Has India really become A Power Surplus Nation?

Poor infrastructure and India have been synonymous for a long period of time. A result of which has been absence of basic facilities such as water, power, transportation and healthcare to a large share of population living mostly in the rural parts of the country. The World Bank’s Global Electrification Database last reported figures for 2012, suggest that only 78.7% of India’s population had access to electricity.

Situation has indeed improved over the last five years as reflected in government data. Per the Ministry of Power, a total of 13,134 villages have been electrified from the start of Modi Government, which leaves another 4,481 villages to be electrified by end of 2017. That is equivalent to about 0.22 million households without access to electricity.

Installed capacity of the country has gone up a staggering 154%; from 124 GW in 2006 to 315 GW by the start of 2017. Energy deficit has come down from 10.6% in 2006 to 0.6% in 2017. In the same period the peak power deficit has come down from 13.7% to 0.5% (refer charts below, Source CEA).

It is worthwhile to note here that for the first time in history, the country has become net power surplus, with a total export of 5,798 MUs to neighboring countries during the period April-2016 to February-2017. Going ahead the Central Electricity Authority, which is the central planning agency, has projected that by this year end the country shall be net power surplus and there would be no requirement to set up any coal based thermal power plant till 2022.

The above fact while true does not present the complete picture. While it is correct to say that the demand is currently being met; there are two issues that remain unsolved. One is the sorry state of affairs of most distribution utilities, which lead to rampant outages as a result of old and poorly maintained last mile wires infrastructure. Two is the dormant demand from yet to be electrified and recently electrified households and premises, which is indirectly dependent upon their economic potential for a higher usage of electricity in meeting their energy requirements, and from subsidized sectors such as agriculture, which is deliberately not supplied for 24x7.

The scope and scale of above two issues can be assessed provided the necessary data is identified and recorded. The distribution utilities do not make public the data of planned and unplanned outages. The utilities should be required to record outages caused as a result of technical maintenance, which can be both planned and unplanned in nature, as well as outage hours which are caused due to a utility’s inability to procure power well in time and at desired level of tariffs.

Difference in cost of supply versus tariff charged to a particular category of consumer, gives rise to cross-subsidy in the power supply system. Categories such as agriculture and low-income residential have been historically subsidized by commercial and industrial consumers. Such allocation leads to differential service standards where the utility has nil incentive to provide uninterrupted quality power to subsidized consumers. An overall reform in tariff structuring and delinking of power supply from politics is a long sought after goal. Till such time the above two issues are resolved, it is hard to claim with certainty that the nation is indeed power surplus.

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