BMI View: Our view that power sector reforms would be a top priority for Modi's government is playing out. We are seeing notable progress in the Indian power market regarding renewable energy expansion, reducing red tape for power projects and improving fuel availability for thermal generation. That said, in vestment in India's power grid infrastructure will need to increase if Prime Minister Modi's ambitious power plans are to be realised. T he transmission and distribution net work remains highly inefficient, posing a significant risk to the expansion of the power and renewables sector in India. R eforming power tariffs will therefore be fundamental to ensuring sustainable supply and achieving Modi's power expansion ambitions.
Latest Updates And Structural Trends
Coal stock shortages have been a persistent bottleneck for coal-fired power generation in the country over the last five years (causing widespread power shortages), as state-controlled Coal India has failed to meet its coal output and supply targets. However, the situation has improved over the last few months, as Modi's efforts to increase the availability of coal domestically - primarily by accelerating the bidding process for coal mines and implementing more stringent production oversight - are bearing fruit.
Since coming to power, the Government has relaxed several environmental rules to make it easier for companies to develop new projects. Small and medium-sized coal miners can now expand production by 50% without public consent, while polluting industries can operate closer to national parks. This relaxation of environmental laws has translated into a major reduction in red tape for the power sector and significant progress has been made with clearing the backlog of projects awaiting environmental approval.
India has rapidly emerged as a key investment destination for renewable energy developers, resulting in a strengthening renewables project pipeline and surging installation rates across the country. In light of this, this quarter we have upwardly revised our solar capacity forecasts this quarter in light of the continued strengthening of the sector we have seen over the last three months. We forecast solar capacity to reach over 5GW by end-2015 and 8.7GW in 2016 (a 21.8% annual growth), compared to the 6.5GW of solar capacity we had previously forecasted for 2016.
The nuclear deal with the US in January 2015 and with Russia in December 2014 reinforces India's commitment to nuclear as a source of power, and highlights potential for more nuclear power projects in future. We forecast nuclear power generation to grow by an annual average of 6.9% between 2015 and 2024, but will monitor progress in the industry closely, with the potential for an upward revision to our generation and capacity forecasts over the coming quarters. That said, we highlight pricing, funding and limited public support for nuclear power will remain key challenges to sector growth.
|e/f = BMI estimate/forecast. Source: EIA, UN, BMI|
|Generation, Total, TWh||1,178.295||1,253.730||1,339.554||1,431.472||1,518.655||1,614.100||1,708.848|
|Consumption, Net Consumption, TWh||980.2||1,043.9||1,115.9||1,198.5||1,274.0||1,353.0||1,436.5|
|Capacity, Net, MW||248,844.3||262,543.4||282,426.5||305,834.2||326,703.5||347,589.0||367,689.0|
The India Power Report features BMI Research's market assessment and independent forecasts covering electricity generation (coal, gas, oil, nuclear, hydro and non-hydro renewables), electricity consumption, trade, transmission and distribution losses and electricity generating capacity.
The India Power Report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing national and multinational operators by sales, market share, investments, projects, partners and expansion strategies.
- Use BMI's independent industry forecasts for India to test other views - a key input for successful budgeting and strategic planning in the power market.
- Target business opportunities and risks India's power sector through our reviews of latest power industry trends, regulatory changes, and major deals, projects and investments in India.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Competitive Landscape analysis.
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis, covering power markets, regulatory changes, major investments, projects and company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the power sector and within the broader political, economic and business environment.
BMI’s Power Forecast Scenario
Forecasts to end-2024 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:
- Generation: Electricity generation total, thermal, coal, natural gas, oil, nuclear, hydropower, hydro-electric pumped storage and non-hydropower renewables.
- Transmission and Distribution Losses: Electric power transmission and distribution losses.
- Trade: Total imports and exports.
- Electricity Consumption: Net consumption.
- Electricity Capacity: Capacity net, conventional thermal, nuclear, hydropower and non-hydroelectric renewables.
BMI’s Power Risk Reward Index
BMI’s Risk Reward Indices provide investors (power companies, service companies and equity investors) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors,
Structure, size and value of the industry sector; overview of the industry landscape and key players; an assessment of the business operating environment, sustainable energy policies, pricing and the latest regulatory developments.
Key Projects Database
Details and analysis of all current and planned developments (new ventures, capacity expansion and other investments) across the sector broken down by location, sector type, capacity, value, companies and operational status.
Illustration of the power industry that exploits our data-rich, in-depth analysis of the leading players in the sector and examination of operational results, strategic goals, market position and the potential for investment.
Power Outlook long-Term Forecasts
Regional long-term power forecasts covering electricity generation, consumption and capacity for thermal, hydroelectric and nuclear power. These are supported by a country specific overview, alongside an analysis of key downside risks to the main forecasts.
Providing BMI’s near-term economic outlook for the region as a whole, as well as taking a close look at countries of particular interest and the latest trends and developments.
The Power Market Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports, including Energy Information Administration (EIA), World Bank (WB) and United Nations (UN).