India is world's 3rd largest consumer of electricity. It's per-capita power consumption was 1208 kWh in 2019-20 compared to the world average of 3,260 kWh. Over the last 8 yrs, consumption has reported consistent growth from 914 kWh in FY13 to 1208 kWh in FY20 an increase of 32%
India accounts for 18% of world population but only 6% of world's primary energy. This is where things get interesting. Renewable Energy is playing a pivotal role in transition of India to a power surplus country.
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The share of Renewable energy in overall installed capacity has more than tripled from 11.8% in Mar-2015 to 37.9% by Aug-2021. Govt has set a target of 175 GW installed capacity by 2022 for renewable electricity generation. The current capacity stands at 100GW.
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The fall in generations costs of RE is also putting pressure on electricity tariffs in the wholesale and short-term markets. With govt emphasizing more on RE capacity and reforms in traditional power sector, the next 10 years for India's energy sector will be very different.
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RBI said that India needs strategic policy changes, curb crosssubsidisation, faster resolution of financial stress in DISCOMS and decentralization of production and distribution for faster adoption of green energy. Look for companies that will be beneficiaries of this tailwind.
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