2020

INDIA’S
POWER
OUTLOOK

VOLUME 1 -
CURRENT STATE OF PLAY
Lead Researcher
Vrinda Gupta

Assisted by
Harneet Kaur, Kriti Sharma, Parul Babbar, Prince Malla, Sonam Sinha

Design and Layout

Priya Kalia

Design and Image Resources

Pexels.com, Pixabay.com, Freepik.com

Coordination
Geetika Singh, Srinivas Krishnaswamy and Raman Mehta

January, 2020
New Delhi, India

The views/analysis expressed in this report/document do not necessarily reflect the views of Shakti Sustainable Energy
Foundation (SSEF). SSEF also does not guarantee the accuracy of any data included in this publication nor does it accept
any responsibility for the consequences of its use.

The material in the report is based on data points and information that we believe to be reliable and adequately
comprehensive, but we do not take guarantee that such information is in all respects accurate or complete. Vasudha
Foundation does not accept any liability for any losses resulting from the use of this report.

The data pertains to the 30th November 2019, unless otherwise mentioned.
CONTENTS
1 Introduction
Ÿ Overview of India's power sector investments
2

Ÿ Snapshot of power sector investments globally

Ÿ India – Power Sector: A snapshot

2 Generation
Ÿ Recent trends in electricity mix and capacity addition
4

Ÿ Trends in import and export of electricity

Ÿ Generation tariff trends in India

3 Transmission
Ÿ Overview of trends in growth of India's transmission infrastructure
8

Ÿ Snapshot of recent developments in the Green Energy Corridor

4 Distribution
Ÿ Overview of India's peak and energy demand deficits
12

Ÿ Trends in AT&C loss trajectory

Ÿ Overview of performance of select electricity distribution utilities

5 Electricity Demand and Consumption

Ÿ Snapshot of recent electricity consumption patterns in India
16

6 Energy Access and Development 18

7 Environment Impact
Ÿ All India trend of emissions from public electricity generation
21

8 Other New Technology and Investment Trends

Ÿ Capital costs trends in selected energy- related sectors
22

Ÿ Trends in battery price pack

Bibliography
The Power Outlook Series developed by Vasudha Foundation with support from
Shakti Sustainable Energy Foundation provides an overview of the current status
of India's power sector with a focus on significant and emerging developments. This
series aims to develop a more informed understanding of the power sector and may
act as a tracking tool for stakeholders.

Volume 1 titled 'Current State of Play' focuses on the entire power sector value
chain and captures the key trends and transitions shaping the sector. It details the
focus areas and lists the policy implications under each sub-sector. Besides the
three sub-sectors (generation, transmission, and distribution), this volume also
looks at electricity demand, consumption, and development in an integrated
manner.
Introduction 1
India's growing population with an increasing per-capita energy
consumption and a conducive policy environment have consistently India's Power Sector
attracted investments into its power sector. In 2018, India's power Investments 2018
sector saw investments of US $35 billion in the generation sub-
sector led by renewable power generation, another US $20 billion in
the grid network led by transmission and approximately US $ 2 billion US $35
1
in battery storage . Although China accounted for more than a quarter Billion
of the world's power sector investment, its growth declined by 7%
between 2015 and 2018. India formed the second largest growing US $20
power market when compared with 2015 levels after the United Billion
States. Moreover, the power sector featured amongst the top ten
sectors attracting foreign investment in India with approximately US
$1.1 billion in 2018-192. The 2018-19 India Economic Survey3 further US $2
highlighted renewable energy (RE) investment plans (without Billion
transmission lines) of US $80 billion till 2022 and a cumulative
investment opportunity of around US $250 billion to achieve 175 GW
Generation Grid network Battery Storage
and 450 GW4 of RE capacity by 2022 and 2030 respectively.

Power sector investments by

major countries and regions, 2018 Generation Networks & battery storage

China
United States
European Union
Coal Transmission India
Gas & oil Distribution MENA
Nuclear Battery storage
SE Asia
Japan
Solar PV
Russia
Wind
SSA
Hydro
Brazil
Other RE
0 20 40 60 80 100 120 140 0 20 40 60 80 100 120 140
USD Billion (2018)

Source: World Energy Investment 2019, IEA5

The Indian Power sector has been evolving rapidly. It has come a long way from conventional generation, large energy deficits and a
low-performing grid by making efforts towards large-scale RE-based capacity addition, ~100% household electrification and
digitalisation of the power sector. The smarter grid is giving its consumers the ability to generate their own power and also manage its
consumption by adopting innovative demand side management programs.

