Navigant Research Blog

In India, 370 Million People in the Dark

Brittany Gibson — July 30, 2012

Early on the morning of July 30th, India experienced its worst power outage in nearly a decade as electricity supply was down for more than 8 hours to more than 370 million people, a number greater than the population of the United States.  The consequences of rising electricity demand and weak electricity infrastructure are now fully on display, as India attempts to identify the cause of the outage and develop a solution to prevent future widespread outages.  There are myriad technical solutions in development across the globe – smart energy, smart grid, and smart industry technologies and strategies – that India may now feel a more pressing need to adopt.

The power industry’s role in supporting economic development is unparalleled.  In India, the power outage in the north affected agricultural operations in Punjab, telecommunications and commuter services in New Delhi, military operations in Kashmir, and water treatment services in Uttar Pradesh, one of the most densely populated regions in the world.  What’s at stake are the food and water supplies to millions of people, the security of those people, and millions of dollars in gross domestic product.

As the real consequences of this power outage continue to emerge, this debacle is likely to become an impetus for Indian politicians to more aggressively pursue energy infrastructure development.  India faces the problems characteristic of other emerging economies – particularly power theft, heavy dependence on coal and other thermal resources, and a fragile power grid.  In the case of this power outage, rising electricity demand and coal shortages proved to be too stressful for the existing infrastructure.  With India’s electricity demand expected to rise five-fold to six-fold in the coming decades, according to the International Energy Agency (IEA), and GDP growth rate forecast to stay above 6% in the coming years, this is increasingly a liability for a country that has never been known for building and maintaining state-of-the-art infrastructure.  India needs a flexible grid infrastructure that can accommodate growth and encourage resource diversity.  Solutions such as advanced battery storage, distributed solar, and microgrids (India is already home to 17 microgrid installations) can provide such flexibility and diversity.  In the coming years, India will be a hotbed for such technologies.  Pike Research forecasts strong growth in many emerging sectors (solar, energy storage, and electrified transportation) in emerging markets, including India.

The power outage in India is a reminder that cleantech market development is not just about the growth and advancement of new technologies and markets; it’s also about new energy development strategies for emerging economies.  The distinct conditions and challenges faced by emerging markets such as India, China, and Brazil provide lessons for the broader market and may ultimately drive cleantech market expansion.

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