Indian Energy Outlook

Pic: IEX

There is no doubt that India is on a path to become one of the largest economies in the world. Still, India's per capita energy consumption today is one-third the global average. Such low per capita energy consumption is an indication of the potential for economic growth. Surely energy will play a critical role in supporting — or encumbering — India's economic growth. The country's energy needs include electricity for agriculture, rural electrification, greater mobility and the power to develop and run modern infrastructure.

Primary energy sources like coal, biomass, petroleum and natural gas are predominantly being used in electricity generation, cooking, transportation and industrial processes. In order to shift towards renewable or green energy alternatives for energy generation processes, India has announced an ambitious target of installing 450 GW of renewable energy plants by 2030. This target is higher than our total fossil fuel based installed electricity generation capacity as of 2019 (Jaiswal, 2019). Towards achieving this target, there is a policy push towards faster adoption of electric vehicles (EVs), electric charging infrastructures for EVs and electrification of railways. Simultaneously, there is also a renewed focus on having a cleaner environment by meeting stringent emission norms and investments, such as on Flue-Gas Desulfurization (FGD) in thermal assets.

Despite a number of years in the making, the issues leading to India's thermal power assets becoming white elephants remain largely unresolved and problematic (Garg, 2020). However, relief for stressed assets is anticipated to pick up, with lenders looking to revive coal-based thermal power projects with a capacity of 5-6 GW, with the existing management, according to the revised Reserve Bank of India guidelines. Further, approximately 12 GW of projects are in the National Company Law Tribunal (NCLT) or in the process of getting admitted and could get potential buyers offering deals. With recent recoveries amongst NCLT cases, a paradigm shift in the outlook of lenders is expected (Mohapatra, 2020).

India's future for energy sector will be noticeably different from its current version. There is a need for newer technologies, business models, and regulatory policies that are specifically tailored to India’s requirements. There is also a need for a robust regulatory framework to deal with institutional changes and building infrastructure.

To conclude, the energy transition today is self-assured to make electricity as the predominant fuel of the future. The pace at which innovation is becoming commercially viable is accelerating and broad global trends are indicating that rapid electrification — driven by efficiency, cost, and climate concerns — is on its way.

References 

1. Jaiswal, A. (2019). Transitioning India's Economy to Clean Energy. Retrieved November 6, 2019 from https://www.nrdc.org/experts/anjali-jaiswal/transitioning-indias-economy-clean-energy
2. Garg, V. (2020). De-stressing power and banking sectors advances with international divestment of RattanIndia's Amravati coal plant. Retrieved January 7, 2020 from https://energy.economictimes.indiatimes.com/energy-speak/de-stressing-power-and-banking-sectors-advances-with-international-divestment-of-rattanindia-s-amravati-coal-plant/3968
3. Mohapatra, S. (2020). Power and utilities outlook 2020: A new decade of growth - Opinion by Sambitosh Mohapatra | ET EnergyWorld. [online] ETEnergyworld.com. Available at: https://energy.economictimes.indiatimes.com/energy-speak/power-and-utilities-outlook-2020-a-new-decade-of-growth/3943

    About the author

 Mr. Jayadeb Nanda, COO, Adani Energy Limited. 

Mr. Nanda is an electrical engineer by profession, he is an alumnus of Sambalpur University, Orissa. He is also a member of the Institution of Engineers, India. Mr. Nanda started his career in NTPC as an executive trainee and went on to become the Executive Director in charge of Eastern Region - 2. With over 34 years of experience, he has a rich experience and knowledge of thermal power plants including, project execution, commissioning and operation & maintenance of various power plants. Trained in the UK, US, France, Belgium and Switzerland in Power plant operations, Mr. Nanda leads the O&M team at Adani Power, to establish robust systems and processes, achieve operational excellence and resource optimization as well as build a leadership pipeline and a culture of meritocracy within the organization. From BTG supplies to power plant commissioning, strategic and technical due diligence and mapping integration plans in M&As to managing talent as well.

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[i]This blog has been designed and created by Shahin Selkar and Chirag Thakkar, students of the Post Graduate Diploma in Management (Infrastructure Management) under the guidance of Dr. Samudra Sen, Assistant Professor at the Centre of Excellence in Energy at the Adani Institute of Infrastructure Management, Ahmedabad.