India's misunderstood electrical grid

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No one would claim that delivering reliable electricity to a country of more than 1.2 billion residents is easy. Certainly India, with its accelerating economic growth in the last few years, has had its challenges in this area. But occasional problems should not obscure the substantial progress that has been made.

The disruption of service had a limited duration because India has steadily improved its ability to produce, transmit and distribute power over the last decade. In 2003, India passed the Electricity Act, which spurred open access to the grid and cleared the way for private participation in electricity generation. As a result, millions of Indians have benefited mightily from their new-found ability to receive electricity.

India added 55,000 megawatts of electrical capacity between 2007 and 2012. That was as much power as had been added in the previous 15 years. The 20,500 megawatts of capacity added in fiscal 2012 was the largest yearly boost in India’s history and was a remarkable achievement given the fact that in 1947 – the year India declared its independence – the country had a total generation capacity of only 1,376 megawatts.

The federal government in India has taken a series of steps to work with states to bolster the financial health of utilities. In addition, almost all villages in the country have been electrified under a program launched in 2004. In his Independence Day address earlier this month, Prime Minister Manmohan Singh said that his next goal is to provide electricity to every household in the nation in the next five years.

That’s an achievable benchmark. The government has prevailed upon Coal India Limited, the state-controlled, coal-mining company headquartered in Kolkata, West Bengal, to sign fuel supply agreements with power producers. As a result, we now have reason to hope that lack of coal will eventually not be a cause of blackouts. The government is also incentivizing the expanded use of renewable fuels such solar and wind power by utilities and is stepping up its energy conservation efforts.

India is one of the few countries in the world with a cabinet-approved, national energy plan – the Integrated Energy Policy. As a consequence, the government has well-defined rules and tariff policies that among other things are compelling utilities to carry more electricity from rural areas, especially in the northeast, to urban centers such as New Delhi, the nation’s capital. The 800-kilo-volts transmission facility between the northeast and Delhi is the highest voltage link ever attempted in the world.

Shortfalls of electricity – once a commonplace occurrence – have been declining markedly. The difference between the availability of electricity during periods of peak demand declined to 10.6 percent in fiscal 2011 from 13.8 percent in fiscal 2007. The nation’s overall energy deficit dropped to 7.9 percent from 9.6 percent over the same period.

The spate of articles following the incidents last month focused on what journalists characterized as the dysfunctional nature of the Indian power sector. These were unfair and, in many cases, inaccurate. They certainly didn’t highlight the real story: India’s electrical outlook is much better now than it ever has been and is getting better at an accelerating rate.

The temporary lapse in India’s power grid last month was unfortunate but was also an aberration. Many challenges lie ahead and no one in India thinks otherwise. But the development of the country’s power supply and distribution network is a success story in the making.

Rao is India’s Ambassador to the United States.