- Demand for electricity in India is expected to increase at a CAGR of 7% between FY07-22, outstripping current supply levels. Per capita consumption is also expected to rise. - Various government initiatives like 'Power for All' and a focus on renewable energy addition are positively impacting the power sector. However, coal remains the primary fuel used in generation. - Factors like rising incomes, urbanization, and industrialization will continue to drive power demand in India going forward. Aggressive renewable energy targets and a focus on rural electrification also support increasing demand for power.

1. -Mirdul Amin Sarkar
E-mail: mirdul.jntu@gmail.com
Will Demand for Power Slowdown in
India

2. Introduction
Indian Power Demand Drivers at A
Glance
Indian Power Demand Will
Continue to Grow
Indian Power Market Drivers-
Analytical view
Conclusion

3.  The Demand for Power will not slowdown in India due to increasing penetration of per
capita electric consumption, increasing industrialization, growing middle class and
consumer base in India.
 It is expected that the Demand for electricity will increase at a CAGR of 7% to 1,894.7
TWh over FY07–22 in India.
 Moreover, the Government of India’s focus on attaining ‘Power for all’ has accelerated
capacity addition in the country. At the same time, the competitive intensity is
increasing at both the demand and supply sides.
 As of February;2017, total installed capacity of power stations in India stood at
315,426.32 Megawatt (MW). And the Ministry of Power has set a target of 1,229.4 billion
units (BU) of electricity to be generated in the financial year 2017-18, which is 50 BU’s
higher than the target for 2016-17. The annual growth rate in renewable energy
generation has been estimated to be 27% and 18% for conventional energy.
 The FY 2015-16 is turning out to be a phenomenal year for the Indian power sector with
the record Renewable Power capacity addition, power generation and even a record
domestic coal production. Thus the present government’s emphasis on improving the
power situation towards overcome the electricity demand supply gap of the nation
would definitely promulgating the demand for power in India.

4. Growing Demand
• Increasing
economic growth,
urbanization and Per
Capita Electric
Consumption
•Increase in industrial
activities.
•Growing middle
class and consumer
base.
Inviting Policy Support
•Electricity Act-2003:
highly liberal
framework for
generation
•Fuel supply
agreement of power
companies with Coal
India Ltd.
•Development of
UMPPs
•National Tariff Policy
(2016): focus on
renewable energy &
private investment
through competitive
bidding
Resulting Increasing Investments
•Rising FDI inflows:
FDI of USD8547
million was made till
FY15, which
increased to
USD11,437.34
million till
December’16
•Growing M&A
activity
•Large investments in
equipment
manufacture &
power generation

5. •Demand for electricity is expected to increase at
a CAGR of 7 per cent to 1,894.7 TWh over FY07–
22
•Current production levels are not enough to
meet demand; annual demand outstrips supply
by about 7.5%
•All India per capita consumption of electricity is
expected to reach 1348 TWh by FY17
•Various reforms being undertaken by the
government are positively impacting India's
power sector. In wake of the surging domestic
coal production, the country’s power sector is
becoming increasingly stable.
690.59
1174.07
1348.4
1894.7
FY07 FY15 FY17E FY22F
Figure1: Electricity Demand Forecast(TWh)
Source: International Energy Agency
(IEA), CEA, Demand estimates based
on IEA forecasts,

6. Industry remains the largest consumer of electricity in India. In the New Policies Scenario,
electricity demand become more than triples over the period to 2040, rising by 4.9% per year on
average from 900 terawatt-hours (TWh) in 2013 to almost 3300 TWh by the end of the
projection period. India accounts for almost 17% of the increase in global electricity demand
from 2013 to 2040, an amount roughly.
Figure 2: Electricity demand in India, by sector, 2000-2040
Source: International Energy Agency, CEA
0
500
1000
1500
2000
2500
3000
3500
2000 2010 2020 2030 2040
TWh
Agriculture
Service
Residential
Transportation
Industry

7. •The government is targeting capacity addition of
around Five-Year Plans (GW) 88.54 GW under the
12th (2012–17) & around 100 GW under the 13th
(2017–22) Five-Year Plan
•The expected investments in the power sector
during the 12th Plan (2012–17) is USD250 billion
•There is a tangible shift in policy focus on the
sources of power. The government is keen on
promotion of hydro, renewable & gas-based
projects, as well as adoption of clean coal
technology.
16.42 19.01 21.13
54.96
88.54
100
8th 9th 10th 11th 12th 13th
Figure3 : Power Generation capacity
under five year plan
Source: CEA, Business Standard,

