Presently, India exports electricity to Nepal, Bangladesh and Myanmar, while India imports power from Bhutan. However, sometimes India also exports power to Bhutan during lean hydro season.

The Inter State Transmission System (ISTS) in India has been planned to facilitate smooth transfer of power across state and regional boundaries all over the country. In this process, robust National Grid has been established leading to One Nation - One Grid - One Frequency, facilitating power transfer from the resource rich areas to major load centers of the country with reliability and security.

As on 31 October, 2019, the installed generation capacity in the country has been around 3,64,960 Mega Watt (MW).

After the enactment of Electricity Act 2003, setting up of a power plant is a delicensed activity. As such proposals for setting up of New Thermal Power Projects are not being received in Ministry of Power or Central Electricity Authority (CEA).

The Government of India launched Pradhan Mantri Sahaj Bijli Har Ghar Yojana - SAUBHAGYA in October, 2017 with the objective to achieve universal households electrification by providing last mile connectivity and electricity connections to all households in rural and all poor households in urban areas across the country.

The Prime Minister has launched the Pradhan Mantri Sahaj Bijli Har Ghar Yojana, or Saubhagya scheme. The aim of this scheme is to provide power to all homes. The Pradhan Mantri Sahaj Bijli Har Ghar Yojana aims to provide power connections to all the estimated four crore households which currently did not have a power connection. The outlay for this scheme would be over INR 16320 crore. These connections would be provided free of cost.

Government of India have issued advisories to the States in 2019 to draw up a road map for switching over to Smart meters, in prepaid mode, over a period of next three years.

The Union Cabinet has approved a new scheme - Ujwal DISCOM Assurance Yojna (UDAY). UDAY provides for the financial turnaround and revival of Power Distribution companies (DISCOMs), and importantly also ensures a sustainable permanent solution to the problem.

There are several reasons for Aggregate and Commercial losses, which include Overloaded Lines/Transformers, use of equipment like lines/transformers having high technical losses by design, Low Power Factor, Low HT/LT Ratio, lengthy lines, faulty Meters (Slow/Not working), power theft, billing inefficiencies, collection Issues like inadequate modes/ inconvenient collection timings etc.

Government of India launched Integrated Power Development Scheme (IPDS) in December, 2014, for extending financial assistance against capital expenditure to address gaps in the power sub transmission and distribution networks in urban areas.

Discom losses are the Aggregate Technical & Commercial (AT&C) losses which reflects the transmission and distribution losses (T&D losses) and billing & collection efficiency of Distribution Companies.

The total Outage Losses due to water shortage reported by the stations in the year 2017-18, up to February, 2018, are about 3400 Million Units (MU), which is about 0.38% of total coal and lignite based generation during the period. Last year, in 2016-17, the total losses were 9565.2 million units.

The Union Cabinet approved for the signing of Memorandum of Understanding between Central Electricity Authority, India and Japan Coal Energy Centre, on Japan-India cooperation for Efficiency and Environmental Improvement for Sustainable, Stable and Low-Carbon supply of Electricity.

Indian Power System is divided into five regions - Northern Region, Southern Region, Eastern Region, Western Region and North Eastern Region (NER). The inter-regional (IR) transmission links between regions enable smooth flow of power from surplus regions to deficit regions.

At present all the five regional grids are interconnected through synchronous links forming one Nation, one Grid, one frequency, one market.

Inter-Regional Power Capacity

The inter-regional power transmission capacity of the National Grid is 99,050 MW (as on March 2019).

Power Transmission System in India

The transmission systems that are in place in the country consist of Inter-State Transmission System (ISTS) and Intra State Transmission System (IntraSTS).

Since January 2011, ISTS transmission schemes, are being implemented either through the Tariff based Competitive Bidding (TBCB) process or under cost-plus mechanism with Regulated Tariff Mechanism (RTM), in accordance with provisions of the Tariff Policy. Accordingly, the ISTS are developed either by POWERGRID or by the successful bidder in case of TBCB projects. POWERGRID also participates as bidder for TBCB projects.

The Intra-State Transmission System is generally developed by State Transmission Utilities or Intra-state transmission licensees in a State.

