Power deficit may reach 5.6% by fiscal 2021-22: Study

India may require 7% annual growth in electricity supply to sustain annual gross domestic product growth of around 8-9%, says study


India will require an additional power supply capacity of 450 gigawatt. Photo: Bloomberg
India will require an additional power supply capacity of 450 gigawatt. Photo: Bloomberg

New Delhi: Country’s power deficit may rise to 5.6% by fiscal 2021-22, from 2.6% of peak demand in the last fiscal, on demand overtaking supply, a study said on Monday.

“Availability of reliable, affordable and sustainable electricity is an essential requirement for propelling the India growth story and all potential sources of energy will need to be tapped to meet the envisaged demand and ensure its energy security,” said the study jointly conducted by industry body Assocham and consultancy major PwC.

India may require 7% annual growth in electricity supply to sustain annual gross domestic product growth of around 8-9%, the study titled ‘Hydropower @Crossroads’ said. In order to achieve the target of 1,800 kilowatt-hour per capita consumption and electricity access for 300 million people by 2034, India will require an additional power supply capacity of 450 gigawatt while hydropower can substantially contribute towards meeting India’s energy needs, it added.

Considering that coal-based generation accounts for about 70% of total installed capacity and over 80% of total units generated in India, the study cautioned that such higher dependency on thermal generation sources pose a serious threat to energy security in terms of fuel availability among others.

“Hydropower can play a crucial role in India’s sustainable development and energy security given that it meets the criteria of sustainability, availability, reliability and affordability,” it said. However, share of hydropower in India’s energy mix has decreased almost by 30% in last 40 years owing to various issues like water sharing disputes, environmental concerns, land acquisition problems and delays in procuring clearance among others.

Considering that hydropower projects are capital-intensive and are faced with various risks and uncertainties, optimum risk allocation mechanisms between developers, government and project affected people need to be in place, the study suggested.

Moreover, new financing avenues need to be developed along with sufficient funding support from the government in order to attract investment in the sector. Highlighting the need to expedite various clearances, such as those for environment, forest and land, study suggested the government to form a specialised institution for facilitating large infrastructure projects in terms of clearances and approvals, thereby minimising the time taken for these processes.

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