ELECTRICITY IN INDIA?

4.4.05

Ashok Dhillon, Chairman & CEO, Canasia Power Corp.

India is a place that we in North American can no longer ignore economically or otherwise. Yet it suffers from power shortages that are crippling to its development and subject its population, both in the cities and in rural areas, to a standard of living that would be considered intolerable in developed countries.

While the shortages of electric power is not the only reason for the standard of living for the average Indian, being what it is but it contributes significantly to the overall underdevelopment and misery.

It is not possible, in today’s environment, for a country to have progress and sustainable development in any sector, social or industrial, without electricity.

Without electric power there can be no industrial growth, no modern medical facilities, no proper educational facilities, no basic facilities like water, let alone clean water, no proper sanitation, no means to protect oneself from the harsh climatic conditions and no way to provide a better future for the next generation.

One can go on forever listing the damage caused to societies when, there is not enough electricity to provide the basic energy required to energize the infrastructure that is a must if a society is to maintain any semblance of acceptable living standards. A couple of weeks of interrupted power, due to ice-storms in Canada and the United States, caused havoc in the lives of the people affected. Hundreds of millions of dollars worth of physical damage was estimated, a few billions of estimated economic loss occurred due to disruptions to business activity. Hundreds of people were injured and some died, due to the loss of protection from the extreme weather conditions.

If this kind of damage is sustained in a matter of weeks in the most developed countries of the world, in human health and economic loss, due to the lack of electricity, then it is fair to say, that the damage to human lives and economic losses sustained by countries like India with people numbering over a billion, is truly incalculable.

The numbers quoted in the various studies, trying to quantify the damage done to human lives due to a lack of a basic need such as electricity and the domino effect it has on other vital basic needs such as water, sanitation, food, transportation, medical facilities, education, etc. are at best highly inaccurate and at the worst, totally meaningless for there is no way to quantify the damage that is being done on a day to day, month to month and year to year basis.

All one can say when you look at a State such as U.P., trying to get by with 3,500 MW of power available to it, that the damage being done to its 150 million people both in economic and personal terms is unimaginable. The same can be said for the country as it tries to move forward into the 21st century with over a billion people dependent on less than 100,000 MW of power available at any given time.

To try to correct this intolerable situation the private sector was called to step in and invest in the Power Sector, but when the private sector responded hardly any real support was extended by either the State or Central Governments or the various development agencies. Well known clichés and conditions were trotted out to excuse the chronic apathy of the government agencies for their non-performance. The multi-lateral agencies such as the World Bank assisted these entrenched agencies by not demanding performance from them but tacitly supported them by excusing their damaging behavior by claiming that they can not “demand” performance but can only “encourage” it.

The result is that after practically a decade of the so-called liberalization of the Power Sector, hardly any improvement can be discerned in the quantity and quality of the power supply situation.

In most areas of the Country and the State, if one is to ask the common man, the answer is swift and unequivocal, the power situation for them is worse than it has ever been before.

The Government of India has projected incremental demand at approximately 9% per annum in the Country, on 115,000 MW of installed capacity. That would require over 10,000 MW of power to be added on an annual basis just to keep up with current demand. In the past ten years, the Country has managed to add less than 3,000 MW of power per year. This of course does not factor in the estimated existing shortfall, which the current Power Minister has declared to be over 100,000 MW.

In the State of Uttar Pradesh (or U.P.), according to the World Bank Project Appraised Report (dated March 24, 2000), the shortfall is estimated to be approximately 8,000 MW (14,000 estimated demand minus 6,000 MW installed capacity) that number of course is not accurate because even though U.P.’s installed capacity is reportedly approximately 5,000 MW the actual Mega-Wattage available at any given time is only 2,500. Therefore the real shortfall today is probably around 11,000 MW. Every consumer that can afford it has a small to mid-sized diesel generator on site which, is generating electricity at an extremely expensive rate and is highly polluting.

According to the same report, within the next 10 years (by the year 2011), U.P. will need an additional 14,500 MW of generating capacity. Add that to the current shortfall and the State will be short over 24,000 MW in the next 10 years.

U.P. is in a Power Crisis today and that crisis is deepening. This crisis is not accurately measured because half of the State is not even connected. So there is no way of knowing what the real damage or shortfall really is.

In a Country where the Power Minister is saying that the Country needs an additional 100,000 MW immediately to resolve the power crisis, the World Bank had given the U.P. Government advice not to allow any new Independent Power Producer’s to proceed with new projects for at least another 5 to 6 years until, by their estimation, the State will be able to offer additional generation because of its improved financial condition. The fact of the matter is that U.P. will never get out of its crisis if that advice is followed.

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