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The End of Electricity?

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Probably not, but it must seem that way to many residents of the northern half of India. Two days ago the largest power outage in history -- affecting a population of 370 million people -- swept through states surrounding the nation's capital, New Delhi. Twenty-four hours later, it lost its record-breaking status when not only the Northern Grid serving the region around Delhi, but also the Eastern and Northeastern Grids went down, leaving 620 million people, half of the nation's population in regions without power.

The official explanation -- weak monsoon rains translating to lower power generation, hotter temperatures and more air conditioning demand -- are no doubt technically correct, but utterly miss the point. Closer to the truth is the comment by outgoing Power Minister Sushilkumar Shinde that the problem was that state power authorities, faced with greater demand than they could meet, were simply overdrawing their allotment on the national grid at levels the system could not sustain: "Everyone overdraws from the grid. Just this morning I held a meeting with power officials from the states and I gave directions that states that overdraw should be punished. We have given instructions that their power supply could be cut."

But Shinde's comment is the tip of the iceberg. The fundamental social contract surrounding electricity has broken down in India, and this breakdown poses an existential threat to the country's development prospects. The solution is technically and economically relatively easy, but requires rethinking power for the 21st century -- because at the heart of India's power crisis is outmoded public policy.

Let's begin with the numbers. Of the 620 million people in the region that lost power, about 200 million don't have any electricity to begin with. Another 100 million are in wired villages where actual electrons are an occasional, but not necessarily even a daily, event -- they have spasmodic power.

The remaining 300 million urban or small town customers lose power frequently on hot summer afternoons when demand peaks. So being without power is not a new experience in homes and businesses, but when the whole grid goes down even normally protected users, like railroads and water treatment plants, shut down. And these users, unlike most businesses, can't rely on back-up diesel generators.

The country has a shortage of generating capacity - reported as 8 percent. But the peak power shortfall is much more severe -- in excess of 14 percent. The grid is outdated, in spite of Minister Sushilkumar's risible statement after the first blackout that India had the best grid in the world. So when power shortages cascade through the system on hot summer afternoons, system operators don't even know how much power is flowing through each sub-station - so they cut neighborhoods off (load-shedding) without knowing exactly how much power they are saving. And something like a third of the power produced is taken without payment through illegal connections, adding another huge payer of uncertainty to grid management since these users are unmetered, and depriving the State Electricity Boards of the revenues needed to upgrade both generation and grid.

When peak loads are allowed to overload any grid, the quality of the power degrades rapidly. Voltage fluctuates enormously, burning out electronic equipment like computers hooked up to grid power. So to protect their equipment, business run the AC power from the grid through inverters to convert it to DC power capable of being stored in batteries. The batteries are then used to run the facility, backed up by DC diesel generators. But the inversion/battery storage process converts about 25 percent of the precious power into heat -- exacerbating and in some cities actually creating the power shortage they are designed to protect individual users against.

A vital public service, electricity, which by its nature is a community good, has been radically individualized in the Indian context, with devastating consequences for all. Every user is acting in their own short-term self interest, because the power system forces them to, but the impact on the whole economy is shattering.

The government has recognized that the source of the dilemma is scarcity. It is the scarcity of electrons which causes villages to remain backwards, power users to hook-in illegally, businesses to wastefully convert grid power to battery power, and requires anyone who can to use very expensive and polluting diesel back-up.

But the government has continued to be blinded by 20th-century power nostalgia, in which Lenin, Roosevelt and later Mao solved their electrification problems with massive hydro-electric, and in China's case coal, generation. Just flood the grid with enough generating capacity and the lights will go -- and remain -- on is the theory. India bet its future on building the world's largest coal generating facilities -- 16 Ultra Mega Power Projects, largely to be fired with imported coal acquired from Australia or Indonesia on long-term contracts. But when Indonesia decided to stop selling its coal for less than market rates, creating an informal cartel of Asian coal exporters, coal prices doubled. Companies like Tata and Reliance which had been on the projects with fixed electricity prices and limited ability to pass-through fuel cost increases to users found themselves with financially unsustainable commitments -- a number of the projects were simply abandoned.

But even if the UMPP's had proceeded as scheduled, their construction would not resolve the problem that what India most badly needs is peak power electrons generated closer to load. Its grid cannot meet the needs of its remote populations, regardless of how many tons of coal India burns; both wind and distributed solar are cheaper by far than remote coal as a power source; eliminating the enormous energy waste both on the grid and among end users could provide the nation with a huge increase in usable electricity for a tiny cost.

Providing irrigators with solar, not grid-powered, pumps, would save power and water -- and rupees. Remote villages and cellphone towers taken off kerosene and diesel by the provision of solar, bio-mass and wind would save the Government of India more in fossil fuel subsidies than it would cost for the renewables. If urban users were offered feed-in tariffs and access to suppliers for roof-top solar, they would generate their own clean, cheap electrons every afternoon -- enough for their own use but also to stabilize the local grid for smaller customers.

Ironically, India, a nation which has proven itself globally in the business of creating and managing information and intelligence, has adopted an energy strategy based on old models of brute force electrification -- rather than investing in the smartness of its energy system. The world's information technology leader is the world's energy intelligence laggard.

India doesn't primarily need more centralized, base-load power plants -- it needs to modernize its entire power system. It needs to recalibrate power policy to recognize that electricity is a social good, which requires intelligent social management to fulfill its promise. Not all electrons are created equal -- those produced reliably and cleanly, immune to fuel price increases, and locally and efficiently generated and used, are the most valuable. These sources, unlike India's present suite of imported coal, fossil fuel subsidies, stolen power and politicized electricity giveaways, would not bankrupt its treasury to increase its trade deficit on oil and coal. The vicious cycle that is now afflicting the world's biggest democracy could become a virtuous one which restored its development trajectory -- but without the devastating health, environmental and financial costs of over-dependence on fossil fuels.

India's crisis is an opportunity -- but the fact that Minister Sushilkumar, the day after he presided over the world's two biggest power failures was promoted to Home Minister -- is not necessarily a terrific sign that New Delhi has recognized this fact. But it is, after all, only a few hours after the lights went back on -- surely the events of the past two days will help to focus New Delhi's attention on the need for a new strategy.

A veteran leader in the environmental movement, Carl Pope is the former executive director and chairman of the Sierra Club. Mr. Pope is co-author -- along with Paul Rauber -- of Strategic Ignorance: Why the Bush Administration Is Recklessly Destroying a Century of Environmental Progress, which the New York Review of Books called "a splendidly fierce book."

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