Power Sector in India

Photo: Equitymaster.com

The Government of India, having recognized the necessity to improve upon the existing archaic power transmission and distribution system concomitantly along with investment in generation of power in the country, has drawn up ambitious plans for connecting the whole country with a common power grid and to electrify all houses in the country by 2016-20. There are separate agencies and plans for translating the objects of the government into reality.

Government of India having addressed the issue of power generation, has begun serious efforts to reduce the T&D losses from its peak level of 19% to about 6.5% in the next 5 years. This ambitious target calls for revamping of the entire power distribution mechanism in the country, which includes increasing the transmission voltages and making the system more and more tamper proof. 

The country started upgrading its grid capabilities under the aegis of PGCIL (Power Grid Corporation of India) from the existing 132 / 220 Kv to 400 / 765 Kv to bring the country’s power transmission system at par with other nations. 

The plans are on anvil to create a national back bone with transmission capability of 1200 Kv in the next five year plan. This has resulted in a very bright business opportunity for the companies in this space.

The advent of Nuclear Power Era in the country, while addressing the demand for the generation of the power, is expected to open another market front. The power generation by nuclear plants call for massive power evacuation lines to transmit the power generated by these mega power stations to the country’s grid. This holds another exciting business opportunity for the power companies in India. 

Recently, Piyush Goyal, the Minister of Power, Coal and New and Renewable Energy, speaking at the World Economic Forum’s India Economic Summit 2014 said:

"Over the next five years, the Indian power sector would provide an investment potential of $250 billion of which $100 billion will come into the renewable energy sector and $50 billion for the transmission networks”. 

One of the biggest roadblocks facing the Indian economy has been the poor state of infrastructure in the country. It is said that lack of proper infrastructure shaves off about 2% of India's GDP growth every year. The power sector, which is the engine for growth in any economy, is facing a myriad of challenges and setbacks in India. Hence, it would be better if the current DIRECTION-LESS-NDA-GOVERNMENT, focuses more on the infrastructure sector.