Expert Explains | How India could solve its summertime power cuts problem

The recent summer months have brought stark disparities in India's power supply. While national peak demand hit record levels, residents in Gurgaon's affluent neighborhoods faced frequent power outages and resorted to using backup diesel generators, leading to increased air and noise pollution. Conversely, neighboring Delhi experienced minimal power disruptions.

This juxtaposition highlights the stark contrast in the performance of adjacent distribution companies (discoms). To address this issue, a thorough analysis of the power distribution problem and its solutions is necessary.

Discoms serve as the last-mile connectivity providers in the power sector, receiving high-voltage electricity from power plants and distributing it to final consumers at usable voltage levels. The Electricity Act, 2003 grants consumers the right to a stable and high-quality power supply from their discom, with an independent regulatory commission overseeing rates and discom oversight.

States are responsible for policy decisions, free electricity allotments, and subsidized electricity for specific consumer categories. In Mumbai, parallel distribution licensees have operated for nearly two decades, offering consumers real choices and working effectively. This model could be replicated in other states where governance and distribution "rent-seeking" remain problematic.

In the mid-1990s, the H D Deve Gowda-led Central government encouraged parallel distribution licensees in cities with over a million inhabitants, offering them cheaper electricity from Mega Power Projects, which would have import and excise duty exemptions. Although states agreed to privatization, they failed to proceed, leading to the Central government abandoning its Mega Power Policy after a decade due to its failure.

The solution to frequent power cuts lies in increasing the distribution network's capacity to accommodate the rapid rise in demand from air conditioning during summer. This can be achieved through increased competition, investment, and technology adoption through parallel licensing, ensuring that discoms receive adequate revenue from rates and undertake necessary investments.

Additionally, promoting solar panel installation in public spaces and buildings with attractive feed-in tariffs and installing battery storage systems at load centers can help meet evening demand peaks and reduce reliance on diesel generators.