India Electricity Industry Report - 2015

December 11, 2015

This report profiles India’s electricity industry, discussing market trends and outlook through 2015 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 FYE March 2015, India’s power supply outpaced power demand again. This was due to a significant increase in both installed capacity and power generation. As a result, the net power deficit shrank by a significant 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 of India 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.

Nevertheless, poor quality infrastructure still limits India’s growth potential. According to the CEA’s 17th Electric Power Survey of India (EPS) projections, the 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 capacity addition of about 76,000 MW in 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 domestic energy generation capacity.

Key Points:

• Annual electricity sales grew at a CAGR of around 9% during the last 10 years. Electricity, gas and water supply sector had a contribution of 2% to the overall gross value added in FY15.

• Rising per capita income of Indians has resulted in an increase in per capita electricity consumption. Domestic per capita consumption rose at a CAGR of 5% during 2004-14.

• Electricity production recorded a strong growth, with the production index growing by 8.2% in FY15. The index recorded a stable growth of 4.1% y/y in 1HFY16.

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