The volume of electricity transacted through Power Exchanges has increased at an annual growth rate of 34% during 2008-09 to 2018-19, whereas the weighted average price of the electricity transacted through Power Exchanges has declined from Rs. 7.49/kWh in 2008-09 to Rs. 4.26/kWh in 2018-19.

Year Volume of Electricity (BU) Weighted Average Price (Rs./kWh)
2008-09 2.77 7.49
2009-10 7.19 4.96
2010-11 15.52 3.47
2011-12 15.54 3.57
2012-13 23.54 3.67
2013-14 30.67 2.90
2014-15 29.40 3.50
2015-16 35.01 2.72
2016-17 41.12 2.50
2017-18 47.70 3.45
2018-19 53.52 4.26

As per the Sections 66 of Electricity Act, 2003, the Appropriate Commission shall endeavour to promote the development of a market (including trading) in power. The Power exchange is a Market Infrastructure Institution that provides a fair and competitive market place for trading in electricity.

There are two power exchanges in India, which were set up in the year 2008.

  1. Indian Energy Exchange Limited (IEX)
  2. Power Exchange of India Limited (PXIL)

All Discoms, Generation utilities including IPPs, Traders and Open Access consumers spread across the country, actively participate in the exchanges to meet their power requirements. A robust payment security mechanism adopted by the Power exchanges has led to no default or delay in payment.

Power Exchanges have also played key role in supporting revival of stressed thermal power plants (without PPAs) by providing them a platform to sell power though Power exchanges. Competitive price discovery takes place at the power exchanges in India. The power exchange transactions are around 3.5% to 4% of total generation.

Presently, India is exporting power to Bangladesh, Nepal and Myanmar.

1. India - Bangladesh

India is currently supplying 660 MW power to Bangladesh and it would increase the same by 840 MW after completion of additional transmission links.

2. India - Nepal

India is currently supplying 465 MW power to Nepal and it would further increase it by 310-410 MW with the operation of 132 kV D/c Dhalkebar-Muzzafarpur line at 400 kV.

3. India - Myanmar

India is supplying about 2-3 MW of power from Manipur (India) to Myanmar through 11 kV transmission line from Moreh in Manipur (India) to Tomu town in Myanmar.

Year-wise Export of Electricity

Countries Export of Energy in MUs
2015-16 2016-17 2017-18
Nepal 1469.59 2021.21 2388.96
Bangladesh 3654.40 4419.61 4808.83
Myanmar Nil 3.23 5.07

According to Rural Electrification Policy 2006, a village is declared electrified if:

  1. Basic infrastructure such as Distribution Transformer and Distribution Lines are provided in the inhabited locality as well as the Dalit Basti/hamlet where it exists.

  2. Electricity is provided to public places like schools, Panchayat Office, Health Centres, Dispensaries, Community Centres, etc.

  3. The number of households electrified should be at least 10% of the total number of households in the village.

The Ministry of Environment, Forest and Climate Change (MoEF&CC) notified new environmental norms for Thermal Power Plants on 7 December 2015 and 28 June 2018.

1. TPPs (units) installed before 31st December, 2003

Particulate Matter: 100 mg/Nm3

Sulphur Dioxide (SO2): 600 mg/Nm3 for units less than 500 MW capacity; 200 mg/Nm3 for units 500 MW and above capacity

Oxides of Nitrogen (NOx): 600 mg/Nm3

Mercury: 0.03 mg/Nm3 (for unit size 500 MW and above)

2. TPPs (units) installed after 31st December 2003 and upto 31st December 2016

Particulate Matter: 50 mg/Nm3

Sulphur Dioxide (SO2): 600 mg/Nm3 for units less than 500 MW capacity; 200 mg/Nm3 for units 500 MW and above capacity

Oxides of Nitrogen (NOx): 300 mg/Nm3

Mercury: 0.03 mg/Nm3

3. TPPs (units) installed from 1st January 2017

Particulate Matter: 30 mg/Nm3

Sulphur Dioxide (SO2): 100 mg/Nm3

Oxides of Nitrogen (NOx): 100 mg/Nm3

Mercury: 0.03 mg/Nm3

To ensure uninterrupted power supply position in the country, a phased implementation plan (to be implemented before 2022) for installation of Flue Gas De-Sulphurization (FGD) in plants for a capacity of 1,61,402 MW (414 Units) and upgradation of Electrostatic Precipitator in plants for a capacity of 64,525 MW (222 units) was prepared by Central Electricity Authority (CEA) in consultation with the stakeholders and this plan was submitted to MoEF&CC on 13 October, 2017. The Central Pollution Control Board (CPCB) has issued directions to Thermal Power Plants to ensure compliance as per the plan prepared by CEA.

