The Financial Year 2017-18 will be remembered in history as one of the most tumultuous years for the power sector as the focus globally shifts towards green and sustainable energy.
The future of the power sector’s growth has increasingly become dependent on factors like efficiency, cost-effectiveness, digitization, sustainability, and most importantly, being environmentally conducive. By 2030, the world’s middle-class population will likely expand from 3 billion to more than 5 billion.
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The growth will coincide with widely improving standards of living, resulting in rising energy use in all countries as people develop modern business and gain access to various amenities. Global energy need is expected to rise by about 25%, which will be mainly driven by growth in need in countries like China and India where the power need is said to increase by 40% which will be roughly equal to the load of energy used in the US today.
Coupled with the increase in need, the demand for power is expected to grow by more than 60% between 2016 and 2040, led by the near-doubling of power demand in the other countries.
India is the world’s fastest-growing economy which is fuelled by large-scale uptick in industrial production, growth in the working population and the improving standard of living in the country.
India’s power sector is dominated by fossil fuels which accounts for a majority of the installed power-generation capacity.
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India’s national grid had a total installed capacity of 344 GW as on June 2018, of which thermal power accounted for 223 GW, renewable energy accounted for 69 GW, while hydro and other sources accounted for 52 GW. India at the current moment is asurplus power-generating country, but due to inadequate connectivity and issues in theTransmission and Distribution (T&D) lines, there is intermittent supply of electricity to the people of the country.
For addressing this issue, the government has been implementing schemes like “Power for All”, which aims to provide continuous and uninterrupted electricity supply to all households, industries and commercial establishments by creating and improving the necessary infrastructure.
The “Power for All” is a joint collaboration of the Government of India and the State Governments where funding is shared. It is estimated by an international energy agency that India is expected to add 600 to 1,200 GW of power-generation capacity before 2050.
With so much generation capacity being added in India over the next few years, there is huge potential for both conventional as well as renewable sources of power.
Even if India reaches thisvery ambitious target, it will be pointless without efficient T&D.
Toward addressing this issue, theGovernment of India has announced multiple schemes aimed at developing the distribution projects like the Integrated Power Development Scheme (IPDS), Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY), Rural Electrification, National Electricity Fund and Financial Restructuring Scheme. Ratings agency Moody’s has projected a stable outlook for the power sector on account of the improvement in domestic coal availability, thus moderating the fuel supply risk.
However, it has been a mixed bag for Ujjwal Discom Assurance Yojana (UDAY).
While the distribution utilities have seen an improvement in their liquidity, the extent to which their operational efficiency has improved, still remains unclear. Therefore, while there are many opportunities in the Power Sector in India, there are multiple challenges too.
Primarily, the challenges are in the generation and distribution sectors due to inadequate process streamlining.
India Power has been making various suggestions to the government from time to time and is sanguine that they would have a detailed evaluation towards policy process optimization. The thermal power plants are facing a severe crisis which will result in billions of dollars of non-performing loans in the sector very soon.
It is therefore imperative for the government to act urgently. However, India Power, with over nine decades of experience in the T&D segment, presence in generation across coal, wind and solar plants and lastly but most
importantly, offering Operations & Maintenance (O&M) services through the Joint-Venture partner - Uniper of Germany, is sure to overcome the problems and will continue to grow profitably.
With Best wishes,