India suffers a power deficit of 8 to 12 percent in peak periods, and power cuts of eight hours a day are common in many parts of the country. A quarter of the population, 300 million people, has no access to electricity at all.
Even though India has the world’s fifth-largest reserves of coal, disputes over environmental and land permits have kept many new mines from opening, while a lack of investment in technology has prevented output from growing to keep up with demand.
Existing mines have strict limits on how much coal they can extract, supposedly to safeguard the environment but in practice simply arbitrary, said U. Kumar, an expert on coal who advises some of India’s top industry leaders. A six-month-old Coal Ministry proposal to raise those limits by 20 percent as an emergency measure has “fallen on deaf ears,” he said.
As a result, about 10 percent of power plants have no coal supply right now, Kumar said. “We are going to face a frightening scenario,” he added. “It is going to be very difficult to meet the demand of our people.”
To meet some of the shortfall, India has been forced to import expensive coal from abroad, but it is politically unable to pass those higher costs on to consumers, bankrupting the sector still further.
Losses in electricity transmission and distribution are also among the world’s highest, 24 to 40 percent, because of inefficiencies and theft.
A constraint to growth
Indian economic growth has slowed to around 6 percent, while inflation is in double digits. That is a sign, Chinoy said, that investment by the public and private sectors has not kept up with the country’s consumption-led boom of recent years, inhibiting the economy’s ability to sustain rapid growth without pushing up prices.
“The biggest constraint to India’s growth potential is lack of capacity,” he said, “and the biggest single constraint to growth is the lack of available and adequate power supply.”
Earlier Tuesday, a senior power official in the northern state of Uttar Pradesh, Avinash Awasthi, was transferred for failing to prevent Monday’s blackout. But officials found no obvious scapegoat for the second day’s failure.
“We are absolutely clueless why this has happened again today,” said Shakti Sinha, an official in the power department of the Delhi government. “Yesterday we knew it was overdrawing of power; today it looks like a technical fault. The system failed somewhere.”