Still, the sector continues to grapple with a large number of traditional issues such as high Aggregate Technical and Commercial
(AT&C) losses, non-cost reflective tariffs, old infrastructure and inefficient system level planning. Moreover, new developments such
as large RE growth and its intermittencies, significant baseload capacity addition, rapidly declining prices for solar and wind, sales
migration (via open access and captive), decentralization of power and massive household electrification efforts are bound to pose
newer challenges for the grid. Despite this, India is expected to emerge as the largest market for power sector investments in the next
decade.
2
THE POWER SECTOR INDIA
A Snapshot

Generation Transmission
365.98 GW (Gigawatts) 4,20,490 ckm (Circuit kilometers)
Total installed capacity Number of transmission lines

9,45,205 Mus (Million units) 9,49,923 MVA (Mega Volt-Ampere)

Overall generation (provisional values) Substation transformation capacity

84.4 GW 426 ckm*

Installed RE capacity (excluding large hydro) Number of transmission lines completed
i
under the Green Energy Corridor
129.8 GW
Total Installed RE capacity 770 MVA*
Number of transmission substations
56% completed under the Green Energy Corridor
Average thermal PLFs (provisional values)
(excluding gas-based plants) * Values taken from Tarang Dashboard, as on 27th December, 2019

Distribution Consumption
8,80,208 Mus ~2.6 Crores
Total energy requirement Number of households electrified
8,75,512 Mus 1,181 kWh
Total energy available Per capita electricity consumption
(provisional as on 2018-19)
1,83,804 MW
Total peak demand 42% (Industry sector as on 2017-18)
1,82,533 MW Percentage electricity share by the
Total peak met highest demand sector

21.35%**
Average AT&C loss
0.38 Rs/unit**
ACS - ARR gap
** Values taken from UDAY Dashboard, as on 24th December, 2019

I
https://pib.gov.in/Pressreleaseshare.aspx?PRID=1567817
3
 2 Generation
INDIA’S
INSTALLED
POWER CAPACITY
MIX WASTE TO ENERGY

(in GW) 0.14

COAL+LIGNITE 9.81
BIOMASS

203.95 RES
SOLAR
84.40 32.53

WIND

SM
ALL
37.28

-
HYD
NUCLEAR
GAS+DIESEL HYDRO

RO
25.45 4.65
45.40
6.78
Source: CEA monthly reports on installed capacity6

th
As on 30 November 2019, India had an installed power capacity of 365.9 GW, of which coal dominated with 56%, followed by RE at
23%, hydro at 12%, gas and diesel together at 7% and the remaining 2% consisting of nuclear energy. Amongst RE sources, the key
contributor was wind energy with a 10% share in total installed capacity, followed by solar energy (9%), biomass energy (3%), and
other RE sources (1%). More private sector participation (almost 50% of the installed capacity) and the 175 GW target of RE capacity
addition by 2022 gave a huge investment boost to the sub-sector. Globally, India ranks fourth in wind power, fifth in solar power and
fifth in renewable power installed capacity7.

Source-wise quarterly percentage capacity addition in India

From 2017 to 2019 Renewable energy,
led by solar power,
continues to expand
40.00 in India.
35.00
Capacity Addition (%)

30.00

25.00

20.00 Thermal
15.00 Solar
10.00
Wind
5.00

0.00 Other RES

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
-5.00 2 per. Mov.
Avg. (Solar)
2017 2018 2019

Source: CEA reports on installed capacity from 2017-20198

4
Ÿ Following the 175 GW RE announcement in 2015, large solar capacity additions were made from Q1 2017 to Q2 2018 with a
record of 14 GW of capacity within 18 months. The slowdown triggered from mid-2018, due to larger economic headwinds,
states expectations of lowest possible tariffs and disregard of the signed power purchase agreements. While the country has
commendably achieved almost 50% of the 175 GW target, setting up another 91 GW by 2022 could be an uphill task given the
current policy and market environment.
Ÿ During almost the same period from Jan'17 to May'19, almost 5.6 GW of old and conventional thermal power plants were retired
on account of increasing competition from RE sources, non buoyant demand, and uneconomic operation.

POWER CAPACITY MIX TRENDS

FROM 2014-15 TO 2019-20
IN INDIA DECLINING COAL AND RISING RE SHARE
IN THE OVERALL CAPACITY MIX

COAL GAS NUCLEAR HYDRO RE

2014-15 60% 9% 2% 15% 14%

2015-16 61% 8% 2% 14% 15%

2016-17 58% 8% 2% 14% 18%

2017-18 57% 8% 2% 13% 20%

2018-19 56% 7% 2% 13% 22%

2019-20 56% 7% 2% 12% 23%

Source: CEA reports on installed capacity from 2015-20199

The actual generation has also grown at par with the installed capacity at a CAGR of 6% from 1,110 BUs in 2014-15 to 1,376 BUs in
2018-19. While coal continues to dominate the capacity mix but it sees a declining year-on -year share in actual generation and
overall capacity mix.

