India to face massive power surplus

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
TULSIDAS DUBEY-EMBA 2015-18, Vinod Gupta School of Management, IIT Kharagpur


 

India may be heading for a huge surplus of generation capacity because 300 million people who don’t have access to electricity also don’t have means to buy power.

The government said it intends to expand power generation capacity about three-fold to 800 gigawatts by 2030 and to fuel this, it is targeting coal production of 1.5 billion tonnes a year by 2020.
At present, a large chunk of this population is using energy, say kerosene, and are incurring a cost in procuring them. If power becomes available, they can stop using kerosene for lighting lamps and use electricity instead.
Even with adequate availability of power, distribution companies may not be keen on supplying electricity at the current tariffs.

“At present, a large number of beleaguered utilities tries to restrict supply of power for areas where selling electricity is a loss-making proposition,” As per  India Ratings & Research.
They do not have the financial capability to supply power to match the demand in view of losses on supply of power.
Power utilities would need the support of the state governments if cheap power has to be supplied to a loss-making consumer category. However, officials from the Indian Energy Exchange, a platform for power trading, said people without access to electricity would buy power if it was made available to them.

Source:

1.Economic Time

2. India Ratings & Research publication at internet.

 

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