Page 231 - DECO502_INDIAN_ECONOMIC_POLICY_ENGLISH

Unit 19: Sectoral Performance II: Role of Infrastructure in Economic Development

Table 6. Growth of Installed Plant Capacity in Public Utilities (in thousand MW) Notes

Year Hydro Thermal Nuclear Total
1950-51 0.6(33) 1.1 (67) -- 1.7
1970-71 6.4 (43) 7.9 (59) 0.5(2) 14.7
2000-01 25.1 (25) 73.6 (72) 2.9 (3) 101.6
2008-09 36.9 (25) 107.0 (72) 4.1 (3) 148.0 (100)
2009-10 36.9(23.0) 118.0(74.0) 4.5(3.0) 159.4(100)
Note : Figures in brackets are percentage of total installer capacity.
Source : Economic Survey, 2010-11.

Hydel Power
Hydro-electric power is a renewable natural resource. In 1950-51 installed capacity of hydro-power
was 560 MW but by 2009-10 it had increased to 36,900 MW; but in relative terms, it had declined from
33 per cent to 23 per cent. (This was because of the greater growth of thermal power since 1951)
Hydel power has several advantages :
(a) It is the most economical source of power
(b) There is no problem of pollution of atmosphere or disposal of waste in generation of hydel
power; and
(c) Oil, coal and natural gas resources which can be used for producing electricity are in short
supply and have implications in terms of high costs and exert greater pressure on foreign
exchange resources; hydel power can easily replace them.
It has, however, been aruged that hydel projects take a long period of gestation as compared to thermal
projects. This point was examined by the Power Economy Committee which after thorough investigation
concluded that in case a hydro project is thoroughly examined and designed before implementation,
the actual period of construction is nearly the same as that of a thermal project. This explains why the
Power Commission in 1962 and Energy Survey of India Committee (1965) recommended that greater
reliance be placed on hydro-projects. After the tremendous enthusiasm for hydro-electric projects during
the First and the Second Plans, there was a slackening of emphasis of hydro schemes. This was an
unwise step, and there was a need to reverse this trend. Emphasising this as a future directional change
of policy, the Power Economy Committee (1971) stated : “Under the existing conditions in the country,
the hydel schemes constitute the most economic source of electric production .... To control and reduce
the cost at energy generation and supply in the country, to enable full utilisation of generating facilities
already built up and to ensure that the limited capital allocations to the power supply industry go the
farthest in meeting the country’s estimated deficit, the bulk of the new generating capacity to be added
during the 5th and 6th Plans should be derived from hydro sources.”
In spite of these clear advantages claimed for hydro-power, and despite the fact that only one-fifth of
hydro power has been harnessed in the country so far, the Government has been relying more on
thermal power to relieve the power shortage in India.
During 1998-99, the Governemnt of India announced a policy on Hydro-Power Development with a
view to exploiting the vast hydropower potential available in the country at a faster rate. Accordingly,
action was initiated to add nearly 8800 MW hydel capacity in the Central Sector by 2004-2005.
Thermal Power

Thermal power which is generated by coal and oil has always been the major source of electric power
in India. In absolute terms installed capacity of thermal power had increased from 1,150 MW in 1950-
51 to 1,18,000 MW in 2009-10; and in relative terms the share of thermal power had increased from 67
per cent to 74 per cent during this period. Bulk of the thermal power is derived from coal and only a
small fraction comes from oil. Both coal and oil are non-renewable and exhaustible resources. Low

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