Various Dimensions of the Indian Energy Sector - Daily Current Affair Article

Why in News?

The power market of the Indian Energy Exchange (IEX) has achieved a high level of 8,248.52 MU (million units) in March 2021. This is a testimony to the steady growth of India's energy sector.


  • Energy is one of the most important components of infrastructure, which is important for economic development and the welfare of nations. The existence and development of adequate infrastructure are essential for the sustained growth of the Indian economy.
  • India's electricity sector is the most diverse in the world. Sources of power generation range from traditional sources such as coal, lignite, natural gas, oil, hydroelectricity, and nuclear power to viable non-conventional sources such as wind, solar, and agricultural and domestic wastes.
  • Increasing economy, rising living standards have led to rapid demand for electricity in the country and it is expected to increase in the coming years.

The energy market in India

  • India needs energy for sustainable economic growth. The Indian government's focus on achieving 'power for all' has accelerated the capacity addition in the country. At the same time, competitive intensity is increasing both on the market and supply-side (fuel, logistics, finance, and manpower).
  • By 2022, solar power is estimated to contribute 114 GW, followed by 67 GW from wind power and 15 GW from biomass and hydropower.
  • The total installed capacity of power stations in India was 373.43 GW as of October 2020.
  • The Power Market of the Indian Energy Exchange (IEX) is the first and largest energy exchange in India to provide a nationwide, automated trading platform for the physical distribution of electricity, renewable energy certificates, and energy savings certificates. It is a publicly listed company with the 'National Stock Exchange' (NSE) and 'Bombay Stock Exchange' (BSE). It is regulated by the Central Electricity Regulatory Commission (CERC).
  • In December 2020, the Asian Development Bank (ADB) and the Government of India signed a $ 132.8 million loan to improve and improve the quality of electricity supplied to homes, industries, and businesses in Meghalaya.
  • In March 2020, the central government signed a Rs 13,500 crore agreement to end strategic sales at Kamarajar Port Limited, THDC India Limited, and North Eastern Electric Power Corporation Limited (NEEPCO).

Challenges of Indian Energy Sector

  • Majority (about 53.4%) of India's energy supply is dependent on coal which is a factor of pollution. Although the government is making rapid efforts in this field.
  • State power distribution companies of India are at a loss. In the financial year 2019-20, the total debt of discoms reached Rs 3.84 lakh crore.
  • Despite many efforts by the government, currently only 10% of the consumers in the country are supplied electricity by the private sector, most of it is limited to the urban areas.
  • There has been a sharp decline in electricity consumption [March (-8.7%), April (-23.2%), May (-14.9%), and June (-10.9%) due to the shutdown of industrial activities due to the Corona epidemic.

Government's efforts to improve the power sector

The Government of India has identified the power sector as a major area of focus to promote sustained industrial development. Some initiatives by the government to promote the Indian power sector are as follows:

  • According to the Central Electricity Authority (CEA) estimates, the share of renewable energy generation will increase from 18% to 44% by 2029–30, while thermal is expected to decrease from 78% to 52%.
  • The government announced a plan to set up an inter-ministerial committee under NITI Aayog to pursue research and studies on energy modeling.
  • 111 lakh crore will be spent under the National Infrastructure Pipeline for the financial year 2019-25. 24% capital expenditure is estimated for the energy sector during FY 2019-25.
  • In the Union Budget 2020-21, Rs 15,875 crore has been allocated for the Ministry of Power.
  • Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya) was launched by the Government of India to achieve universal household electrification by March 2019.
  • Ujjwal Discom Assurance Yojana (UDAY) was launched by the government to encourage the operational and financial transformation of state-owned power distribution companies (DISCOMS).

India's global position in the energy sector

  • In May 2018, India ranked fourth in the Asia Pacific region out of 25 countries in terms of overall energy use.
  • India was ranked fourth in wind energy, fifth in solar energy, and fifth in renewable energy installed capacity as of 2018.
  • India ranked sixth in the list of countries to invest significantly in the US $ 90 billion in clean energy.
  • India is the only country among the G20 nations which is in a position to achieve the goals under the Paris Agreement.

The conclusion

  • Energy is constantly needed to achieve India's growing young population and economic growth. The Government of India has released its roadmap to achieve 227 GW of capacity in renewable energy (including 114 GW of solar power and 67 GW of wind power) by 2022 which will support India's clean energy supply. The policy of India at this time is to achieve the energy goals without putting too much pressure on the environment and India is succeeding in it.
General Studies Paper 3
  • Economy
  • Infrastructure: Energy, Ports, Roads, Airports, Railways, etc.

Mains Question:-

  • The policy of India at this time is to achieve the energy goals without putting too much pressure on the environment and India is succeeding in it. Do you agree with the statement? Give your arguments in favor of the answer?