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Power Sector in India – Darkness Ahead?

At the very start, let me throw a few numbers at you, just don’t get confused by them. India has the fifth largest installed power capacity on the world (the first four are – US, Japan, China and Russia –in that order), and is one of the top power consumers. You think this is good enough? OK – let us have more numbers – India has an installed power capacity of approximately 150 MW (2009), which is 4% of the global capacity. The per capita power consumption (per year) in India is about 720 KWh (or units), which is less than 5% of the per capita consumption in USA, and less than 20% than that of China. The global per capita consumption of power is about 2,340 KWh (Units).

Indian Power Sector – A Brief Snapshot

Indian Power Sector - Darkness Ahead?

Indian Power Sector - Darkness Ahead?

If you consider the Indian power sector, a very bleak picture emerges. If there have been any achievements, they are definitely been very few and far between – and none of them worthy of any mention. There are schemes galore – but they have largely remained on papers, and no effect has been felt on the ground. If you live anywhere in India – you can definitely vouch for this. Just think – has the power situation improved or worsened where you live? I can easily guess your answer.

Let us consider a few chief highlights of the Indian power sector, as it currently is -

>> Current installed power generation capacity – 150,000 MW (approximately).

>> Domination of public sector enterprises – National Thermal Power Corporation(NTPC), National Hydroelectric Power Corporation (NHPC), Nuclear Power Corporation of India (NPCI) and Power Grid Corporation of India.

>> Of this, 75% is constituted by thermal power(coal based and gas based), 21% by hydro electricity power, 3.5% by nuclear power and less than 0.5% by wind and solar power.

>> More than 50% of the power generation in India is coal based.

>> Gap between peak electricity demand and production – 12%

>> Though 80% of rural areas have been connected to electricity, less than 45% of rural households have access to electricity.

>> Transmission and distribution losses – 35-45%.

A close look at the above figures reveals the bleakness of the Indian power sector. For example, let us start from the last point – transmission and distribution losses. Rajiv Gandhi had once remarked about 5 paise out of 1 rupee reaching the intended beneficiaries. The situation is somewhat similar in the power sector, where out of every 100 units produced, 33 are lost during transmission and distribution! Most of this is due to power theft.

The power generation in India is largely coal based – thus adding to the already heavy pollution.

The persistent gap in peak demand and supply levels of electricity has meant frequent power outages, even in the so called metropolitan cities – some of which pride themselves as global software hubs (I live in one such city).

Indian Power Sector – The Challenges

In typical fashion, the government has set up hugely ambitious targets for the past many years, and failed miserably every time. Consider this – during the past three 5-Year plans (8th, 9th and 10th), the target achievement rate in installing fresh power generation capacity has been less than 50% ! Yet still, every year a higher target is set. The top reasons for this massive slippage are –

- delays in technology procurements,

- delays in awards of works,

- delays in clearances and land acquisition,

- delays in financial closure,

- court cases,

- law and order problems, and

- lack of trained manpower.

Let us have a look at the current target. Till 2012, the installed capacity is planned to increase by 78,000 MW – a steep target, especially considering that the current installed capacity is only 150,000 MW. Now, what is the game plan to achieve this massive 50% boost, and that too in the next TWO years, is something that only the government of India can reveal.

Another crucial factor is the really huge finance that will be needed for this expansion – it is estimated that the targeted enhancement will need an investment of RS 7,50,000 crores (more than USD 150 billion). With fiscal deficit already approaching 10 % of GDP, it is anybody’s guess where this money will come from.

Urgent Overhaul Needed

The power demand in India is set to explode in the coming years. Various estimates suggest that if (a very big IF indeed) India wants to sustain a 8-9% GDP growth over the long term, it will need to have 4,00,000 MW of installed capacity by 2020! The situation becomes more daunting, almost impossible, if 2030 estimates are believed – at 9,50,000 MW! Please remember, the total installed capacity as of 2010 is 150,000 MW only!

Whether India will be able to achieve these figures or not, is really a moot question. But considering the current track record of our performance, you will definitely not like to place any bets!

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9 Responses

  1. ya i agree with your article……….
    India has a rich source of methane in various forms like cow dung etc. and fortunately we have technology(compatible with present tech.) to generate electricity out of that.so of we start using resources like methane for generation then:-
    1.generation problem will resolve
    2.no harm to envoirment
    so far as transmission problem is concerned we have to modify our belief system that rather than building a big high capacity power plant we have to install number of small (~1 to 2 MW) plants .in short “one plant one area”.it will resolve following problems:-
    1.transmission losses will be reduced
    2.more jobs to common man(as small plants donot require highly qualified candidates)

  2. I actually quite liked the irony of the title and see that you have got quite a vivid audience who either love you or hate you…:)
    Though I am not an expert on the subject, I do wish to know if anything can be done with renewable energy sources like the wind power. India does have many areas where wind energy can be tapped so is it a worthwhile attempt if done on a large scale?

  3. Siddharth, I liked all your articles so far…

  4. sorry i don’t agree with the title you has given for this article …i’m sure india will not get into dark….

  5. apparently it wasn’t the best language that i cud’ve used but i just got carried away reading ur phenomenal article. it seriously amazes me that u see darkness ahead. the T&D thing that u quoted was correct three four years back. this was the latest i cud find: http://www.financialexpress.com/news/centre-seeks-s-koreas-help-to-reduce-t&d-losses/635298/
    i understand 50% coal isn’t that good, but being a developing country we don’t have many choices and by no means does it make future of power sector dark.
    pardon me for the language but well considering the article i still doubt if i need be sorry. nwz take care and plz be a bit more careful next time. cheers!! bye..

    • Hi,

      I always welcome disagreement, as long as the language is acceptable for family reading.

      It is OK that you disagree with the T&D losses figures – I have based the estimate on a white paper submitted by a highly reputed global consultancy service. Government estimates are significantly lower than those figures – for obvious reasons. I will cite another example – the poverty figures in India differ widely – even when the estimates are done by different Government bodies.

  6. Apparently, you are a kid, and as such, I will excuse your language, which has been suitably modified for family viewing. I hope your mother was not reading this!

    As for your facts and figures, I am not sure what got your goat.

    T&D losses – I stand by my figure.

    80-90% target SHALL be achieved – I hope you are correct – though previous records somewhat blunt my enthusiasm on this front.

    50% power generation from coal – Nowhere have I said that is bad – even though it IS actually so – you will learn more about environment as you grow up!

    Respect for my country – Don’t teach me son – you don’t know me!

    I will allow your reply, but if you use the same type of language – I will trash your comments. And call your mother!

  7. dude i’ve only one thing to say “*****”. how in this world u calling urself a pro blogger. currently indian power sector is going through its best ever phase. insead of using big words prefer quoting facts and correct facts please.
    *current T&D losses are 26.7%
    *in the eleventh five year plan 80-90% of the target shall be achieved, based on the progress made till date.
    *by the time u wrote this article installed capacity had reached 160,000 MW
    *and 50% of electricity coming from coal is not even close to bad. around world average only. china depends on coal for more than 75% of its energy needs.

    ma sincere request to you: have some respect for your country and take some note of what u sayin.

    PS: even if a kid can find these many mistakes in such a small piece of urs, can imagine what sort of pro u are.