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Why India’s Energy Sector is making rapid progress with impressive execution of policy and growth

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The new face of India’s Energy sector

India’s energy sector has been the star performer under the new Modi government. Though the new government has unleashed a host of policies such as Make in India, Digital India etc., the most progress has been seen in the energy sector. Electricity supply has become surplus in many places instead of chronic deficits. Coal mining effectively saw the first transparent allocations, after the Supreme Court rejection of the private arbitrary allocation of coal mines to private parties in the last decade or so. This allowed the government leeway to implement major reforms and it earned billions of dollars as a result of auctioning the mines. Earlier the mines were simply given away, leading to runaway profits by private companies who made out like bandits (both literally and figuratively).

Reforms have also been implemented in the electricity distribution space, where the government has implemented new reforms. Renewable energy has been the undisputed growth leader in the last one and half years, with India’s solar energy being the toast of foreign investors who have committed billions of dollars. Auctions for almost 10 GW of tenders will be done in this year, which is massive compared to India’s total installed solar capacity of 4 GW. The government is on track to raise annual solar installation to 10 GW a year. Some reforms have also been done in the sick oil and gas space, which has been hurt by falling prices as well. Subsidies using a market mechanism has allowed some of the gas power plant to operate at 40-50% PLF from 0 previously, giving relief to the Indian consumers, banks and developers. The government is also set to sell the small and marginal oil and gas fields. New mechanism of a revenue sharing model over PSC is also set to be implemented for the new NELP round.

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New production targets for coal mining imply that India will import much lower coal than it does now. As I wrote earlier it was criminal of India’s government to allow a situation where the country was importing 200 million tons of coal (only 45 tons of met coal), even when India had the 3rd largest reserve of coal (enough to meet India’s demand for more than a 100 years).

The main mover and shaker has been Piyush Goel who handles 3 crucial ministries of coal, power and renewable energy. He has single handedly put India’s energy sector in a growth trajectory removing major hurdles. The transparency has also been exemplary in India’s famously corrupt government operations. Solar power prices have fallen below Rs 5/kWh, mainly due to high competition and a level playing field. Unlike many of the mediocre ministers in PM Modi’s government, Piyush Goel has got things done both at the policy and the ground level. He has set a new benchmark of performance which others are finding extremely hard to follow. PM Modi must replace his under-performing ministers to help India reach its potential.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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