Profile

The power industry plays a vital role in the economic development of any country. Electricity is a key driver of rapid economic growth and industrialization in the country. It is one of the critical infrastructure on which development of several economic sectors depend. India is the world's sixth largest energy consumer accounting for about 3.5% of the world's total annual energy consumption. Availability of reliable and quality power at competitive rates to Indian industry is necessary to make it globally competitive and to enable it to exploit the tremendous potential of employment generation. Over the years, Indian power industry has shown considerable growth. Foreign direct investment (FDI) up to 100 percent has been permitted through automatic route in generation, transmission and distribution segments.

Source of Power

Non Renewable Energy:

Fossil fuels

The Industrial Revolution in Europe in the 19th century forced human's to seek alternative sources of fuel to cater to the increasing demand. Focus was shifted to fossil fuels as an alternate source of energy. Fossil fuels were formed millions of years ago. They are nothing but fossilized organic remains that after millions of years has been converted into oil, gas and coal. Because this process takes a long time, they are known as non renewable.

Coal

It is the most easily available fossil fuel in the world. It is mostly carbon and is used as a combustion fuel, especially after the Industrial Revolution. Coal can further be divided into lignite, bituminous and anthracite. Lignite and Bituminous have lesser percentage of carbon and therefore burn faster. They are not environmentally friendly, Whereas Anthracite has about 98% carbon and therefore burns slowly and is more environmentally friendly. Coal can be found in both underground mines and open mines. Though Petroleum gained prominence through the 20th century, coal still continues to be the most used raw material for power generation.

Oil and Gas

Oil and Gas is mostly found in underground rocks. Millions of years ago when plants and animals died, they got buried in layers of mud and sand. The earth's crust changed its shape and put immense pressure and heat on the dead plants and animals. Over a period of time, the energy in those plants and animals changed into hydrocarbon liquids and gases. They then turned into chemicals called hydrocarbons .Most of the hydrocarbons is found under the sea bed. Oil has a disastrous effect on the environment and many scientists believe the main reason for global warming. Natural gas is usually found near a source of oil. It is a mixture of light hydrocarbons. It is lighter than air and is odourless. It is therefore mixed with a chemical that gives it a strong odour and thereby easy to detect in case of a leak. It is the cleanest burning fossil fuel.

Renewable Energy:

Because of the environmentally disastrous effect of non renewable energy, an alternate source of energy which would not pollute the environment and which can also be renewed was tapped. They are known as renewable energy. The various types of renewable energy are

Solar Energy

It is the most easily available renewable resource. After the oil shock in 1970's many countries conducted research work to tap solar energy. It is believed in the next few years millions of consumers across the world would switch to solar energy. In India the Indian Renewable Energy Development Agency and the Ministry of Non Conventional Energy Sources are devising strategies to encourage the usage of solar energy. Solar energy can be used for cooking, heating, drying, distillation, electricity, cooling, refrigeration, cold storage etc.

Hydel Energy

Energy available in fast flowing water can be used to generate electricity. Waves occur due to the interface of the wind with surface of sea and represent a transfer of energy. This energy can be tapped for commercial purpose.

Hydro Power

It is the one of the best, cheapest and cleanest source of power, though large dams could have environmental and social repercussions. In view of these problems associated with larger dams, experts have advocated the construction of smaller dams. New environmental laws to safeguard the planet from the effects of global warming have made smaller hydropower projects more viable.

Wind Energy

It is the kinetic energy used for many centuries in water sports like sailing and for irrigation. It converts kinetic energy into more usable forms of power. Wind turbines help to convert the energy in the wind into mechanical energy which can be used for generating power. Since the late 1980's the viability of wind energy has gained in prominence across the globe. In India the states of Tamil Nadu and Gujarat lead in the field of wind energy.

Biomass

It is sourced from the carbonaceous waste of animals and is also the by products from timber industry, agricultural crops, raw material from forest, household waste and wood. It can be used to generate power with the same power plant that are burning fossil fuels and is very much environmentally friendly. It is being used in the western countries for applications such as combined heat and power generation. In India 90% of the rural households and 15% of the urban households uses bio mass fuel.

Nuclear Energy

Nuclear energy can be created in nuclear reactors under strict human control. The nuclear power can be generated by the fission of uranium, plutonium or thorium or the fusion of hydrogen into helium. Nowadays mostly Uranium is used for generating nuclear power. With a view to increase India's dependence on nuclear energy to offset the energy crisis in the country, the Indian government entered into an agreement with the government of USA called the 123 agreement. This agreement aims to assuage greater cooperation between the two countries in the field of nuclear technology.

Indian Scenario

India has the fifth largest generation capacity in the world with an installed capacity of 152 GW as on 30 September 2009, which is about 4 percent of global power generation. The power sector is high on India's priority as it offers tremendous potential for investing companies based on the sheer size of the market and the returns available on investment capital. Almost 55 per cent of this capacity is based on coal, about 10 per cent on gas, 26 per cent on hydro, approximately 5 per cent on renewable sources, about 3 per cent on nuclear and 1 per cent on diesel.  India had been traditionally depending on thermal power as a major source of power generation, which constitutes about 65% of current capacity. Balance is contributed by Hydel power (26%), Nuclear (3%) and Renewable energy (6%).

The Indian government has set ambitious goals in the 11th plan for power sector owing to which the power sector is poised for significant expansion. In order to provide availability of over 1000 units of per capita electricity by year 2012, it has been estimated that need-based capacity addition of more than 100,000 MW would be required. This has resulted in massive addition plans being proposed in the sub-sectors of Generation Transmission and Distribution.