By Pavel Choudhury
India recently faced its largest ever blackout in July, when around half its 1.2 billion people lost power. The outage stretched from Assam in the north-east to the Himalayas and the north-western deserts of Rajasthan.
Businesses and various services were badly affected. Delhi’s metro rail system, which serves 1.8m passengers-a-day, shut down on two consecutive days. Train stations in Kolkata also struggled and there were widespread traffic jams. Hospitals coped with backup generators during the outage, but 200 miners were temporarily stuck underground in Burdwan.
India’s economy suffers a peak-hour production deficit of about 10 per cent. With such a high power demand, which continues to increase and shows no signs of slowing down, the blackout has highlighted the massive opportunities that exist for Welsh energy companies in India.
Indian Power Minister, Sushilkumar Shinde, raised concern over demand by drawing attention to states that were drawing more than their share of electricity at peak times from the over-burdened grid. Between a quarter and 40 per cent of Indians are not connected to the grid, but increasingly have the economic desire and means to buy electrical products.
Unfortunately, the blackout was worsened by an unusually weak monsoon which lowered hydroelectric generation and kept temperatures higher, increasing electricity usage as people tried to cool off. The weak monsoons also lead to India’s farmers using electric pumps to draw well water to irrigate their crops.
Despite the unwelcome disruption to business, the blackouts have given renewed impetus to much-needed Government reforms on stalled power and infrastructure projects, which are now being fast-tracked.
India’s electricity distribution and transmission is mostly state run, with private companies operating in Delhi, Mumbai and Kolkata. Less than a quarter of generation is private nationwide and if the planned reforms go ahead, there will clearly be immense opportunities for overseas energy and infrastructure companies to expand in the market.
Recently, Swiss energy company ABB, won an order worth $33million from NPTC Limited, India’s largest power company, to build two substations in the western Indian state of Maharashtra. The substations will facilitate transmission of electricity from new power generation plants being constructed in the region.
Demand is key and improved power production is likely to further stimulate the economy. “Energy is like blood in your veins. It is as vital as that to economic growth,” said Rajiv Kumar, secretary general of the Federation of Indian Chambers of Commerce and Industry. “If there is a shortage of blood, you can’t function – similarly if there is a shortage of energy, the economy can’t work.”
The UK has started collaborating with India on cleaner coal technologies and have been advising some of the promoters of mega (40,000MW and above) coal-based power projects being set up in India to be carbon-capture ready.
The availability of fuel, and the large dependence on coal, which accounts for nearly 56% of India’s energy mix, has impacted on the country’s ability to meet its additional capacity targets. Increased use of power backup units also drove up demand for diesel and has had an impact on India’s import bill, adding to the current account deficit.
To address this, the government is trying to secure £255bn investment in solar power, opening up opportunities for specialists in the sector. Other areas of renewable energy generation such as wind power, waste-to-energy, tidal and geothermal are also being explored.
Pavel Choudhury is Communications and Editorial Executive at the UKIBC.