Electricity generation by power utilities during 2007-08 was targeted to go up by 7.2 per cent to 710 billion KWh. The growth of power generation in April-December 2007 was lower than the targeted growth rate. While growth in all three segments, that is, thermal, hydro and nuclear generation, slowed down, nuclear power generation, in particular, showed the sharpest decline during the current year in comparison to the corresponding period last year. The deficit in power supply in terms of peak availability and of total energy availability during the current year was 14.8 per cent and 8.4 per cent, respectively. While shortages are being experienced by each region, they are more acute in the North-Eastern and the Western Region. In the case of the thermal power sector, the State, Central and private sector plants reported a plant load factor (PLF), a measure of efficiency, of 70.2, 85.4 and 92.5 per cent, respectively, during April December 2007-08. The PLF in each of these sectors as well as in every region has improved over time. However, there is a marked variation across the regions. The power sector is a major consumer of coal using about 78 per cent of the country’s coal production. Coal-fired thermal units account for around 62.2 per cent of total power generation in the country. Thus, coal continues to be the mainstay for the power sector. Based on the status of various projects, for the capacity addition, the target for 2007-08 was fixed at 12,039 MW, of which 7,263 MW has been commissioned up to January 31, 2007. It is expected that the total capacity addition during the current financial year would be 10,821.8 MW with thermal, hydro and nuclear accounting for 8,015 MW, 2,587 MW and 220 MW, respectively.

There are 45 hydro projects with an aggregate capacity of 15,000 MW under construction. Preparation of pre-feasibility reports of 162 schemes with aggregate installed capacity of 49,930 MW has been completed by CEA. Bulk of the potential which is in the Himalayan region — the hill States of Jammu & Kashmir, Himachal  Pradesh, Uttarakhand and the North-East— is yet to be tapped.

Under the Electricity Act of 2003, “trading” has been recognized as a distinct licensed activity in addition to distribution and transmission. Trading helps in resource optimization by facilitating the disposal of surplus power with distribution utilities on the one hand, and in meeting short-term peak demand on the other. The Central and State Electricity Regulatory Commissions have powers to grant inter-state and intra-state trading licenses, respectively. CERC has granted 26 inter-state trading licenses so far. Traders are categorized on the basis of volume of electricity to be traded and net worth of the trader.