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Electricity or power is the most important source of commercial energy. Our total installed capacity of generating power was around 2300 Mega Watt (MW) in 1950–51. It increased to 33,300 MW in 1990–91 and to 143800 MW in 2005-06 and further to 188000 MW in 2009-2010. Thus, over a period of 59 years, 75 times increase in the installed capacity, adding 4000–5000 MW every year.


Sources Of Electricity:

There are 5 major sources of electricity

  1. water
  2. coal
  3. oil
  4. gas
  5. radioactive elements like uranium, thorium and plutonium

Electricity generated from water is known as hydro-electricity. Electricity generated from coal, oil and gas is called thermal electricity and electricity generated from radioactive elements is called atomic energy. Of the present capacity, 60 percent is the thermal sector and non conventional source of energy, 20 percent is the hydel and 2.5 percent is the nuclear and rest is in the other sectors. In terms of generation of power, thermal and non conventional energy is contributing 74 percent, hydel around 12 percent and nuclear 2 percent and others contributing 12 percent.


The Central Government operates through National Thermal Power Corporation (NTPC), National Hydroelectric Power Corporation (NHPC) and Nuclear Power Corporation of India Limited (NPCIL). State governments have their State Electricity Boards (SEBs). There also exist Central Electricity Authority and Central Electric Regulatory Commission.

Problems Relating To Energy

1. Demand and supply imbalances in commercial fuels – Demand for commercial fuels has increased due to demographic structure, rising urbanization and social and economic development. The demand-supply imbalance has become a matter of grave concern. In 2006-07, out of 539 mtoe of primary energy demand, 391 mtoe demand was for commercial fuel and 148 mtoe was for non commercial energy. Out of 391 mtoe demand for commercial energy, 259 mtoe was domestically produced and 132 mtoe was imported, non-commercial energy 148 mtoe was produced and consumed domestically.


2. Oil prices and inflationary pressure – Since 1973, oil prices have been rising in the international market. During 1973–2010, the Organisation of Petroleum Exporting Countries (OPEC) has increased the prices many times.


3. Growing oil imports bill – Since 1973, India’s oil imports bill has increased

substantially. In 1973–74, India’s oil import bill was Rs. 1100 crore. It increased to Rs. 10,816 crore in 1990–91 and to a record level of Rs. 4,11,650 crore in 2009–10. Petroleum, oil and lubricants (POL) constitute around 1/3rd of our import bill.


4. Transmission and distribution losses – One of the major problems faced by the power companies are transmission and distribution (T&D) losses. These losses include substantial amount of theft of power. National average of this loss is around 23 percent while in many states, it is more.


5. Sick SEBs – Many SEBs have become financially sick. A large portion of these losses is accounted for by almost free supply of power to agriculture. Besides, operational inefficiencies, high cost structure, lower power tariffs and large overdues have made SEBs sick.


6. Operational inefficiency – Most of the thermal power plants are operating
inefficiently. Plant load factor (PLF) measures the operational efficiency of a
thermal plant. If total generating capacity is say 600 billion kilo-watt hours (kwh) and we are producing only 300 billion kwh, plant load factor here is 50. Plant load factor varies across the regions. It is lowest in Eastern region (63 percent in 2009-10) and highest in southern region (83 percent in 2009-10).


7. Inadequate electrification – Till date, nearly 19 per cent of villages are not

electrified. In many villages, there are a very few houses which are lighted. This is sad considering the fact that 67 years have passed since we got

independence and still our rural areas are without electricity.


  1. Electricity act was passed in 2003 and Electricity Amendment Bill 2005 was passed in 2005. The focus is on improved investment in power sector and fixing of power tariffs on the basis of competition, efficiency, economical use of resources, commercial principles and consumers’ interests.
  2. Ministry of Power launched the ‘Partnership in Excellence’ programme. Under the programme, 26 thermal stations with PLF less than 60 percent were identified. Steps were taken to improve their efficiency.
  3. Government is encouraging the use of hydel and wind energy sources.
  4. In order to reduce transmission losses, distribution reforms have been carried out. In 2002, power sector was privatized in Delhi.
  5. Government is encouraging private sector investment in power guidelines.
  6. An All India Power Grid, also called national Grid is envisaged to be developed by the year 2012.
  7. Five sites are being identified the development of Ultra-Megia Power Plants (UMPP) with capacity of 4000MW each.
  8. Steps are being taken to provide access to electricity to all areas including villages and hamlets. For this, ‘Rajiv Gandhi Grameen Vidhyutikaran’ programme was started in 2005.

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