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The India captive power generation market size is forecast to increase by USD 7.81 billion, at a CAGR of 7.6% between 2023 and 2028. The market growth and forecasting report includes historic market data from 2018-2022. The market growth analysis report is witnessing a growing demand for the increasing adoption of cogeneration plants, the changes in regulations for these projects, and the shift toward renewable energy sources
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The shift toward renewable energy sources is the primary trend shaping market growth. India has shifted its focus toward renewable energy sources for energy generation. The significant rise in the adoption of renewable energy sources is attributed to the competitive prices and compared with the traditional modes of energy generation. By the end of 2024, more than USD16 billion is expected to be invested in the renewable energy sector in India in 2024. Moreover, the market is highly influenced by the shift toward renewable energy sources, resulting in the installation of renewable energy-based plants.
Consequently, the adoption of renewable energy-based plants is expected to fuel the market during the forecast period, due to stringent emission standards and the focus on achieving a sustainable ecosystem. The cost of energy generation through such sources is expected to decline further due to the developments in technologies and production capacity. Therefore, the use of renewable energy sources will drive market growth during the forecast period.
The extraction and production of metals and minerals consume huge amounts of energy at all stages, such as mining, chemical extraction, beneficiation, and recycling. Processes such as smelting, leaching, and electrowinning are energy-intensive processes. In addition, the amount of load variation associated with the processes is very high, which affects the stability of the grid. Owing to these factors, the metals and minerals end-user segment is highly dependent on captive energy generation.
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Additionally, large metal and mineral manufacturers such as Essar Global Fund Ltd., Jindal Steel and Power Ltd., and Tata Power Co. Ltd. are the major contributors to the overall generation capacity of India. Aluminum smelting is another extremely energy-intensive process, as the cost of the energy required to produce aluminum accounts for almost one-third of the total cost of production. Therefore, the growing demand for metals and minerals will drive the market during the forecast period.
High industrial power tariffs is the key factor driving market growth. The high-cost tariffs generally have a negative impact on all the industries that rely on electricity inputs as they increase the competition between domestic manufacturers and international manufacturers. Additionally, for applications such as metal smelting or steel manufacturing that require blast furnaces or energy-intensive processes, the high industrial power tariffs result in high costs of operation, thereby increasing the overall operational expenditure (OPEX) of the companies. However, these tariffs continue to rise for industrial applications.
Furthermore, the manufacturing sector has emerged as one of the fastest-growing sectors in India with the assistance of initiatives such as Make in India. Owing to the energy-extensive nature of the sector and the high industrial tariffs, several organizations have turned toward installing their own plants for captive consumption instead of relying on the grid. As a result, several players in energy-intensive sectors have installed plants to cater to their domestic needs. Thus, such factors are expected to drive market growth during the forecast period.
Shortage of coal for captive power generation is a challenge that affects market growth. Due to reasons such as the government's plan to prioritize the supply of coal for its power-producing utilities, plant owners have been experiencing coal scarcity. Further, the Indian Government stressed the supply of coal, especially to utilities, to ensure a steady supply of electricity. In more than 100 thermal power plants in India, coal stocks have fallen below 25% of the required stock. Historically, captive power plant operators have borne the burden of coal scarcity.
Moreover, the lack of coal hurts operations and puts the manufacture of several end-products, including steel, cement, aluminum, and fertilizers, in jeopardy. As a result, plants are not operating at full capacity, which has an impact on the manufacturing facilities' output. Furthermore, plants are charged a greater price for coal than independent power plants (IPPs). Hence, such factors may impede market growth during the forecast period.
The market research report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Fuel Type
8 Market Segmentation by Ownership
9 Customer Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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