The Indian power sector offers tremendous potential for investing companies. The power market in the country is the fifth largest in the world. The targeted generation capacity in the 12th Five Year Plan (FYP) is 88,537 MW and for the 13th FYP the envisaged generation capacity addition is 94,000 MW (by 2022). Such a boost in generation capacity needs matching transmission and distribution infrastructure. Growing environmental concerns have shifted the interest towards renewable sources of energy which mainly includes wind power, and solar PV plants. In the recent past there has been considerable growth in power plants based on non-conventional and renewable sources of energy.
The sheer size of the power market in the country along with the attractive returns available is significant to bring in many Indian and international players. The Government of India has also initiated several policies to promote and acquire investments in the power sector. The Electricity Act 2003 has given a liberal framework for generation by de-licensing the generation sector. All controls on Captive Power Plants have also been lifted. The liberal provisions in the Electricity Act 2003 have paved the way for a more reliable and cost effective power in the country. Prominent policies such as the National Electricity Policy, Ultra Mega Power Project Policy, Tariff Policy etc. have contributed a lot to boost the confidence of the participants in the power sector.
Foreign Direct Investment (FDI) up to 100 percent is permitted for generation and transmission of electrical energy produced by thermal and hydel power plants. Route to FDI is also open for renewable energy generation and distribution, distribution of electric energy and power trading. Several schemes are also there to attract new and young entrepreneurs entering the renewable energy sector. Fast and efficient growth of the power sector in the country will also facilitate the creation of enormous job opportunities.