P A R Y & Co
P A R Y & CO

Opportunities in Power Sector of India (Base Year 2008)

Power sector has to be tapped which is yet to be explored to its potential in India. At present the country is having 135,000 MW power generation capacities and seeking to add another 78,577 MW of generating capacity in the next five years (i.e. by year 2012). India has exploited only 25% of its hydropower potential till date. Wind Power today account for about 1% of total world power generation and has vast untapped potential, as it is a major renewable resource, which is thoroughly ‘green’ and environmentally benign.


Significant features of Power Sector of India (as on 2008)
  • Power generation capacity to be enhanced from present capacity of 1,35,000 MW to 2,13,000 MW by 2012.
  • Setting up of 12 Ultra Mega Power Projects (UMPP) within next five years under Public Private Participation scheme (PPP) and also allowed the state governments to revamp their own resources and to set up power projects in their respective states.
  • Each UMPP has a generating capacity of 4000 MW and will cost around Rs. 16,000 crore to set up.
  • The substantial part of the power generated is to be allocated to the state where the UMPP site is located. For ex. In the case of “Krishnapatnam UMPP”, Andhra Pradesh will get 1600 MW out of total generation capacity of 4000 MW.
  • Central Electricity Authority (CEA) is the apex power sector planning body that finalised the locations of the UMPP and other related matters and Power Finance Corporation (PFC) is the nodal agency responsible to implement it.
  • 100% FDI is allowed in Power Sector through automatic route.
  • No Income Tax on the Profits earned from the generation/distribution of Power.
  • At present PFC & REC (GoI undertakings) together account for 60% of money loaned to the Power Sector.
  • With new investment norms, competitive tariff bidding and likely productivity gains in generation, the power sector now looks at handsome returns of 25% or more.