India is the third largest producer and third largest consumer of electricity in the world, with the installed power capacity of 344.69 GW as of August 2018. The country also has the fifth largest installed capacity in the world.

The government has target of capacity addition of around 100 GW under the 13th Five-Year Plan (2017-22). Wind energy is estimated to contribute 60 GW, followed by solar power at 100 GW by 2022. The target for renewable energy has been increased to 175 GW by 2022.

Evolution of Indian Power Sector

Before 1956

  • Electricity (Supply) Act 1948.
  • Establishment of semi-autonomous State Electricity Boards (SEBs).

1956 - 1991

  • Industrial Policy Resolution (1956).
  • Generation and distribution of power under state ownership.
  • Power losses, subsidies, infrastructure bottlenecks and resource constraints.

1991 - 2003

  • Legislative and policy initiatives (1991).
  • Private sector participation in generation.
  • Fast-track clearing mechanism of private investment proposals.
  • Electricity Regulatory Commissions Act (1998) for establishing Central and State Electricity Regulatory Commissions and rationalisation of tariffs.

After 2003

  • Electricity Act (2003).
  • National Tariff Policy (2006).
  • New renewable energy policy have been announced.
  • Amendments made in Electricity Act so as to create competition.
  • Implementation of Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY) and Integrated Power Development Scheme for rural and urban areas respectively.
  • Implementation of Ujwal DISCOM Assurance Yojana (UDAY) which would enable electrification to all villages and tracking it using the Grameen Vidyutikaran App.
  • Amendment in National Tariff Policy (2016) has been made, wherein government is focusing more on sustainable utilisation of renewable energy resources.

Power Generation

With electricity production of 1,201.543 BU in India in FY18, the country witnessed growth of around 55.72 percent over the previous fiscal year. Over FY10 - FY18, electricity production in India grew at a CAGR of 5.69 percent.


India has large reserves of coal. By the end of August 2018, total installed coal capacity in India stood at 196.10 GW. India’s proven natural gas capacity measures about 24.87 GW as on August 2018.


With a large swathe of rivers and water bodies, India has enormous potential for hydro power. As of August 2018, India has 45.46 GW of hydro power generating capacity.


Wind energy is the largest renewable energy source in India; projects like the Jawaharlal Nehru National Solar Mission (aims to generate 20,000 MW of solar power by 2022) are creating a positive environment among investors keen to exploit India’s potential. There are plans to set up four solar power plants of 1 GW each. As of August 2018, India has 70.65 GW of renewable energy capacity.


As of August 2018, India has 6.78 GW of net electricity generation capacity using nuclear fuels (across 20 reactors) and aims to increase it to 45 GW by 2020. With one of the world’s largest reserves of thorium, India has a huge potential in nuclear energy.