Topic :

Objective :
To Study Reforms And
Restructuring of Indian Power
Sector
 Index

 Abstract
 Introduction
 History of Indian Power Sector
 Structure of Indian Power Sector
 Development of the Indian Power
Sector
 Electricity Act 2003
 Biggest Electricity Power plants
 Power sector in Maharashtra
 Current Scenario of Electricity in India
 Challenges in Indian Power Sector
 Conclusion
 ABSTRACT
For expansion of any country’s economy,
development of infrastructure, and eventually
improving the quality of life, electrical power is
one of the greatest enabler. And hence three
decades back, India, initiated power sector
reforms to make its power sector efficient and
sustainable.
However, even three decades after starting
the reform initiatives, almost all the state power
utilities are under significant financial and
technical losses, which is hindering further
expansion and strengthening of distribution
system.
This report analyses the present scenario
of Indian power distribution sector and the
reasons behind it’s poor financial and technical
performance. Through the comprehensive
analysis, it is shown that even after introduction
of new policies, reforms, and regulatory
initiatives, Indian distribution sector is still
suffering from systemic flaws and vulnerabilities
characterized by cross-subsidies, inefficiency,
substantial technical and financial losses, poor
quality of power, low efficiency, outstanding
debts, frequent supply disruptions, inability of
expansion, sluggish privatization, poor customer
satisfaction, political interference, and low
reliability.
This report discusses the chronology of
reforms brought in so far in the power
distribution sector in India, and further suggests
measures that can be adopted in administrative,
technical, and commercial fields to improve the
quality and reliability of supplied power.
To meet the needs of India's growing
economy, providing reliable, affordable, secure,
and sustainable energy requires exploring a range
of options including maximizing domestic
production, diversifying the fuel mix and the
source of supply, and maintaining sufficient
reserves, if necessary.
This will ensure price stability as also
security of supply in the energy sector.
Fluctuations in the delivery price of the energy
have cascading effect on the growth process itself.
Despite high economic growth, poverty
remains high. Hence, expanding economic
development opportunities is a key focus of the
government.
 INTRODUCTION

India is the world’s third largest producer

and third largest consumer of electricity.
The national electric grid in India has an
installed capacity 383.37 GW as of 31 May 2021.
Renewable power plants, which also
include large hydroelectric plants, constitute 37%
of India’s total installed capacity.
Power is among the most critical
component of infrastructure, crucial for the
economic growth and welfare of nations. The
existence and development of adequate
infrastructure is essential for sustained growth of
the Indian economy.
India’s power sector is one of the most
diversified in the world. Sources of power
generation range from conventional sources such
as coal, lignite, natural gas, oil, hydro and nuclear
power to viable non-conventional sources such as
wind, solar, and agricultural and domestic waste.
Electricity demand in the country has
increased rapidly and is expected to rise further
in the years to come. In order to meet the
increasing demand for electricity in the country,
massive addition to the installed generating
capacity is required.
 In May 2018, India ranked fourth in the
Asia Pacific region out of 25 nations on an index
that measured their overall power.
India was ranked fourth in wind power,
fifth in solar power and fifth in renewable power
installed capacity as of 2018. India ranked sixth
in the list of countries to make significant
investments in clean energy at US$ 90 billion.
India is the only country among the G20
nations that is on track to achieve the targets
under the Paris Agreement.
Structure of Indian
Electricity Sector
 HISTORY
The first demonstration of electric light in
Calcutta was conducted on 24 July 1879 by P W
Fleury & Co.
On 7 January 1897, Kilburn & Co secured
the Calcutta electric lighting license as agents of
the was registered in London on 15 January
1897.
A month later, the company was renamed
the Calcutta Electric Supply Corporation. The
control of the company was transferred from
London to Calcutta in 1970.
Motivation by the success of electricity in
Calcutta, power was there after introduced in
Bombay.
Development of the Indian
Power Sector

1879:- First demonstration of electric light in

Calcutta was conducted by P.W Fleury & Co.

1882:- Mumbai was electric lighting

demonstration for the first time at Crawford
Market.

1887:- Indian Electricity Act 1887 was enacted.