8. Coal
66%
Hydro
11%
Solar
11%
Wind
7%
Nuclear
3%
Other
RE
2%
Coal continues to be the mainstay of power in India (63% of total mix), however average
capacity factor reduces to 56%
Figure4 : Coal in generation mix-2022
59.80%
59%
61.12%
58%
56%
2012 2013 2014 2015 2022F
Source: ICFI

9. 58%
8%
8%
26%
Year2030
67%15%
2% 17%
Year 2016
Thermal
Hydro
Nuclear
Renewables
Hon'ble minister of State with Independent Charge for Power, Coal, New and Renewable
Energy has said that the “Coal continues to be the mainstay of power in India”
Figure5 : Indian Energy Mix ; Present & Future, 2016-2030
Source; MNRE, ICFI

10.  India is currently facing a peculiar problem of demand-supply gap in power. The power
scenario in India continues to be grim even as the country gears up to expand its power
supply to bridge the large demand- supply gap.
 All the Regions in the Country namely Northern, Western, Southern, Eastern and North-
Eastern Regions continued to experience energy as well as peak power shortage of
varying magnitude on an overall basis, although there were short-term surpluses
depending on the season or time of day. The surplus power was sold to deficit states or
consumers either through bilateral contracts, Power Exchanges or traders. The energy
shortage varied from 0.2% in the Western Region to 5.2% in the North-Eastern Region.
Demand Supply Gap

11. 0 10,000 20,000 30,000 40,000 50,000 60,000
Northern
Western
Southern
Eastern
North-Eastern
Northern Western Southern Eastern
North-
Eastern
Peak Demand
Met(MW)
50,622 48,199 39,875 18,056 2,367
Peak Demand(MW) 54,474 48,640 40,030 18,169 2,573
Figure 6: Power Peak Demand and Peak Demand Met Gap, by Region (2015-16)
Source: CEA

12. 0 100,000 200,000 300,000 400,000
Northern
Western
Southern
Eastern
North-Eastern
Northern Western Southern Eastern
North-
Eastern
Availability (MU) 324,009 345,967 283,494 123,646 13,735
Energy Requirement
(MU)
340,475 346,767 288,025 124,653 14,488
Source: CEA
Figure 7: Energy Requirement and Availability Gap by Region, (2015-16)

13. Indian Power Market Drivers

14.  The increasing population , urbanization would promulgate the per capita power
consumption . In an indication of growing appetite for electricity in India, the
country’s per capita electricity consumption has reached 1010 kilowatt-hour (kWh) in
2014-15, compared with 957 kWh in 2013-14 and 914.41 kWh in 2012-13.
Figure 7: Per Capita Electric Consumption in India (2012-2022)
0
500
1000
1500
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Per Capita Electricity Consumption(Kwh)
Source: CEA
Per Capita Electric Consumption and Increasing Urbanization Would
Promulgate the Power Demand in India

15.  GOI initiative of “Make In India” ,India is set to become a global manufacturing hub with
investments across the value chain. India’s power demand is expected to rise up to1,905
TWh by FY22
Figure 8: Share of electricity consumption in industrial sector
Increasing Industrialization Would Propel the Demand for Power in India
37.60% 37.70% 37.80% 38.60% 39.30%
44.90% 44.40% 43.80%
58.00%
44.00%
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
Source: Ministry of Statistics and Program Implementation

16. • Under Deen Dayal Upadhyay Gram Jyoti Yojana’s (DDUGJY) rural electrification
package, measures were taken up in mission mode starting August 2015 with a
target to electrify un-electrified villages of the country by May 2018, to fit into the
grander plans of providing ’24×7 Power for All’ by 2019. As per GARV dashboard,
of the 18,452 villages to be electrified, electrification has already been done for
11,434 villages. Electrification needs to be carried out in 6,320 villages and the
remaining 698 villages are uninhabited.
‘Power For All’ and 100 per cent Rural Electrification – going on full
throttle and may achieve targets sooner.

