As per the Ministry of Power ("MoP"), GoI, the all India installed capacity of electric power generating stations was 112,058.42 MW as on March 31, 2004. This total capacity consisted of 29,500.23 MW hydro power based capacity, 77,968.53 MW thermal power based capacity, 2,720 MW nuclear power based capacity and 1,869.66 MW wind power based capacity. Nevertheless, end consumers of electricity continue to experience shortages in terms of reliable access to electricity. It is estimated by the Ministry of Power that the current power shortage is 7.1% and the peak power shortage is 11.1%.

The 16^th Electric Power Survey carried out by the Central Electricity Authority has projected a peak demand of 115,705 MW and an energy requirement of 719,097 MU by the end of 10th Five Year Plan (2002-07), according to the Secretary, Ministry of Power, GoI in his presentation at World Bank Conference "Energy Week 2004' held from March 8, 2005 to March 12, 2005 in Washington, USA, while the peak demand and energy requirement by the end of the 11th Five Year Plan (2007-12) has been projected at 157,107 MW and 975,222 MU respectively. The GOI has targeted capacity additions of about 41,000 MW during 10th Five Year Plan. Further, in order to provide power on demand to all consumers by 2012, the GOI plans to add around 100,000 MW of additional capacities during the 10th and 11th Five Year Plan periods. (Source: 16th Electric Power Survey).

The National Electricity Policy 2005, inter alia, calls for:

• Access to electricity to be available to all households in the next 5 years;
• Availability of power to fully meet the demand by 2012. Energy and peaking shortages to be overcome fully; and
• Supply of reliable and quality power.

Also, the National Electricity Policy expresses the need to use non-conventional energy sources such as co-generation, small hydro, solar, biomass and wind. It has also prescribed that the State Electicity Regulatory Commissions would determine the percentage of power that should be purchased from such sources of energy, apart from allowing 100% foreign investment as equity. Other sources which are covered under non-conventional/ renewable energy include, Photo-voltaic, Geothermal, Tidal and Urban & Industrial waste based power projects (Source: Ministry of Power). Such sources of non-conventional and renewable energy sources shall also assist in bridging the demand supply gap.