Power is an essential requirement for
all facets of life and has been recognized as a basic human need. It is
a critical infrastructure on which the socio-economic development of a
country depends. The availability of reliable and quality power at competitive
rates is very crucial to sustain growth of all the sectors of the economy,
that is, primary, secondary and tertiary. This helps to make domestic
markets globally competitive and thus improve the quality of life of the
Under the Constitution of India, electricity is a concurrent subject at entry number 38 in the List III of the Seventh Schedule. India is the world's sixth largest energy consumer accounting for about 3.5% of the world's total annual energy consumption. The thermal, hydro and nuclear energy are the major sources of generation of electricity in India. The total installed power generation capacity has been 1,47,402.81 MW (as on December 31, 2008), consisting of 93,392.64 MW (thermal); 36,647.76 MW (hydro); 4,120 MW (nuclear); and 13,242.41 MW (renewable energy sources).
In India, the Ministry
of Power is the nodal authority for the overall development of electrical
energy in the country. It is concerned with perspective planning; policy
formulation; processing of projects for investment decision; monitoring
of the implementation of power projects; training and manpower development;
as well as the administration and enactment of legislation in regard to
power generation, transmission and distribution. It is responsible for
the administration of the Electricity
Act, 2003, the Energy
Conservation Act , 2001 and to undertake such amendments to these
Acts, as may be necessary from time to time, in conformity with the Government's
policy objectives. The Ministry also provides research, development and
technical assistance relating to hydro-electric and thermal power transmission
and distribution systems in the States/UTs as well as deals with all the
matters concerning energy conservation.
The Ministry has several undertakings/ organisations operating
under it. They may be classified as follows:-
Policy Initiatives and Opportunities
Bodies, which include:-
Electricity Authority (CEA) - is an attached office of the Ministry
and assist it in all technical matters. CEA is responsible for overall
planning and technical coordination as well as supervision of standard
programmes of entire electricity sector of the country. It specifies
the technical and safety requirements for construction, operation
and maintenance of electrical standards and electrical lines. It
is also involved in formulating the 'National Electricity Plan'
in accordance with the 'National
Electricity Policy', once in five years.
Electricity Regulatory Commission (CERC) - has been constituted
in order to:- (i) regulate the tariff of generating companies
owned or controlled by the Central Government; (ii) regulate the
tariff of generating companies other than those owned or controlled
by the Central Government, if such generating companies enter
into or otherwise have a composite scheme for generation and sale
of electricity in more than one State; (iii) regulate the inter-State
transmission of energy including tariff of the transmission utilities;
(iv) grant licences for inter-State transmission and trading;
and (v) advise the Central Government in formulation of National
electricity policy and tariff policy.
Electricity Regulatory Commissions (SERCs) - have been constituted
in order to:- (i) determine the tariff for generation, supply,
transmission and wheeling of electricity, whole sale, bulk or
retail sale within the State; (ii) issue licences for intra-State
transmission, distribution and trading; and (iii) promote generation
of electricity from renewal sources of energy etc.
Tribunal for Electricity (APTEL) - has been constituted for
the purpose of hearing cases against the orders of the Regulatory
Commissions and the Adjudicating officer.
Valley Corporation (DVC) - is the first multi-purpose river
valley project of the Government, set up for the unified development
of Damodar Valley region spread over the States of West Bengal and
Jharkhand. Its objectives are:- (i) flood control and irrigation;
(ii) water supply and drainage; (iii) generation, transmission and
distribution of electrical energy; (iv) afforestation and control
of soil erosion; and (v) promotion of industrial, economic and general
well-being of the people.
Beas Management Board (BBMB) - has been constituted for the
administration, maintenance and operation of Bhakra Nangal Project.
It manages the facilities created for harnessing the waters impounded
at Bhakra and Pong in addition to those diverted at Pandoh through
the BSL Water Conductor System. It has also been assigned the
responsibility of delivering water and power to the beneficiary
States in accordance with their due/ entitled shares.
