Catching the Shadow

The recent collapse of the national electricity grid was due to underdrawal on the first day and overdrawal on the second day. The underdrawal was due to less consumption in the night. It led to tripping. The overdrawal was due to higher consumption during peak hours. This too led to tripping. The problem of underdrawal can be possibly managed by timely shut down of a few turbines. The problem of overdrawal is more intractable. The Government is making an all-out effort to increase generation to meet this demand. Yet, the gap between supply and demand continues to increase because increase in demand is outstripping the increase in supply. The shortage of electricity has remained in the range of 8-12 percent for last many years.

There are two ways to manage this mismatch between supply and demand: Increase supply or reduce demand. The supply-side solution of increasing generation has been adopted by the Government. It is doomed to failure though, because of ever-increasing demand. It is like the Government is trying to catch the shadow. The demand increases as much as, or even more, than the increase in supply. A more circumspect approach of simultaneously limiting demand is urgently required.

The demand-side approach is pooh-phooed on grounds that new technologies will enable unabated increases in electricity generation. It is indeed true that nuclear, solar and shale gas inventions have enabled much greater increases in electricity generation than thought possible previously. However, human history teaches that there have been limits set by nature that mankind has not been able to transgress. Grand ancient civilizations such as that of the Indus Valley have collapsed as a result of excessive exploitation of natural resources. Thermal, nuclear and hydro-power each have their negative environmental impacts that cannot be wished away. Even wind and solar may have negative impacts that will become clear as time progresses.

The unending increase in consumption of electricity by the rich is unsustainable both from the ecological and social standpoint. Increased generation will lead to ecosystem stress; while inequality in consumption will lead to social stress. Diversion of mere two percent of present generation of electricity is sufficient to meet the lifeline consumption of the 30 kWh per month per household of the 30 crore-odd unelectrified households in the country. The reduction in welfare of the rich by cutting their consumption by two, or even four, percent would be minimal while the increase in welfare of 30 crore households would be phenomenal.

The way to go is to push the services sector which consumes about one-tenth of the electricity in comparison to manufacturing. This is often countered by arguing that services such as transport are predicated on manufacturing. This is not wholly correct. The services sector should be separated between the stand-alone services such as education, movies and music; and supportive services such as transport. Focus on stand-alone services would enable people to increase their overall standard of living without requiring much increase in consumption of electricity.

The Central Electricity Authority is currently engaged in the exercise of making National Electricity Plan as mandated under the Electricity Act, 2003. The Authority feels constrained to take this aspect into account because it is required to make the Plan in accordance with the National Electricity Policy which follows the one-sided supply-side approach of increasing generation. However, the Act requires the Government to make the Electricity Policy in consultation with the Central Electricity Authority. A two-exchange between the Government and Authority is envisaged. The Authority will do a great service to the nation by bringing demand-side solution into focus.


Vol. 45, No. 8, Sep 2-8, 2012