Introduction

Power is one of the most critical components of infrastructure crucial for the economic growth and welfare of nations. The existence and development of adequate infrastructure is essential for sustained growth of the Indian economy. India’s power sector is one of the most diversified in the world.

Sources of power generation range from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power to viable non-conventional sources such as wind, solar, and agricultural and domestic waste. Electricity demand in the country has increased rapidly and is expected to rise further in the years to come. In order to meet the increasing demand for electricity in the country, massive addition to the installed generating capacity is required.

Indian power sector is undergoing a significant change that has redefined the industry outlook. Sustained economic growth continues to drive electricity demand in India. 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 market and supply sides (fuel, logistics, finances, and manpower).

Thermal power generation in the seasonally strong month of May grew by an unexciting 5%. However, slowing thermal capacity additions and a steady rise in overall demand means that utilization levels at thermal power plants are rising. Importantly, utilization or plant load factors for the thermal power sector have expanded on a cumulative basis - April to May 2018. Utilization levels rose as growth in capacity additions slowed to the low single-digits.

Considering the fact that thermal power caters to most of India’s electricity needs at present and a limited number of plants are being built or are in the pipeline, the country may end up in a tight supply situation in three-four years if battery storage does not become cost-effective (making renewable energy accessible round the clock).