About India's Power Needs
There is currently a significant shortage of power supply in India. As of March 2011, India’s population was approximately 1.1 bn and had an energy generation capacity of only 175 GW. This falls extremely short of China’s capacity to generate 869 GW of energy for its population of 1.3 bn. As of 2008, only 52.5% of Indian rural households had electricity. The GOI set a target that every household should be grid connected by 2010 and that average consumption should increase to 1,000 kWh/capita by 2012.
Maintaining India’s recent GDP growth rate of between 6.5% and 9.0% is threatened by the country’s lack of installed power capacity. To address the widening gap between supply and demand, the Indian government opened the electricity market to the private sector through the Indian Electricity Act, 2003 and has outlined its intention to increase total generation capacity to 350 GW by 2016. The government is also increasing the contribution made by renewable energy sources by mandating States, through the Renewable Purchase Obligation (“RPO”) mechanism, to purchase up to a minimum of 10% of their annual energy requirements from renewable sources by 2012 increasing to 20% by 2020. An estimated 64 GW of renewable energy will be needed by 2017 to meet these obligations. The Directors believe that the growing levels of energy consumption present a significant opportunity for power suppliers.