5
 Trends of import and export in electricity in India
India became a net
8000
exporter of electricity
7000
for the first time in
6000
2016-17

Electricty (Gwh)
5000
4000
3000
Gross Electricity Import 2000
1000
Gross Electricity Export
0
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

Source: Energy Statistics 2019, MOSPI 10

Ÿ Over the past 10 years from 2008-09 to 2017-18, India's gross import of electricity decreased at CAGR of (-) 0.5%, (from 5,897
GWh in 2008-09 to 5,611GWh in 2017-18).
Ÿ The export of electricity increased from a negligible 58 GWh in 2008-09 to 7,203 GWh in 2017-18.
11
Ÿ During 2018-19, India imported 5,081 GWh of electricity annually from Bhutan and exported 2,813 GWh and 6,786 GWh to
Nepal and Bangladesh respectively.

GENERATION TARIFF TRENDS IN INDIA

India's solar and wind tariffs trajectory
SOLAR AND
WIND PRICES 14
12.16
A COMPARISON 12
8.79
10 8.37
7.27
Rs./kWh

8 6.57
6.03
6 4.90
Auctioned wind tariffs 4 2.87 2.72 2.5
Weighted Average Solar Tariffs 2
3 2.68 2.81
(Rs/kWh)
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Source: Data taken from Standing Committee on Energy (2016-17 to 2017-18), MNRE12 and India Wind Energy Association13
Vasudha Foundation Analysis

Solar prices have dropped by about 80% in India between 2010 and 2019. This has been possible because of a conducive policy
environment for the sector and incentives that provided investor confidence. Also, setting up of aggressive targets and
implementation of policies through streamlined efforts have favored faster implementation at lower costs.

COAL PRICES Power purchase cost of coal based thermal power plants
ANALYSIS (2009-10 to 2018-19)

Gradual rise in 4.08 4.06

3.84
per-unit coal 3.46 3.6 3.62 3.52
3.28
based power 2.99
2.77
purchase cost
Rs./kWh

Since 2009-10
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

Source: Data taken from various Discoms and Vasudha Foundation Analysis

6
 COAL, WIND AND SOLAR Tariff Trend for Coal, Solar and Wind (In Rs./ kWh)
A COST COMPARISON
5.5
5.0
4.5
4.0
3.5
3.0

Rs/kWh
2.5
2.0
1.5
1.0
0.5
0.0
2016-17 2017-18 2018-19

Average Coal Tariff 4.06 3.62 3.52

Solar Highest Bid Weighted Average Tariff 4.79 3.47 2.91

Solar Lowest Bid Weighted Average Tariff 2.97 2.47 2.44

Wind Highest Bid Tariff 3.46 3.43 2.83

Wind Lowest Bid Tariff 3.46 2.43 2.51

Source: Vasudha Foundation Analysis

In the past two years, record low-tariffs were discovered for both wind (Rs 2.43/unit) and solar (Rs 2.44/unit), whereas the coal prices
continued to hover around Rs 3.5/unit. Clearly, power generation prices are not going to be a hurdle for the accelerated deployment of
renewable energy in the country.

T
he Central Government continues to promote policy and regulatory efforts to achieve the 2022 target of 175 GW
of installed RE capacity. Some of these efforts include stronger compliance to revised renewable purchase
obligation (RPO) targets, waiver of inter-state transmission system (ISTS) charges and losses, solar -wind
hybrids and solar energy in agriculture, for example through the KUSUM (Kisan Urja Suraksha evam Uhaan
Mahaabhiyan) scheme. While RE will continue to play a significant role in future, it is important to recognize that a
smooth transition will depend on how specific regulatory and technical challenges associated with renewables are
addressed. Further, the energy mix needs to be balanced for efficient capacity utilisation. The huge tariff declines in
solar and wind are already posing competition to coal-based plants. Moreover, significant amounts of recent surplus
baseload capacity have already been added in previous years. If not managed efficiently, this can lead to some of these
thermal power plants becoming into non-performing assets (NPAs). This will further increase the financial burden of
the already debt laden distribution utilities.

7
Transmission 3
The transmission sub-sector has consistently grown to become one of the largest operational and integrated grids with huge
investments in high voltage lines and substations. This sub-sector is largely dominated by state utilities while the private sector
currently accounts for only 3-4% of the total transmission capacity.

