smart Grid Projects: Several pilot projects across India are testing advanced technologies like
automated demand response, distributed energy resources, and real-time monitoring
 • Total Projected Capacity (2030):
PROJECTED POWER • Total Capacity: Approximately 820 GW (Gigawatts)
Breakdown by Source:
SECTOR IN 2030. 1. Renewable Energy: - Projected Capacity:~500 GW
• Percentage of Total Capacity: ~60-65%
• Components: Solar Power: ~280 GW
• Wind Power: ~140 GW
• Hydropower: ~70 GW
• Biomass and Others: ~10
Projected Power Sector in 2030By 2030,
India's power sector is expected to 2. Coal: - Projected Capacity:~240-260 GW
undergo a significant transformation, - Percentage of Total Capacity: ~30-35%
driven by the nation's ambitious - - Role: Coal's share in the energy mix is expected to decline, but it
renewable energy goals, ongoing will still play a crucial role in providing base load power. New
infrastructure improvements, and the coal plants will likely be more efficient and equipped with carbon
capture and storage (CCS) technologies to reduce emissions.
need to meet increasing energy demand
sustainably. The total installed capacity 3. Nuclear Energy: - Projected Capacity: ~20 GW
is projected to nearly double from 2023 - Percentage of Total Capacity: ~2-3% -
levels, with a substantial shift towards - Role: Nuclear power is expected to see modest growth,
renewable energy sources contributing to the base load capacity with new plants coming
online. This is part of India's strategy to diversify its energy
sources and reduce dependence on fossil fuels.
Key Highlights:-
• Shift to Renewables: The most significant change from 2023 will be the dramatic increase in renewable
energy, particularly solar and wind. This shift will help India reduce its carbon footprint and meet its climate
commitments under the Paris Agreement.
• Coal's Role: Although coal's share will decrease, it will still be a significant part of the energy mix due to its
reliability and ability to provide continuous power. The focus will be on making coal plants more efficient and
less polluting.
• Grid Modernization: To support the large influx of renewables, India's grid infrastructure will need to be
significantly modernized. This includes investments in smart grids, energy storage systems, and enhanced
transmission networks.
• Energy Storage and Technology: The widespread deployment of energy storage systems (such as batteries)
will be critical for managing the variability of renewable energy sources. Additionally, advancements in green
hydrogen and other technologies may begin to contribute to the energy mix.-
• Policy Support: Achieving this ambitious capacity target will require continued and enhanced policy support,
including incentives for renewable energy, carbon pricing mechanisms, and reforms in the distribution sector to
ensure financial sustainability. In summary, by 2030, India's power sector will be much more diversified, with
renewables forming the core of the energy mix. This transformation will be key to meeting the country's
growing energy needs sustainably while reducing its dependence on fossil fuels.
 2030 PROJECTION:
Widespread Adoption of Smart Grids:
• By 2030, the Indian power grid is expected to be significantly more advanced, with widespread adoption
of smart grid technologies across the country.
• Advanced Metering Infrastructure (AMI): Full deployment of smart meters, enabling real-time data
collection, better demand management, and improved energy efficiency.
• Grid Automation: Increased automation of grid operations, allowing for real-time monitoring, fault
detection, and faster response times to outages or fluctuations in supply.
Enhanced Renewable Energy Integration:
• Grid Flexibility: Improved flexibility in grid operations to handle the variability and intermittency of
renewable energy sources like solar and wind.
• Energy Storage Systems: Large-scale deployment of energy storage solutions, such as batteries, to store
excess renewable energy and release it during peak demand or when renewable generation is low.
• Microgrids and Distributed Generation: Expansion of microgrids and distributed generation systems,
particularly in rural and remote areas, to enhance energy access and grid resilience.-
 CONTINUED….

• Reduction in T&D Losses: - Significant reduction in T&D losses to below 15%, achieved through grid
modernization, better infrastructure, and stricter regulations.
• Cybersecurity and Grid Stability: - As grids become smarter, they also become more susceptible to cyber threats.
By 2030, there will be a strong focus on cybersecurity measures to protect the grid from attacks.
• Grid Stability and Reliability: Continuous monitoring and management to ensure grid stability, even with the
increasing share of variable renewable energy
• Digital Transformation: The Indian power grid will undergo a digital transformation, leveraging data analytics, IoT
(Internet of Things), and AI (Artificial Intelligence) to optimize grid operations and enhance efficiency.
