Nearly two decades after opening up the power sector, private investments in generation is restricted to a miniscule 15.3% of the total capacity. This average, however, hides the significant diversity in the progress of private power across different generating segments. At the bottom of the table is the nuclear power segment where the public sector monopoly has kept private investments out and limited the share of nuclear power generation capacity to 2.8% of the total generation capacity.
The scenario is equally dismal in hydro power. Though hydro-power capacity is just a quarter of the total generation capacity, the largely untapped segment offers vast potential for the private sector. In fact, the ?50,000 mw hydro-electric initiative? launched early this decade envisaged the preparation of preliminary feasibility reports of 162 hydro-electric schemes in 16 states.
But despite the high priority to hydro-generation schemes, whose additional potential was worked out to be about 1, 07,000 mw, the private sector investments in this segment has been negligible, with just 1230 mw of private generation capacity being built over the years. The total generation capacity of the private sector still accounts for just a 3.3% share of the 36,878 mw national hydel capacity set up so far.
Private investment in thermal power is somewhat more respectable, with its share a little more than 10% of the total thermal generation capacity of 93,475 mw. But a more detailed investigation show that the bulk of the private sector gains in thermal power generation is in the tail segments—in gas and diesel power generation.
While coal-based thermal plants account for the bulk of the thermal power generation capacity, accounting for 77,399 mw of the total thermal capacity of 93,475 mw, the capacity built by the private sector in coal thermal plants has been just 5,241 mw. This is just 7% of the total thermal power generation from coal, a minuscule amount, given that the ultra-mega power projects opened up for the private sector envisages 4,000 mw of capacity in each unit.
However, private investments have made much more headway in gas-based thermal units, contributing close to a third of the gas-based capacities and accounting for 4,566 mw of capacity out of the total countrywide capacity of 14,877 mw in this segment. In the diesel segment, private power made substantial gains, with the sector accounting for almost half of the 1,200 mw of capacity set up. It is, however, surprising that the private sector has made such massive inroads into such a risk-prone sector, especially given the uncertainties of oil prices. But a redeeming feature is that any negative impact of oil prices on the electricity segment would be minimal, since the segment has less than a percent share of the total electricity generation capacity in the country.
What is, however, most significant is that the largest component of private sector investments in the power sector has been in new and renewable energy, with its share going up to more than four-fifths of the total generation capacity, contributing 10,995 mw of the national capacity of 13,242 mw. In fact, the numbers show that almost half of the total power generation capacity built by the private sector so far has focused on the renewable energy segment.
The disparities in the flow of private investments into different power generation segments pale when compared to the inequalities across geographical regions. Overall, the bulk of the private investments in power generation has been concentrated in two regions. Top of the chart was the southern region, with a total capacity of 9,771 mw in the private sector, which was a massive 43% of the total private power generation capacity at the national level. The western region, the other major location, contributed an equally impressive 9,467 mw, which was 42% of the total generation capacity in the power sector. Consequently, the northern and eastern regions were left with just 8% and 6% of the total private sector capacities and the north-eastern region with still negligible shares.
But what is more interesting is the distribution of private power generation capacity in various regions. For instance, almost two-thirds of the hydro-energy capacity set up in the private sector was in the northern region while the western region accounted for the rest. The southern, eastern and north-eastern states have no hydro-power capacities built there despite the substantial potential offered by these regions.
The scenario in thermal power generation is vastly different from that of the hydro-segment with the northern region still waiting to commission even a single watt of capacity. Here, the lead was taken by the western region, with more than half the capacity built by the private sector, and followed by the southern region, which accounted for a third of the private power capacity built in thermal power. Additions to thermal power capacity by the private sector in the coal-rich eastern region were a bare 14% of the total.