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Energy Overview - Power Sector in India India

According to the Central Electricity Authority ("CEA"), The power sector in India plays a crucial role in supporting the countrys economic growth and development. As of March 31,2023, the total installed capacity of the Indian power sector reached 416,059 megawatts (MW). This capacity is divided among three sectors: state, central, and private, each making significant contributions.¹

Installed Capacity Breakdown:

The power generation capacity in India is distributed as follows:

1) Central Sector: The Central Sector contributes 24.05% of the total installed capacity, with a capacity of 1,00,055 MW. Power projects in this segment are owned and managed by central government agencies, public sector undertakings, and joint ventures.

2) State Sector: The State Sector accounts for 25.41% of the total installed capacity, amounting to 1,05,726 MW. These power projects are primarily owned and operated by various state electricity boards and corporations.

3) Private Sector: The Private Sector is the largest contributor, representing 50.54% of the total installed capacity with a significant capacity of 2,10,278 MW. Private companies have played a pivotal role in the development of the power sector by investing in power generation, transmission, and distribution projects.

In the financial year spanning from April 1,2022, to March 31,2023, the installed generation capacity in the Indian power sector can be categorized into two main segments: fossil fuel (A) and non-fossil fuel (B). These categories represent different sources of energy used for power generation.

Fossil Fuel (A) accounted for 57.0% of the total installed capacity, amounting to 237,269 megawatts (MW). Within this category, the major contributors were coal, with a capacity of 205,235 MW (49.3%), followed by gas with 24,824 MW (6.0%), lignite with 6,620 MW (1.6%), and diesel with 589 MW (0.1%).

Non-Fossil Fuel (B) made up 43.0% of the total installed capacity, totalling 178,790 MW. The largest component within this category was Renewable Energy Sources (RES) including hydro, which accounted for 172,010 MW (41.3%). This included hydro power generation with a capacity of 46,850 MW (11.3%), as well as a combination of wind, solar, and other renewable energy sources amounting to 125,160 MW (30.1%). Further breakdown of the renewable energy sources revealed wind power contributing 42,633 MW (10.2%), solar power contributing 66,780 MW (16.1%), biomass power and co-generation contributing 10,248 MW (2.5%), waste to energy contributing 554 MW (0.1%), and small hydro power contributing 4,944 MW (1.2%).

In addition to the above, nuclear power accounted for 6,780 MW (1.6%) of the total installed capacity.

Overall, the total installed capacity of the Indian power sector during the mentioned financial year stood at 416,059 MW, encompassing both fossil fuel and non-fossil fuel sources.

The electricity generation target (Including RE) for the year 2023-24 has been fixed as 1750 Billion Unit (BU). i.e. growth of around 7.2% over actual generation of 1624.158 BU for the previous year (2022-23). The generation during 2022-23 was 1624.158 BU as compared to 1491.859 BU generated during 2021-22, representing a growth of about 8.87%.

The electricity generation target for the year 2023-24 was fixed at 1750 BU comprising of 1324.110 BU Thermal; 156.700 BU Hydro; 46.190 Nuclear; 8 BU Import from Bhutan and 215 BU RES (Excl. Large Hydro).

All India Power Supply -Energy ⁴

Plan Wise Growth of Electricity Sector in India ⁵

India is the third largest energy-consuming country in the world. This demonstrates an exigency to produce affordable, reliable and clean energy to meet the needs of the burgeoning population in the country. It is extremely vital for the future development of the economy and will require extensive groundwork on formulating strong policies, technology leaps and higher capital influx in the sector. As Indian economy is continuing to make a remarkable progress, it is estimated that the country is set to experience the largest increase in energy demand over a period of 20 years. The ever-expanding industrialization and urbanization will primarily drive the energy demand that is forecasted to reach 405 Gigawatts of renewable energy capacity by 2030.

The availability of and access to energy and energy sources are particularly essential for poverty reduction and further improvements in standards of living. Data on availability of energy resources within the national territory of a given country during a reference period along with reliable and timely monitoring of the supply and use of energy becomes indispensable for sound decision-making.

The United Nations (UN) General Assembly, in its 70th Session held on 25th September 2015, adopted the document titled "Transforming our World: The 2030 Agenda for Sustainable Development" consisting of 17 Sustainable Development Goals (SDGs) and associated 169 targets. The SDGs are a comprehensive list of global goals integrating social, economic and environmental dimensions of development. Realizing that Energy is critical for people deprived of the opportunity of access to sustainable energy, Goal 7 with the aim to ensure access to affordable, reliable, sustainable and modern energy to all was adopted as one of the 17 SDGs. The goal also stresses more focused attention to improve access to clean and safe cooking fuels and technologies, improve energy efficiency, increase use of renewable sources and promotion of sustainable and modern energy for all. Energy from renewable resources - wind, water, solar, biomass and geothermal energy - is inexhaustible and clean.

The targets adopted as a part of the Goal 7 of SDGs 2030 Agenda are as follows:

- By 2030, ensure universal access to affordable, reliable and modern energy services.

- By 2030, increase substantially the share of renewable energy in the global energy mix.

- By 2030, double the global rate of improvement in energy efficiency.

- By 2030, enhance international co-operation to facilitate access to clean energy research and technology, including renewable energy, energy efficiency and advanced and cleaner fossil-fuel technology, and promote investment in energy infrastructure and clean energy technology.

- By 2030, expand infrastructure and upgrade technology for supplying modern and sustainable energy services for all in developing countries, in particular least developed countries, small island developing states and land-locked developing countries, in accordance with their respective programmes of support.

