Power sector – India is growing fast to cater to the needs of 1.4 billion Indians. Below are some of the key numbers about the sector.
A 1 GW power plant operating at full capacity generates around 8.76 Billion units implying that the current capacity is around 3872 Billion units. This is assuming 100% capacity across all power producing plants. Generally solar operates at less than 25% capacity and wind and hydro also operate at much lower capacity.
This leads to overall capacity being around 2000-2500 Billion units. Currently India is consuming around 1600 Billion units.
If we benchmark this to the top 10 in the world, following is the list
India is the third highest consumer of power but per capita wise, India is still lowest in the top 10 countries. The second lowest country being Brazil which is 2 times per capita consumption of power and China being around 5 times that of India.
If India has to be amongst the most industrialized countries with the largest population in the world, the power consumption in India must rise to at least 3 times the current size (assuming that India comes to half of China per capita consumption today; there is also a 7% CAGR growth of power need in the world.)
This implies that the need for power in India is going to grow multifold. The key challenge the sector faces is also the low ROE and ROCE as well as risk of payment defaults.
To address this the government has continually pushed reforms to ensure that the thirst of power in the country does not go unquenched and hence power sector – India will see a rapid growth. For more industry analysis – click here.
