India falls short of achieving increased power generation capacity

Government pins hopes on private investment in renewable energy sector by offering fiscal and financial incentives

By Kundan Pandey
Published: Saturday 28 February 2015


Is India on track to increasing capacity in the power sector? It does not seem so, if one goes by the findings of Economic Survey 2015 tabled on February 27 in Parliament. The Survey shows that India is lagging behind and has added only 11,610.41 MW. This figure includes 1,000 MW generated by nuclear power facilities commissioned till December 31, 2014.

The capacity addition target of 2014-15 is 17,830.3 MW. During the Twelfth Plan period, the target is 88,537 MW, comprising 26,182 MW from the Central sector, 15,530 MW from the state sector, and 46,825 MW from the private sector.

The cumulative capacity addition as on December 31, 2014, was 50,058.22 MW, which constitutes 56.5 per cent of the Twelfth Plan target. The individual targets achieved by the Central, state, and private sectors are 39.2 per cent, 64.5 percent, and 63.6 per cent respectively.

The Survey tries to explain the slow addition of capacity by highlighting the negative growth in hydro generation in 2014-15 due to a poor monsoon.
The Survey says that as population increases, the demand for every key service will increase and energy security will be one of the biggest challenges. The government claims that giving an extra boost to renewable energy will be the future game-changer.

To provide a big push to solar energy, two new schemes have been started—the Scheme for Development of Solar Parks and Ultra Mega Solar Power Projects and the Pilot-cum-Demonstration Project for Development of Grid-Connected Solar PV Power Plants on Canal Banks and Canal Tops. These were rolled out in December 2014.

Supplementary guidelines were issued under the existing Solar Pumping Programme for Irrigation and Drinking Water scheme to solarise the targeted 0.1 million pumps throughout the country during the current year.

India’s total renewable power installed capacity as on December 31, 2014, has reached 33.8 GW. Wind energy continues to dominate this share, accounting for 66 per cent of installed capacity, followed by biomass, small hydro power and solar power.

India’s renewable energy sector is driven primarily by the private sector. The government has been promoting private investment in renewable energy through an attractive mix of fiscal and financial incentives in addition to preferential tariffs being provided at the state level.

Installed capacity of Indian solar power in 2013-14 was 2,647 MW. As per Bloomberg New Energy Finance/United Nations Environment Programme (UNEP) report, in 2013, there was a total investment of US$ 6 billion in renewable energy in India. Proposals for the next five years are likely to generate business opportunities to the order of US$ 160 billion.

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