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| India Infoline Sector Reports | Wed, 18-Feb-2004 16:50:28 IST (GMT+5:30) | |
| Power | ||
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Outlook Rising Demand Power demand grew by 7.5-8% annually over the last decade, fuelled by industrial growth and urbanisation. The demand growth is expected to grow at the rate of 9% annually. Capacity Addition Has Not Kept Pace Lack of resources and project implementation delays have led to insufficient generating-capacity growth, resulting in capacity falling short of rising energy requirements. Power-generating capacity addition grew at 5.94% annually for over a decade until 1996, resulting in a continous deficit of 8-10%. Inefficiencies Add To The Deficit Low PLF and high transmission and distribution losses add to the supply deficit resulting from insufficient generating capacity and rising demand. India’s PLF is 64.7% against an international average of over 70%, owing to old, inefficient plants and wide disparity in peak and non-peak demand. Also the T&D losses are over 22%, far higher than the international standard of 7-10% because of low voltage distribution network, theft and pilferage. The loss is low in the private sector. Growing Power Consumption In Domestic And Agricultural Segments In the last three decades, maximum growth in consumption was registered under the domestic and agricultural consumer segments. Increased use of electronic equipment by India’s huge middle class population, improving reach of power distribution in rural areas and increased use of irrigation have led to higher growth in these areas. Domestic consumption is certain to remain a high growth area in future, while growth in agricultural consumption is expected to taper and reduce in per centage terms. Investment Requirements Improvements in the capacity utilization, quick-yield capacity augmentation and maximized end-use efficiencies require an estimated investment of Rs5 trillion over the next fifteen years. This is over six times the total investment in the sector during the Eighth Five Year Plan. Expansion of this order would effectively mean replicating, over the next 10 years, the total system capacity installed during the last 50 years.
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