Understanding India’s Electricity Sector
India is third in the world for both power production and consumption. It generates electricity from a variety of sources, including renewable energy sources like wind, solar, and bioenergy from household and agricultural waste, as well as conventional fuels like coal, lignite, natural gas, and oil. The demand for electricity in the nation has increased quickly and is predicted to do so in the future. In order to provide a consistent supply of energy to households, businesses, and industries throughout the country, India's electricity sector is vast, complex, and multidimensional, including a large number of important stakeholders, regulatory agencies, and technology. Let’s take a look -
Regulatory Bodies
Several organizations oversee and control India's electrical industry to guarantee effective electricity production, transmission, distribution, and use. The following are the main regulatory agencies in charge of the industry:
1. Ministry of Power (MoP): The general policies and regulation of India's electric sector are under the purview of the Ministry of Power, a central government ministry. The ministry is in charge of managing the development of infrastructure, including generation, transmission, and distribution, as well as maintenance initiatives, and the production of electricity.
2. Central Electricity Regulatory Commission (CERC): The CERC is the national regulatory authority that oversees the functioning of the electricity market, The regulatory functions of the authority include overseeing the tariffs of generating companies owned or controlled by the Central Government, as well as those not owned or controlled by the government but involved in the generation and sale of electricity across multiple states. The authority also regulates the inter-state transmission of electricity, determining the corresponding transmission tariffs. It is responsible for issuing licenses to entities operating as transmission licensees or electricity traders in inter-state operations. Additionally, the authority works to improve access to information for all stakeholders and adjudicates disputes involving generating companies.
3. State Electricity Regulatory Commissions (SERCs): The State Electricity Regulatory Commissions (SERCs) in each Indian state are in charge of regulating electricity distribution, rates, and policies at the state level. These commissions collaborate with the CERC, although they concentrate on regional concerns such as power distribution, consumer protection, and state-specific renewable energy goals.
4. Central and State Transmission Utilities: In India, both state and central utilities are in charge of power transmission. To ensure that power can be transmitted between states, interstate electricity transmission is handled centrally by the Power Grid Corporation of India Limited (PGCIL). At the state level, intra-state transmission and grid stability are handled by the transmission utilities in each state.
5. Ministry of New and Renewable Energy (MNRE): MNRE is the nodal Ministry of the Government of India for all matters relating to new and renewable energy. The broad aim of the Ministry is to develop and deploy new and renewable energy to supplement the energy requirements of the country.
Power Generation in India
Electricity in India is generated from a diverse mix of sources, including thermal, hydro, nuclear, and renewable energy.
1. Thermal Power Generation: Thermal power plants, which burn coal, natural gas, or oil, are the dominant source of electricity generation in India. Coal-fired plants, in particular, contribute to a large portion of India's electricity generation capacity. However, this heavy reliance on coal has led to concerns about air pollution and carbon emissions, which has prompted efforts to transition to cleaner sources of energy.
2. Hydropower: Hydropower is another significant source of power generation, particularly in states with abundant water. Large hydroelectric dams as well as smaller run-of-river projects contribute a sizable share to the national grid.
3. Nuclear Power: India also generates a portion of its electricity from nuclear power, with several nuclear plants spread across the country.
4. Renewable Energy: India has made substantial progress in expanding renewable energy capacity, particularly in solar and wind power. India aims to achieve 500 GW of non-fossil fuel-based power by 2030, and renewable energy has become a key focus of national energy policy.
India's total electricity generation capacity has reached 452.69 GW, with renewable energy contributing a significant portion of the overall power mix. As of October 2024, renewable energy-based electricity generation capacity stands at 201.45 GW, accounting for 46.3 percent of the country's total installed capacity. This marks a major shift in India’s energy landscape, reflecting the country’s growing reliance on cleaner, non-fossil fuel-based energy sources.
Transmission of Electricity
Once electricity is generated, it needs to be transmitted from power plants to distribution networks. Transmission is typically done through high-voltage lines to minimize losses over long distances.
1. High-Voltage Transmission Lines: Electricity is transported via high-voltage transmission lines from power plants to substations. The Power Grid Corporation of India (PGCIL) is responsible for managing interstate and inter-regional transmission.
2. Substations and Step-Down Transformers: At substations, high-voltage electricity is stepped down to lower voltages for local distribution. These substations are key to maintaining the stability of the grid and balancing supply and demand.
3. Transmission Losses: Electricity transmission over long distances results in some energy losses due to resistance in the wires. These transmission losses are typically around 3-5%.
Distribution of Electricity in India
The final step in the journey of electricity is distribution, bringing power from substations to homes, industries, and businesses. This is where DISCOMs (Distribution Companies) play a crucial role.
1. Distribution Companies (DISCOMs): Delivering electricity to customers is the responsibility of DISCOMs, which are the local utilities. They are the owners of the infrastructure needed to distribute electricity, such as meters, transformers, and power lines. DISCOMs distribute electricity to end consumers after buying it from power plants (either on the open market or through long-term power purchase agreements). Tata Power, BSES Rajdhani, Adani Power, MSEDCL (Maharashtra), and others are a few of the DISCOMs. These businesses are usually state-owned, but in an effort to increase efficiency, privatization and public-private partnerships have become more popular in recent years.
2. Electricity Metering and Billing: An electric meter measures the amount of electricity that reaches the customer. Customers are billed according to their electricity consumption, which is measured in kilowatt-hours (kWh) or units. In addition, DISCOMs are in charge of billing, customer service, and meter maintenance.