• Consumer Empowerment: Consumers will have greater control over their energy usage through smart meters and
demand response programs, allowing them to save money and reduce energy consumption.
• Sustainability: Grid modernization will play a crucial role in supporting India’s transition to a low-carbon energy
system, enabling the integration of higher levels of renewable energy. This slide underscores the importance of grid
modernization as a foundation for India's energy transition, highlighting the technological advancements and
strategies needed to create a more reliable, efficient, and sustainable power grid by 2030.
DEVELOPEMENT/INVESTMENT

 Total FDI inflows in the power sector reached US$ 18.28 billion between April 2000-March 2024, accounting for 2.69% of the total FDI
inflow in India.
 Some major investments and developments in the Indian power sector are as follows:
Cumulative FDI inflow in the power sector stood at US$ 18.28 billion between April 2000-March 2024.
 From April 2020 to September 2023, the renewable energy sector in India attracted US$ 6.1 billion in FDI equity investment.
 India has received a cumulative amount of US$ 3.8 billion in foreign direct investment (FDI) in the solar energy sector over the past three
fiscal years and the ongoing fiscal year until September 2023.
 India ranked fourth in the list of countries to make significant investments in renewable energy by allotting US$ 77.7 billion between 2015
and 2022.
 In FY24 (until November 2023), the power generation in India was 1,176.13 BU.
 India’s electricity generation from renewable and non-renewable sources for FY21, FY22, and FY23 was 1,373.08 BU, 1,484.36 BU, and
1,617.72 BU, respectively.
 The power generation industry in India will require a total investment of Rs. 33 lakh crore (US$ 400 billion) and 3.78 million power
professionals by 2032 to meet the rising energy demands, as per the National Electricity Plan 2022-32.
 By 2031, the current installed nuclear power capacity is expected to rise from 7,480 MW to 22,480 MW because of the progressive
completion of projects under construction and accorded sanction.
 As informed in August 2023, towards achieving carbon neutral Ladakh, NTPC is setting up a hydrogen fuelling station, and solar plant and
providing five fuel cell buses for operation on intracity routes of Leh.
 In August 2023, North Eastern Electric Power Corporation Limited (NEEPCO), a 100% subsidiary of NTPC, took a significant step towards
sustainable energy development by signing a Memorandum of Agreement (MoA) with the Government of Arunachal Pradesh.
CONTINUED…

 In July 2023, NTPC’s Group installed capacity touched 73,024 MW.

 In July 2023, PFC signed various MoUs worth Rs. 2.37 lakh crore (US$ 29 billion) with 20 companies in the clean energy space.
 In August 2023, Tata Power EV Charging Solutions Limited (TPEVCSL), a Tata Power group Company and Zoom car, a leading
marketplace for car sharing, entered into a Memorandum of Understanding (MoU) to promote widespread electric vehicle adoption and
deliver a seamless, user-friendly charging experience to EV users nationwide.
 In August 2023, SJVN was conferred with “2nd Annual Greentech Quality & Innovation Award 2023” under the category of Quality
Improvement.
 In June 2023, Tata Power, one of the leading players in the electric vehicle (EV) charging infrastructure space, collaborated with the
Ayodhya Development Authority to set up EV charging points in public parking locations across the city.
 Tata Power Company has been recognized as the country's ‘Most Attractive Employer Brand,’ according to the recently published
Randstad Employer Brand Research (REBR) 2023 report by HR services provider Randstad India.
 In June 2023, a Memorandum of Understanding (MoU) was signed between NHPC Limited and the Government of Odisha through
GRIDCO Limited for “Development of Pumped Storage Projects (PSPs) and Renewable Energy in the State of Odisha”.
 India has the potential to attract an investment of over US$ 20 billion in renewables in 2023.
 In May 2023, NTPC commenced its venture into hydrogen and energy storage solutions with the establishment of a hydrogen hub in
Andhra Pradesh.
 In May 2023, TP Saurya Tata Power Trading Company Ltd. signed a power purchase agreement to set up a 200 MW solar project at
Bikaner, Rajasthan.
