This week we’re publishing a field guide on the future of coal in India. So briefly, the newsletter will revert back to its original form: giving you a deeper perspective on an issue of global importance that I’ve spent the past few months working on.
Saturdays weren’t much fun growing up. After a grueling week of classes at school and homework in the evenings, weekends were supposed to be the time when we kids could do whatever we wanted: watch TV, play video games, listen to music.
But we couldn’t. For at least six hours, usually from 10am to 4pm, there was no electricity in my hometown of Nashik, a city near Mumbai in western India. The blackouts were called “load shedding,” which I understood to occur when there was so much demand from industry that power plants simply couldn’t serve city dwellers’ homes too.
We were lied to. Two decades later, I found out what was really happening as I worked on a project that set out to understand the future of coal in India.
In hindsight, it should have been obvious. Demand for electricity is typically low on a weekend; industries aren’t really operating. Each power cut was a deliberate choice—not a blackout, but a “brownout.”
The real explanation for the power cuts exposes the deep problems in India’s electricity system. Most Indians get their electricity from a state-owned electricity supplier, which operates as a regulated monopoly. Its job is to pay power plants to generate electricity, build and maintain the grid to distribute power, and charge customers for using those services.
But most of these state-owned companies are racking up huge losses. Though law-abiding citizens are willing to pay for regular service, electricity theft is rampant, and as a regulated utility, a company isn’t allowed to raise tariffs that could help it make up for the theft. And as an instrument of the government, the utility also has to carry out government policies, such as providing subsidized electricity to farmers—whether or not its accounting books are balanced.
The upshot is the utility will provide as little power to citizens as it can get away with.
Two decades later, the duration of these brownouts has decreased. But they still happen. Most Indians I spoke to aren’t aware that the power cuts they endure aren’t always because of technical problems. I suspect the lack of awareness is one reason why state-owned utilities are able to get away with such poor service.
This will have to change. The lack of reliable electricity isn’t just an injustice for law-abiding citizens and punishment for innocent children, but a ball and chain on India’s economy.
The average Indian resident today consumes only a tenth of the electricity used by an average US resident. Eventually that number will go up. And today, more than 75% of that electricity comes from burning coal. If India continues to grow its electricity use with such heavy reliance on coal, it’s likely the world will blow past its carbon budget and bring on catastrophic climate change.
Fortunately, just as there are fewer and shorter brownouts, there appears hope that India’s coal use might peak sooner and at a lower level than previously thought. I hope you’ll take the time to read the state of play of India’s coal industry, which untangles the forces that are making it happen.
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