Introduction
Energy is a critical infrastructure for economic development and for improving the quality of life.  It is a matter of concern that the annual per capita consumption of India, at about 350 kWh is among the lowest in the world.  People in a large number of villages have no access to electricity. Shortage of power and the lack of access continue to be a major constraint on economic growth.  Yet, despite these problems, India’s energy sector offers huge potential for investors, operators and developers across generation, transmission and distribution. 

Policy framework in place
That is possible because reforms in the Energy sector have been under way for several years and have now brought about several important institutional changes.  These are making the energy sector efficient and more competitive and they include: the Electricity Act 2003 is in place, the National Electricity and Tariff policies envisaged in the Act have been notified, regulators are in place in the states and have issued a series of regulatory orders which are beginning to reduce the wide dispersion in electricity tariffs. Many states have unbundled their State Electricity Boards (SEBs) into generation, transmission and distribution companies for better transparency and accountability.  

Buoyant outlook
Based on the demand projections made in the 16th Electric Power Survey, over 100,000 MW additional generation capacity needs to be added by 2012 to bridge the gap between demand and supply of power.  Formation of a strong national power grid has been recognized as a flagship endeavor to steer the development of the power system to cost-effective fulfillment of the objective of “Electricity to All” at affordable prices. A strong all-India grid would enable exploitation of unevenly distributed generation resources in the country to their optimum potential.

Coal
The large coal reserves in the country provide a ready and economical resource and ensure energy security.  The total demand for coal is projected to increase from 432 million tonnes in 2005-06 to 670 million tones in 2011-12.  Coal will be the most important fuel for power generation till 2012 and beyond.  Emphasis has been laid on setting up large pit head stations to avoid high costs associated with transportation of high ash bearing Indian coal and overstraining the already stretched rail network.

Feedback’s expertise
Feedback Ventures has a deep understanding and knowledge of India’s power sector. Feedback offers implementable, holistic and quality advisory, engineering and capacity building services in energy covering coal, oil, gas and power to multilateral, government and private sector clients.