The
Indian power sector offers tremendous potential for investing companies. The
power market in the country is the fifth largest in the world. The targeted
generation capacity in the 12th Five Year Plan (FYP) is 88,537 MW and
for the 13th FYP the envisaged generation capacity addition is 94,000 MW (by 2022). Such a boost in
generation capacity needs matching transmission and distribution infrastructure. Growing
environmental concerns have shifted the interest towards renewable sources of
energy which mainly includes wind power, and solar PV plants. In the recent
past there has been considerable growth in power plants based on non-conventional
and renewable sources of energy.
The
sheer size of the power market in the country along with the attractive returns
available is significant to bring in many Indian and international players. The
Government of India has also initiated several policies to promote and acquire investments
in the power sector. The Electricity Act 2003 has given a liberal framework for
generation by de-licensing the generation sector. All controls on Captive Power
Plants have also been lifted. The liberal provisions in the Electricity Act
2003 have paved the way for a more reliable and cost effective power in the country. Prominent
policies such as the National Electricity Policy, Ultra Mega Power Project
Policy, Tariff Policy etc. have contributed a lot to boost the confidence of
the participants in the power sector.
Foreign
Direct Investment (FDI) up to 100 percent is permitted for generation and
transmission of electrical energy produced by thermal and hydel power plants. Route
to FDI is also open for renewable energy generation and distribution,
distribution of electric energy and power trading. Several schemes are also
there to attract new and young entrepreneurs entering the renewable energy
sector. Fast and efficient growth of the power sector in the country will also
facilitate the creation of enormous job opportunities.
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