The Government has decided to invite bids for 50 GW of renewable energy capacity annually for the next five years i.e., from Financial Year 2023-24¹² till Financial Year 2027-28. These annual bids of ISTS (Inter-State Transmission) connected renewable energy capacity will also include setting up of wind power capacity of at least 10 GW per annum. The plan finalized by Ministry of New & Renewable Energy (MNRE) at a meeting chaired by Union Minister for Power & NRE Shri R. K. Singh last week, is in accordance with Prime Ministers announcement at COP26, of achieving 500 GW of installed electricity capacity from non-fossil fuel (Renewable Energy + Nuclear) sources by 2030.

India currently has a total renewable energy capacity of 168.96 GW (as on 28th February 2023) with about 82 GW at various stages of implementation and about 41 GW under tendering stage. This includes 64.38 GW Solar Power, 51.79 GW Flydro Power, 42.02 GW Wind Power and 10.77 GW Bio Power. Renewable Energy (RE) projects take around 18-24 months for commissioning, the bid plan will add 250 GW of renewable energy and ensure 500 GW of installed capacity by 2030. The Ministry of Power is already working on upgrading and adding the transmission system capacity for evacuating 500 GW of electricity from non-fossil fuel. In addition to this, the Ministry has declared a quarterly plan of the bids for FY 2023-24, which comprises of bids for at least 15 GW of renewable energy capacity in each of the first and second quarters of the financial year (April- June 2023 and July-September 2023 respectively), and at least 10 GW in each of the third and fourth quarters of the financial year (Oct-December 2023 and January-March 2024 respectively).

For decades, as demand for power has grown, India has added large-scale conventional power resources. Now, with solar and wind power and other renewable electricity (RE) resources becoming commercially available in the marketplace, there are additional choices available to policymakers and stakeholders concerned with the technical, economic, and environmental characteristics of a future power system that keeps pace with economic growth. One of Indias major advantages today and going forward is that its RE potential is vast and largely untapped. Recent estimates indicate that Indias solar potential is greater than 10,000 GW and its wind potential could be higher than 2,000 GW

The governments effort to formulate smart policies for the expansion of solar power is transforming the Indian electricity sector. By backing solar power adoption, the sector is enabling clean, affordable and reliable power production to meet the needs of a growing number of households and industries. Despite transforming the residential and commercial sector usage, Indias energy sector depends more on buildings and factories that are yet to be made operational in a sustainable manner. As on 28 February 2023, India had a total renewable energy capacity of 169 GW, which included 65 GW¹¹ solar power. India added 1.9 GW of solar capacity in the first quarter of calendar year 2023, a 48 per cent decrease year-over-year (YoY) compared to the 3.6 GW added in Q12022. By 2026,- Indian industry will be able to manufacture solar modules worth 100 gigawatts (GW) annually, and help the country be a net exporter of solar power.

According to the latest data released by the renewable energy ministry, 8,877-MW rooftop solar capacity was added as on 31 March 2023 as against 7,520 MW¹³ as on 30 September 2022. The grid-connected rooftop solar scheme by the Ministry of New and Renewable Energy aims to achieve a cumulative installed capacity of 40,000 MW by 31 March 2026.

The Indian LED lighting market is expected to grow at a CAGR of 23.4% in the forecast period of 2023-2028. The India LED Lighting Market size is estimated at USD 4.41 billion in 2023,-and is expected to reach USD 8.52 billion by 2028, growing at a CAGR of 14.10% during the forecast period (2023-2028). In FY 2021, the market was worth INR 228.66 billion. It is anticipated to grow at a CAGR of about 3.58% between FY2022 and FY2027, reaching INR 281.57 Bn by FY 2027. As of FY 2021,367.80 million units of LED lights were sold in the country Renewables, led by solar, and EVs are leading the expected increase in clean energy investment in 2023:

The recovery from the slump caused by the Covid-19 pandemic and the response to the global energy crisis have provided a significant boost to clean energy investment. Comparing our estimates for 2023 with the data for 2021, annual clean energy investment has risen much faster than investment in fossil fuels over this period (24% vs 15%). Our new analysis highlights how the period of intense volatility in fossil fuel markets caused by the Russian Federations (hereafter "Russia") invasion of Ukraine has accelerated momentum behind the deployment of a range of clean energy technologies, even as it also prompted a short-term scramble for oil and gas supply.

We estimate that around USD 2.8 trillion will be invested in energy in 2023. More than USD 1.7 trillion is going to clean energy, including renewable power, nuclear, grids, storage, low-emission fuels, efficiency improvements and end-use renewables and electrification. The remainder, slightly over USD 1 trillion, is going to unabated fossil fuel supply and power, of which around 15% is to coal and the rest to oil and gas. For every USD 1 spent on fossil fuels, USD 1.7 is now spent on clean energy. Five years ago, this ratio was 1:1. Clean energy investments have been boosted by a variety of factors. These include improved economics at a time of high and volatile fossil fuel prices; enhanced policy support through instruments like the US Inflation Reduction Act and new initiatives in Europe, Japan, China and elsewhere; a strong alignment of climate and energy security goals, especially in import-dependent economies; and a focus on industrial strategy as countries seek to strengthen their footholds in the emerging clean energy economy.

This momentum has been Led by renewable power and EVs, with important contributions also from other areas such as batteries, heat pumps and nuclear power. In 2023 low-emissions power is expected to account for almost 90% of total investment in electricity generation. Solar is the star performer and more than USD 1 billion per day is expected to go into solar investments in 2023 (USD 380 billion for the year as a whole), edging this spending above that in upstream oil for the first time. Consumers are investing in more electrified end uses. Demand for electric cars is booming, with sales expected to leap by more than one-third this year after a record-breaking 2022. As a result, investment in EVs (defined as the incremental spending on EVs vs the average price of vehicles sold in a given country) has more than doubled since 2021, reaching USD 130 billion in 2023. Global sales of heat pumps have seen double-digit growth since 2021.