Power is one of the prime infrastructure requirement for economic development of a nation. Its level of availability, accessibility and affordability is an important determinant of quality of life. India is the world's sixth largest energy consumer, accounting for about 3.5% of the world's total annual energy consumption. The installed power generation capacity in India has increased by more than 85 times since independence and has reached 1,28,182.47 MW (as on 31st January 2007), consisting of 84149.84 MW (thermal); 33941.77 MW (hydro); 3900 MW (nuclear); and 6190.86 MW (renewable energy sources).
In India, the Ministry of Power is primarily responsible for regulation and development of electrical energy. It is concerned with perspective planning; policy formulation; processing of projects for investment; monitoring the implementation of power projects; training and manpower development; and the enactment of related legislations.
The Ministry has initiated several policy measures to attract private investment in order to enhance power generation capacity and promote energy efficiency in the country. For instance, the 'National Electricity Policy' has been announced for laying the guidelines for accelerated development of the power sector and supply of electricity to all areas, keeping in view the availability of energy resources, technology, economics of generation and energy security issues. The policy aims at achieving the following objectives:-
- Access to electricity, that is, make it available for all households in next five years;
- Demand to be fully met by 2012 and energy shortages to be overcome;
- Supply of reliable and quality power of specified standards in an efficient manner and at reasonable rates;
- Per capita availability of electricity to be increased to over 1000 units by 2012;
- Minimum lifeline consumption of 1 unit/household/day as a merit good by year 2012;
- Protection of consumers' interests, etc.
The power sector was among the first sectors to be opened up for private sector investment. Though the initial impetus was on investment in power generation projects, subsequently, it was also allowed in distribution and transmission projects. The Government of India is also encouraging investors to set up renewable energy based power generation projects on Build-Own-Operate basis. The guidelines for private sector participation in transmission sector envisage two distinct routes, namely:- (i) Joint Venture (JV) Route, wherein the Central Transmission Utility (CTU)/ State Transmission Utility (STU) shall own at least 26% equity and the balance shall be contributed by the Joint Venture Partner (JVP); and (ii) Independent Private Transmission Company (IPTC) Route, wherein 100 percent equity shall be owned by the private entity. Thus, significant investment opportunities exist in all the segments of the power sector.
For more details visit our Section on 'Infrastructure'
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