Power Sector in India

What is the one thing today, lack which will bring everything to a halt? It is Power or Electricity. In the modern times everything that we do is driven by power from our basic needs (due to it’s necessity in manufacturing) to the luxuries like air conditioner that are now a part of our lives.

Energy can be broadly divided into two classes utility and captive. Utility energy is the electricity generated by power companies to be sold to consumers throughout the Country. The main operation here is
power generation and selling it. Captive Energy is the electricity generated by some big companies for themselves. (Some companies have massive electricity requirement so they operate their own power plants).

Agriculture, Industrial, Commercial, Domestic, and Other Sources are the five heads under which the users can be classified. Any growth/decline in each area would affect the power consumption and thus affect the power sector as well.

Function wise there are there are three classifications. Power Generation Companies or Gencoms are at the origin of the value chain. They include all the power plants be it thermal, Nuclear or hydel. Power Transmission Companies or Transcoms take the Electricity generated by the power plants and are responsible for its transmission across the country. Power Distribution Companies or Discoms are the front face of the electricity sector. They are responsible for the last leg connectivity.

Total installed capacity in India: 3,74,052.12 MW. Share of Private sector in Gencoms is 41%. Major part of the energy produced is through coal. This is one of the reasons coal occupies a crucial role in the sector. The largest power plant in India is: Vindhyachal Thermal power station in Madhya Pradesh. It is owned and operated by NTPC (PSU).

Why do we need a Transcom ?
Amount of power generated by each power plant is massive ( on an avg, 3 mn units). Requirement of various sectors in the country are different. Households require less energy, factories require the energy depending on their scale, hotels and restaurants have different requirements and so on. Hence, we need a middle player to step down and allocate the power generated by the plant and supply it to different categories of consumers. (It is responsible for setting up the transmission network).

Power Distribution Companies Discoms or Distribution companies are involved in the front end operations and dealing with the consumer grievances. Major share in this area is of Government enterprises, Private players have entered only in some major cities.

Major Trends in the power sector are
Rise of Renewable energy There has been a greater focus on renewable sources of energy. Government of India has set a target of installing 175 GW of Renewable Energy capacity by the year 2022. Solar: 100 GW Bio-power: 10 GW Wind: 60 GW Small Hydropower: 5 GW

Large corporates have started entering into personalized contracts for bulk purchase of power. With more inflow of foreign companies, PPAs will become more common in future.Corporate PPAs (Power Purchase Agreements)

Electric Vehicles are also a very important factor nowadays. with the new introduction and the enthusiasm towards ‘GO Green Drive’. There has been a push towards adoption of electric vehicles. Govt. has launched National Electric Mobility Mission Plan, 2020 to incorporate faster adoption of EVs. (Offering incentives on use of Electric vehicles) Foreign Electricity Trade Indian power companies have started expanding into new geographies. This process is to be expedited by development of enabling infrastructure. For e.g. Undersea cable for trade with Sri-Lanka.

The power sector is also rapidly moving towards Digitization. There has been an increasing trend to leverage digital technologies like IOT and more focus on Cyber security in Power sector to ensure effectiveness and solve the pending problems of the sector.


Anurag Kumar Thakur

Anurag Kumar Thakur

I am a Physics graduate with Mathematics and Statistics as my electives.

Anurag Kumar Thakur

I am a Physics graduate with Mathematics and Statistics as my electives.

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