India’s Blackouts Highlight Need for Electricity Governance Reform

India recently experienced one of the world’s worst blackouts, with 670 million citizens directly impacted. While media reports have focused on the repercussions from two days of outages, this incident illustrates a much larger, more systemic problem: the need for improved electricity governance.

India’s History of Power Problems

India has the world’s fifth-largest electrical system, with an installed electric capacity of about 206 gigawatts (GW). India initiated power sector reforms in the early 1990s through a range of legal, policy, and regulatory changes. Over the last two decades, some of these reforms have been impressive, but several others weren’t taken. This lack of follow-through has resulted in a growing gap between electricity demand and supply throughout the country. Recent blackouts may have shined a spotlight on this gap, but it’s a situation that’s widespread in India: Not only do 400 million Indians lack access to electricity, but electricity supply is unreliable and of poor quality even in large parts of “electrified” India. In addition to the existing demand, Indian consumers, businesses, and industries seek more electricity to power appliances, processes, and products, further exacerbating the demand-supply gap. By 2035, India’s power demand is expected to more than double.

In looking at the recent blackouts and India’s power supply situation in general, three major governance issues jump out:

3 Holes in India’s Electricity Governance

1. Loss and Theft: The predominant solution proffered by policymakers in India is to increase generation capacity—unmindful of the substantial technical losses due to outdated power lines, leaky cables, and poor maintenance; commercial losses due to poor metering and local politicians’ populist “free power” policies ; and rampant electricity theft caused by people hooking up wires to overhead electricity cables. Building more power plants without fixing these problems is akin to pouring water into a bucket with large holes. With India’s power plants close to 70 percent dependent on coal and natural gas, the current coal shortages and non-availability of gas haven’t helped the situation. The Planning Commission’s Working Group on Power for the 12th Plan, among other studies, have pointed to these “holes,” but so far there’s been no serious effort made to address electricity losses or theft. No doubt, there are vested interests that benefit by the business-as-usual scenario. But there is an urgent need to hold decision-makers accountable for solving these issues on a priority and not allow them to obfuscate the situation by announcing another round of new power plants. The first step towards this goal is demanding accurate estimates of electricity losses, as well as public disclosure of efforts being taken to address them.

2. A Lack of Accountability: India’s transmission network needs strengthening in order to efficiently deliver the generated electricity from power plants located in different parts of the country to millions of consumers. Each state in India has its own transmission agency, and these are networked into one of five regional grids. Over the last decade, India has embarked on a project to join the five regional grids and establish a national grid. The plan sounds good in theory, but it requires a high level of discipline in order to work. Each state government needs to coordinate with the others to ensure no one is drawing too much power or impacting another’s allocated electricity. The blame game that followed the recent blackout showcases the fact that this communication and coordination just isn’t happening yet. Also, there is really no one accountable for managing the grid, pointing to a serious accountability vacuum.

3. Lack of a Holistic Governance Approach: India does not have a holistic approach to electricity planning or implementation. Generation, transmission, and distribution planning (and investments in each of them) happen independent of each other; renewable energy planning takes place outside of conventional electricity planning; and service to on-grid consumers and off-grid consumers happen separately–all of which highlights the absence of an over-arching electricity governance framework. This situation has caused ad hoc and lopsided planning, with no public disclosure of information about efforts to close the electricity demand-supply gap. Plus, no one agency or institution anywhere in the country is accountable for the failure to provide affordable, reliable, and quality electricity.

Improving India’s Electricity Governance

The Electricity Governance Initiative's 2006 assessment of India's power sector identified a range of core electricity governance problems.

This list certainly isn’t exhaustive—several other interlinked problems contribute to the malaise affecting India’s power sector, from bad monsoons and water scarcity to inefficient electrical appliances. There are solutions to some of these concerns through improved technology (such as isolating and responding to grid problems and enhancing power plants’ efficiency) and innovative policies (like holistic planning approaches and incentivizing grid discipline), but addressing the accountability and governance issues are key to improving India’s power sector.

WRI’s Electricity Governance Initiative (EGI) is a network of civil society organizations working to promote transparent, inclusive, and accountable decision-making in the electricity sector in several countries, including India. EGI’s 2006 assessment of India’s power sector identified a range of core electricity governance problems in India. Following the assessment, EGI has begun a project that could provide a pathway to avoid another disaster like India’s recent blackouts. The project seeks to develop a holistic and participatory approach to electricity planning, working with decision-makers to close the “holes” and explore the potential of improved energy efficiency and renewable energy in order to shrink the demand-supply electricity gap.

Indian civil society can also play a role in improving governance. Citizens can create a “demand” for improvements by asking that information on sector problems and potential solutions be placed in the public domain. They can also hold decision-makers accountable for providing affordable, reliable, and quality electricity for all. Unless both citizens and decision-makers start to chip away at India’s core governance problems, blackouts—and a host of other power problems— will likely become increasingly common.