 Adani Group is exploring a US$ 3 billion investment in Vietnam’s seaport ecosystem and wind and solar energy projects.
CONTINUED..
 In February 2023, Tata Power inaugurated ‘Divyang’ a managed customer relations centre in Mumbai, which is a first among Indian power
utilities.
 In January 2023, the Union Cabinet (CCEA) approved investment of Rs. 2,614 crores (US$ 315 million) for SJVN’s 382 MW Sunni Dam
Hydro Project.
 In January 2023, President of India laid foundation stone of SJVN’s 1000 MW Bikaner Solar Power Project in Rajasthan.
 In January 2023, the President of India dedicated transmission system built by Power Grid for 8.9 GW of solar power in Rajasthan.
 Mumbai headquartered Essar Group has formed the Essar Energy Transition (EET) with the objective to invest a total of US$ 3.6 billion in
developing a range of low carbon energy transition projects over the next five years.
 In November 2022, the Maharashtra State Electricity Distribution Corporation Limited (MSEDCL) granted the "Letter of Award" (LoA) to
Tata Power Renewable Energy Limited (TPREL), a Tata Power subsidiary, to build a 150 MW solar project in Solapur, Maharashtra.
 In October 2022, SJVN started commissioning its 75 MW Solar Power Project in Parasan Solar Park which is located at Tehsil Kalpi,
District Jalaun near Kanpur, Uttar Pradesh.
 In August 2022, NHPC Limited and the Government of Himachal Pradesh inked an implementation agreement for the 500 MW Dugar
Hydroelectric Project in the Chamba District of Himachal Pradesh.
 In August 2022, Norfund, who manage the Norwegian Climate Investment Fund, and KLP, Norway’s biggest pension company, signed an
agreement to buy a 49% share of a 420 MW solar power plant in Rajasthan for Rs. 2.8 billion (US$ 35.05 million).
 In August 2022, Tata Power Green Energy Limited (TPGEL), a wholly owned subsidiary of Tata Power, commissioned a 225MW hybrid
power project in Rajasthan.
 In August 2022, NHPC signed a MoU with the Investment Board Nepal (IBN) to develop 750 MW West Seti and 450 MW SR-6
Hydroelectric Projects in Nepal.
 In July 2022, NTPC signed a MoU with MASEN (Moroccan Agency for Sustainable Energy) for cooperation in the renewable energy
sector.
 In June 2022, SJVN announced a collaboration with the Assam government for the development of hydro and renewable energy projects in
the state.
CONTINUED..
 In June 2022, SJVN signed investment agreements worth Rs. 80,000 crore (US$ 10.24 billion) with the Uttar Pradesh
government for implementing three solar power projects in the state.
 In June 2022, NTPC declared commercial operation of second part capacity of 15 MW out of 56 MW Kawas Solar PV
project in Gujarat.
 In June 2022, NHPC signed an engineering, procurement, and construction (EPC) contract with Adani Infra Limited to
develop a 600 MW solar project under the Central Public Sector Undertaking program (Phase-II).
 Investment in India’s renewable energy sector grew more than 125% YoY to touch a record US$ 14.5 billion in FY22.
 In March 2022, NTPC announced that it will start commercial operations of 74.88 MW capacity of its 296 MW Fatehgarh
solar project in Rajasthan.
 In March 2022, Adani Solar, and Smart Power India (SPI), a subsidiary of Rockefeller Foundation, signed a non-financial
and non-commercial MoU promote the usage of solar rooftop panels in rural India.
 In February 2022, Kolkata-based Eminent Electricity Distribution Ltd., a subsidiary of CESC Limited, bid Rs. 871 crore
(US$ 113.24 million) to take over Chandigarh’s power supply department, which was approved, and the transition will
happen by the end of March.
 In November 2021, NTPC announced that its 80 MW solar power-generation capacity in Jetsar (Rajasthan) has started
commercial operations from October 22, 2021. The total capacity of the project is 160 MW.
 In November 2021, SJVN began the second unit work of the 1,320 MW Buxar thermal power plant in Bihar.
GOVERNMENT POLICIES
AND INITIATIVES
 The Government of India has identified the power sector as a key sector of focus to promote sustained industrial growth. Some initiatives
by the Government to boost the Indian power sector are as below:
 The Union Cabinet has sanctioned the PM-Surya Ghar: Muft Bijli Yojana. This initiative, with a total budget of Rs. 75,021 crore (US$ 9
billion) aims to install rooftop solar systems and offer complimentary electricity of up to 300 units per month to one crore households.
