Power is also known as electricity is one of the important components of infrastructure that effects economic growth and well being of countries. The existence and growth of adequate infrastructure is vital for the continuous growth of the Indian economy.  The Indian power sector is the most diversified one in the world. Sources of power generation can range from conventional sources such as lignite, coal, oil, nuclear power, natural gas and hydro to other feasible non-conventional sources like wind, solar and domestic and agricultural waste. The electricity demand in our country has been constantly increasing and is expected to grow further in the years to come. To meet the increasing requirement of electricity, an enormous addition to the installed generating capacity is required.

The electric power industry’s key objective is to attract investment for more efficient production as well as transmission activities. Investment on new generation capacity addition is quite risky as it is expected to become more cautious under the de-regulated electricity market environment. The main reason is because the investors are keen in short term investments and are hesitant to invest in generation capacity that requires large investment and a long recovery period and also has many increasing uncertainties on load variation and restricting policies.

Investors are likely to spend a substantial amount of time as well as effort in analyzing the interaction between the investment and the decentralized decisions of the participants. While taking a generation investment decision, the expectation regarding variations in the regulatory policy, future electricity demand, financial status as well as spot market prices are some major considerations. The timings, location and capacities of new power plants are basically at the discretion of the generating companies, even though an indicative generation plant could be provided by the regulatory to guide and monitor the planning and investment.

The growing population and emerging counties are some of the key drivers of the power generation market. But however the cost required to carry out the maintenance activities could hamper the growth and of this market. Large opportunities are therefore power generation as the demand for electricity is rapidly growing at a fast pace in Asia Pacific counties specially countries like China and India. The power generation sector of India has an investment potential of about 15 trillion in the next five years. The goal of the government is to produce 2 trillion units of energy by 2019, which means doubling the current generation capacity in order to provide energy 24x7 for various purposes in the country.