Amol Kotwal

Indian Power Generation Sector - At Cross-roads

Over the years, the Indian power sector has had its own share of ups and downs. The Electricity Act 2003 was a watershed event, giving a much needed boost to the sector's economic viability.
However, there have been a host of other concerning factors, leading to poor performance of the sector:

• Lack of adequate power generation capacity addition. Power generation capacity addition has been stagnant for the past 2 decades, and planned targets have been consistently missed
• Delayed clearances – environmental, forest etc. 
• Land acquisition issues 
• Fuel linkages 
• Dismal conditions and inappropriate maintenance of existing power plants and transmission and distribution (T&D) equipment/infrastructure
• Rampant power theft, leading to high Transmission and Distribution (T&D) losses impacting finances of Power T&D utilities.
• Poor financial condition of the State Electricity Boards (as per report from the Power Finance Corporation the aggregate losses of SEB’s reached a peak of INR 526 Billion in FY2008-09)

India’s current Installed Power Generation capacity stands at 186.6 Giga Watts (GW) (as at end December,
2011), with an energy deficit and peak deficit of 7.9 percent and 10.6 percent, respectively.