 In the Budget for 2024, the government's power sector initiatives have been allocated funds that are 50% higher. Increased funds have
been allocated to green hydrogen, solar power, and green-energy corridors in line with the renewable energy target for 2030.
 In the Union Budget 2022-23, the government allocated Rs. 7,327 crore (US$ 885 million) for the solar power sector including grid, off-
grid, and PM-KUSUM projects.
 Under the Union Budget 2022-23, the government announced the issuance of sovereign green bonds, as well as conferring infrastructure
status to energy storage systems, including grid-scale battery systems.
 The Green Energy Corridor projects have been initiated to facilitate renewable power evacuation and reshaping the grid for future
requirements. As on October 2022, 8651 km of intra-state transmission lines have been constructed and 19,558 MVA intra-state
substations have been charged.
 To encourage rooftop solar (RTS) throughout the country, Ministry New and Renewable Energy has developed a National Portal wherein
any residential consumer from any part of the country can apply for rooftop solar without waiting for Discom to finalize tender and
empanel vendors. Since the launch on July 30, 2022, the total number of applications received on the national portal is for 117 MW solar
capacity and the feasibility of more than 18 MW projects is granted.
 Production Linked Incentive Scheme (Tranche II) on ‘National Programme on High Efficiency Solar PV Modules,’ with an outlay of Rs.
19,500 crore (US$ 2.47 billion) was approved and launched.
 As of August 24, 2022, over 36.86 crore LED bulbs, 72.18 lakh LED tube lights and 23.59 lakh energy-efficient fans have been
distributed across the country, saving around 48,411 million kWh per year and around Rs. 19,332 crore (US$ 2.35 billion) in cost savings.
 CONTINUED…

 As of November 2022, over 51.62 lakh smart metres have been deployed under the National Smart Grid Mission (NSGM), with a further
61.13 lakh to be deployed.
 Electrification in the country is increasing with support from schemes like Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY), Ujwal
DISCOM Assurance Yojana (UDAY), and Integrated Power Development Scheme (IPDS).
 In order to meet India’s 500 GW renewable energy target and tackle the annual issue of coal demand supply mismatch, the Ministry of
Power has identified 81 thermal units which will replace coal with renewable energy generation by 2026.
 In February 2022, a parliamentary standing committee recommended the government to take steps to increase the loan limit for
renewable energy sector under priority sector lending. The current limit stands at Rs. 30 crore (U$ 3.93 million).
 In December 2021, West Bengal got a loan approval for US$ 135 million from the International Bank for Reconstruction and
Development (also called the World Bank) to improve the operational efficiency and reliability of electricity supply in select regions in
the state.
 In November 2021, the government announced future plans to increase the funding under the PLI scheme for domestic solar cells and
module manufacturing to Rs. 24,000 crore (US$ 3.17 billion) from the existing Rs. 4,500 crore (US$ 594.68 million) to make India an
exporting nation.
 In November 2021, Energy Efficiency Services Limited (EESL) stated that it will partner with private sector energy service companies to
scale up its Building Energy Efficiency Programme (BEEP).
CONTINUED…

 In September 2021, the Government of the United Kingdom announced that it will invest US$ 1.2
billion through public and private investments in green projects and renewable energy in India to
support the latter’s target of 450 GW of renewable energy by 2030.
 The Pradhan Mantri Sahaj Bijli Har Ghar Yojana, “Saubhagya,” was launched by the Government of
India with an aim of achieving universal household electrification. As of March 2021, 2.82 crore
households have been electrified under this scheme.
 According to the S&P Global Platts Top 250 Global Energy Rankings 2021, Reliance Industries Ltd.
and Indian Oil Corp. Ltd. ranked 3rdand 6th, respectively.
 100% FDI allowed in the power sector has boosted FDI inflow in this sector.
 Schemes such as Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY) and Integrated Power
Development Scheme (IPDS) are expected to augment electrifica on across the country.
 Cabinet approves PM-Surya Ghar: Muft Bijli Yojana for installing rooftop solar in One Crore
households
THANK YOU