CUMULATIVE YEAR-WISE GROWTH

OF TRANSMISSION LINES AND SUBSTATIONS

220 kV and above

1000 950
900
827
800 741
659
600 596
531
391 413 420
400 313 342 368
291
200

0
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20

Transmission Line ('000s Ckm) Substations ('000s MVA)

Source: National Power Portal 14

As on 30th November 2019, the Indian transmission system includes:

Ÿ 4,20,490 ckm of transmission network
Ÿ 9,49,923 MVA of transformation capacity
Ÿ 100,550 MW of national grid inter-regional capacity

Growth of India's transmission sector

between
FY 2014 to FY 2019
As on March 2014 As on March 2019 Addition CAGR

Inter-regional power transmission 33,950 99,050 65,100 "

capacity of national grid (MW)

All India power transmission 291,336 413,407 122,071 "

network (ckm)

Substation Transformation 530,546 899,663 369,117 "

capacity (MVA)

Source: CEA Executive Summary Reports, March (2014 and 2019)15

India's transmission network capacity grew at a CAGR of 11% between FY 2013-14 and FY2018-19. With regard to transmission
lines, it expanded at a CAGR of 7% by adding 122,071 ckm since March 2014. Only under the 12th plan period (2017-22) ,6,124 ckm
(till November 2019) of 800kV HVDC (high-voltage, direct current) transmission lines were constructed for the first time.
8
Voltage-wise

Transmission Lines (in Ckm) and Substations (in MVA)

transmission lines 200000

and substations
in progress 150000 152715

100000 96577
From Nov’19 to Mar’22 76800

50000 33230 35631

Transmission Lines (Ckm) 12019 8991.82 8570 7500 4000
3734 696
Substations (MVA) 0 1473 3676 364
400 220 765 <220 230 800 320 1200

Voltage Level (in kV)

Source: CEA monthly transmission report, November 201916

The graph above shows the voltage-wise transmission lines and substations which are planned from November 2019 to March
2022.. The maximum number of transmission lines and substations are planned at 400 kV and 220 kV since these voltages are
primarily used for bulk long-distance transmission.

GREEN ENERGY CORRIDOR

Accelerated investments in RE generation capacity needs to be matched with an equivalent investment in grid capacity
expansion. Hence, the focus of the transmission sub-sector is to ensure grid integration of large amounts of variable RE while
minimising integration cost.
Accordingly, the Green Energy Corridor was devised as a comprehensive scheme for large scale evacuation and integration of
175 RE capacity by 2022. Further POWERGRID, has set a capex target of US$ 7.7 billion over 2018-202117 to implement the
scheme. It is being implemented by the eight states of Tamil Nadu, Rajasthan, Karnataka, Andhra Pradesh, Maharashtra, Gujarat,
Himachal Pradesh and Madhya Pradesh which have a sizeable RE potential.
th
As per the Tarang Dashboard (on 27 December 2019), the total length of transmission lines and substation capacities to be
18
constructed under the Green Energy Corridor are 1,556 ckm and 22,742 MVA .

800
778 Green energy corridor
Transmission Lines (in ckm)

transmission lines
in progress
400 (in cKM)
300
228 250

0
Haryana Andhra Pradesh Himachal Pradesh Karnataka

Source: Tarang Dashboard (updated on 27th December 2019)19

Green energy corridor

7475
substations
8000
in progress
Substations Capacity

6000
(in MVA)
3218 3253.6
4000 2590
2070
2000 650 800 840 1000
25 100 250 470
0
Maharashtra Assam Rajasthan Uttar West Haryana Himachal Orissa Gujarat Madhya Karnataka Jammu Andhra
Pradesh Bengal Pradesh Pradesh & Kashmir Pradesh

Source: Tarang Dashboard (updated on 27th December 2019)20

9
TRANSMISSION NETWORK OF INDIA
Inter State Lines

Last Updated : May-2019

Source: Power Grid Corporation of India Ltd

10
W
hile the transmission system has matured extensively over many years, there are noteworthy challenges
that are impacting the grid integration of renewables. For instance, some of the wind developers in Gujarat
and Tamil Nadu continue to face uncertainties in getting access to the transmission network. It takes
around 36-40 months to build the required transmission capacity, but wind projects are expected to be completed
within 18 months of the project start date21. This has also resulted in low participation in some of the recent wind and
22
solar auctions conducted by Solar Energy Corporation of India Limited (SECI) . This can delay India's achievement of
it's wind capacity target.
Robust planning and state of the art modelling will be necessary to address the additional congestion and complexity
that the grid will experience with large quantities of intermittent RE share. Therefore, it is critical to enhance
coordination between states to lower the price of RE integration in an effective manner. Accordingly, the Ministry of
Power plans to set up 11 Renewable Energy Management Centres under the Green Energy Corridor, that will aid better
forecasting of RE generation and demand. Out of these, eight REMC have already been commissioned in 201923.
It is further critical to ensure that strengthening of the transmission infrastructure happens at the same pace of
24
announcement of the new tenders . However, the progress under the Green Energy Corridor has already been slower
25
than envisaged and its timely completion is critical towards meeting the 175 GW target.

