This report discusses the current state of the electricity industry in India, with an analysis of trends in the sector through H1 2013 and market outlook through 2021–22. The report also includes reviews the leading players in the sector, among them NTPC, Tata Power, and Reliance Infrastructures.

India’s fast-paced economic growth and its rapid rate of industrialization and urbanization have fuelled energy demand. According to the Central Electricity Authority (CEA), an additional capacity of around 76,000 MW is needed to satisfy the projected demand by 2016–17. Given that electricity has become more and more imperative to achieving or maintaining India’s economic growth, the government has an ambitious vision to supply electricity to the whole of India in the coming years.

The country’s appetite for energy is growing extremely fast, with demand outstripping supply, which has resulted in power shortages. India consumes roughly 3% of the world’s total energy. Despite increases in energy use, consumption per capita in India is one of the lowest in the world, but this figure is steadily increasing. India currently has the fifth-largest generation capacity in the world. Thermal generation constitutes more than two-thirds of the total energy generation.

In order to fuel a rapidly growing economy, the Indian energy sector requires investments to the tune of USD 120bn–150bn every five years. The imperative for private sector investment is strong in order to complement the public sector in meeting this investment requirement and to bring in the required capabilities and technologies to enhance energy resource extraction. Moreover, government policies and foreign investment in the sector will help in bridging the gap between supply and demand for electricity in India.

Key Points:

• This report offers an overview of the market position (including financial highlights) for leading players including National Thermal Power Corporation Limited (NTPC), Tata Power Company Limited (Tata Power), and Reliance Infrastructure Limited (Reliance Infrastructures or RELINFRA). The report also includes a comparative matrix and SWOT analysis for the same firms.

• Looking at the 12th Plan (2012–17), a capacity addition close to 100,000 MW is anticipated, around 50% of which is expected to come from the private sector.

• The annual energy generation for FY13 grew by 4% y/y to 912.1 billion units (BU), representing 98% of the targeted generation.

• The annual power deficit declined successively during 2009–12, touching 8.4% at the end of FY12. However, it saw a marginal increase of 30 basis points during FY13.

• During the 11th Plan, India’s electrical energy consumption grew at a CAGR of 11%. In the fiscal year 2011–12, India’s electrical energy consumption increased 11.3% y/y to 773BU.