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Power sector to attract Rs 11.56 trillion investments in five years

   November 2, 2018        617        Jayajit Dash

The country’s is poised to attract investments worth Rs 11.56 trillion between 2017 and 2022. Investments are expected to flow into thermal, hydro, nuclear and segments.

Between April 2000 and June 2018, FDI (foreign direct investment) inflows in the reached $14.18 billion, accounting for 3.64 per cent of the total FDIs drawn by the country. A report by the Indian Brand Equity Foundation (IBEF) attributed the to the 100 per cent FDI allowed in the sector under the automatic route.

 Reviving the power sector

India is the third largest producer and consumer of electricity in the world with its installed reaching 344.72 Gw by September 2018. The government has targeted capacity addition of 100 Gw from 2017 to 2022. Expansion in industrial activity together with growing population and increasing electrification is set to provide impetus to demand. is estimated to rise from 1160.1 TwH (Terawatt-hour) in 2016 to 1894.7 TwH in 2022.

 Why detaching power tariff from politics is an uphill task for states

Coal-fired is forecast to record 6.5 per cent compounded annual growth rate (CAGR) between 2017-18 and 2022-23. In parallel, the government aims to reach 175 Gw of installed capacity in by 2021-22.

Although the country’s has jumped by 100 times since independence, growth in demand has been even higher due to accelerating economic activity. India is set to become the first country to use LEDs for all lighting needs by 2019, thus saving Rs 400 billion annually. Between FY10 and FY18, the country’s electricity generation grew at a CAGR of 5.69 per cent. The country’s power demand is projected at 1905 TwH by 2022 with multiple drivers like industrial expansion and growing per capita incomes fuelling demand.

 Politics in power sector reforms

As of September this year, the country’s total thermal power installed capacity stood at 221.8 Gw. The rated capacities of renewable, hydro and nuclear energy totaled to 70.65 Gw, 45.49 Gw and 6.78 Gw respectively. Energy generation from conventional sources stood at 105.7 billion units (as on August 2018). Between 2017 and 2022, conventional sources are expected to witness capacity addition of 58.38 Gw. An additional 8.11 billion units (BU) of installed capacity is set to be achieved by FY19.

Coal-based power installed capacity which currently stands at 196.10 Gw is expected to climb to 441 Gw by 2040.

Business Standard