Overview of electricity in India

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The growth in the Indian economy has seen a rapid rise in the demand for power from all segments. While the rapid industrialization demands a large share of electricity, the domestic as well as the agriculture sector have not been left far behind. Infact if one studies the trend; there is almost a similar percentage growth in the demand for electricity in India from both the domestic as well as the industrial sectors.

Over the past 2 decades, India has emerged as one of the fastest growing economies in the world. With the dynamics of the global economy slowly starting to change, the eyes of the world shift focus to the Indian economy, and consequently to the infrastructure supporting it. The power sector is today one of the most important sectors of the Indian economy. As the Indian economy grew over the last 2 decades, so did its hunger for energy. In fact, the demand grew faster than what the existing or developing projects could provide. Power generation remains an issue till date. Electricity generation remains a priority for both the government as well as the industry as it seems to be the key for growth of the economy.

For the last 30 years, the annual demand for energy has been growing by year on year making India the 6th largest consumer of electricity in the world. The demand for electricity in India has seen increasing demand not only from the industrial sector, but from the domestic sector as well. The growth of economy has spawned a new breed of consumers who also consume a lot of electricity in India. However the shortfall in power generation has left both the domestic as well as the industrial consumers in a loss making situation. In fact, the productivity loss due to the shortfall in electricity generation in India seems to be growing at an alarming rate over the past few years.

Players in the power sector

Since inception, the generation and supply of electricity came under the purview of the State Electricity Boards. With the entire country being connected to a grid the idea may have been conceived for individual states to generate their own electricity and sell the excess to the neighboring states. However following liberalization since 1991, a lot of private and global players are entering this sector. In the face of the demand-supply deficit, power generation in India appeared to be, and still is a very lucrative business proposition for private entities.

Geographical Distribution of the power sector in India

If one divides the installed capacity of the power sector in India geographically, one observes that the North, South and the West Zone have a similar install base, with the West having a slightly higher capacity than the other two. This somehow reflects the economic situation of these regions. However, the East lags far behind. Only a fraction of the installed capacity for electricity generation in India is present in the Eastern part. Some of the power plants also happen to be located on islands.

While it is easy to study the power scenario in Urban India, one has to remember that a majority of the Indian population still lives in rural areas. When one looks at the distribution of electricity across the country, the facts are not quite pretty. The power sector in India covers a large proportion of the countries rural areas mainly due to the national grid. However this is merely eyewash. Although there is connectivity present with domestic households in rural India, very few of these domestic households are actual consumers of electricity. In fact, India’s per capita consumption is less than a fraction of that of Canada.

The Energy Sources used for generating electricity in India

While focusing on the power sector, one important question which arises is the energy source used for generation of electricity. The power sector in India has used almost every kind of energy source available for electricity generation. The usage depends pre-dominantly on the availability of the resource. They are as follows:

Coal fired power plants:

Coal as an energy source is pre-dominantly used by the power sector for thermal power generation in India. India has some of the World’s largest reservoirs of coal. Most of the coal fired thermal plants are around the areas where these mines are present. However the quality of coal is quite low and it requires treatment for proper electricity generation.

Hydro-electric power plants:

Another source of energy used by the power sector is hydro-energy. The large number of rivers provide ample opportunity for this source to be tapped. Many state governments have done the same by building dams and reservoirs. It is mainly observed in Southern India where coal deposits are low.

Gas fired power plants:

Gas fired turbines are also being used for electricity generation in India. Although not as dominant as coal or Hydro, it has a good amount of installations in terms of Megawatts generated in India.

The other sources of energy such as oil and nuclear energy are also being used to a lesser extent. Off late, renewable sources of energy have been given a boost by the government for electricity generation.

Electricity in India-The road ahead

There has been a lot of built-up around the rhetoric of India as the next economic super-power. With the growing economy and burden of expectations from within the country and abroad, a lot of industrial development seems to be planned for the next few years. However given the current state of the power sector, there may be a huge energy crisis unless the situation is quickly rectified. The government seems to be on the right track, giving subsidies and schemes for private players looking to set-up power plants in India. One can only hope that electricity generation in India grows to be a fuel for growth and not the loose cog that derails the engine of industrialization.

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