11
 4 Distribution
The electricity distribution sub-sector is often considered to be the weakest link in the overall power sector value chain. It is currently
dominated by state power utilities with private sector participation only in the big cities. While it continues to battle serious
challenges, it has also seen some improvements in the last few years.
There has been a significant reduction in overall peak and energy demand deficits. The deficits reduced from as high as 9% in 2012-
13 to 0.7% and 0.5% peak and energy deficit as of November 2019. However, the deficit situation is higher in many states in the
northern, eastern and north-eastern regions in particular. There has also been a gradual decrease in aggregate AT&C losses from
~25% in 2012-13 to 21.35% in December 201926. Over the last few years, almost 25 states and union territories have adopted tariff
revision exercises leading to more than 50% reduction in the gap between the average cost of supply and average revenue realized
from 0.85/unit (on subsidy received basis) in 2012-13 to 0.38/unit in December 201927. Further, with the implementation of the
SAUBHAGYA (Pradhan Mantri Sahaj Bijli Har Ghar Yojana) scheme,all states reported electrification of all willing households except
ii 28
few in households in LWE affected Bastar region of Chattisgarh .

YEAR-WISE COMPARISON OF
Significant reduction
INDIA'S PEAK AND ENERGY
in peak and energy
deficits DEMAND DEFICITS (IN %)

10 9 8.7
8

6
4.5 4.2 4.7
3.6
4 3.2
2.1
1.6 2
2
0.7 0.7 0.8 0.6 0.7 0.5
0
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20

Peak Demand deficit (%) Energy Demand Deficit (%)

Source : CEA Annual Reports29

AT&C losses trajectory from

2012-13 to 2019-20 (in %)

As on 24th December 2019 30 25.48 25.72

22.62 23.98
25 22 21.35
18.72
20
15
10
5
0
FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19

ii
Left-wing extremism Source: PFC report on performance of state power utilities, CEA annual reports and UDAY Flyer 201930

12
 STATES AND THEIR
AT&C LOSSES
Almost 12 states have AT&C
A comparison losses higher than 25%
Global Standards ~8%31
>35%
AT&C Losses

25%-35%

15%-25%

<15%

0 1 2 3 4 5 6 7 8 9

Number of States
Source : UDAY dashboard32

The technical losses are largely due to aged infrastructure and inefficient systems. But a considerable portion of such losses are also
due to issues that are commercial in nature, including poor metering, billing and collection practices, electricity theft and ineffective
human resource planning practices.

RATING OF 41 PUBLIC DISTRIBUTION

14
UTILITIES ACROSS 22 STATES
Number of Discoms

12
10
8
6 2016-17
4
2 2017-18
0
A+ A B+ B C+ C
Level of operational and financial performance
Source: MOP Annual Integrated Ratings, October 201933

Significant improvement can be observed in the operational and financial performance of the distribution utilities between 2016-17
and 2017-18. The number of distribution utilities with high to very high performance (A+, A) more than doubles in 2017-18. A slight
decrease is also observed in the number of distribution utilities with low to very low performance (C+, C). Gujarat distribution utilities,
BESCOMiii , APEPDCLiv (Vishakhapatnam) and Uttarakhand distribution utility continues to be the better performers.

89,603
DISCOMS FINANCIAL POSITION
BEFORE UDAY 72,486 69,753
62,154 66,022
57,680 55,283
Subsidy Booked (in INR crores) 47,965 46,112

Subsidy Released (in INR crores) 36,885 36,089 36,423 36,128

30,009
25,771
Aggregate book losses on accrual basis (in INR crores)

2011-12 2012-13 2013-14 2014-15 2015-16

Source: PFC performance reports of state power utilities (2011-12 to 2015-16)34
iii
Bangalore Electricity Supply Company Limited
iv
Eastern Power Distribution Company of Andhra Pradesh Limited (India)
13
The distribution sub-sector is battling two main challenges - ensuring financial viability and providing universal access to all
households. The state subsidizes electricity for farmers and households which have resulted in mounting financial losses over
the years. The revenue gap is partly cross subsidized by the commercial and industrial consumers and in part by budgetary
support by the respective state Governments. Further, the Central Government has time and again initiated various bailout
packages for the state distribution utilities, the most recent one being UDAY (Ujwal Discom Assurance Yojana). The UDAY scheme
was launched in November 2015 for the operational and financial turnaround of the state distribution utilities. As per the recent
RBI report35, the total outstanding liabilities of State Governments under the UDAY scheme are expected to reach to 1.97 lakh
crore by March 2020 from 0.98 lakh crore in 2016.

