India’s Energy Forecasts Are Falling Short And Climate Could Win

  • Solar lanterns, rooftop panels meeting more electricity needs
  • Traditional power producers facing more clean-energy rivals

Millions in India still are waiting to connect to the grid as routine power shortages often lead to blackouts. It may not be the traditional power companies that meet their needs.

Photographer: Prashanth Vishwanathan/Bloomberg

Those looking for a bright spot in the global warming picture might want to pay closer attention to India.

For several years, demand for electricity in the world’s second-most populous country has trailed forecasts, data compiled by India’s Central Electricity Authority show.

While the reasons for the mismatch are complex, the gap raises the prospect that India won’t need to burn as much coal to meet its future energy needs. Rather, much of it is going to come from solar panels and lanterns, both of which can be supplied off grid.

Millions in India still are waiting to connect to the grid as routine power shortages often lead to blackouts. It may not be the traditional power companies that meet their needs. Instead, emerging technologies such as solar lanterns and rooftop photovoltaics are becoming the energy of choice -- and are starting to bite into traditional sources of demand.

As solar and energy storage technologies improve, some of the 300 million not connected to the grid may eventually get their electricity through off-grid installations and appliances, said Nitin Zamre, managing director for India at ICF International Inc., an energy consultancy based in Fairfax, Virginia.

“This will have the potential to reduce India’s carbon footprint as the demand moves to cleaner supply -- a big positive for the fight against global warming and climate change,” Zamre said.

Pollution Link

India’s power demand is a major variable in the debate about how to rein in global warming. It accounted for almost 7 percent of global emissions in 2012, World Resources Institute data show.

The International Energy Agency’s outlook is for installed power capacity forecast to more than triple by 2040. India’s fleet of coal plants is likely to expand more than 2 1/2 times, adding more of the greenhouse gas pollution blamed for increasing the global temperature. Any dip in electricity demand would have a big impact on those emissions.

Cleaner Supplies

India has ambitious plans to clean up its energy supply, which also may keep a lid on power demand in the future.

Under the Paris Agreement signed by more than 190 countries, India has promised to boost the amount of power coming from sources other than fossil fuels to 40 percent from about 30 percent. Prime Minister Narendra Modi is working to make rooftop solar a major energy source with a program that’s enticing overseas investment.

“If 60 million to 70 million energy-starved households need around 3 kilowatts installed capacity each a few years, then the market size of off grid-products potentially could be around 200 gigawatts, from less than 100 megawatts of penetration at present," Krishnan Pallassana, India director at London-based the Climate Group, said in a phone interview.

As Pallassana sees it, decentralized access to energy could be a game changer, making a substantial reduction in greenhouse gases a possibility and paving the way for India to exceed its climate pledges.

Another signal that India’s power needs are shifting comes from the expansion of energy-efficient technologies -- especially LED light bulbs, which use a fraction of the electricity that traditional ones do.

India has promoted energy-efficient lighting and now wants to replicate its experience with appliances. So far, the lighting program, which seeks to upgrade 770 million bulbs by 2019, has saved 19 million tons of carbon dioxide emissions, or $1.35 billion annually, according to government estimates.

“We will soon start a program for energy-efficient air conditioners, which has the potential to help save 150 gigawatts over time if the market response is as encouraging as LED bulbs," said Saurabh Kumar, managing director at Energy Efficiency Services Ltd., the state-backed overseer of the energy efficiency program.

One explanation for the gap between forecasts and actual power demand is the state of the nation’s power distribution companies. As of March 2015, the state-owned enterprises had accumulated combined losses of 3.84 trillion rupees ($57 billion), according to a report by KPMG.

Those losses mean power distributors can’t buy more electricity to satisfy expected demand, nor can they add more customers, ultimately meaning a lot of latent power demand is going unsatisfied.




Meanwhile, India’s traditional energy producers are also under pressure. With distributors unable to buy as much power as they’d like, traditional power plants are being forced to generate less than their rated capacity. Modi’s push to install as much as 175 gigawatts of renewables by 2022 has added to competition between power generators.

Major conventional-energy generators in India are also getting into the renewables game as solar costs fall -- giving the country an even better chance of controlling emissions.

“A 15 percent improvement in the already committed goals, even at a constant GDP growth rate, would cut absolute emissions equivalent to the entire emissions of major economies like Canada or Germany within a 2030 timeline,” said Vivek Adhia, head of business engagement at WRI in India.

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