India Gets Closer to Electrification, but Many Still Without Power

India is getting closer to Prime Minister Narenda Modi’s goal of electrifying every village, but many villagers are still without power. The Indian government defines a village to be “electrified” if its public places such as schools and medical centers and 10 percent of its households are connected to the national grid. This leaves many homes (over 30 million) without power still. A recent assessment has shown that less than 8 percent of the newly electrified villages had all homes electrified. Lack of electrification hinders economic growth, health care, sanitation, and education. With electrical connections, households can get access to conveniences Americans take for granted–refrigerators for food storage, televisions, computers, and washing machines–and shops can stay open later at night.  India’s economic advancement and the advancement of its people depend on electricity availability and reliability.

Modi’s administration is reporting that it is close to accomplishing the prime minister’s goal since most of the over 18,000 villages without power now have some access to it. But access alone is insufficient; the people must have an adequate and reliable supply of power. The Indian government’s definition of “electrified” essentially means that wires exist between power plants and villages, but not all households are connected and insufficient electrons may be flowing through those wires.

Source: Bloomberg

India instituted a $2.5 billion program to provide power connections to almost every household by the end of March 2019, which will be close to when Modi’s term expires. According to Bloomberg, India has electrified about 13 percent of the nearly 36.8 million homes recently identified as needing power. Another source indicates about 30.6 million rural households still need to receive a power connection. To meet Modi’s goal by its deadline, India will have to more than triple its monthly pace of electrification.

In January, the power ministry estimated that 28 gigawatts of electrical capacity would be required to connect all homes to the power grid. Currently, India’s power plants cannot find buyers for all the electricity that they can produce. Almost 75 gigawatts of India’s power plants are under financial stress due to under-utilized capacity, fuel shortages, and overdue payments from distribution companies.

But to keep up with the increasing demand for electricity, India must add about 15 gigawatts of generating capacity annually for the next 30 years. Most of the country’s electricity (two-thirds) is supplied by coal-fired plants and more such plants are likely to be built. India has the fifth largest coal reserves in the world at 94.8 billion metric tons, according to the BP Statistical Review of World Energy, and its technically recoverable coal resources are more than triple that number. India plans to double its coal production by 2020, making it the second largest producer of coal in the world, behind China.

Progress Toward Electrification

Since 2000, India has made major progress toward electrification. Electricity reached 82 percent of the population in 2016—almost double its share in 2000 when it was 43-percent electrified. Despite the progress, of the roughly one-fifth of the world’s population without electricity that year, about 239 million of those people were in India.

World’s second-most-populous nation has the most people lacking access to electricity

Source: International Energy Agency; World Bank (Note: As of 2014)

The homes that remain without electricity are spread widely across regions of the country, but most densely in the populous northeast. Uttar Pradesh, a large north Indian state, accounts for 42 percent of the nation’s households without electricity access, according to government data.

Source: Bloomberg

India’s electricity supply is controlled and maintained by its state governments, which use cheap power as a political tool, often at a financial loss. As of March 2015, state distribution companies had accumulated debts of almost 4.1 trillion rupees ($61.7 billion). The distributors, known as discoms, handle their losses by limiting power supplies to heavily-subsidized consumers in rural areas and selling more expensive electricity to industrial consumers.

Conclusion

In the Western world, and particularly in the United States, reliable and affordable electricity are taken for granted—so much so that experimenting with the existing system is being promoted by politicians and special interests. India, on the other hand, has been making the delivery of electricity to its population a priority, but over 30 million homes and over 200 million people are still without power. Besides getting wires to all homes, the Indian government must supply electrons over those wires and those electrons need to be sustainable and affordable. Thus, India is building power plants, including coal-fired power plants. India needs to make other adjustments as well to its generating sector. State-owned distribution companies are in debt, not all capacity is being fully utilized, and there are fuel supply problems, among other issues that need to be fixed for sustainable and affordable supply.

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