India is the third largest producer of electricity in Asia. Generating capacity has grown from 1362MW in 1947 to 113,506 MW. The overall production rose from 301 Billion Units (BU)s in 1992-93 to 558.1 BUs in 2003-04.

India is dependent on thermal, hydel and nuclear power plants for energy generation out of which coal based thermal power plants provide the major mainstay. In some regions hydel power projects also act as a sizeable source of energy. Non-conventional and renewable sources of energy like wind, solar and tidal per projects are also being stresses upon these days.

Installed Capacity of various kinds of energy sources in India (as on september2004)

Growth Of Installed Capacity

Year	Thermal	Hydro	Nuclear	Total
1992	48,086	19,194	1,785	69,065
1993	50,749	19,576	2,005	72,330
1994	54,369	20,379	2,005	76,753
1995	58,113	20,833	2,225	81,171
1996	60,083	20,986	2,225	83,294
1997	61,877	21,642	2,225	85,744

Consumption Of Electricity

Demand elasticity of electricity with respect to GDP was highest in the First and the Third plan period at 3.06 and 5.11 respectively. This figure stabilized to a manageable 1.65 in the eighties. In the eight plan period this figure fell further and an increase of 1% in the GDP caused a 0.97% rise in consumption.

Growth of consumption of electricity has been slower than the GDP growth over the last few years. However this may not mean an actual rise in efficiency of electricity consumption- it could be just a reflection of high growth in the service sector. Experts suggest that for the targeted economic growth rate of 7% the power sector need to grow at 10 %. Industry forecasts suggest that per capita consumption will rise to over 1000 KW per annum within the next decade. The 16th Electric Power Survey, projects that India’s peak demand will hit 157,107 MW by 2012.

Supply Shortage

Though the availability of power has increased significantly, demand for power, has continued to exceed supply. This sector is plagued with acute speak and energy shortages at 7.1% and 11.2%. An added burden is the huge urban and rural divide when it comes to supply-as per the 2001 Census Only 56% of households have access to electricity, with rural access at 44% and urban access at 82%. Even those households which do have access to electricity the supply is not particularly reliable and is intermittent. The annual per capita consumption at about 580KW is among the lowest in the world. These problems are primarily because of the following reasons:

• Insufficient power generation capacity
• Underutilization of existing capacity
• Lack of interregional transmission links
• Worn out sub-transmission and distribution network
• T&D losses, power theft and asymmetrical tariff structure
• Slow rate of rural electrification
• Inefficient use of electricity
• Lack of grid discipline

Performance/ Policy Initiatives / Decision Taken during the year 2003-04

• Generation during 2003-04 over the previous year improved from 531 BU to 558 BU Overall PLF of generating stations improved from 72.2% to 72.7% while in central sector it improved from 77.1% to 78.7%.
• Generation Performance
• Electricity Act 2003 enacted in July 2003.
• 50,000 MW Hydro Initiative launched
• Improvement in Power Supply Position- since the Ninth Plan (1996-97), the peak shortage has decreased from 18% to about 11%. Supply shortfall has also reduced from 11.5% to 7.1%.
• Accelerated Electrification Program for One Lakh villages and One Crore rural households launched. The scheme outlay of Rs 6,000 cr. comprises a grant of Rs 2,400 cr.

Achievements And Targets

The aim of 24 hour continuous power supply in urban rural areas still remains a distant dream. To ensure reliability of the sector and to meet the energy target by 2012 a massive increase in generation capacity is needed. Loss making PSUs need to be restructured so that government is relieved of the burden of providing support. Capacity of about 100,000 MW is planned to be set up during the 10th and 11th plans, i.e. between 2002 and 2012.This means that the installed capacity needs to be doubled and that too at the rate of about 430 MW every fortnight! Capacity addition plan for addition of 41,110 MW is mentioned in the Ninth Plan period where the Central, State and Private sector’s share is expected to be 51%, 16%, and 25% respectively.

About 7% is projected to be sourced from renewable sources and 2% from the Tala project in Bhutan. [Capacity Addition Program, Mission 2012, MoP]. In 2003 the Prime Minister launched the Hydro Power initiative in which a capacity of 50,000 MW is to be added in 2002-2012. The amount earmarked the for power sector in the Tenth Plan period has been raised to Rs 1,43,399 cr, which amounts to an increase of approximately 214% over the Ninth Plan outlay of Rs 45,591 crores.

In the last two Plan periods, not even half of the capacity addition planned was achieved. The optimistic expectations from the IPPs have not been realized and in hindsight it seems that the approach of inviting investments on the basis of government guarantees was perhaps not an ideal strategy.