The power and energy sector or industry includes companies involved in the development and exploration of oil or gas reserves, oil and gas drilling, and refining. The energy industry also includes integrated power utility companies like renewable energy and coal.
Energy is one of the main inputs for the economic development of any country. In the case of developing countries like India, the energy sector assumes critical importance because of the ever-increasing energy needs requiring huge investments to meet them.
India’s per capita electricity consumption is targeted for 50% growth within the Eleventh five year plan from this level of 704 units per annum.
Electricity is one of the efficient, convenient, versatile forms of commercial energy and is therefore considered as the backbone of industrial & agricultural growth.
Presently India is facing serious challenges of energy security threat due to shortfall of peak power supply by 16.6% & energy supply by 9.6%.
Under the above scenario, the coal-based thermal power plant is being focused on a major source of commercial energy.
The power basket, the hydro sector is taken into account for serving peak load only, causing a decreasing trend of specific generation per unit of installed capacity. Renewable energy growth is given due importance with special emphasis given on wind generation.
Nuclear power though occupies only about three percent of the energy basket, but it is targeted as one of the important sources of power in the years to come.
Indian power sector analysis 2020
India has been the third-largest consumer of electricity and the third-largest producer and within the world with installed power capacity reaching 370.49 gigawatts as of May 2020. The Government of India has set a target to realize 175 GW installed capacity of renewable energy by FY22.
In May 2018, India ranked fourth within the Asia Pacific region out of 25 nations on an index that measured their overall power.
India was ranked fourth in wind generation, fifth in solar energy, and fifth in renewable power installed capacity as of 2018.
The power sector of India is undergoing a big change that has changed the industry outlook. The sustained process continues to drive electricity demand in India. The Government of India is planning to attain ‘Power for all ‘ accelerated capacity addition within the country.
By 2022, solar power is estimated to contribute 114 Giga-Watt, followed by 67 Giga Watt from wind generation and 15 Giga Watt from biomass and hydropower. The target of renewable energy has been increased to 227 GW by 2022.
The total installed capacity of power stations in India stood at 370.34 Giga Watt as of April 2020.
HISTORY OF POWER AND ENERGY SECTOR IN INDIA
When India became an independent country in 1947, it had an influence generating capacity of 1,362 Mega Watt. Hydropower and coal-based thermal power are the most sources for generating electricity. The generation and distribution of electrical power were carried out primarily by private utility companies.
PRESENT OF POWER AND ENERGY SECTOR IN INDIA
The total installed capacity of power stations in India stood at 370.34 Giga Watt as of April 2020. Electricity production reached 1,252.61 billion units (BU) in FY20. Between April 2000 and March 2020, the industry attracted US $ 14.98 billion in Foreign Direct Investment (FDI), accounting for 3 of total FDI inflow in India.
FUTURE OF POWER AND ENERGY SECTOR IN INDIA
By 2022, solar power is estimated to contribute 114 GW, followed by 67 Giga Watt from wind generation and 15 Giga Watt from biomass and hydropower. The target for renewable energy has been increased to 227 GW by 2022. The total installed capacity of power stations in India stood at 370.34 GW as of April 2020.
GOVERNMENT POLICIES
Government plans to determine a renewable energy capacity of 500 Giga Watt by 2030. Pradhan Mantri Sahaj Bijli Har Ghar Yojana-Saubhagya was launched by the Government of India to achieve universal household electrification by March 2019. In September 2018, a draft amendment to Electricity Act, 2003 was introduced.
Final Thoughts
India’s Power sector is increasing day by day and the companies which are listed on the stock exchange and which are involved in the Power sector are going to boost in the upcoming years. To earn good profit from the power sector in the stock exchange we should know about the fundamental analysis of stocks first and manage our Portfolio accordingly.
