essay on power sector

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Power sector: facts, issues, government policies & way forward.

The Power Sector is really important for a country’s development and well-being. In India, having a good power infrastructure is crucial for the economy to grow . The goal is to make sure everyone can sustainably afford electricity . This article aims to provide a comprehensive overview of Power Sector and It’s Facts, Issues, Government Policies, & Way Forward. The Ministry of Power has been working hard to make sure there is enough electricity for everyone by connecting the whole country with a national grid, improving the distribution network, and making sure every household has access to electricity.

India has a diverse mix of power sources, including coal, natural gas, oil, hydro, nuclear power, wind, solar, and even agricultural and domestic waste. The demand for electricity in the country is increasing rapidly, and more power plants need to be built to meet this demand.

Important Facts about India’s Power Sector

India is the third-largest producer and consumer of electricity worldwide, with an installed power capacity of 442.85 GW as of April 30, 2024.
Growing population along with increasing electrification and per-capita usage will provide further impetus. Power consumption in India in FY23 logged a 9.5% growth to 1,503.65 billion units (BU).
India has committed to augment non fossil fuel based installed electricity generation capacity to over 5,00,000 MW by 2031-32.
100% FDI allowed in the power sector has boosted FDI inflow in this sector.
Schemes such as Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY) and Integrated Power Development Scheme (IPDS) are expected to augment electrification across the country.
Cabinet approves PM-Surya Ghar: Muft Bijli Yojana for installing rooftop solar in One Crore households.
As per the National Infrastructure Pipeline 2019-25, energy sector projects accounted for the highest share (24%) out of the total expected capital expenditure of Rs. 111 lakh crore (US$ 1.4 trillion).
Total FDI inflows in the power sector reached US$ 18.28 billion between April 2000-March 2024.
India’s power sector is expected to attract investment worth Rs. 17 lakh crore (US$ 205.31 billion) in next 5-7 years.

Systemic Issues in India’s Power Sector

Government policies & initiatives related to power sector in india.

In the Union Budget 2022-23, the Indian government allocated Rs. 7,327 crores for the solar power sector, including grid, off-grid, and PM-KUSUM projects .
Sovereign green bonds were announced in the Union Budget 2022-23, and infrastructure status was given to energy storage systems, including grid-scale battery systems.
The Green Energy Corridor projects aim to facilitate renewable power evacuation and reshape the grid. As of October 2022, 8,651 km of intra-state transmission lines and 19,558 MVA intra-state substations have been constructed.
The Ministry of New and Renewable Energy developed a National Portal to encourage rooftop solar (RTS) across the country, allowing residential consumers to apply for rooftop solar without waiting for Discom (electricity distribution company) approval.
The Production Linked Incentive Scheme (Tranche II) for high-efficiency solar PV modules, with an outlay of Rs. 19,500 crores, was approved and launched.
Energy-saving initiatives have been implemented, with the distribution of LED bulbs, tube lights, and energy-efficient fans, resulting in significant savings in electricity consumption.
The deployment of smart meters under the National Smart Grid Mission (NSGM) has exceeded 51.62 lakhs.
Electrification efforts are supported by schemes like SAUBHAGYA Scheme, Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY), Ujwal DISCOM Assurance Yojana (UDAY), and Integrated Power Development Scheme (IPDS).

The Solution to Issues Faced by the Power Sector in India

Reforms in subsidies , such as providing direct subsidies per acre of land through Direct Benefit Transfer (DBT) for agriculture, could be considered.
The KUSUM scheme , promoting the use of solar pumps in agriculture and enabling local discoms to buy surplus power from farmers, offers an alternative to the power subsidy model.
Effective enforcement of cross-subsidy rationalization is necessary.
The government should actively promote cross-border electricity trade to utilize existing and upcoming generation assets.
To manage power demand, 100% metering-net metering, smart meters, and metering of electricity supplied to agriculture need to be introduced.

The Indian power sector is poised for a remarkable transformation throughout the current decade (2020-2029) as it experiences substantial shifts in demand growth, energy sources, and market dynamics.

The Ministry of Power is actively working towards replacing coal-based energy generation with renewable sources in 81 thermal units by 2026, with the overarching objective of achieving India’s impressive 500 GW renewable energy target. These initiatives signify a determined commitment towards a more sustainable and resilient energy future for the nation.

Source: Power Sector in India