India has been witnessing an unprecedented economic growth and is catching up with the developed countries at a fast pace. But to sustain this growth rate over a period of time, it needs infrastructure and more importantly, power. With the opening up of the economy and the resulting economic boom, power sector has turned into both a cause of concern and a gold mine of opportunity. Concern because it can well be India’s Achilles’ heel and slow down or even pull back the growth rate. Globally, the country is the world’s sixth largest energy user comprising about 3.3 % of the overall global energy expenditure per year. In spite of its extensive yearly energy output, Indian power sector is a regular importer of energy because of the huge disparity between demand and supply. The ministry of power has set for itself an ambitious goal of adding 100000 MW capacity by 2012 to bridge the gap. On paper it looks ambitious but is actually necessary to propel the country forward. The very fact that such an enormous quantity of power is required makes this an excellent opportunity for investors and private companies. In fact, the ministry’s vision translates into something around US $ 90 billion opportunity.

At the time of independence in 1947, the generating capacity of the country was 1,362 MW. It has multiplied to over 112,058 MW by the turn of the century. The existing production of per capita electricity in India is around 600 KWH per annum. The gross electricity production capability of the Indian power sector is placed at around 111 GW. A key portion of this generated electricity i.e. 78 GW or 70 per cent is thermal energy.

The market research report by RNCOS titled “Indian Power Sector (2006)” clarifies that, within 2004-05, the overall quantity of electricity expended per head in the country was 400 KWH. The industrial sector accounted for about 35.6% of the total expenditure. The domestic segment used up around 24.8% of the electricity. Consumption by the commercial and the agricultural sector stood at 8.1% and 22.9% individually. The normal per capita consumption came to about 355 KWH. According to the experts at RNCOS, “Along with economic growth and a reduction in the below the poverty level populace, the per capita electricity spending is sure to rise.”