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India has been rushing to incorporate solar and wind power into its electricity system. However, most of these renewable sources lack proper storage systems, which has led to power shortages in the evenings. India's electricity demand grew by 7% in 2023, compared to the global average of 2.2%. This rising demand, coupled with insufficient renewable energy-powered backup, will likely result in increasing power cuts by 2027. Inadequate transmission infrastructure, distribution issues, theft, and default in payments also contribute to power outages in India.
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What You'll Learn
Insufficient renewable energy backup
India is the world's third-largest consumer of electricity and the third-largest producer of renewable energy. In October 2024, 46.3% of its energy capacity came from renewable sources, and the country has committed to a goal of 500 GW of renewable energy capacity by 2030. However, India's electricity demand is growing faster than its supply, leading to concerns about insufficient renewable energy backup.
India's electricity demand grew by 7% in 2023, compared to the global average of 2.2%. Peak electricity demand increased by 68 GW between May 2019 and May 2024, representing an annual growth rate of 6.5%. The post-COVID period saw an even sharper rise, with peak demand increasing by 46 GW in just two years. India's installed electric capacity is 446 GW, with 211 GW coming from coal and 195 GW from renewable sources. However, not all of this capacity is available at all times. For example, during a heatwave, high electricity demand from air conditioners can lead to spikes in demand that cannot be met by renewable energy sources alone.
To address this challenge, researchers have suggested deploying more utility-scale solar plants alongside battery storage. Solar plants and batteries can be deployed faster than coal and hydropower plants. By 2027, 100-120 GW of new solar capacity, with 50-100 GW located alongside batteries, could help avoid shortages. Additionally, India needs to focus on improving grid planning by incorporating hourly and seasonal variability and investing in storage solutions. However, storage systems face efficiency losses and seasonal mismatches, and it is not yet economical to rely solely on renewables to "end coal".
While India has made significant progress in renewable energy, it needs to accelerate its transition away from fossil fuels to meet the growing demand for electricity and avoid power cuts in the future. Balancing the electricity grid is a complex task, and India must continue to invest in and plan for a diverse range of renewable energy sources to ensure a stable and reliable supply of electricity.
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Lack of power storage
India's electricity demand grew by 7% in 2023, compared to a global average of 2.2%. Between May 2019 and May 2024, peak electricity demand increased by 68 GW, from 182 GW to 250 GW, representing an annual growth rate of 6.5%. India's power demand has grown by 6.5% on average since 2015. This increasing demand, coupled with insufficient renewable energy-powered backup, will likely lead to rising power cuts by 2027.
India's Standalone Energy Storage Systems (ESS) sector is still developing, facing challenges such as project cancellations, supply chain issues, weak domestic manufacturing, and power purchase agreement delays. The delay or cancellation of power sale and storage agreements, often due to expectations of lower tariffs as battery prices drop, has been a significant barrier to the sector's growth.
The Indian government has acknowledged the need to rapidly expand energy storage capacity and has introduced several initiatives to support this goal. These include the Energy Storage Obligation (ESO), which aims to enhance grid stability and manage the variability of solar and wind power, and the Viability Gap Funding (VGF) scheme, which provides financial support for standalone Battery Energy Storage System (BESS) projects.
According to the National Electricity Plan, India requires 74 GW/411 GWh of energy storage by 2032. This includes battery storage and pumped hydro energy storage (PHES). By 2047, India's energy storage needs may increase even further, with projections estimating a requirement of 320 GW/2,380 GWh of storage.
The development of utility-scale solar plants alongside battery storage systems can help address the issue of high electricity demand at night, which cannot be met by coal alone. This combination of solar and storage can be deployed faster than coal and hydropower plants, providing a more sustainable and flexible energy solution for India's growing energy demands.
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Inefficient transmission and distribution
India's electricity woes are partly due to inefficient transmission and distribution, which result in significant losses. These inefficiencies are caused by a range of factors, including technical issues, theft, and default in payments.
Technical losses occur due to inadequate infrastructure, such as a lack of parallel power storage facilities for heavily loaded transmission lines. This results in an underload at one end appearing as an overload at the other, leading to unexpected power draws from neighbouring utilities without compensation, as highlighted in the aftermath of the 2012 India blackout.
Distribution issues further exacerbate the problem, with local distribution networks becoming overtaxed and forcing power flows onto the bulk power distribution system unnecessarily. Additionally, the financial health of electricity distributors, known as discoms, is a critical factor. Discoms in states like Bihar, Jharkhand, Madhya Pradesh, Odisha, and Uttar Pradesh are struggling with losses above 20%. Financial struggles limit their ability to invest in optimising their systems, leading to continued inefficiencies in transmission and distribution.
