India turns to Renewable Energy and Abandons Coal, causing one of the World’s Worst Power Outages

Posted by PITHOCRATES - August 5th, 2012

Week in Review

India suffered a massive power outage that left some 600 million Indians without power.  Stranding train travelers.  And trapping miners underground.  Not to mention leaving people to swelter in 100+ degree Fahrenheit temperatures.  In one of the most humid climates to ever grace our planet.  Some buildings had backup generators.  Including hospitals.  But these were few.   Most just suffered.  One wonders how this can happen in one of the biggest emerging economies.  India is, after all, one of the BRICS.  And being that the modern economy runs on energy it leaves one scratching their head.  If India has such a burgeoning economy where is their electricity production (see India: More than 600 million without power in biggest blackout ever by Rick Westhead posted 7/31/2012 on the Toronto Star)?

 While India has been aggressively trying to encourage investment in renewable energy sources such as solar and wind power, critics say it rarely upgrades its electrical grid. India has missed every annual target to add electricity production capacity since 1951, Bloomberg reported.

Oh.  They’ve been pouring millions into renewable energy to save the planet while they in essence have left their country plugged into the lamp post on the corner.  Here’s an interesting fact.  India just recently switched on the world’s largest solar photovoltaic power plant.  They are also a leader in wind power.  So they are working hard to remove their carbon footprint.  While their economy, and their people, starve for reliable electric power.  Let’s go to Bloomberg for more details (see Ambani, Tata ‘Islands’ Shrug Off Grid Collapse: Corporate India by Rajesh Kumar Singh and Rakteem Katakey posted 8/3/2012 on Bloomberg).

About 1.6 trillion rupees ($29 billion) spent by companies including Tata Motors and billionaire Mukesh Ambani-led Reliance Industries Ltd. (RIL), to quarantine their plants from the national grid is shielding India’s biggest users of electricity from disruptions. Sixty years of missed investment targets, transmission losses and theft is prompting factories to build their own plants boosting costs in a nation that suffers from the fastest pace of inflation among BRIC nations…

Five of India’s biggest electricity users generate 96 percent of their requirement, according to their annual reports.

India’s electric power is so unreliable that large consumers of electricity have to produce their own.  We call it captive power.    They generate it.  They keep it.  Which is only fair as they paid a fortune to generate it.  Which, of course, they pass on to their customers.  Via higher prices.  Which just adds to the inflation.

India has missed every capacity addition target since 1951, underscoring the urgency behind Singh’s effort to boost investment in power. As much as $300 billion, or 30 percent of the total spend planned on infrastructure, over the next five years is on the electricity sector, according to Planning Commission Member B.K. Chaturvedi.

The network in Asia’s third-largest economy loses 27 percent of the power it carries through dissipation from wires and theft, while peak supply falls short of demand by an average of 9 percent, according to India’s Central Electricity Authority. Some 300 million people in India, or one in every four, remain without links to the grid and the number will still be about 150 million by 2030, according to the Paris-based International Energy Agency.

The blackout engulfed as many as 19 of the South Asian country’s 28 states on July 31, with more than 100 intercity trains stranded on the second day…

They have been failing to meet demand since 1951?  Wow.  What a horrible track record.  Yet they can build the world’s largest solar photovoltaic power plant.  Even though their electric grid can’t transmit the insufficient power that they can produce.  And what’s astonishing is one in every four people doesn’t even have electricity.  This in one of the strongest emerging economies.  A country that is capable of doing so much better.  Full of people deserving so much better.  But they leave the electric grid to the elements.  While they spend a fortune to build the world’s largest solar photovoltaic power plant.  That can only “power a medium-sized city’s worth of homes.”  What a catastrophic misuse of investment capital.  No wonder large consumers of electricity are building their own generating capacity.

Companies plan to set up more than 33,000 megawatts of new captive power capacity and applications for approvals are pending with various state agencies, Rajiv Agrawal, New Delhi- based secretary of the power producers’ lobby said on Aug. 2. Some of these stations may not be set up because of a shortage of coal supplies, he said…

The pace of growth in generation has failed to keep up with demand because of a shortage in coal and natural gas supply, and deficient monsoon rains.

The world’s second-most populous nation suffers from frequent power outages that can last as long as 10 hours, amid summer temperatures of as high as 45 degrees Celsius (113 degrees Fahrenheit) in the capital, New Delhi. Power supply shortages shave about 1.2 percentage points off the nation’s annual growth, according to the Planning Commission…

This is what happens when you demonize one of the most energy-rich and reliable fuels.  Coal.  To reduce your carbon footprint.  Saving the planet may come at the cost of killing people.  Forcing people in an advanced society powered by electricity to go without electricity frequently.  Coal-fired power plants are the backbone of baseload power.  Those plants that run 24/7 to produce a steady stream of power to meet most of our needs.  These efficient heat engines can spin steam turbines forever as long as we feed them coal.  And a large coal-fired power plant can power everything in a region full of large cities.  Not just the homes in a medium city.

Subsidized electricity to farmers is also exacerbating electricity-supply bottlenecks, discouraging producers from adding capacity. India deliberately abandoned metering power supply for agricultural irrigation in the 1970s, as part of a strategy of switching to new high-yield crops, which required regular water supplies, Miriam Golden of the University of California and Brian Min of the University of Michigan said in a report published in April…

The Reserve Bank of India refrained from raising its benchmark interest rate on July 31 amid the slowest pace of growth in almost a decade and raised its inflation forecast to 7 percent from 6.5 percent, citing rising food prices and lack of roads, ports and power plants…

A dry monsoon season is a double whammy.  The lack of rain has lowered levels in the reservoirs at hydroelectric dams.  Reducing the amount of power they can produce.  On top of that the dry weather has forced farmers to irrigate their lands.  Using free electricity.  Which doesn’t discourage them in any way from sucking power off the grid.  Adding to the strain of the grid.  Doing their part in causing power outages.  Adding to inflationary pressures.  And loss in GDP.

This is a horrendous energy policy.  But you know who would approve of it?  President Obama.  For he is trying to do the same thing in America.  Shutter the coal industry and replace it with renewable energy.  He’s even cool on nuclear power.  Which is something the Indians are planning to expand to meet their exploding electrical demand.  Nuclear power.  So their horrendous energy policy is bad.  But it’s still a bit more sensible in one area.  They aren’t trying to shutter nuclear power, too.  Which happens to be one of the other most energy-rich and reliable fuels.  Joining coal to provide the backbone of baseload power.  Where a government will have it, that is.


Tags: , , , , , , , , , , , , , , , , , , , ,