17. • Soft Loan
• Feed-in Tariff
• Fiscal incentive
• Production subsidies
Supply Side
Drivers
• Renewable Purchase Obligation(RPO)
• RECs
• Net metering
Demand Side
Drivers
Renewable Power Market Drivers in India:

18. •The Government of India announced a massive renewable
power production target of 175,000 MW by 2022; this
comprises generation of 100,000 MW from solar power,
60,000 MW from wind energy, 10,000 MW from biomass, and
5,000 MW from small hydro power projects.
175,000 MW Renewable
Power by 2022
•This Scheme used for promoting generation of electricity
from renewable energy sources.
•Allows Power Producers to sell renewable energy generated
electricity to an off – taker at a pre – determined tariff for a
given period of time
Feed – in Tariff
•Government to reintroduce 'generation-based incentives' for
wind power projects to boost capacity addition in the sector;
Cutting of excise duties by 2 per cent on capital goods import
•USD147.3 million would be allocated to the Ministry of New &
Renewable Energy
Generation-based
incentives
Government Policy & Initiatives

19. •Low-interest–bearing funds to be provided from National
Clean Energy Fund (NCEF) to Indian Renewable Energy
Development Agency Ltd (IREDA) for on-lending to viable
renewable energy projects
Low-interest funds
•Benefit under section 35 (2AA) of the Income Tax Act to
industry/private sponsored research programmers
•Further incentives are available for setting up of projects in
notified areas
Tax benefits
•The policy aims to achieve the objectives of UDAY scheme.
•Special focus on renewable energy has been laid. In order to
promote use of renewable energy, solar Renewable Purchase
Obligation (RPO) is proposed to increase to 8 per cent by
2022
Government Policy & Initiatives
National Tariff
Policy -2016

20. •Special focus on renewable energy has been laid. In order to
promote use of renewable energy, solar Renewable Purchase
Obligation (RPO) is proposed to increase to 8 per cent by
2022
RPO Regulations
•A revival package for electricity distribution companies of
India ( DISCOMs) initiated by the GOI with the intent to fine a
permanent solution to the mess which the power distribution
facing currently.
Ujwal Discoms
Assurance Yojana
(UDAY)
Government Policy & Initiatives

21.  The government of India plans to start as many as 10,000 solar, wind and biomass power
projects in next five years, with an average capacity of 50 kilowatt per project, thereby
adding 500 megawatt to the total installed capacity.
 The Ministry of Shipping plans to install 160.64 MW of solar and wind based power systems
at all the major ports across the country by 2017, thereby promoting the use of renewable
energy sources and giving a fillip to government's Green Port Initiative.
 The Ministry of New and Renewable Energy (MNRE), which provides 30 per cent subsidy to
most solar powered items such as solar lamps and solar heating systems, has further
extended its subsidy scheme to solar-powered refrigeration units with a view to boost the
use of solar-powered cold storage
Government Initiatives

22.  The Government of India plans to set up a US$ 400 million fund, sourced from The
World Bank, which would be used to protect renewable energy producers from
payment delays by power distribution firms, while at the same time protecting the
distribution firms from the shrinking market for conventional grid-connected power,
caused by wider adoption of roof-top solar power generation.
 The Government of India plans to introduce a scheme to encourage setting up of
biomass plants across the country, which will generate electricity and also help
dispose of agricultural waste in a carbon-neutral manner to help tackle growing
pollution.

23.  Well, the demand of power in India keep increasing in future period.
The Renewable power (Solar, Wind, Bio-mass etc.) power demand
will increase at a rapid pace in upcoming period in India due to
NAPCC and CO21 Action plan , and agreement towards decreasing
the air pollution and reduction of fissile fuel dependency by 30%.
 On the other hand, thermal power growth will be slowdown as
compare to previous growth due to its carbon emission and
polluting nature. But the mainstay power will be generated by
thermal power plants as usual in future period too.
 Implementation of energy efficient equipments would be reduce the
power consumption in long term period of Indian power sector. Also
the IOT implementation in power system would reduce the power
demand in long term future period in India.
 Nevertheless, the increasing economic growth and urbanization,
growth of industrialization ,rising population would keep propel the
demand for power in India. And the government policies and
initiatives towards the renewable power generation would definitely
promulgate the demand of power in India.

24. Thank You.