The Indian government has attempted to address these issues through infrastructure upgrades and state government subsidies. However, delays in subsidy disbursements can cause cash flow problems for discoms, hindering their ability to optimise their systems. Consequently, inefficient transmission and distribution persist, contributing to power outages and affecting millions of people across India.
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High electricity demand
India's electricity demand grew by 7% in 2023, compared to the global average of 2.2%. Between May 2019 and May 2024, peak electricity demand increased by 68 GW, from 182 GW to 250 GW, representing an annual growth rate of 6.5%. The post-COVID period saw a sharper rise, with peak demand shooting up by 46 GW in just two years, from 204 GW in May 2022 to 250 GW in May 2024. This high electricity demand has put a strain on the country's power grid, leading to frequent power outages.
India has an installed electric capacity of 446 GW, with 211 GW coming from coal, 195 GW from renewable energy sources, and the rest from gas and nuclear power. However, the country's peak power demand has reached 250 GW, leaving little spare capacity for thermal plants to increase their plant load factor (PLF). These plants are already operating at near-maximum capacity, and there is not much extra capacity left to ramp up further when demand spikes.
The Southern region of India's electrical power system operates through high-voltage direct current (HVDC) interties, while the other four systems (Northern, Western, Eastern, and Northeastern) operate in synchrony at a nominal 50 Hz. The Northern region also has an internal HVDC line to transport power from generators in the east to consumers in the west. However, during the 2012 blackouts, it was observed that many heavily loaded transmission lines had inadequate parallel power storage facilities. This resulted in an underload at one end appearing as an overload at the other, leading to power outages.
To meet the growing demand, India has been rapidly adding solar and wind power to its electricity system. However, most of these renewable energy sources lack proper storage systems to save the extra energy generated during the day for use at night. This results in power shortages during the evening peak hours, even with the addition of new renewable energy sources. The way forward, according to researchers, is to have more utility-scale solar plants alongside battery storage. This combination can store solar energy during the day and provide a faster deployment option compared to coal and hydropower plants.
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Power plant issues
India has been working to add solar and wind power to its electricity system, but most of these renewable energy sources lack proper storage systems to save excess energy for later use. This means that without enough steady sources, the electricity grid becomes unstable, and power outages become more frequent.
In May 2024, India's peak power demand hit 250 GW, while the country's total electricity generation capacity was estimated at around 520 GW, with 280 GW from coal or thermal energy, 198 GW from renewables, and the rest from gas and nuclear. The gap between demand and supply is expected to widen by 2027, with India's power demand growing at 6.5% since 2015, compared to the global average of 2.2%.
The issue of insufficient power supply in India is further exacerbated by losses due to inefficient transmission, distribution issues, theft, and default in payments. These losses, referred to as AT&C losses, dropped from 23% in FY21 to 16% in FY23 due to infrastructure upgrades and state government subsidies. However, discoms (electricity distribution companies) in certain states continue to struggle with losses above 20%. Financial challenges faced by discoms can lead to difficulties in optimising their systems and maintaining stable power supply.
Additionally, power plants in India have faced challenges in meeting the growing demand for electricity. During the 2012 blackouts, power stations appeared to have adequate generation capacity, but they had not implemented droop speed control on their governors, contributing to the issue. The sudden increase in demand during heatwaves can further strain power plants, as coal, India's most reliable power source, may struggle to meet the high demand even with its full capacity.
To address the power plant issues and reduce the frequency of power outages, India needs to focus on improving power plant efficiency, implementing better demand management strategies, and investing in renewable energy sources with proper storage systems.
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Frequently asked questions
Two severe power outages affected most of northern and eastern India on 30 and 31 July 2012. The blackout on 30 July affected over 400 million people and lasted about 13.5 hours. The cause was likely due to a combination of factors, including inadequate power storage facilities, overtaxed local distribution networks, and a lack of coordination between utilities and regulators.
Yes, India has been experiencing increasing electricity demand, with a 7% growth in 2023 compared to the global average of 2.2%. This has resulted in frequent power cuts as the supply fails to meet the demand. India's electricity demand is expected to continue rising, leading to more frequent power cuts by 2027.
India has been working to add more renewable energy sources, such as solar and wind power, to its electricity system. The Central Electricity Authority (CEA) has also introduced a new tool called STELLAR to help electricity distributors manage power supply and reduce power cuts. However, the effectiveness of these measures remains to be seen, as the country's power infrastructure faces challenges such as inadequate storage systems and financial struggles.