Four UMPPs - Sasan in Madhya Pradesh, Mundra in Gujarat, Krishnapatnam in Andhra Pradesh and Tilaiya in Jharkhand have been awarded to the successful bidders so far. Mundra and Sasan UMPP have been fully commissioned.

The allocation of Power from UMPPs is decided by the Central Government in consultation with the States Governments. Up to 50% power is allocated to lead procurer i.e. the state in which UMPP is located. Further, power allocation is based on location of project in particular region, power deficit, availability of transmission infrastructure and equity contribution in Special Purpose Vehicle (SPV), proportionate to power allocation to that particular state, etc.

1. Sasan UMPP, Madhya Pradesh

(6x660 MW)

Sasan in District Singrauli.

Project awarded and transferred to M/s. Reliance Power Ltd. on 07.08.2007. Project is fully commissioned.

Reliance Power Limited consequent upon cancellation of the Chattrasal coal block by MoC has filed a writ petition No. WP (C) 7334 of 2015 in Delhi High Court. The case is sub judice. However, the plant is operational.

2. Mundra UMPP, Gujarat

(5x800 MW)

Mundra in village Tundawand in District Kutch, Gujarat

Project awarded and transferred to M/s. Tata Power Ltd. on 24.04.2007. Project is fully commissioned.

3. Krishnapatnam UMPP, Andhra Pradesh

(6x660 MW)

Krishnapatnam in District Nellore, Andhra Pradesh

The Project awarded and transferred to M/s. Reliance Power Ltd. on 29th January, 2008.

The developer has stopped the construction work at the project site citing new Regulation of coal pricing in Indonesia. The procurers have issued termination notice. The matter is subjudice.

4. Tilaiya UMPP, Jharkhand

(6x660 MW)

Near Tilaiya village in Hazaribagh and Koderma Districts, Jharkhand

Project awarded and transferred on 7th August, 2009 to M/s Reliance Power Ltd (RPL).

The developer, Jharkhand Integrated Power Ltd (JIPL, a subsidiary of RPL), has issued notice of termination of Power Purchase Agreement (PPA) on 28.04.2015 citing non transfer of land to the developer by Jharkhand Government.

Jharkhand Urja Vikas Nigam Ltd. (the Lead procurer) on behalf of all the Procurers has taken over JIPL on 16.05.2018 from RPL. MoC has also been requested to transfer/reallocation of the coal blocks to Jharkhand Infrapower Ltd.

5. Kakwara UMPP, Bihar

A site at Kakwara in Banka Distt has been identified for setting up of UMPP in Bihar.

The likely cost of project would be around Rs. 30,000 Crores.

The Government of India has decided in-principle for strategic sale of its 52.63% holding in Rural Electrification Corporation (REC) Ltd. to Power Finance Corporation (PFC) Ltd.

This would help them to achieve integration across the Power Sector value chain, evoke better synergies, create economies of scale, enhance capability to support energy access and energy efficiency, and may also reduce the cost of power financing. Adequate precautions have been envisaged to maintain their Capital levels.

A High Level Empowered Committee (HLEC) was constituted by the Government on 29 July, 2018 to address the issues of Stressed Thermal Power Projects, headed by Cabinet Secretary with representatives from Ministry of Railways, Ministry of Finance, Ministry of Power, Ministry of Coal and the lenders having major exposure to the power sector.

1. Recommendations for Coal allocation / supply

1.1. Coal Linkage for short-term PPA: Linkage coal may be allowed to be used against short term PPAs and power be sold through Discovery of Efficient Energy Price (DEEP) portal following a transparent bidding process.

1.2. Coal Supply in case of termination of PPAs due to Payment default by DISCOMs: A generator should be able to terminate PPA in case of default in payment from the DISCOM with the facility to use linkage coal for short term PPAs for a period of maximum of 2 years or until they find another buyer of power under long/medium term PPA, whichever is earlier.