Sector Undertakings, which include:-
Grid Corporation of India Ltd. (POWERGRID) - is the Central
transmission utility of India which possess one of the largest
transmission network in the world. It has been set up with the
mandate 'to establish and operate Regional and National Power
Grids to facilitate transfer of power within and across the regions
with reliability, security and economy on sound commercial principles'.
It is responsible for all the existing and future transmission
projects in the Central sector.
Thermal Power Corporation (NTPC) - is the largest thermal
power generating company of India and has been identified as one
of the Navratnas. It has been set up with the objective of planning,
promoting and organizing an integrated development of thermal
power in the country.
Hydro-electric Power Corporation (NHPC) - has been set up
in order to harness the vast hydro, tidal and wind potential of
the country to produce cheap/ pollution-free and inexhaustible
power. It covers all aspects such as investigation, planning,
designs, construction, operation and maintenance of hydroelectric,
tidal and wind power projects.
Electric Power Corporation (NEEPCO) - has been set up with the
objective of developing the large power potential of the North Eastern
(NE) region of the country by installing hydro and thermal power
plants so as to ensure optimum utilisation of commissioned generation
projects. It aims to plan, design, operate and maintain power stations
in the NE region.
Electrification Corporation (REC) - has been set up with the
objective of financing and promoting rural electrification projects
all over the country. The projects cover electrification of villages,
including tribal villages and Dalit Bastis, energisation of pump
sets, provision of power for small, agro-based and rural industries,
lighting of rural households and street lighting. REC provides
financial assistance to State Electricity Boards, State Government
Departments and Rural Electric Cooperatives.
Finance Corporation (PFC) - function as the prime development
financial institution dedicated to the growth and overall development
of the power sector. It provides financial assistance/ services
for power projects in the form of project term loan, lease financing,
direct discounting of bills, short term loan, consultancy services,
Bodies, which include:-
Power Research Institute (CPRI) - serve as a National Laboratory
for undertaking applied research in electric power engineering,
besides functioning as an independent National Testing and Certification
Authority for electrical equipment and components so as to ensure
reliability and develop new products.
Power Training Institute (NPTI) - functions as the National Apex body for the human resource development of the power sector personnel in India. Its headquarter is located in Faridabad (Haryana). It operates on all India basis through its five Regional Power Training Institutes located at Neyveli (Tamil Nadu), Durgapur (West Bengal), Badarpur (New Delhi), Nagpur (Maharashtra) and Guwahati (Assam). They are fully equipped with the latest state-of-the-art training infrastructure and having expert faculties with long years of professional and teaching background.
of Energy Efficiency (BEE) - has been set up to develop policies
and strategies within the overall framework of Energy Conservation
Act 2001. It aims to promote energy saving measures and in turn
reduce energy intensity (i.e. energy consumed per unit product/services,
practice and procedure) of Indian economy.
Venture Corporations, which include:-
Jal Vidyut Nigam Limited (SJVN) - is a joint venture of the
Government of India and the Government of Himachal Pradesh, set
up with the objective to plan, promote, organize and execute hydro-electric
power projects in the Satluj river basin in the Himachal Pradesh.
Hydro Development Corporation (THDC) - is a joint venture of
Government of India and Government of Uttar Pradesh, set up with
the objective to plan, promote, organize, execute, operate and maintain
hydro power projects in Bhagirathi- Bhilangna Valley in Uttar Pradesh.
The power sector is 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 has also been allowed in
distribution and transmission projects. The Ministry has initiated several
reform measures to attract private investment in order to enhance power
generation capacity and promote energy efficiency in the country. For
instance, the 'Electricity Act 2003' has been enacted to provide an enabling
framework for the overall development of the power sector. It is an Act
for consolidating the laws relating to generation, transmission, distribution,
trading and use of electricity; taking measures conducive for development
of electricity industry; promoting competition therein; and supplying
electricity to all areas. The electricity Act also aims to rationalise
electricity tariffs, promote efficient and environmentally benign policies,
constitute CEA and regulatory commissions, provide for stringent penalties
in case of theft of electricity, etc.
Under the Electricity Act 2003, the Central Government has
prepared the 'National
Electricity Policy' in consultation with State Governments and CEA.
