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The power industry plays a vital role in the economic development of any country. This article would enable one to have an in depth understanding of the power industry in India, its growth in India since independence, the various sources of power and its future in the country.

Power Industry

The critical role played by the power industry in the economic progress of a country has to be emphasized. A self sufficient power industry is vital for a nation to achieve economic stability.

Indian Power Industry

Before Independence
The British controlled the Indian power industry firmly before Independence. The then legal and policy framework was conducive to private ownership, with not much regulation with regard to operational safety.

Post Independence
Immediately after Independence, the country was faced with capacity restraint. India adopted a socialist structure for economic growth and all the major industries were controlled by public sector enterprises. By 1970's India had nationalized most of its energy assets, due to its commitment to social goals. By the late 1980's the Indian economy felt the strain of the socialist agenda followed since independence. Faced with a serious deterioration in public finance and balance of payment crisis, the Union government as part of its policy of economic liberalization allowed greater investment by private sector in the power industry.


Constitutional Position
Power as a matter of legislative and executive competence, falls in the Concurrent List (List III of the Seventh Schedule to the Constitution of India).Both the Parliament and state legislatures have the rights to pass laws on the matter and any law passed by the Parliament overrides the existing state laws unless
  • The existing law is conserved or saved from such a repeal or
  • A law passed by the state legislature receives acknowledgment from the President of India.
Post Liberalization
Understanding the critical part played by the power industry, the Union government passed several laws and restructured the Power Industry to gear it up to meet the challenges posed to the Indian economy post Liberalization.

Electricity Bill 2001
Learning from the experience gained through various reform initiatives, the Indian government passed the Electricity Bill 2001.The Bill seeks to
  • Consolidate and rationalize existing laws.
  • To address the issues of developing industry including regulation, power trading, non discriminatory open access, choice of dispensing with vertically integrated state enterprises and encouraging private enterprise.
Energy Conservation Act 2001
The Act was enacted by the Indian government to facilitate stringent steps to ensure the efficient use of energy and its conservation. A Bureau of Energy Efficiency was set up to monitor and regulate the Power Industry according to the provisions of the act.

Non Renewable Energy

Fossil fuels
The Industrial Revolution in Europe in the 19th century forced human's to seek alternative sources of fuel to cater to the increasing demand. Focus was shifted to fossil fuels as an alternate source of energy.

Fossil fuels were formed millions of years ago. They are nothing but fossilized organic remains that after millions of years has been converted into oil, gas and coal. Because this process takes a long time, they are known as non renewable.

It is the most easily available fossil fuel in the world. It is mostly carbon and is used as a combustion fuel, especially after the Industrial Revolution. Coal can further be divided into lignite, bituminous and anthracite. Lignite and Bituminous have lesser percentage of carbon and therefore burn faster. They are not environmentally friendly, Whereas Anthracite has about 98% carbon and therefore burns slowly and is more environmentally friendly. Coal can be found in both underground mines and open mines.

Though Petroleum gained prominence through the 20th century, coal still continues to be the most used raw material for power generation.

Oil and Gas
Oil and Gas is mostly found in underground rocks. Millions of years ago when plants and animals died, they got buried in layers of mud and sand. The earth's crust changed its shape and put immense pressure and heat on the dead plants and animals. Over a period of time, the energy in those plants and animals changed into hydrocarbon liquids and gases. They then turned into chemicals called hydrocarbons .Most of the hydrocarbons is found under the sea bed. Oil has a disastrous effect on the environment and many scientists believe the main reason for global warming

Natural gas is usually found near a source of oil. It is a mixture of light hydrocarbons. It is lighter than air and is odorless. It is therefore mixed with a chemical that gives it a strong odour and thereby easy to detect in case of a leak. It is the cleanest burning fossil fuel.

Renewable Energy
Because of the environmentally disastrous effect of non renewable energy, an alternate source of energy which would not pollute the environment and which can also be renewed was tapped. They are known as renewable energy. The various types of renewable energy are

Solar Energy
It is the most easily available renewable resource. After the oil shock in 1970's many countries conducted research work to tap solar energy. It is believed in the next few years millions of consumers across the world would switch to solar energy. In India the Indian Renewable Energy Development Agency and the Ministry of Non Conventional Energy Sources are devising strategies to encourage the usage of solar energy.

Solar energy can be used for cooking, heating, drying, distillation, electricity, cooling, refrigeration, cold storage etc.

Hydel Energy
Energy available in fast flowing water can be used to generate electricity. Waves occur due to the interface of the wind with surface of sea and represent a transfer of energy. This energy can be tapped for commercial purpose.

Hydro Power
It is the one of the best, cheapest and cleanest source of power, though large dams could have environmental and social repercussions. In view of these problems associated with larger dams, experts have advocated the construction of smaller dams. New environmental laws to safeguard the planet from the effects of global warming have made smaller hydropower projects more viable.

Wind Energy
It is the kinetic energy used for many centuries in water sports like sailing and for irrigation. It converts kinetic energy into more usable forms of power. Wind turbines help to convert the energy in the wind into mechanical energy which can be used for generating power. Since the late 1980's the viability of wind energy has gained in prominence across the globe. In India the states of Tamil Nadu and Gujarat lead in the field of wind energy.

It is sourced from the carbonaceous waste of animals and is also the by products from timber industry, agricultural crops, raw material from forest, household waste and wood. It can be used to generate power with the same power plant that are burning fossil fuels and is very much environmentally friendly.

It is being used in the western countries for applications such as combined heat and power generation. In India 90% of the rural households and 15% of the urban households use bio mass fuel.

Nuclear Energy
Nuclear energy can be created in nuclear reactors under strict human control. The nuclear power can be generated by the fission of uranium, plutonium or thorium or the fusion of hydrogen into helium. Nowadays mostly Uranium is used for generating nuclear power. With a view to increase India's dependence on nuclear energy to offset the energy crisis in the country, the Indian government entered into an agreement with the government of USA called the 123 agreement. This agreement aims to assuage greater cooperation between the two countries in the field of nuclear technology.

Future Trends
  • According to experts the private sector would play a greater role in power generation and foreign investments would increase considerable in his sector.
  • The government of India’s Hydrocarbon vision 2025 gives in detail the guidelines for the policies in India for the next 25 years to attract investment in exploration, production, refining and distribution of petroleum products.

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