Indian Power Sector

ANALYSIS OF POWER INDUSTRY

Piyush Kumar Goel

9/25/16

Power Sector

INTRODUCTION AND OBJECTIVE

IMAGINE a country the size of India without power. No electric lights, mobile phones, radios crackling with

cricket or televisions blaring Bollywood hits. Its economy would be medieval: tailors without electric sewing

machines; metalworkers without power lathes; farmers without water pumps. Everyone would rush to

finish work by sundown. Nights would be lit only by the moon, cooking fires, candles and kerosene lamps.

This is a reality for one third of population in India. India ranks third, just behind US and China, on back of

strong focus by the government on promoting renewable energy and implementation of projects in a time

bound manner.

Objectives

• Analyses pre and post-reform macroeconomic environment

changes and impact of same on Indian power sector

• Examples of action of market players with changes in economic

incentives

• Future prospects of Indian power sector

• Key recommendations

EXECUTIVE SUMMARY

The Indian power sector has evolved from a “nascent/ opening” market phase to a “developing” phase

characterized by attributes like steady demand growth and supply deficits, improved sector attractiveness

supported by attractive reforms, increased rate of capacity additions and inadequacies in support enablers

(equipments, transmission and distribution). Number of players in industry has grown multiple fold. The power

demand in the base case is expected to grow at a steady 5-6% CAGR till 2022.

Governments and utilities are too cash-strapped to extend their grids. Part of the problem is widespread

reluctance among users to pay for electricity. Customers who do not pay their mobile-phone bills can have their

connection taken away remotely; electricity is harder to cut off, and easier to steal. This creates a vicious circle

in which utilities lose money, reducing the funds available for improving and expanding supply, and...