The amount of debt taken under UDAY was the highest as compared to the other previous programs. While the large impact of
UDAY on the state finances was always known before; the impact of the future losses' to be taken over is highly dependent on the
operational and financial improvement of the distribution utilities. Hence, it is crucial for the regulators and state governments to
ensure that the improvement in performance of the electricity distribution sector is aligned as per the set targets.

UDAY REPORT AT A GLANCE As Per Uday Dashboard

on 24th December 2019
FINANCIAL AND OPERATIONAL
PARAMETERS
FINANCIAL

OPERATIONAL
Rs 2,32, 163 crores 100%
Bonds Issued Electricity access to
unconnected households
Rs 2,69,056 crores
Bonds to be issued 100%
Feeder metering (Urban)
21.35%
AT&C losses 100%
Feeder metering (Rural)
Rs 0.38/unit
ACS-ARR gap 87%
DT metering (Urban)
25 out of the 27 states
Tariff Revision Done 62%
DT metering (Rural)

5%
Smart metering (>500kWh)

4%
Smart metering
(>200-500 kWh)

82%
Feeder segregation

100%
Rural feeder audit

100%
Distribution of LEDs under
UJALA

14
I
n the wake of new developments on the generation and consumption side, there is an urgent need for the
distribution utilities to bring fundamental changes in their operations and functioning. With an uncertain demand
and higher small-scale distributed generation; the power planning will become even more complex and tricky. Due
to higher economic sense and better power quality, large consumers will move out of the grid. This will result in a
gradual reduction of the cross-subsidy pie available with the distribution utilities. Lastly, an increasing impetus on
quality of supply will further impact their finance and investments ability.
To address some of the above-mentioned issues; the Ministry of Power has already made the following headways:

Ÿ Additional reform measures to support the existing efforts under the UDAY scheme.
Ÿ A draft notification on separation of the carriage and content operations of existing distribution utilities.
Ÿ Focus on Direct Benefit Transfer (DBT) Scheme for better targeting of subsidies.
Ÿ Great efforts in smart metering and digitalization of processes.

15
Electricity Demand 5
and Consumption
Traditionally, the Indian power sector has been focused on the supply side by consistently adding new power plants, laying
transmission lines and upgrading distribution infrastructure. Nevertheless, power deficits and outages have never been non-existent
and the demand-supply gap still persists. This is due to unequal attention to demand-side analysis and consumption patterns.

Electricity demand and consumption, due to its dynamic nature, is complex to understand and comprehend. Many studies such as
the Electric Power Survey, India Energy Security Scenarios(IESS) tool and other independent studies have made an attempt to assess
electricity demand. But these have to be updated at defined intervals to incorporate the variability in demand and usage. Also, such
studies are critical for efficient planning and operations of the power sector.

SOURCE WISE ELECTRICITY CONSUMPTION IN 2017-18

1% 6%
TRACTIONS
AND RAILWAY

9% OTHERS* 24%
COMMERCIAL
DOMESTIC

INDUSTRY
AGRICULTURE

18%
42%

*Others include municipal street lighting, water pumping and others Source: Energy Statistics 201936

According to the Energy Statistics 2019, the industry sector has always been a predominant consumer of electricity within the
consumption matrix of India. Of the total consumption of electricity in 2017-18, the industry sector accounted for the largest share
(42%), followed by domestic (24%), agriculture (18%) and commercial sectors (9%) and the rest 7% by others. Despite significant
electrification and capacity enhancement, the overall electricity consumption increased at a nominal CAGR of 5% between 2013-14
to 2017-18. Moreover, the consumption mix remained unchanged for the same period indicating sluggish demand growth in the
residential and industrial sectors.

