Power is a key input for socio-economic development of India. Ensuring access to electricity for all households, availability of adequate power to fully meet the demand and increasing the per capita availability of electricity to over 1000 units by 2012 are the key objectives under the National Electricity Policy 2005. Government of India has introduced a slew of measures and policies towards achieving them.

While the power sector in India has witnessed a few success stories in the recent past, there are innumerable challenges resulting from the gaps that exist between planning & delivery. The bottlenecks facing the sector include project execution delays on account of land acquisition, environmental clearance, equipment shortage, manpower shortage etc. and operational concerns like fuel availability and schedule dependency on transmission lines. These issues, coupled with factors of climate change and grid security has led the government to recognise the importance of distributed power generation through Captive Power Plants (CPPs) as well as renewable source based Independent Power Projects (IPPs).

During the year 2009-10, the overall power generation in India increased to 771.5 Billion Units (BU) from 723.7 BU in 2008-09 recording a growth of 6.6%. The current demand-supply gap for electricity stands at around 10% with peak shortage at 12%. The Power Ministry has projected an actual power demand of 1077 BU by the end of 11th plan period. Against the capacity addition target of 78,700 MW under the 11th plan, approximately 9,585 MW of power generation capacity has been added during 2009-10. Triveni estimates one-third of all further capacity addition to happen through CPPs and renewable resource based IPPs.

As per the recent statistics, the total installed capacity in the country is 164 GW, 7.7% of which is from renewable energy sources. Industrial sector consumes 35% of the total electricity generated in the country. Industries that generate steam for their manufacturing process would logically add power generation to their fold. Even those industries that do not use steam for their core processes will add captive power generation in order to safeguard from grid problems and/or utilise the waste-heat productively. Most of the smaller industrial units have deployed diesel generators to counter the erratic power supply coming in way of their growing power requirements. With the cost per unit of electricity produced through diesel generators being quite high, these industries are increasingly shifting towards steam turbine based captive power generation. Industries like Textile, Distilleries, Breweries, Caustic Soda, Fertilizer, Paper and Pulp Industry, Solvent Extraction, Sugar, Rice, Petrochemical etc. have a significant power generation potential through co-generation.

Bagasse based co-generation in sugar mills and other biomass based power plants harness grid quality power. It is estimated that the surplus power generation in sugar mills alone, through bagasse co-generation, can lead to over 5000 MW of power supply to grid. While the biomass based power generation capacity has reached to about 900 MW during the year, its potential is estimated at around 21,000 MW in India.