Noted with interest: “Electricity Crisis Hobbles an India Eager to Ascend”

Excerpted from article by Somini Sengupta on 21 May 2007 in the New York Times.

Concluding questions by NWI. Comments and insight are sought.

• GURGAON, India — This suburb south of New Delhi is where the fruits of India’s economic advance are on full display: sprawling malls, skyscrapers housing India’s acclaimed software companies, condominiums with names as fanciful as Nirvana Country. . . . Look up at the tops of buildings, and on any given day, you are likely to find three, four or six smokestacks poking out of each, blowing gray-black plumes into the clouds. If the smokestacks are being used, it means the power is off and the building — whether bright new mall, condominium or office — is probably being powered by diesel-fed generators.
• “This being India, a country of more than one billion people, the scale is staggering. In just one case, Tata Consultancy Services, a technology company, maintains five giant generators, along with a nearly 5,300-gallon tank of diesel fuel underground, as if it were a gasoline station. . . . The reserve fuel can power the lights, computers and air-conditioners for up to 15 days to keep Tata’s six-story building humming during these hot, dry summer months, when temperatures routinely soar above 100 degrees and power cuts can average eight hours a day.
• “The Gurgaon skyline is studded with hundreds of buildings like this. In Gurgaon alone, the state power authority estimates that the gap between demand and supply hovers around 20 percent, and that is probably a conservative estimate. . . . For all those who suffer from crippling power cuts in cities like this, there are others who have no connection to electricity at all. According to the Planning Commission of India, 600 million people — roughly half the population — are off the electric grid. For this reason, it is impossible to estimate accurately the total national shortfall. . . . But no matter how it is calculated, there is no doubt that India’s electricity crisis is becoming all the more acute for the roaring pace of the country’s economic growth and the new material aspirations it has generated.
• “A recent report by McKinsey Global Institute frothily predicted a fourfold increase in consumer spending by 2025, vaulting India, as it said, “into the premier league among the world’s consumer markets.” McKinsey forecast that India would surpass Germany as the fifth-largest market in the world. . . . The government has promised electric connections for all — which means access to the grid, not round-the-clock power — by 2009. That is a target that does not seem plausible at current rates of power generation.
• “What the state cannot provide efficiently, many take for themselves. The World Bank estimates that at least $4 billion in electricity is unaccounted for each year — that is to say, stolen. Transparency International estimated in 2005 that Indians paid $480 million in bribes to put in new connections or correct bills. . . . The country’s energy needs are one of the government’s main arguments for a nuclear deal with the United States, which would allow India to buy reactors and fuel from the world market. . . . But even if the deal goes through, it would lift nuclear power, which provides 3 percent of India’s energy, to no more than 9 percent, said Leena Srivastava, executive director of the Energy and Resources Institute, a private research group.”

Questions:

>> What is the economic loss to India when power outages occur?

>> How do businesses adjust to, or even plan for, the outages?

>> Might there be any gains from regular loss, or restricted use, of power?

>> What industries are suffering or benefiting from these outages?

>> What opportunities exist to enhance the power generation and transmission industries?
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- NWI staff

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