The policy has been announced for laying down 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. It aims at achieving the following
- 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
- 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.
Moreover, the Electricity (Amendment) Act, 2007 has been announced to amend certain provisions of the Electricity Act, 2003, such as, the Central Government, jointly with State Governments, to provide access to electricity to all areas including villages and hamlets through rural electricity infrastructure and electrification of households.
of Power has set an ambitious mission of 'power for all by 2012',
which is a comprehensive blueprint for power sector development. The mission
requires that installed generation capacity should be at least 2, 00,000
MW by 2012. It aims to provide reliable, sufficient and quality power
supply to all areas at an optimum cost as well as enhance commercial viability
of power industry. To be able to achieve such objectives, following strategies
are being adopted like:-
- Power generation strategy with focus on low cost generation,
optimisation of capacity utilization, controlling the input cost, optimisation
of fuel mix, technology upgradation and utilization of non-conventional
- Transmission strategy with focus on development of National
Grid including InterState connections, technology upgradation and optimisation
of transmission cost;
- Distribution strategy with focus on system upgradation,
loss reduction, theft control, consumer service orientation, quality
power supply commercialisation, decentralized distributed generation
and supply for rural areas;
- Financing strategy to generate resources for required
growth of the power sector; etc.
Besides, the Ministry envisages establishing an integrated
'National Power Grid' in the country in a phased manner by the year 2012 with an inter-regional power transfer capacity of about 37,700 MW. The first phase has been completed in 2002, wherein regional grids were mainly connected by HVDC back to back stations and inter regional power transfer capacity of 5050 MW has been established. The implementation of second phase has already commenced and with the commissioning of Talcher Kolar HVDC bipole, Raipur Rourkela 400 kV D/C transmission system along with series compensation and second back to back station at Gajuwaka, inter regional power transfer capacity has grown to 9450 MW. It has created a synchronous grid from Arunachal Pradesh to Goa spanning across a length of 2500 km, encompassing an area of 16 lakh sq km with an installed capacity of over 50,000 MW. With other links, under implementation/ planning, the cumulative inter regional power transfer capacity is expected to be enhanced to 37,150 MW by 2012.
Moreover, rural electrification is considered vital programme
for the socio-economic development of rural areas. Its objectives are
to trigger economic growth and generate employment by providing electricity
as an input for productive uses in agriculture and rural industries as
well as improve the quality of life of the rural people by supplying electricity
for lighting of homes, shops, community centres and public places in all
The Government of India, from time to time, has been launching
several programmes for electrification of rural areas in the country.
For instance, the 'Rural Electrification Supply Technology (REST) Mission'
has been launched with a view to accelerate electrification of all villages
and households progressively by year 2012 through local renewable energy
sources, decentralized technologies and conventional grid connection.
It aims to provide affordable and reliable power supply to rural areas
and effect implementation through distributed generation schemes, wherever
Besides, a scheme called the 'Rajiv Gandhi Grameen Vidhyutikaran
Yojana (RGGVY) for Rural Electricity Infrastructure and Household Electrification'
has been introduced in April, 2005 for achieving the National Common Minimum
Programme objectives of providing access to electricity to all rural households
over a period of four years. The Rural Electrification Corporation (REC)
is the nodal agency for implementation of the scheme. Under this scheme,
90% Capital Subsidy will be provided for rural electrification infrastructure
- Creation of Rural Electricity Distribution Backbone (REDB) with one 33/11 kV (or 66/11 kV) substation in every block where it does not exist.
- Creation of Village Electricity Infrastructure (VEI)
for electrification of all unelectrified villages/habitations and provision
of distribution transformer(s) of appropriate capacity in every village/habitation.
- Decentralized Distributed Generation (DDG) and Supply
System form conventional sources for villages/habitations, where grid
supply is not cost effective and where Ministry of Non-Conventional
Energy Sources would not be providing electricity through their programme(s).
This scheme inter alia provides for financial assistance
for electrification of all unelectrified Below Poverty Line (BPL) households
with 100% capital subsidy.