1895:- The government of Bengal passed the
Calcutta Electric Lighting Act.
1897:- Kilburn & Co secured the Calcutta
electric lighting license as agents of the Indian
Electric Co. A month later, the company was
renamed as Calcutta Electric Supply Corporation
Limited which was registered in London. The
first hydroelectric installation in India was
installed near a tea estate in Darjeeling
(Sidrapong Hydel Power Station).
1903:- Indian Electricity Act 1903 was the First
attempt to regulate the electricity sector broadly
in the country . But, this act was ambiguous, as it
did not recognize bulk sale of electricity and also
jurisdictions of local government and
Government of India were not clearly
demarcated.
1910:- Electricity Act 1910 enacted to regulate
supply by licensees to consumers

1948:- Electricity (Supply) Act 1948 (ES Act)

Formation of State Electricity boards with
full powers to control generation, distribution
and utilization of electricity
within their respective states and Central
Electricity Authority for planning and
development of power system
1956:- Indian Electricity Rules was introduced .
Industrial Policy resolution (nationalizing the
generation and distribution of electricity, except
for the private license that already existed.
1962:- Atomic Energy Act 1962 was enacted.
1964 :- Five Regional Electricity Boards (REBs)
were formed by the Government of India with
the concurrence of State Governments with a
view to ensure integrated grid operation and
regional cooperation on power
1969:- Rural Electrification Corporation (REC)
was established to ensure the availability of
electricity for accelerated growth as a remedy to
famines of 1960s and also to improve the quality
of life for rural and semi-urban population.
1975:- Creation of Central Generating
Companies for development of super thermal
power stations at coal pit heads and large
hydroelectric stations leading to creation of
NTPC, NHPC & NEEPCO. Amendment to
Electricity Act 1910 enables generation in
Central Sector, commercial viability in functions
of SEBs.
1976:- Electricity Supply Act was amended.
Government Generating Companies recognized
under the Act. Price, terms and conditions of
sale of energy by generating companies
determined by the appropriate government.
1977:- 400kV voltage level was introduced.
1985:- Power System Planning Criteria issued by
CEA. For the first time West Bengal Govt.
started a Generating Company named as
WBPDCL, apart from State Electricity Board.
1991 :- ES Act 1948 amended to pave the way
for the formation of private Generating
companies
1992 :- First Gazette Notifications on the criteria
for fixing the tariff for sale of electricity by the
Generating companies to SEBs or any other
agency
1998 :- Electricity Regulatory Commission Act
1998 enacted paving the way for the formation
of Central Electricity Regulatory Commission
(CERC) State Electricity Regulatory
Commissions (SERC). Regulatory power
of the State governments transferred to
SERC. Consequently, Tariff regulatory
function of CEA transferred to CERC
1998 :- Act amended to provide for Central
Transmission Utility (CTU) and State
Transmission Utilities (STU)

1999 :- Privatisation of distribution in Odisha

2000 :- Indian Electricty Grid Code (IEGC)
2002 :- Privatisation of distribution in Delhi
2002:- Availability Based Tariff was implemented
when Power Sector commercial losses had risen
to about RS 25000 Crore.
2003 :-Electricity Act 2003 enacted by the
Parliament. This Act repeals the IE Act
1910, ES Act 1948, ERC Act 1998
2004 :- Open Access Regulations
2006:- Tariff Policy, Competitive bidding for
procurement of ultra mega power project.
 Electricity Act 2003

Electricity Act 2003 enacted by the

Parliament. This Act repeats the Indian
Electricity Act 1910. Electricity supply Act 1948.
Electricity Regulatory Commission Act 1998.
The Salient features of the Electricity Act 2003
are:-
Creates a liberal and transparent framework
for the development of power sector.
Facilitates investment by creating competitive
environment and reforming distribution sectors.
SEBs has to be unbundled into separate
generation, transmission and distribution entities.
Licensing for generation sector is removed,
except techno-economic clearance for hydro
projects exceeding a capital cost notified by
Central Government.
Freedom to have captive and group captive
generations.
 Establishment of SERCs made madatory.
Recognizing trading as an independent
activity.
Open access in transmission facilitating multi
buyer and seller model.
Open access to consumers having demand
above one MW within five years from date of
enforcement of Electricity (Amendment) Act
2003.
Regulators have been mandated to enforce
this.
Envisaging consumer redressal forum and
their appellate authority, the Ombudsman.
100 percent metering made compulsory.
For rural and remote areas, stand alone
systems for generation and distribution
permitted.
biggest hydroelectric power
plant in India