16
 ELECTRICITY CONSUMPTION,
GDP & POPULATION

Per Capita GDP Growth Rate/ Population Growth Rate (%)

8 7
IN INDIA (2014-18)
7 6.43
6

Electricity Per Capita Growth Rate (%)

6 5.53
Population is taken on a 5
calendar year basis 5 4.37
4
4
6.05 6.64 6.83 5.78 3
3 2.4
2
GDP Per Capita Growth Rate 2

Population Growth Rate 1 1

1.15 1.12 1.09 1.06
Electricity Per Capita Growth Rate
0 0
2014-15 2015-16 2016-17 2017-18
Year
Source: RBI, World Bank(2019), CEA(2019)37

The per capita consumption has increased at a simlar CAGR of 5% from 1,010 kWh in 2014-15 to 1,181 kWh in 2017-18; which is
v
only one-third of the world's average consumption . A comparative assessment of per capita electricity consumption with per capita
GDP and population growth rates shows the declining per capita electricity consumption with the decreasing per capita GDP and
population.

A
nation-wide electrification was achieved through SAUBHAGYA scheme. But the provision of an electricity
connection does not guarantee quality and reliability of power supply. Also, these new connections are in the
rural areas or for domestic consumers; who's tariff is either subsidized or free. Increasing the number of
supply hours to these connections might increase the overall electricity demand business for distribution utilities but
could be a loss making proposition. Hence, in order to avoid a catch 22 like situation, it is important to ensure metering
of all the connections whether its free or subsidized. This will help the distribution utilities to better manage and plan
their demand. Further, regulatory provisions should ensure cost -reflective tariffs or a direct transfer of state subsidy to
these consumers in case of subsidized tariffs to avoid any future losses on account of these new consumers.

v
https://www.ibef.org/download/power-Jan-2019.pdf

17
 6 Energy Access
and Development
Access to adequate, reliable, sustainable, and affordable modern energy services is essential for the socio-economic development of
a country. The Sustainable Energy for All (SE4All) initiative aims to achieve universal access to modern energy services for
vi
households, productive uses, and community applications, by 2030. Lack of affordable and clean energy (SDG7 ) poses barriers to
the attainment of community good health and well-being (SDG3) and quality education (SDG4).
Accordingly, access to reliable electrification can positively impact healthcare services, improve the availability of quality education
and generate livelihood opportunities. Although household access to modern energy has received increasing attention in the country,
access to energy for the community (productive and consumptive) needs to be emphasized and tracked closely.

Electricity Per Capita Consumption and

HDI Across Various Countries (2017)

14 1.00
Australia Germany United Kingdom
United States
Japan
0.90
12 12.60 Russian Federation
Brazil China 0.80
Indonesia
9.90 South Africa
10 0.70
India

8.10 Nepal Pakistan 0.60

Electricity Per Capita Consumption

8
7.00
6.80 0.50

HDI (2017)
(MWh/Capita)

6
0.40
5.00
4.60
4 4.00 0.30

2.50 0.20
2
1.00 0.10
0.90
0.60
0.20
0 0.00
Australia Germany United United Japan Russian Brazil China South Indonesia India Nepal Pakistan
States Kingdom Federation Africa

Country
Electricity Per Capita Consumption (MWh/Capita) HDI (2017)

Source: Human development data (1990-2017), UNDP38

The above scatter graph shows a high degree of correlation between the per capita electricity consumption and Human Development
Index (HDI) levels for the 13 shortlisted countries. This is even more significant for countries with low development indices since a
small improvement in the per capita energy consumption correlates to significant improvement in their HDI levels.

vi
Sustainable Development Goal

18
 As per the graph below, India constitutes 13% of the global population with an electricity consumption share of only 4% of the total
consumption. The analysis is much like a mirror image for countries like the United States, high to very high HDI countries, where
sparsely populated countries occupy a major share of electricity consumption.

WORLD SHARE OF ELECTRICITY CONSUMPTION (TWH) POPULATION DISTRIBUTION ACROSS COUNTRIES

12% 3%
6% 13

UNITED STATES
1 %
%
REST OF THE WORLD
UNITED STATES 27 CHINA
5%

MED REST OF THE WORLD

17%
I
HDI C UM AND
OUN L
TRIE OW

13%
S CHINA
INDIA
%

HIGH HDI
20

COUNTRIES
VERY HIGH HDI

4%
INDIA MEDIUM AND LOW
COUNTRIES

9%
HDI COUNTRIES
VERY HIGH HDI
COUNTRIES HIGH HDI

%
COUNTRIES

19
26% 16%

Source: IEA Energy Atlas and World Bank39

RURAL-URBAN ENERGY CONSUMPTION

ANALYSIS

RURAL URBAN

Population in % Electricity in kWh Decile Class Population in % Electricity in kWh Decile Class

