India’s power back-up bill estimated at Rs 130,000 cr annually


Rakesh Sarin,
Managing Director,
Wartsila India
New Delhi, India — (METERING.COM) — August 27, 2009 – India’s annual power back-up bill is estimated at a staggering Rs 130,000 crore (US$26.6 billion) according to a new study by Universal Consulting for power company Wartsila India.

The study found that Indians spend Rs 100,000 crore (US$20.5 billion) on power back-up equipment such as gensets, batteries and inverters. In addition the country spends Rs 30,000 crore (US$6.1 billion) operating inefficient power back-ups using gensets which belch smoke and inverters that emit acid fumes, also releasing an additional 1.9 million tonnes of carbon dioxide per year.

The message for policy makers is clear, says the study: That money, if collected from harassed power consumers, would be enough to build power plants to generate 25,000 MW of electricity – almost 20% of the present generation level.

Commenting on the study, Rakesh Sarin, MD of Wartsila India, said a “reliability surcharge” of 50 paisa (1 US cent) per unit, which is far less than the extra charges consumers are incurring to maintain the back-up, could support rapid capacity build-up.

There are examples of consumers, such as in Mumbai, who benefit from a reliable 24×7 power supply by paying a reliability charge.

In one of the projections, Power Grid Corporation of India has estimated the value of lost opportunity for the country in 2008-09 at Rs 2,89,000 crore (US$59 billion). In GDP terms, this is equivalent to a loss of nearly 6 percent.

Sarin said the correlation between growth in GDP and addition to power generation capacity is close to 1. This means that to realize the country’s ambition to grow by 9 percent, power generation needs to grow by 9 percent annually after wiping out the substantial existing deficit.