Tehri Hydropower Complex – 2,400MW

 Biggest Nuclear Power Plant

Kudankulam Nuclear Power Plant – 6000

MW (Tamil Nadu)
Biggest Solar Power Plant

Bhadla Solar Park – 2245 MW

(Rajasthan)
Biggest Wind Power Plant

Jaisalmer Wind Park – 1064 MW

(Rajasthan)
 Power Sector In
Maharashtra (MSEB)

 MSEB is largest Electricity

distribution company in India.
nd
 2 largest in Asia.
 In 2003, after seeing the issues
restructuring of distribution
happen in Mumbai 2005 by
dividing the state electricity
board into 4 companies.
 In Maharashtra reform process is
steadily progressing toward
success.
 Current Scenario in India

India is the 3rd largest producer and 4th largest

consumer of electricity in the world with the
installed capacity reaching 370 GW as of May
2020.
The country also has the 5th largest installed
capacity in the world.
The government targets capacity addition of
around 100 GW under the 13th five-year plan
(2017-22).
Wind energy is estimated to contribute 60
GW followed by solar power at 100 GW by
2020.
The target for renewable energy has been
increased to 175 GW by 2022.
 100 percent FDE is allowed under the
automatic route in the power segment and
renewable energy.

 Power Installed Capacity : 370348 MV(As

on 23-05-2020)
 Supply Demand Gap:0.5%
 Per Capita Power Consumption:
1149KWH/Year (Year 2017-18)
 All India Thermal Plant Load Factor
:52%(Till Nov 2019)
Challenges In Indian Power
Sector

 Inequality last mill connectivity

 Demand built up measures
 Unequal electricity distribution
 Erratic power pricing
 Over rated capacity
 Lack of timely information on
load and demand
 Lack of adequate coal supply
 Poor gas pipeline connectivity and
infrastructure
 Resistance to energy efficiency in
the residual building sector
 Resistance to hydro electric power
 Resistance to nuclear power
generation
Problems and solutions
1] Poor circuit protection/ No RCCB
Residual Current Circuit Breaker (RCCB) is a
device that detects and prevents low
voltage circuit if there is a current leak
Solution:
Get an RCCB installed as it gives protection
against direct and indirect currents, shock,
and electrical fire

2] Electrical surges
It usually occurs due to poor electrical
wiring in the house, faulty appliances,
damaged power lines, or when lightning
strike
Solution:
Check your electrical connections that
connect the device to the home grid.
Disconnect the poor quality power boards or
devices from the outlet. The surges should
stop; if they don’t, you must call an
electrician.

3] Overloading
The light fixture you may be using for your
high-watts bulbs or other fittings could be
designed for low voltage. This violates the
code, increasing the risk of melting the
socket and wire insulation of the fixture due
to high heat from the bulb. This can cause
electrical fires.
Solution:
Fit the right bulb to the right fixture. If you
are unsure of the wattage the fixture can
handle, it is safe to use a 60-watt or a smaller
bulb.
4] High Electricity Bills
Some reasons why you may get a high
electricity bill are:1.Damaged wiring and
circuit 2.Leakage in electrical systems
.Electrical devices are outdated and consume
more power
Solution:
You can reduce the cost of electricity bills by
switching to more cost-effective devices and
unplugging appliances when they are not in
use as suggested by zero-waste blogger.
Repairs damaged wires and identify
electrical devices that may be causing power
surges.

5] Electrical Shocks
You may experience electrical shocks when
you turn an appliance on or off. Even if the
shocks are mild, it is an indication that the
appliance has an electrical problem, or there
are issues with the wiring.
Solution:
You can plug in another device and see if you
face the same problem. If the results are
reproducible, call in an electrician to fix the
problem before anyone gets hurt.
 Conclusion

 Power sector growth , the main

driver for the Countries Economic
Growth.
 To make future brighter India gear
up to utilize renewable sources.
 Hydro power plant and Nuclear
plant replace thermal power plant.
 2003 Act ,allowing private player to
invest in generating sector change
whole picture.
 India is one of the fastest
developing country.