Electricity being one of the basic resources for day-to-day living, the technical availability of this resource is to be ensured with economic viability. This research is an attempt to study the impact of different features of power demand and power generation on the cost of electricity. This study is focused on the objective of cost efficiency in generation of power. The study has been made from three perspectives. At first, attempt has been made to address the problem arising from growth and fluctuations in demand of power. Secondly, in context of growing and fluctuating demand of power the study tried to assess the behaviours of supply of power in terms of installed capacity and capacity utilisation. Thirdly, efforts have been made to study the behaviour of cost of power with respect to utilization of capacity and fluctuation in demand, thermal hydro mix and nature of plants.