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In order to ensure adequate growth in the nation’s power capacity in line with the rapidly growing electricity demand, the Ministry of Power has directed all states and union territories for adherence to ‘Resource Adequacy Guidelines’. 

As per the notification released by the Ministry of Power, the Indian economy is expected to keep growing at a high rate and become the third-largest economy of the world by the year 2030. As a result, power consumption has also surged, with the peak power demand rising by more than 79%, from 136 GW in 2014 to 243 GW presently. Correspondingly, generation capacity has also expanded, rising from 248.5 GW in March 2014 to 428.3 GW in December 2023, a 72.4% increase. Additionally, the nation has installed adequate inter-regional transmission infrastructure to move 117 GW of power across the nation.

Ministry of Power further noted that to cater to the rapidly growing demand, it is imperative that the country's generation capacity also develops at an accelerated rate. The Rule10 of the Electricity (Rights of Consumers) Rules, 2020 states that distribution licensees must provide power to all customers round-the-clock, with the exception of a few consumer categories for which the State Electricity Regulatory Commission has set lower supply hours. As a result, it is required that all distribution licensees tie up enough capacity for a round-the-clock power supply. In this regard, on June 28, 2023, the Indian government issued ‘Resource Adequacy Guidelines’ in accordance with Rule-16 of the Electricity (Amendment) Rules, 2022.