1.3. Procurement of bulk power by a nodal agency against pre-declared linkages: A nodal agency may be designated which may invite bids for procurement of bulk power for medium term for 3 to 5 years in appropriate tranches, against pre declared linkage by Coal India Limited (CIL).

1.4. PSU to act as an aggregator of power: NTPC can act as an aggregator of power, i.e., procure power through transparent competitive bidding process from such stressed power plants and offer that power to the DISCOMs against PPAs of NTPC till such time as NTPC's own concerned plants/units are commissioned.

1.5. Increase in quantity of coal for special forward e-auction for power sector: Ministry Of Coal may earmark for power, at least 60 per cent of the e-auction coal, and this should be in addition to the regular coal requirement of the power sector.

1.6. Linkage to be provided at notified prices without bidding: The generator should be required to bid only once, for the procurement of PPA and linkage should be granted at notified price without any further bidding, to the extent of incremental coal production.

1.7. Non-lapsing of short supplies of coal: If there is a shortfall in the supply of coal and it is attributable to the Ministry of Coal or Railways; such shortfall need not lapse and be carried over to the subsequent months up to a maximum of three months.

1.8. ACQ to be determined based on efficiency: Upper ceiling for the ACQ/MW may be prescribed by the CEA on the basis of efficiency parameters and irrespective of the capacity and actual consumption of that plant, the coal may be supplied on that basis.

2. Recommendations to facilitate sale of power of the stressed power plants

2.1. Retirement of old and inefficient Plants: Old and high heat rate plants not complying with new environment norms may be considered for retirement in a phased and time bound manner at the same time avoiding any demand/supply mismatch.

3. Recommendations on Regulatory & DISCOM payment issues

3.1. Mandatory payment of Late Payment Surcharge (LPS): Late Payment Surcharge be mandatorily paid in the event of delay in payment by the DISCOM.

3.2. Payment Security mechanism for IPPs: PFIs providing the Bill Discounting facility may also be covered by TPA i.e. in case of default by the DISCOM, the RBI may recover the dues from the account of States and make payment to the PFIs.

4. Other Recommendations

4.1. Cancellation of PPA/ FSA/ LTOA post NCLT scenario: PPAs, FSA and LTOA for transmission of power, EC/FC clearances, and all other approvals including water, be kept alive and not cancelled by the respective agencies even if the project is referred to NCLT or is acquired by any other entity. All of these may be linked to the plant and not the Promoter.

4.2. Cancellation of PPA for non-compliance of COD: In case there is a delay in the commissioning of a project, the DISCOMs may be advised not to cancel the PPAs signed with the Generator and the same be kept on hold for a certain period of time.

4.3. Low utilization of Gas plant capacity due to paucity of natural gas: In order to revive gas based power plants, Ministry of Power and Ministry of Petroleum & Natural Gas may jointly devise a scheme in line with the earlier e-bid RLNG Scheme (supported by PSDF).

It is believed that with the implementation of the recommendations outlined in the report, issues affecting many of the stressed thermal power projects are likely to get resolved and the investments made can be put to productive use.

Year Generation from Conventional Sources Generation from Renewable Sources Total Generation
(BU) (BU) (BU)
2008-09 723.794 27.860 751.654
2009-10 768.429 36.947 805.376
2010-11 811.143 39.245 850.387
2011-12 876.887 51.226 928.113
2012-13 912.057 57.449 969.506
2013-14 967.150 53.050 1,020.200
2014-15 1,048.673 61.719 1,110.392
2015-16 1,107.822 65.781 1,173.603
2016-17 1,160.141 81.548 1,241.689
2017-18 1,206.306 101.839 1,308.146

Central Electricity Authority (CEA) has issued an advisory dated 17 Nov 2017 to all the coal based power plants to use 5-10% of agro residue based pellets along with coal. CEA has also issued technical specification for pellets or torrefied pellets.

In line with above advisory, NTPC has floated tender for procurement of 1000 metric tonnes per day (MTPD) of agro residue based pellets or torrefied pellets for NTPC Dadri. Out of total requirement of 1000 MTPD, purchase order for 200 metric tonnes per day of agro residue based pellets or torrefied pellets has been placed to three companies with supply duration of 2 years.

