Economy

Is India really power surplus?

Maulik Madhu BL Research Bureau | Updated on January 17, 2018 Published on July 10, 2016

bl10_power in states

While data show a shrinking deficit, reality is a large number remains without a connection, especially in rural areas

According to a recent report by the Central Electricity Authority, the country is expected to become ‘power surplus’ in 2016-17. Data too show that the all-India ‘power deficit’ has been easing. From 8.7 per cent in 2012-13, the shortfall was down to 2.1 per cent in 2015-16.

While this is good news, it needs to be taken with a pinch of salt.

Powerless

For, the numbers show the extent to which power supply falls short of the demand by those connected to the grid. ‘Connected’ is the word to watch. With nearly six crore rural households, comprising a third of rural households, not having an electricity connection, the reported numbers under-estimate the country’s real demand for electricity.

Many urban households, too, have no electricity connection.

Also, the supply of electricity to farmers (which is subsidised or free) is limited to few hours every day.

It is these limited hours of supply that are taken into account while calculating the power requirement of agricultural customers to arrive at the overall deficit or surplus.

“The deficit is only capturing the unmet demand of the people connected to the grid. However, people who are yet to be connected and those with poor supply quality are not being taken into account,” says Ashwini Chitnis, Senior Research Associate, Prayas (Energy Group), a not-for-profit organisation working in the energy sector. 

“In an absolute sense, by which I mean the availability of 24x7 power supply to all, we still have a deficit,” says VP Raja, former Chairman, Maharashtra Electricity Regulatory Commission.

The true picture is captured by India’s per capita electricity consumption: at 957 kWh (kilowatt hour) in 2013-14, it was less than one-third the world average of 3,104 kWh in 2013. 

Is there an improvement?

The narrowing deficit does point to improving supplies and, therefore, reduced load-shedding for those with electricity connections.

On the supply side, additional generation capacity, better availability of domestic coal and stronger transmission network have bumped up power availability. On the other hand, industrial slowdown and the strained finances of Discoms have curtailed demand.

It’s still dark

But for States where access to electricity is poor, the declining deficit that the Centre is harping about does not mean much.

Take, for instance, Odisha, Mizoram and Tripura, which are expected to be power surplus in 2016-17 going by CEA data. But as of May 2016, the percentage of un-electrified rural households varied 22 and 52 per cent, with Odisha at the top end.

With these States being largely rural, poor electricity access for rural households implies poor access for households, in general.

“Since the potential electricity demand of these people does not get registered on the system, the deficit number is artificially low,” says Balawant Joshi, Founding Director, Idam Infrastructure Advisory, a power sector consultancy firm.

 It’s even worse for the significantly rural UP, Bihar and Jharkhand. As many as 87 per cent of rural households in Bihar, 70 per cent in UP and 63 per cent in Jharkhand have no electricity connection.

Bright spots

There are, however, some States such as Gujarat and Maharashtra where the access to power is almost universal and the deficit, according to the CEA, is also close to zero.

Tamil Nadu is yet another State with almost universal access and a power deficit of 0.7 per cent in 2015-16. According to Joshi, the commissioning of the Tuticorin thermal power plant and the Kudankulam nuclear power plant in the State has made a difference.

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Published on July 10, 2016
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