35% Population 20% 245 90-100% 12.5% 2213 90-100%

with 197.4 Unit per capita
Annual Electricity consumption 15% 132 80-90% 12.5% 1046 80-90% 36% Population with
1373.8 Unit per capita
12% 70-80% 11.3% 70-80% Electricity consumption
108 800
11% 60-70% 9.6% 60-70%
93 Highest Rural and 658
9% 83 50-60% Lowest Urban are 9.4% 50-60%
554
almost equal
8% 74 40-50% 8.7% 471 40-50% 64% Population with
414.7 Unit per capita
65% Population with 7% 30- 40% 8.6%
67 401 30- 40% Electricity consumption
77.4 Unit per capita
Population-wise Per 8.1%
Annual Electricity consumption 7% 59 20-30% Capita yearly 339 20-30%
consumption of
6% 51 10-20% electricity in kWh 8.4% 282 10-20%

39 0-10% 10.3%
5% 203 0-10%

Exclude 75 million households without electricity Exclude 5 million households without electricity

Source: Presentation by Dr. Satish Balram Agnihotri, 201440

19
I
ndia is making significant strides in providing grid-based household level electrification. But the Distributed
Renewable Energy (DRE) options cannot be overlooked. DRE solutions are critical in providing reliable and quality
energy access to unserved population. Not just electricity, but DRE applications can be used as a means to
maximise growth and development by creating opportunities for better livelihoods in rural areas. Also, DRE
technologies and the SDG are intrinsically linked. Hence, the DRE sector should be looked as a complementing
opportunity and not competing.

20
Environment IMPACT 7
The emissions from public electricity generation rose by almost 80% over the ten-year period since 2005 levels (as mentioned in
the graph below). While the emissions from electricity generation increased significantly by 2015, there has been only a
marginal increase in its overall share of emissions from the energy sector (from 66.3% in 2005 to 68.3% in 2015). This is largely
due to increasing efforts to decarbonize India's generation sector.

ALL INDIA TREND

OF EMISSIONS FROM
PUBLIC ELECTRICITY
GENERATION
958
1000 923
855
Million Tonnes of CO2 equivalent

814
755
800 704
674
639
600
559
600 534

400

200

0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: GHG Platform India41

21
 8 Other New Technology
AND INVESTMENT Trends
Capital costs trends in
selected energy-related sectors

120
Upstream oil and gas
100
Solar PV (utility-scale)
80
Onshore wind
60
Battery storage (utility-scale)
40
LEDs
20
0
2010 2012 2014 2016 2018
Source: World Energy Investment 2019, IEA42

In power, capital cost declines – reflecting technology progress and economies of scale – have been most evident in solar
PV (-75% since 2010), onshore wind (-20%) and battery storage (-50%).

Trends in battery price pack (in $/kWh)

1160
87% reduction
899
Price (in $/kWh)

707
650
577

373
288
214 176 156
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Source: Bloomberg NEF 2019 Battery Price Survey43

Lithum-ion is being considered as a predominant technology choice for electric storage-majorly due to rapid price reductions.
Since 2010, lithium-ion battery prices have dropped by a whopping 87% in real terms, with the combined cost for a cell and
pack at $156 in 2019.

22
This report outlines the current state of play of the India power sector. The sector is
going through rapid transitions that will bring irreversible changes to the way we
produce our electricity, make electricity access more equitable, fuel our cars, cool
our buildings, identify our service provider etc. All these trends will have widespread
impact on businesses, governments and people in the coming years. With these
power outlook series, we hope to help all stakeholders navigate various
developments shaping this inevitable transition. Further, we hope to focus on what
is required for relieving the sector of its inefficiencies and shortcomings.
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Shakti Sustainable Energy Foundation (Shakti) seeks to facilitate India's transition to a sustainable energy future
by aiding the design and implementation of policies in the following sectors: clean power, energy efficiency,
sustainable urban transport, climate policy and clean energy finance.

Vasudha Foundation is a not for profit organization set up in April 2010 with the belief in the conservation of Vasudha,
which in Sanskrit means the Earth, the giver of wealth and with the objective of promoting sustainable consumption of
its bounties.

The core mission is to promote environment -friendly, socially just and sustainable models of energy by focusing on
renewable energy and energy efficient technologies and lifestyle solutions. The organization focuses to bring about
reduction in greenhouse gas emissions in the environment and ensure energy efficiency, energy security, energy
independence, and sustainable development and simultaneously, promoting the concept of “Low Carbon Solutions”
and “Green Economies”. To know more about the Foundation visit, www.vasudha-foundation.org
 www.vasudha-foundation.org
CISRS House, 14 Jangpura B, Mathura Road, New Delhi – 110 014, India
+ 91-11-2437-3680