Power Shortage and Its Impact on the Indian Economy

The power supply position of the country remains grim even in the first year of 12th Five year plan 2012-2017 in spite of massive 55000 MW capacity addition in the 11th plan against meagre capacity addition of 21000 MW in the 10th plan. The country suffered energy shortage of 2011-12 as the supply was 858 BU (billion units) against the demand of 937 BU. The peak power demand during the previous year 2011-12 was 1,30,006 MW while the availability was 1,16,191 MW, thereby rendering a peak demand gap of 10.6 percent.

The power supply position during the current year 2012-13 also seems to be same or even worse. The peak power demand so far has been 1,35,453 MW. The peak demand is likely to touch 1,37,000 MW during the month of March 2013 whereas the viability could be 1,24,200 MW leaving 1 gap of around 10.5 %. The energy demand for the current year is expected to be 1015 BU against the expected energy supply of 925 BU thus leaving a gap of around 90 BU i.e. 8.7-8.9 % which is more than the supply gap of terminal year of 11Mth plan.

The gap between the demand and supply has remained almost constant, rather tending to be on higher side pointing towards shortfall in generation. It is also to mention that there has been accelerated growth in energy generation from renewable sources particularly wind and solar installations. The power generation from conventional coal based power plants has been gradually reducing. The Plant Load Factor (PLF) of coal based thermal power plants had reached above 78% during 2006-07 and remained above 75% for five years during 2006-2011. During the last two years the PLF of coal and gas based generating station is coming down largely on account of fuel supply constraints. PLF of coal fired station was about 73% during 2011-12 and may barely touch 70% during the current year resulting in energy supply shortfall.

India is a developing country and shortfall in the power supply has direct impact on the GDP growth of the country. Power supply gap of 8-9 % has potential to lower GDP by 0.6-0.7 %. A developing economy can ill afford to drop GDP growth by such a large margin. In fact our neighbour China overcame energy shortage to achieve massive double digit growth.

Serious efforts are necessary to overcome energy shortage for achieving the potential economic growth of the country. Concerted efforts are required to improve generation from existing generating capacity and reduce the staggering T&D (transmission and distribution) losses to wipe out the energy shortage. Business as usual is carried on to take care of power sector and electricity supply thus not finding significant change and the country continues to suffers ever since with shortage in power supply. It is no time to just walk fast, we must run to catch the opportunity to wipe out the power shortage and empower our industry to be competitive globally to harness the economic growth.

The fossil fuel reserves are limited and so does India has limited coal reserves which may not last more than 50-60 years with present trends of coal consumption. The coal mine development and coal production rate has failed to match the demand necessitating dependence on import of coal.

Our country has been continuously suffering from power supply constraints owing to high transmission and distribution (T&D) losses ranging from 34-24 %. T&D losses at present account for about 24% of the energy available against world average of 9.5 %. Transmission and distribution losses are below 7% in USA, Canada, European countries, China, South Korea and many Asian countries. An improvement in T&D losses by 10% is good enough to bring India from power deficit state to power surplus state. Even after improvement of 10% the T&D losses would continue to be far above the world average. Thus the target of 10% improvement in T&D losses over next three years should be immediately taken up in the first Phase. The direct saving of ‘ 35000-40000 crores per year apart from indirect benefits of 0.7 % growth in GDP would benefit power industry and the nation. The metro cities and mega cities have very high potential of bringing down T&D losses to the level of European countries and accordingly start needs to be made from high potential candidates. CEA had also suggested that the T&D losses should be in the range of 8-15% which varies with intensity of load and the distances of the load center.

State Electricity utilities are short of fund to take up such net work improvement program accordingly Central Government has taken up the program under APDRP however the tangible results are still awaited.

There is need for retrospection and target the high yield and low hanging fruits to reap the benefits at faster rates. Government should invest in the project to reduce T&D losses and salvage the lost energy.

The investment in T&D improvement can be recovered much faster through saving in cost of energy. The project on T&D loss recovery is multi benefit and some of which are adumbrated below.

Overcome energy shortage by

Reduced carbon foot print
Preserving fossil fuels
Decongesting fuel transport corridor
Cheaper energy cost to consumers
Higher Economic growth of the Nation

Source: ORF Online

About Ritesh Pothan

Ritesh Pothan, is an accomplished speaker and visionary in the Solar Energy space in India. Ritesh is from an Engineering Background with a Master’s Degree in Technology and had spent more than a decade as the Infrastructure Head for a public limited company with the last 9 years dedicated to Solar and Renewable Energy. He also runs the 2 largest India focused renewable energy groups on LinkedIn - Solar - India and Renewables - India
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