As per NTPC, use of farm stubble in its power plants will increase the cost of power generation. The increase in variable charge of electricity will depend on difference in price of biomass and coal, increase in heat rate and increase in auxiliary power consumption. The increase in fixed charges will depend as per additional capital expenditure required for biomass material handling infrastructure.

As per estimate of Central Electricity Authority (CEA), 1000 TPD (tonnes per day) of biomass pellets have the potential to generate 65 MW of power or 1.56 MU of electricity on daily basis when fired with coal in a coal fired power plant.

A total of 14305 MW gas based power generation capacity is stranded in the country due to non-availability of domestic gas.

Empowered Group of Ministers (EGoM) on pricing and utilization for natural gas under New Exploration and Licensing Programme (NELP) recommended allocation of KG D6 gas to Power sector.

S. No. Name of Projects Sector Developer Installed Capacity (MW) State
15 PRAGATI CCGT-III S Pragati Power Corporation
17 DHUVARAN CCPP(GSECL) S Gujarat State Electricity Corporation Ltd 112 GUJARAT
18 UTRAN CCPP(GSECL) S Gujarat State Electricity
Corporation Ltd
19 PIPAVAV CCPP S GSPC Pipavav Power
Company Ltd
20 DHUVARAN CCPP S Gujarat State Electricity Corporation Ltd 376.3 GUJARAT
21 HAZIRA CCPP EXT S Gujarat State Energy
Generation Ltd
22 VATWA CCPP (retired in 2015-16) P Torrent Power 100 GUJARAT
23 ESSAR CCPP P Essar Power 300 GUJARAT
24 UNOSUGEN CCPP P Torrent Power 382.5 GUJARAT
25 DGEN Mega CCPP P Torrent Power 1200 GUJARAT
P Pioneer Gas Power Ltd 388 MAHARASHTRA
  TOTAL     14305  

Nine states achieve 100% household electrification under Saubhagya; total 16 states have 100% household electrification now. More than 2 crore electricity connections released under Saubhagya and 100 percent village electrification achieved under DDUGJY. Energy deficit reduced to almost zero and India emerges as net exporter of electricity to Nepal, Bangladesh and Myanmar.

Electricity is in the concurrent list and providing electricity connection to consumers is the responsibility of the States and distribution companies. However, the Central Government provides assistance to States under Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) for creation of necessary infrastructure for rural electrification. Government of India has launched Pradhan Mantri Sahaj Bijli Har Ghar Yojana - "Saubhagya" to achieve universal household electrification.

NTPC Vidyut Vyapar Nigam Limited (NVVN), a wholly owned subsidiary of NTPC Ltd., a power trading company has emerged as the lowest bidder for supply of 300 MW power to Bangladesh for 15 years.

According to Rural Electrification Policy 2006, a village is reported as electrified, if

  1. basic infrastructure such as Distribution Transformer and Distribution Lines are provided in the inhabited locality as well as the locality inhabited by weaker sections of the society/hamlet where it exists;

  2. electricity is provided to public places like Schools, Panchayat Office, Health Centres, Dispensaries, Community Centres etc.; and

  3. the number of households electrified should be at least 10% of the total number of households in the village.

The Government of India have targeted to electrify all remaining unelectrified households, across the country including Uttar Pradesh, by 31st March, 2019 under Pradhan Mantri Sahaj Bijli Har Ghar Yojana- Saubhagya and supplemented by Deen Dayal Upadhayaya Gram Jyoti Yojana.

The Government has taken several initiatives to improve the performance in major infrastructure sectors. Five major initiatives taken in the power sector are given below.

CERC (Central Electricity Regulatory Commission) on 17 February, 2014 has replaced the UI (Unscheduled Interchange) Regulation 2009 with Deviation settlement mechanism regulation 2014 in order to strengthen the grid and improve grid stability. This step was taken to ensure that situations of grid failure like that of 30 & 31 July, 2012 will not happen again.

The grid failure has presented a case where some states were using the UI as a trading platform; The grid failure states like Haryana, U.P. were overdrawing heavily whereas states like Rajasthan & Punjab were under drawing from their schedule resulting in frequency variation in the specified range and at the same time making the grid unstable, thus resulted in grid failure.

At the end of financial year 2014, India had 243 GW of installed power generating capacity. 69.2% of it is based on thermal power projects, mostly dominated by coal based power stations.

