Meeting India's energy security

In Perspective

For a country that is on a rapid course of development it must be counted as a shame that 56 per cent of India’s rural population does not have access to electricity. According to the Planning Commission, 600 million people are off the electric grid. Of the total energy consumed in India, 25 per cent is produced from cow dung and firewood, while 75 per cent is produced from coal, petroleum and other hydrocarbons.

About 40 per cent of this 75 per cent is used for electricity in India while the ratio of electricity to total primary energy is around 60 to 70 per cent in countries like Norway and Canada. The typical Indian consumes about one-fifteenth as much energy per year as the typical American. Despite our low level of per capita electricity consumption we are apparently heading for an energy crisis. India (along with China) is fast heading to be the world’s largest consumer of primary energy. The scale of the crisis is evident from fact that out of our total installed capacity of 1,47,000 megawatts (MW), only 85,000 MW is operational at any point, resulting, in effect, in a 12 per cent shortage during peak hours. But going by our previous records of failure, there is serious reservation about whether we would be able meet the target earmarked in the 11th Plan period.

Energy shortfall varies from state to state but the general rule is that the most industrialised states suffer the most, like Maharashtra which faces a deficit of more than 30 per cent at times. The gruelling summer months obviously result in long hours of power outages. At any given time, we are power deficit.

China already burns more than twice as much coal as the US, and in the race to keep up with soaring energy demand, it is building 550 new coal-fired power stations. Coal, incidentally, accounts for 70 per cent of China’s energy consumption.

 Coal is critical to power generation in India too, with almost 61 per cent of the installed generating capacity (110,000 MW) being coal-based but sadly there is not enough coal as reserve though clean-burning coal technologies could be an option as we have to remain critically dependent on coal. Captive power plants have some chance if they have capacity utilisation and if the surplus power could be linked to a grid.

In the tenth Plan, the government had no provision for targeting capacity addition in the renewable energy sector and non-conventional sources of energy like wind, solar and biomass. Advocates of nuclear energy maintain that it is free from some of the serious air pollution problems that can accompany coal-fired and, to a lesser extent, natural gas-fired electricity generation.  But nuclear electricity has been found to be much more expensive than fossil electricity in most countries where there is a competitive electricity industry. In the UK and the US nuclear energy is even more expensive than wind power. Nuclear energy is not the solution to India’s power crisis but just a value addition.

The Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) – a scheme for rural electricity infrastructure and household electrification – was launched on April 4, 2005 by Prime Minister  Manmohan Singh, with the objective of providing access to electricity to all households and improving rural electricity infrastructure. But the gap between the task that has been accomplished and what remains to be done makes it unlikely to realise the National Electricity Policy aiming of ‘Power to all by 2012.’

India initiated power-sector reforms in 1991 to encourage competition and seek private participation with little result. The government set up a central electricity regulatory authority in 1998 to control all components of the power sector, but little is done to put an end to large scale theft and pilferage of electricity and to cut huge transmission and distribution losses. Apart from free electricity, about a third of the total electricity bills raised are not realised or not billed. The World Bank estimates that at least $4 billion in electricity is unaccounted for each year – that is to say, pilfered.

Bribes paid

Transparency International estimated in 2005 that Indians paid $480 million in bribes to put in new connections or correct bills. State electricity boards suffer an unsustainable level of aggregate technical and commercial losses.

The UPA government included power as one of the main components of the infrastructure sector in its national common minimum programme (CMP) in its first tenure. With the new mandate, it has a new call to do all within its devices to ensure energy security of a rising India driven by fulsome needs of economic growth.