The year was one of mixed fortunes for the sector and would be best remembered for the hyped listing of Reliance Power Ltd, an Anil Ambani stable firm that had bagged deals for two ultra-mega power plants.
Although it came in the midst of the IPO boom, the stock was hammered down on its debut -- a phenomenon Anil Ambani blamed on people close to his estranged brother Mukesh. RPL tried to make up for some of the losses to the investors through a bonus issue.
The ambitious target of adding 78,000 MW of electricity generation capacity was overshadowed by the turf-war between equipment supplier BHEL and the nation's largest power utility NTPC, with the latter wanting to set up its own equipment manufacturing factory.
BHEL and its administrative ministry of heavy industries opposed the move tooth-and-nail and in the end the two formed a joint venture for a manufacturing unit but it remained to be seen if the new plant would come up just in time for meeting the XIth Plan targets.
The sector had missed by a mile, the targets set in the previous plans. For a sector battling tight schedules, another bad news lay on the fuel front firstly with coal shortages and then the price of naphtha shooting through the roof.
In the absence of alternate sources, plants ran below capacity and the infamous power cuts continued to plague major cities.
But relief was not far away when the recession in major economies saw oil prices crash in the last quarter, with naphtha prices collapsing to cost, for the first time in many years, cheaper than LNG.
The beleaguered Dabhol power plant struggled to piece together a viable revival plan as one unit or the other kept tripping and questions raised on the equipments supplied by reputed suppliers like GE.
While NTPC's plans for a follow-on public offer was put on back-burner, a planned IPO by NHPC was derailed by choppy stock markets.
The silver-lining for the sector was advancing of the completion dates for some of the ultra-mega power projects such as Sasan. Also, an import duty cut on naphtha helped generators cut on fuel cost when oil was peaking to record highs.
But there seemed to be no push for reforming the sector, which lost up to 40 per cent of electricity distributed to pilferers. The focus continued on adding new generation capacities.
Beginning of power exchange was a landmark development, with the country's first power exchange starting operations on June 27 this year. IEX, promoted by Financial Technologies (India) and public sector PTC India, has also Infrastructure Development Finance Company (IDFC), Adani Enterprises, Reliance Energy, Lanco Infratech, Rural Electrification Corporation (REC) and Tata Power Company as stakeholders.
Meanwhile, the government has set an ambitious capacity addition target of 78,577 MW during the XIth Plan Period (2007-12). It also plans to add 11,000 MW in the current financial year (2008-09).
It is hopeful of not only achieving the target but also plans to bring about a sea change in the power dynamics in the country.
"We still have a long way to go, lots of problem...fuel and gas shortage," Minister of State for Power Jairam Ramesh said, adding that "certainly, we have done much better than what we did in 15 years."
The Ministry of Power is also gearing up to tackle the coal situation in the country. "We are looking to provide speedy coal linkages to the developers....fuel linkages are very important," Power Secretary Anil Razdan said.
