India in the Dark

India suffered two massive power failures in as many days. 600 million people were affected, with disruptions not only in electricity, but in transport around the north of the country as well. The first power grid collapse, on Monday affected seven states in northern India, home to more than 350 million people. Tuesday’s failure was larger, setting a world record for blackouts and disrupting activity on an even more massive scale than the day before. The blackouts come at an unfortunate time, coinciding with a worrying drought and sweltering summer temperatures.

Q1: How did the blackouts happen?

A1: A single point of blame is difficult to discern; however, there are a number of reasons why this could have happened and why it could happen again. Currently there is a drought, a weak monsoon season (20 percent lower than average), and temperatures in India’s north that have been soaring. As homes and office buildings turn up their air conditioners, and as farms increase their use of irrigation pumps, they draw more power from the system.

At the same time, low rainfall also affects India’s sources of hydropower, delivering less juice into the system. But perhaps the most important reason is that with India’s rapid economic growth, the supply and distribution of power have simply not kept up. Even if enough power were generated, the transmission system could not effectively distribute it. The power generation and distribution systems are in dire need of expansion and investment in order to keep up with rapid development—none of which is happening, for a host of political and environmental reasons.

Some Indian officials have pointed to a transmission glitch near Agra, in Uttar Pradesh, which they claim is responsible for the second (and larger) power outage. India’s state governments also provide free electricity to a large swath of the population, adding to demand and leaving the state and power companies to pick up the bill—incurring yawning deficits—while creating no extra supply. An estimated 30 percent of power is stolen as well.

Q2: What is India doing about the blackouts?

A2: There has been much discussion of potential solutions to the recurring blackouts throughout India. They vary from reforming the grid to enforcing strict penalties for “overdrawing” to encouraging more off-grid and renewable solutions to expanding coal mining.

India’s latest five-year plan calls for a 50 trillion rupee (approximately US$1 trillion) investment in the infrastructure sector, with 50 percent of that coming from the private sector. This includes a plan to bring $400 billion in investment into the power industry to modernize India’s electrical grid.

A senior Indian Administrative Service official in Uttar Pradesh was transferred in the wake of Monday’s blackouts. So far, officials have not blamed anyone for Tuesday’s failures.

Q3: Who is affected the most by these and other blackouts?

A3: Average citizens take blackouts in relative stride, experiencing outages of 2 to 12 hours on a daily basis depending on where they live. Many homes and office buildings have backup diesel generators and are largely unaffected. Approximately 300 million citizens do not have access to power to start with.

Of those affected, it is safe to say that the hardest hit are small and medium-sized businesses, which often cannot afford backup generators and so cannot operate during the outages. Some analysts see these outages as a sign of a much larger issue—that India does not have the capacity to keep up with its growth—and this is a source of concern as India’s appeal as an investment destination has recently taken a hit.

Q4: Where do they go from here?

A4: The Indian government has set up a three-member panel to get to the bottom of the blackouts and report back in two weeks. That’s a start, but without addressing deep-rooted political problems, ranging from land acquisition to unaffordable state subsidies, it will be difficult to effectively address India’s current power and infrastructure insufficiencies. Effective administration in a few of India’s states can serve as an example for others, especially when it comes to availability and consistency of electricity; it is not necessary to look outside for answers, as other states can already serve as models.

Also, much has been reported about the fear that power outages will keep foreign investment away from India. But this is mostly unfounded, as private industry has generators for backup and some companies have built their own private power plants. Other infrastructure issues like railways, ports, and cold-chain technology pose more of an impediment. India’s governments (national and state) must work seriously toward investing in their power generation and transmission capacities.

Persis Khambatta is a fellow with the Wadhwani Chair in U.S.-India Policy Studies at the Center for Strategic and International Studies in Washington, D.C.

Critical Questions is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2012 by the Center for Strategic and International Studies. All rights reserved.