India Electricity Industry Report - 2014

September 30, 2014

This report profiles India’s electricity industry, discussing market trends and outlook for 2014 and beyond. The report also highlights leading players in the sector including National Thermal Power Corporation Ltd, Tata Power Company Ltd and Reliance Infrastructure Ltd.

In FY14, power demand grew at a slower pace compared to power supply because of industrial slowdown in the country. As a result, the net power demand deficit shrank by a huge margin. However, India’s fast-paced economic growth and its rapid rate of industrialization and urbanization will continue to fuel energy demand in the long term. According to the Central Electricity Authority (CEA), an additional capacity of around 76,000 MW is needed to satisfy the projected demand by 2016-17. Given that electricity has become necessary to achieve or maintain India’s economic growth, the government has an ambitious vision to electrify the whole country in the coming years. Renovation and modernization of old thermal and hydro power plants and large untapped hydro, solar and wind power also give a huge opportunity for growth in the sector.

However, poor quality infrastructure still limits India’s growth potential. According to the CEA’s 17th Electric Power Survey of India (EPS) projections, peak electric demand would reach 298GW by 2021-22. To meet the country’s demand requirements, the Working Group on Power for the Planning Commission estimates a capacity addition of about 76,000 MW during the 12th Plan and 93,000 MW in the 13th Plan. The government has created a USD 11bn debt fund to bridge a funding shortfall and ease the financing of power sector projects as well as overhaul the poor infrastructure.

In order to fuel a rapidly growing economy, the Indian energy sector requires investments. Private sector investment in addition to the public is needed to bring in the required capabilities and technologies to enhance India’s energy generation capacity.

Key Points:

• According to the Ministry of Power, India has the fifth largest generation capacity in the world, accounting for around 4% of the global power generation capacity.

• Annual electricity sales grew at a CAGR of around 8% during the last 10 years. GDP contribution from the electricity, gas and water sectors touched INR 1.1tn at the end of FY14.

• Rising per capita income of Indians has resulted in an increase in per capita electricity consumption, which grew at a CAGR of 5% during 2003-13.

• Electricity production recorded a subdued performance with the production index growing by 3.3% in FY14, lowest in five years. The overall industrial growth index declined by 0.1% during the same period. This has brought down the overall demand for electricity in the economy. However, the electricity index growth revived slightly in the first four months of FY15 due to an increase in the industrial growth figures.

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  • FX, Financials and Capital Markets
  • And more!

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