Electricity Sector in India - Problems With India's Power Sector

Problems With India's Power Sector

India's electricity sector faces many issues. Some are:

• Government giveaways such as free electricity for farmers, partly to curry political favor, have depleted the cash reserves of state-run electricity-distribution system. This has financially crippled the distribution network, and its ability to pay for power to meet the demand. This situation has been worsened by government departments of India that do not pay their bills.
• Shortages of fuel: despite abundant reserves of coal, India is facing a severe shortage of coal. The country isn't producing enough to feed its power plants. Some plants do not have reserve coal supplies to last a day of operations. India's monopoly coal producer, state-controlled Coal India, is constrained by primitive mining techniques and is rife with theft and corruption; Coal India has consistently missed production targets and growth targets. Poor coal transport infrastructure has worsened these problems. To expand its coal production capacity, Coal India needs to mine new deposits. However, most of India's coal lies under protected forests or designated tribal lands. Any mining activity or land acquisition for infrastructure in these coal-rich areas of India, has been rife with political demonstrations, social activism and public interest litigations.
• Poor pipeline connectivity and infrastructure to harness India's abundant coal bed methane and shale gas potential.
• The giant new offshore natural gas field has delivered less fuel than projected. India faces a shortage of natural gas.
• Hydroelectric power projects in India's mountainous north and northeast regions have been slowed down by ecological, environmental and rehabilitation controversies, coupled with public interest litigations.
• India's nuclear power generation potential has been stymied by political activism since the Fukushima disaster in Japan.
• Average transmission, distribution and consumer-level losses exceeding 30%.
• Over 300 million people in India have no access to electricity. Of those who do, almost all find electricity supply intermittent and unreliable.
• Lack of clean and reliable energy sources such as electricity is, in part, causing about 800 million people in India to continue using traditional biomass energy sources – namely fuelwood, agricultural waste and livestock dung – for cooking and other domestic needs. Traditional fuel combustion is the primary source of indoor air pollution in India, causes between 300,000 to 400,000 deaths per year and other chronic health issues.
• India’s coal-fired, oil-fired and natural gas-fired thermal power plants are inefficient and offer significant potential for greenhouse gas (CO2) emission reduction through better technology. Compared to the average emissions from coal-fired, oil-fired and natural gas-fired thermal power plants in European Union (EU-27) countries, India’s thermal power plants emit 50 to 120 percent more CO2 per kWh produced.

The July 2012 blackout, affecting the north of the country, was the largest power grid failure in history by number of people affected.