India's Dark Night

The Politics Behind the Power Failure

Indian children study by kerosene lamp. (Rupak De Chowdhuri / Courtesy Reuters)

India can boast of the world's biggest democracy and its oldest culture. And now it has added another superlative: site of history's largest power failure. The country's electricity grid faltered on July 30, 2012 and then again the following day. An area that is home to more than half of the country's population -- between 600 million and 700 million people -- went dark.

Most of those living in that area, however, did not feel the loss. A sizeable portion own backup power sources, either diesel-powered generators or inverters, which work like giant batteries. They charge up when electricity is available; when it isn't, they can be used to power whole households. Those who owned generators and inverters turned them on as soon as the grid failed, and their lives went on as normal.

Another part of the population -- millions of people -- didn't feel the outage because they were never connected to the grid to begin with. The states in northern and eastern India, which bore the brunt of the blackout, have among India's lowest rates of electrification. According to the 2011 census, in Uttar Pradesh, the largest state in India and one of those that lost power, only 24 percent of the state's 25 million rural households are electrified. For comparison, China's household electrification rate had already exceeded 98 percent by 2003.

Millions likely did lose power, though, and transportation ground to a halt, stranding rail passengers and choking already dense streets and highways. In addition, the blackout renewed global doubts about India's ability to sustain high growth.

Immediately following the first outage, India's Ministry of Power formed an investigatory commission and put A. S. Bakshi, the chairman of the Central Electricity Regulatory Commission, in charge of it. The body will likely point to a host of factors that led to the outage, including inadequate power and extraordinary circumstances. Many have already speculated that this year's monsoon, which came later than usual, exacerbated problems in a flawed power system. The months before the monsoon are usually extremely dry and hot; the average daily high temperature in Delhi in May is 103. Farmers use more electricity then than usual, as they pump water from subterranean reservoirs for irrigation. The middle class, too, uses more electricity than usual, to power fans and air conditioners. This year was particularly bad because the delay in the monsoon depressed hydroelectric resources by lowering the water levels in the reservoirs that feed the country's power-generating dams.

Another theory is that a particular part of the grid that, in the recent past, has transmitted more power than it can safely carry tripped the whole system. In this argument, the problem is less that there is too little electricity to go around than lousy management of the power resources that exist.

In fact, the problem is both -- and has been for a long time. At independence in 1947, India had very low rates of electrification and per capita energy consumption. Since then, the country's electricity generation capacity has grown tremendously, from total installed generating capacity of 1362 megawatts in 1947 to 173,626 by the end of 2011. It is still not enough, however, to satisfy the ever-increasing ranks of electricity consumers. Meanwhile, the various state governments have underinvested in the infrastructure that transmits electricity from dams and power plants to consumers. The country's electricity infrastructure is stretched almost beyond its technological capacity in many parts of the country. Compounding these problems is the fact that electricity is surprisingly easy to steal, by tampering with the meters, bribing the meter readers, or hooking a new line into an existing electricity wire. Although public utilities have vigilance units that routinely uncover power theft, thieves steal thousands of megawatts from the grid each year.

The problems in India's power sector stem from failures of governance. The institutional boundaries of much of the country's energy grid correspond neatly to political boundaries, so when it comes to public utilities, each state thinks about satisfying its own constituencies first. Even at India's birth in 1947, scientists and statesmen knew that organizing the energy sector in such a way would be a problem. B. R. Ambedkar, one of the drafters of India's constitution and the country's most prominent ex-Untouchable leader, and Meghnad Saha, a Bengali scientist and early champion of the Damodar Valley Authority (an organization regulating the generation of thermal power and hydropower, similar to the United States' Tennessee Valley Authority), predicted that the setup would lead state governments to hoard their energy resources. A solution, they suggested, was for the central government to take control of electricity. But Ambedkar and Saha lost out to those who championed keeping control of electricity at the provincial level, as it had been under the British administration.

So, from the 1950s onward, India's electricity grid comprised publicly owned, vertically integrated utilities companies, one for each state. Individual systems were governed by State Electricity Boards (SEBs), which generated, distributed, and transmitted power within their territories. A close relationship between the boards and the government ensured that electricity provision was often used to win votes and consolidate political control. For example, many state governments put pressure on their respective SEBs to reduce the cost of electricity for favored constituencies. In states with influential rural constituencies, such as Punjab and Haryana, farmers paid very low rates or nothing at all for electricity. In most cases, though, the large landowners benefitted the most from subsidies. The low tariffs prevented the utilities from earning enough profits to finance improvements to the grid.

Of course, the central government has not been a silent observer in this process. Since the energy system was set up in the late 1940s, the national Ministry of Power, the Planning Commission, and the Central Electricity Authority have been working to strengthen New Delhi's control. In 1975, the central government established large electricity generation companies, which produce thermal and hydroelectric power. Since then, it has worked to form a nationwide transmission system. Its first move was to lay transmission lines across state boundaries to knit together disparate state-level grids into five regional grids. Over the course of the last two decades, New Delhi laid high-voltage transmission lines between the regional grids to build a national grid. Now, only the southern regional grid remains to be fully interconnected.

In theory, a national grid ensures that electricity produced in areas of the country rich in coal and hydropower can be sent to areas with fewer energy sources. But the high-voltage transmission lines that integrated the statewide and region-wide systems require carefully coordinated regulation and management. For example, the frequency of electricity in the grid must remain within carefully calibrated parameters. Further, central and regional agencies must collect and analyze real-time data about how much power is being drawn from and poured into each area.

But in India, coordination sometimes breaks down. And without it, the national grid is prone to breakdowns, which is part of what happened last week. A grid collapse in one zone had a cascade effect, shutting down the power systems in neighboring regions. There are technologies that can isolate grid failures, but these systems were either not in place or not robust enough.

In other words, even if technical causes and extraordinary events explain the 2012 power failure, the event reveals graver problems across India's entire energy sector. Despite the central government's increasing influence in energy provision, state-level politicians continue to meddle in the sector and to skew it toward local interests. If this devastating blackout does not prompt India's parochial-minded politicians to take energy more seriously, the possibility of yet another national breakdown cannot be ruled out. More to the point, the recent collapse has already given a number of foreign investors jitters about India's creaking infrastructure and the seeming inability of the political class to address the chronic problems forthrightly. Without reforms, India's hope of emerging as a major global actor will remain a mirage at best.

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