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Power Grid Crash in India

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Power crash in india
The investment opportunities in the Indian power sector are immense. The power ministry has set a target for adding 76,000 MW of electricity capacity in the 12th Plan (2012-17) and 93,000 MW in the 13th Five-Year Plan (2017-2022). As per the funding requirement of the 12th five year plan, a capital requirement of Rs. 13, 72, 580 crores is estimated to arise. The main sources of financing are commercial banks, public financial institutions, dedicated infrastructure/power finance institutions, insurance companies, overseas markets, bilateral/multilateral credit, bond markets and equity markets.

The power sector was one of the first sectors to be opened up to private investment in the 1990s. Today it is the sixth largest attracter of Foreign Direct Investment (FDI) with upto 100 per cent FDI being allowed under automatic routes for projects of electricity generation, transmission, distribution and power trading. Along with this there are several government initiated policies to promote and garner investments in the power sector. For eg. The National Electricity Policy which aims at power for all and annual per capita consumption of electricity to rise by end of 2012.

However, even today the country is faced with major challenges in the form of a persistent demand supply gap of approximately 9% and culmination of the same has come in the form of two massive power grid failures in the month of July. India suffered from the biggest power outage in the world affecting 22 states and 620 million people. Unfortunately this came after an impressive performance by the power sector with addition of almost 17000 megawatts of capacity in 2011-12.

However, it is not that the there is low generation leading to the lack of supply of power. It is estimated that 40000 mw of installed capacity is lying unutilized. 10000 mw is for

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