Power outages: Is India fated to sweat it out this summer?

New Delhi, May 17 -- With temperatures soaring, demand for electricity is set to peak in the next few weeks. Things should be under control as India has added significant capacity to its power production. But outages are common in many parts of the country. Where is the disconnect? Mint explains.

In 2022-23, India consumed 1,503.65 billion units, a 9.4% rise over 2021-22. Consumption has grown at a steady clip each year since 2009-10 when it was 747 bn units. The annual daily peak or the day when electricity demand is at its highest (generally in the peak summer month of June), has also grown over the years. In 2022-23, demand for power peaked at 215.89 Gigawatts. But it has already been surpassed in the current financial year when an early onset of heatwave saw demand hit 226.9 GW on 18 April, 2023. And at some point in the next 30 days, it is expected to hit a new peak - of 230 GW.

India has an installed power generation capacity of over 416 GW, nearly half of which comes from coal-based power plants. But it's not a true indicator of how much it really produces: average capacity utilization fell from 84% in 2009-10 to 53.6% in 2021-22 before recovering to 66% in April 2023. Availability of coal is erratic. As a result, there is always a mismatch between demand and supply. Against the peak demand of 2022-23 for example, the most that plants could produce was 207.23 GW. Last month, the highest was 215.88 GW. However, the shortfall has narrowed from 12.7% in 2009-10 to 0.5% today.

With the onset of summer, large parts of the country are facing power outages between 2-8 hours daily. According to a survey by Local Circles in 272 districts, 85% of households face daily power cuts with 57% going without power for up to 2 hours. Another 37% cope with power cuts of 2-8 hours. More than 63% households face up to two power cuts a day.

Power distribution companies-the middlemen between power producers and consumers - suffer from a legacy of high transmission losses and inability to hike tariffs. So, discoms cut losses by prioritizing supplies to industrial consumers. Factories can handle high voltage power which costs less for discoms to supply. And they can pay more. This comes at the cost of households, where tariff is low-governments rarely allow discoms to hike electricity bills. This attempt at striking a balance leads to outages.

With a projected increase in power demand from 1,513 billion units in 2022-23 to 1,908 billion units by 2026-27, the government is investing Rs.14.5 trillion for additional power generation capacity of 210 GW. The national grid is being upgraded with more transmission lines. The missing piece that needs to be fixed is the financial health of discoms. State governments have to find the political will to privatize discoms while allowing them to hike tariffs in line with rising cost of production. Published by HT Digital Content Services with permission from MINT. For any query with respect to this article or any other content requirement, please contact Editor at contentservices@htlive.com