As of 31 March, 2014, the total capacity of coal based thermal power plants was 145.3 GW (59.8% of the total). This capacity is aggregate of more than 140 thermal power stations spread across the nation mainly in the eastern, western and southern regions.

In most of the states, the allocation from Central Generating Stations is less than the demand of the state. Electricity is a concurrent subject. It is the responsibility of the State Government to arrange power from various sources - state’s own generation, power exchanges, other states to meet the requirement of the state.

There are two power exchanges in India - Indian Energy Exchange (IEX) and Power Exchange India Limited (PXIL), where electricity is being traded. The electricity prices are discovered on Day Ahead Market (DAM) of these power exchanges in every 15 minutes time block. These prices fluctuate in every time block, leading to fluctuations in a day, depending upon the electricity demand and supply position in the market at any given point in time. 

The Government of India has enacted the Electricity Act, 2003 to consolidate the laws relating to generation, transmission, distribution, trading and use of electricity and generally for taking measures conducive to development of electricity industry and for protecting the interest of consumers. Reform is an ongoing process and hence the amendments to Electricity Act are being carried out as and when required after due consultation with various Stakeholders.

The capacity of transmission lines depends on various factors like voltage level, conductor configuration, line length, inter-connection arrangement etc. As on 28 February 2018, a total of 3,87,383 ckm of transmission lines (220 kV and above) exists in India.

Power Finance Corporation (PFC) has sanctioned an amount of Rs.1,77,212 crores as financial assistance to State Power Utilities for strengthening of Infrastructure during the years from 1 April, 2014 till 31 December, 2017. Conditions of financing depends upon financial viability and eligibility criteria.

The Government of India has launched Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) to address the challenges of rural electrification. Apart from implementation of village electrification, the scheme includes feeder separation, augmentation and strengthening of sub-transmission and distribution system. It also envisages close monitoring at Central level through inter-Ministerial Monitoring Committee, at State Level Standing Committee (SLSC), headed by Chief Secretary and at the District level, through DISHA.

The Southern Region (SR) is connected with the North-East West Region (NEWR) through various inter-regional AC links at 220 kV, 400 kV, 765 kV level and HVDC link. With the commissioning of new transmission lines, the grid connectivity upstream and downstream of the main NEWR-SR corridor has further strengthened.

The State of Arunachal Pradesh is managed by two government departments - Department of Power (DoPAP), responsible for managing the transmission and distribution systems and Department of Hydro Power Development (DHPD), responsible for management and development of hydro power plants in the State. Arunachal Pradesh State Electricity Regulatory Commission (APSERC) is constituted as a one-member body designated to function as an autonomous authority responsible for regulation of the power sector in accordance with the provisions of Electricity Act, 2003.

The existing allocated capacity including central sector allocations for DoPAP stands at 210 MW which includes 67 MW from the State Sector (DHPD & APEDA) projects. Since all the State Sector projects and most of the Central Sector projects are hydel, the State faces power crunch during lean hydro periods.

DoPAP, responsible for the transmission function in the State has 3 intra-state transmission lines and 7 sub-stations at 132 kV and above level with an installed capacity of 167 MVA.

Present Status

As of October 2017, Arunachal Pradesh had a total installed power generation capacity of 277.96 MW. Out of these central utilities contributed 168.97 MW, private utilities contributed 4.29 MW & state utilities contributed 104.61 MW.

Renewable energy in conjunction with hydropower are the major sources of electricity generation in the state & contributed around 108.99 MW & 97.45 MW to the installed capacity of the state, respectively.

In May 2017, UJAAS received a letter of intent from Arunachal Pradesh Energy Development Agency to design, supply, install, test and commission a 200 kwp-Grid Connected Solar PV Plant at State Assembly Building in Itanagar.

Arunachal Pradesh’s environment ministry panel has approved Nyamjang Chu hydropower project worth US$ 1.06 billion, in the Tawang region of Arunachal Pradesh. Once built, the plant will produce 780 MW of electricity.

Dibang project in Arunachal Pradesh has received the government's approval for diversion of land. A 3,000 MW hydel project will be constructed by NHPC (National Hydroelectric Power Corporation), and is expected to get completed by the end of 2019.