An Indian shopkeeper watches by candle-light during a power outage due to a fire which broke out at Kinari Bazar, a busy market in Chandni Chowk, the old quarters of New Delhi on August 25, 2014
Work ethic: keeping the shop open during a blackout

In late July 2012, more than 600m people across northern and eastern India abruptly found themselves without fans, air conditioners or light in sweltering, humid heat, as the national power grid suffered a series of catastrophic late night failures.

The outage started at 2.30am, triggered by northern states drawing more than their allocated electricity quota, as drought-hit farmers ran water pumps to irrigate parched fields and Muslims rose before dawn to prepare food for the Ramadan festival.

The blackout, which also hit the national capital, New Delhi, lasted more than 12 hours in many areas, crippling trains and disrupting traffic. A second major grid collapse followed just 36 hours later. It was a painful reminder to an aspiring superpower of the fragility of its basic power infrastructure.

Two years on, Indian officials and industry executives say aggressive steps have been taken to prevent a repeat of such a widespread failure. But with Indian power demand surging – and both generating capacity and transmission and distribution infrastructure struggling to keep up, the situation remains precarious.

“Unless more is built, we are going to remain vulnerable,” says Anish De, a partner and infrastructure expert at KPMG, the consultancy.

“We are seeing better controls, so we should expect fewer failures. But since network augmentation is not enough, better controls can only work to a point, leaving us vulnerable.”

Nearly 25 years after it began liberalising its state-controlled economy, India still suffers an acute shortage of power. Nearly 53m Indian households are not connected to the grid, but even areas that are electrified suffer routine, protracted power cuts.

Per capita, electricity use in India is a quarter of the global average, but demand grew 6 per cent last year, as rising incomes fuelled growing use of power-consuming appliances such as fans, TVs and air conditioners.

Demand for electricity is expected to rise even higher as the economy recovers from its present slowdown, with a new administration focused on reviving growth.

In this climate of relative power scarcity, Indian states all have quotas for how much power they can draw from the national grid. But in the past, states faced few penalties for overdrawing, as the northern state of Uttar Pradesh was believed to be doing when the grid collapsed. Since that calamitous blackout, however, the government-controlled Power Grid Corporation of India has got tougher with states that breach “grid discipline”.

“The controls are getting better and better,” says Mr De. “They are equipping substations so that, if there is indiscipline, they can cut users off much faster.”

The policy of getting tough with states has been aided by significant investments in high-tech sensors to monitor power flows to predict requirements more accurately.

But while such policies and technologies are helping alleviate pressure on the grid in difficult circumstances, India still faces fundamental challenges that leave the grid vulnerable.

The power distribution system was traditionally organised in regional grids, creating large demand-and-supply imbalances. Generating capacity is concentrated in coal-rich eastern India, while demand was strong in the heavily industrialised areas of the south and west, but links between the regions were limited.

The country is now trying to integrate its regional grids to create a robust national network, but it remains a work in progress.

Piyush Goyal, minister for power, coal and new and renewable energy, says: “There are states such as Chhattisgarh with power they are desperate to sell, and then states like Delhi that are desperate for power but don’t have enough lines to bring it in.”

Under prime minister Narendra Modi, India’s new government has also pledged to ensure all Indians have access to power 24 hours a day, seven days a week by the next parliamentary election in 2019, a pledge that implies a significant expansion of both power generation, and transmission and distribution.

Overall, Mr Goyal estimates that more than $250bn in investment will be needed in the next few years to meet these goals, including about $50bn in transmission and distribution.

It remains unclear whether the funds are to come from the cash-strapped government or private companies, which have shown little interest in investing in transmission infrastructure.

Even if financial constraints are overcome, India will face a tough time securing land on which to erect transmission pylons, unless the new administration is willing to tweak a recent law that lays down onerous procedures for acquiring farmland for infrastructure.

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