Electricity generation began in India in 1898 with the commissioning of the first hydel power plant at Darjeeling with installed capacity of 20 lakh k. In 1899 one thermal plant with capacity of 1,000 km was set up at Kolkata.

In 1925 the total installed capacity of electricity of the country was 1.6 lakh km which increased to 19 lakh km by 1947 (12 times increase). The Tata Hydro-electric Works in Maharashtra, the Metter Scheme in Tamil Nadu, the Sivasamudram Scheme in Karnataka, and the Upper Ganga Canal Stations in Uttar Pradesh and the Mandi Scheme in Punjab were some important hydel power projects of the time. Use of the electricity was confined to the urban centers and for domestic pur­poses.

After independence, great emphasis was placed on the development of electricity in the Five Year Plans. A number of big power projects, particularly hydel projects, were executed as a result of which the installed capacity of electricity increased from 2,300 mw in 1950-51 to33,300mwin 1980-81 (14.5 times increase during last 30 years). The gain was spec­tacular after 1960-61 onwards.

In 1975 National Thermal Power Corporation Limited (NTPC) was set up which established a number of thermal power stations based mainly on coal in different parts of the country. Thus the installed capacity of electricity increased to 1, 31,400 mw in 2003-2004, exhibiting 295% growth during 1980-81 and 2003-2004.

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Ther­mal sector has the largest percentage share (61.26%) in installed capacity followed by hydro (22.45%) and nuclear (2.05). The actual genera­tion of electricity has also witnessed the similar phenomenal increase. It increased from 6.6 billion km in 1950-51 to 20.1 billion km in 1960-61
(204.5% growth), 119.2 billion km in 1980-81 (6 times growth between 1960-61 and 1980-81), and 633.3 billion km in 2003-04 (431.3% growth be­tween 1980-81 and 2003-2004). Here also 74.55% of the country’s electricity is generated under ther­mal sector (Table 16.XII). During last 43 years (1960-61 to 2003-2004) there has been 52 times increase in the generation of thermal electricity, against 8 times in case of hydro-electricity and 8 times in case of nuclear power.

This is due to heavy investment, longer gestation period and lack of suit­able sites in case of hydel and nuclear power projects. Recently some natural gas based power plants are being installed to accelerate electricity generation in the country.