Gujarat stands out as the leading state in India for electricity generation by the private sector. Over the last five years, however, states such as Rajasthan, Odisha, and Chhattisgarh have witnessed the most significant percentage increases in power supplied by private companies.
Between the fiscal years 2019-20 and 2023-24, Rajasthan recorded the highest growth, with private power supply surging by an impressive 125%. The state’s electricity supply from private entities skyrocketed from 28,225 million units (MUs) in 2019-20 to 63,500 MUs in 2023-24, according to data presented in the Rajya Sabha during the recent winter session. Similarly, Odisha and Chhattisgarh experienced over a 60% increase in private sector electricity supply during the same period, with Odisha’s private power generation rising by 63% and Chhattisgarh seeing nearly a 60% boost.
Other states, including Haryana (50% growth), Tamil Nadu (44% growth), and Uttar Pradesh (40% growth), also experienced notable increases in power supplied by private firms. On average, the share of electricity produced by private players across India rose by 29% over the five years studied. The total electricity generated by private entities increased from 5.35 lakh MUs in 2019-20 to 6.9 lakh MUs annually.
Experts in the energy sector highlight that the growth of private sector electricity generation in India is accelerating, surpassing both state and central contributions. From 2008-09 to 2023-24, the state sector’s share of total installed generation capacity fell from 54% to 24%, while the central sector’s share dropped from 31% to 24%. In contrast, the private sector’s share surged from 15% to 52%. Currently, out of a total installed capacity of 456,757 megawatts (MW) in the country as of November 2024, private players account for over 53%, or approximately 243,974 MW.
Atanu Mukherjee, CEO and President of Dastur Energy, attributes the increase in private sector electricity generation in states like Rajasthan, Odisha, and Chhattisgarh to targeted policy reforms, infrastructural improvements, and enhancements in operational efficiency. He notes, “Since 2018, Odisha has experienced a significant revival of its renewable energy policy, with a growing focus on solar and wind power. These renewable sources now make up over 45% of the state’s energy mix. With relatively low domestic demand, Odisha has excess power that allows it to sell electricity to neighboring states. This blend of renewable energy emphasis and effective utilization of surplus capacity has played a key role in the rise of private sector power supply. Likewise, Rajasthan’s strategic planning and its emergence as a hub for renewable energy have facilitated meaningful contributions from private players.”
He further adds, “Chhattisgarh’s initiative to minimize transmission and distribution losses has been transformative. By tackling issues such as theft, unnecessary power consumption, and billing inefficiencies, the state has enhanced the financial stability of its power sector. Additionally, improved grid connectivity and comprehensive network planning have fortified its energy systems, ensuring reliable power supply. These strategies have fostered an environment favorable to private sector investment.”
Among all Indian states, Gujarat continues to lead in private electricity generation. In the year 2023-24, private companies in Gujarat produced 97,000 MUs of power, the highest in the country. This represents a 4% increase from 2019-20. Following closely is Chhattisgarh, generating 85,000 MUs during the same period. This output significantly exceeds that of more developed states like Maharashtra and Karnataka, which produced 76,000 MUs and 40,588 MUs, respectively.
