In the early morning smog and heat of Ahmedabad city, in the Indian state of Gujarat, the 400MW Torrent coal-fired power station looms over homes and businesses that huddle a stone’s throw away from the plant.
The scene is emblematic of a nation in thrall to its need for energy.
According to SM Krishna, the country’s minister for external affairs, India wants to achieve a double-digit growth rate by 2012, up from the 9% projected for the coming year.
Astronomical growth such as this is a basic necessity to provide for a population of more than a billion people, particularly if it aims to lift a further 185-million people out of poverty by 2015, Krishna said.
But a secure supply of electricity is crucial to meeting those targets and India’s appetite for energy is good news for South Africa, as the Asian tiger looks outwards for energy resources.
SA coal imports to increase
Coal imports from South Africa hit a reported 17-million tonnes last year and are likely to increase.
“We are planning substantial coal imports from other countries. Even though we have coal, it is not up to the mark,” said Krishna.
He noted that, with Australia and Indonesia, South Africa is a likely source for increased coal imports.
Moves are already afoot to increase coal procurement, with state-owned Coal India, which provides 80% of India’s coal demand, setting aside six billion rupees ($135-million) to buy coal mines in the United States, Australia, Indonesia and South Africa, local newspaper The Hindu reported.
While South Africa faces looming power shortages in the coming years, the odds seem surmountable when held up against the challenges that a country the size of India faces.
Challenges for India
The nation relies chiefly on thermal power generation — or electricity from oil, gas and coal-fired power stations.
The energy mix, according to the country’s ministry of power, is made up of 65% from thermal power, 24% from hydropower, 3% from nuclear power and 8% from renewable sources.
Unlike South Africa, where electricity generation and transmission falls mainly on to the state utility, Eskom, India began work to reform its electricity sector a decade ago.
It has split its generation, transmission and distribution networks.
Generation has been opened to independent power producers, distribution networks have remained with the state but have been corporatised to improve efficiency, while transmission has remained state run, according to Debajit Palit of The Energy and Resources Institute.
Improvements
Palit said the process had begun to bear fruit, particularly when it comes to curbing technical losses and improving non-payment.
He estimated that technical losses decreased from about 40% to about 20% while tariff collection in some regions is up 90%.
But the country faces huge challenges, particularly when it comes to providing electricity to the rural poor.
A report released by the International Energy Agency in March noted that 64.5% of India is electrified, with a 93.1% electrification rate in urban settings but only 52,5% in rural areas.
Demand for more
But when 850-million people, or around 70% of the population, live in the rural areas, a huge number of Indians still need access to power.
And, despite the room created for private sector players, only 13% of the country’s 164500MW of installed capacity is provided by independent power providers.
More than half the capacity is generated by the federal state sector (India has 28 states) with the rest, or 34%, coming from the central government.
This is compared with South Africa’s total installed capacity of just over 40000MW, almost entirely sourced from Eskom.
“Although India has considerably improved its generating capacity, it still has difficulty in meeting demand and there are persistent power shortages, which constrain India’s economic growth,” said the report.
“With the development of the industrial and commercial sectors, as well as the wider use of electrical equipment, electricity demand keeps increasing.”
It stated that in 20 years’ time India will need to increase its capacity to a massive 96 0000MW.
Implications for climate change
This has huge implications for climate change. But the country, and its fellow Asian powerhouse, China, is reluctant to subordinate its much-needed development in the name of going green — particularly in the light of Western nations, which have been free to pollute the planet to reach their current levels of wealth and economic development.
“We believe sustainable development is good for all. But we have millions of people who require access to commercial power and have none,” said Vivek Katju, a senior official in India’s ministry of external affairs.
“There can’t be a shift in the world’s fundamental approach to climate change. But countries with historical responsibilities must discharge those responsibilities.”
In a bid to address concerns about climate change India is planning to increase its nuclear power production extensively.
It hopes to take the share of nuclear power production from the current 5 000MW to about 20 000MW by 2020.
Meanwhile, the nation makes do. India’s businesses have worked around the problems of power shortages either by installing generators or by building their own captive power plants to ensure security of supply.
One such example is Hero Honda Motors in Delhi. It is the largest manufacturer of two-wheeled motor vehicles in the world, producing a bike every 18 seconds.
The company has a 20MW plant that runs on furnace oil and natural gas to keep it going 24/7.
“We need power all the time — we can’t rely on the grid,” a company manager said.
As for the millions of rural and urban poor, fire and lantern light is the only option until power reaches them.
The M&G flew to India as a guest of the Indian High Commission. This was not declared in the print version of the article.