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Indian people walk a narrow lane as high-voltage cables come out from an power meter at a slum in Mumbai, India, Friday, Aug. 3, 2012. (Rajanish Kakade/AP)
Indian people walk a narrow lane as high-voltage cables come out from an power meter at a slum in Mumbai, India, Friday, Aug. 3, 2012. (Rajanish Kakade/AP)

INDIA

The lights are back on in India, but the future is dim Add to ...

The lights are back on in India, just in time for citizens to read dire predictions about how much worse the country’s power crisis may soon become.

Monsoon rains have been well below average so far this year. This means power-hungry northern states are generating less hydroelectric power than usual, even as their demand rises. The lack of rain keeps temperatures high and air conditioners running, while farmers are forced to do more electrically powered agricultural irrigation. Supply is dwindling even as demand swells steadily up.

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This week, it was northern and eastern states that were compensating for the lack of rain and overdrawing, but in the coming weeks, Maharashtra, Gujarat, Karnataka and Rajasthan, in the west and south, will be forced to do the same, the Indian Meteorological Department predicts.

Last Monday, the northern grid failed, leaving 380 million people without power for about six hours – which was, at the time, the world’s worst power outage. Less than a day later, India bested that record with a total collapse of the nation’s northern and eastern power grid, which left 670 million people, or about 10 per cent of the global population, without electricity. While power failures are routine across the country, the scale of this one crippled business, shut down some essential services, stranded train passengers and trapped miners underground.

The events of the past week have made clear that no system exists to prevent a repeat of the grid collapse, and no one in government has articulated a clear plan to address the crisis. Hours after Monday’s blackout, the central government promoted Power Minister Sushil Kumar Shinde to one of the cabinet’s two most powerful posts, that of Home Minister. He told reporters his performance as Power Minister was “excellent” and said “this country does not need to worry” about the electrical shortfall.

On a typical day with all systems functioning as normal, India is 12 per cent short of meeting its energy needs. Even with the grid fully operational, more than 400 million Indians have no access to electricity. Ironically, the impact of this collapse might have been even greater had India had more success meeting its electrification targets. While 1,100 trains froze on their tracks this week, for example, stranding tens of thousands of people, only a third of trains have been switched to electricity from diesel, which has been a government plan for decades – so the rest of the trains kept running.

But electrification is slowly and steadily taking place, driving up demand at the same time that the economy grows and industry expands, also straining the existing power supply. The national planning commission says power undersupply is costing the country 1.2 per cent in GDP growth each year.

The cause of the grid collapse remains unclear. Many power experts predict it will eventually be shown to have been human or mechanical failure. But most of the blame is being pinned on “greedy” states that sucked more than their share off the power supply, which is apportioned out in ratios determined by the central government. The states angrily deny they were overdrawing, saying they were no more than 5 per cent above their allotted draw – but the national ministry has produced evidence that, for example, massive Uttar Pradesh was warned no fewer than 402 times between June 1 and July 16 for exceeding its allotment of electricity.

Last Monday, the Central Electricity Regulatory Commission ordered the top officials in five states to appear before it two weeks later to explain the excessive draws; hours later the grid collapsed.

The fines paid by states for overdrawing are substantially lower than the price they would pay to buy electricity if they exceed their allotted draw. And, Indians learned this week, monitoring officials don’t have the authority to disconnect states if they are overdrawing, even when the entire grid is at risk. And the powerful governments in Uttar Pradesh and Punjab, in particular, bully bureaucrats, who are supposed to protect an overdrawn grid with rotating blackouts, into keeping their lights on.

There are also other culprits, including extremely poor management of utilities and lack of maintenance. The central load centre was not monitoring demand at the moment the collapse happened, the government acknowledges. Budgets for maintenance of the power system have been slashed because the government will not permit a hike in tariffs. A parastatal company called Coal India supplies most of the coal for electricity generation but is chronically short of fuel and frequently accused of gross corruption.

Electricity supply to farmers is heavily subsidized in many states, a trusted political sop. Most utilities are operating at a loss and with large debts, because of the artificially low price of power, and that is preventing new investment in infrastructure.

The delivery of the power that does get produced is plagued by “last-mile” problems: a frail, dysfunctional grid, poor monitoring and rampant power theft. In some cases, transmission and distribution losses are as high as 60 per cent of what is generated.

Prime Minister Manmohan Singh says the country needs to spend $400-billion on power generation in the next five years. The country has missed every single target for power supply expansion since 1951.

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