At a time when India is looking to fight the global financial slowdown and surge ahead by adding trillions to its gross domestic product (GDP), the power sector in the country seems to be facing its own problems.
According to members of The Economic Times India Leadership Council, the country has overlooked solving the current issues of power generation and distribution, and has rather concentrated on deploying a plan to create capabilities in generating power from renewable sources.
Data from US-based independent and statistical analytics firm Energy Information Administration (EIA) show that India suffers from one of the highest levels of electricity transmission and distribution (T&D) losses globally.
T&D losses account for the electricity that is generated but doesn’t reach the customers. According to EIA, India’s T&D losses equal 20% of the total generated amount, which is more than twice the global average and nearly three times as much as the US.
Highlighting other issues, the members also said that companies operating in the power utilities segment (generally dealing in distribution) are currently cashstrapped and hence they haven’t been able to buy power from manufacturing companies resulting in low power offtake.
These members include Gyanesh Chaudhary, MD and CEO, Vikram Solar; Ajay Kapur, CEO, Vedanta Aluminium & Power; Anil Chaudhry, country president and MD, Schneider Electric; Santosh Khatelsal, MD, Enerparc Energy; Syed Sajjadh Ali, MD, Eaton Power; and Sriram Ramakrishnan, MD, Fuji Electric India.
To add to the issues, the members said the country has not been investing in the current infrastructure to plug energy leakage and ensure lastmile delivery to consumers.
The strain on the economy has also affected the energy demand in the country which has fallen for the fourth straight month, the members said, adding that the new and expanded capacities of power generation are lying idle.
UNDERSTANDING INDIA’S ENERGY BASKET
To understand the impact of the crisis and how members are looking to work towards solving it, it is very important to understand India’s energy basket. According to the members