The Economist - UK (2022-05-07)

The Economist May 7th 2022 Asia 51

ElectricityinIndia

Heat and no light

E

lectricity hasbeengettingincreas­
ingly scarce in India. In a recent survey
two­thirds  of  households  said  they  had
been facing regular power cuts. Residents
of  some  rural  areas  in  the  northern  states
report  receiving  only  a  few  hours  of  elec­
tricity a day. The shortage has even reached
posh  parts  of  Delhi,  the  capital,  whose
pampered  residents  are  usually  insulated
from many of the discomforts suffered by
their compatriots.
The most immediate reason for the cri­
sis  is  scorching  heat.  The  past  couple  of
months  have  been  even  hotter  than  usual
in South Asia. In north­west and central In­
dia  average  temperatures  in  March  and
April were the highest since records began
122 years ago (see map). As a result, air­con­
ditioners  in  homes  and  offices  have  been
whirring  away  at  levels  not  usually  seen
until mid­May. That has come on top of al­
ready rising demand after the easing of co­
vid­19  restrictions  and  an  uptick  in  eco­
nomic activity.
India no longer lacks capacity. Over the
past  two  decades  it  has  built  more  coal
plants,  which  generate  about  70%  of  the
country’s  power,  and  speeded  up  the  ex­
pansion of renewables. It has also connect­
ed all but a tiny percentage of households
to the grid (though not to 24­hour supply). 
But in recent weeks coal plants have not
been  receiving  enough  coal  to  operate  at
capacity.  At  the  start  of  this  month  more
than  100  of  India’s  173  thermal  plants  had
critically low stocks. At the end of April, of­
ficials  in  Delhi  said  the  capital  could  run
out of coal in a matter of days, threatening
electricity supply to hospitals and the met­
ro system. Power plants have been scram­

bling  for  fuel  from  Coal  India,  a  state­

owned  company,  and  paying  steep  prices

for coal at auctions. 

One reason for the shortage is that coal

is  cumbersome  to  move  around.  Demand

for  train  travel  recovered  quickly  after  co­

vid measures eased in March, causing busy

tracks. The government has cancelled hun­

dredsofpassengertrainsoverthecoming

weekstomakewayforcargoones.

Butthereisadeeper,morelong­run­

ningreason:electricityproducershaveno

incentivetokeeplargestocksofcoalbe­

causetheycannotbesurethattheywillbe

paid regularly. Billing and payment for

electricityispatchy,leavingmanydistri­

butioncompaniesintheredandunableto

paythepowerplants,whichinturnhavea

hardtimepayingtheminers.“Theyhave

known fortwo months thatcoal stocks

were declining, but instead ofbuilding

them upthen,wenowhaveabunchof

brokeentitiesscramblingtobuycoaland

electricityata premium,”saysKarthikGa­

nesanoftheCouncilonEnergy,Environ­

mentandWater,a think­tankinDelhi.

Intheshortterm,powerplantsanddis­

tributorshavelittlechoicebuttomuddle

through. Longer­term, several fixes are

possible. Oneis to ensure existing coal

stocks are used by the most efficient

plants,whicharedisadvantagedbylong­

standingdistributioncontractsthatfavour

older,morefuel­hungryplants.Doingthat

couldreducecoalconsumptionbyaround

6%a year,reckonsMrGanesan,freeingup

stocksforemergencies.Andasthegovern­

mentcontinuestoexpandrenewablesthe

pressureshouldease.

Anothersolutionistoconvincemore

usersofelectricityactuallytopayforit.

Farmersinmanystatesareentitledtofree

power. Around 10% ofhouseholds con­

nectedtothegriddonotreceiveregular

bills.Theftisrampant.Astudyin 2019 by

pwc, anaccountancyfirm,estimatedthat

distributioncompaniesloseabouta fifth

of their revenue to theft, meter­tampering

and leaks from faulty power lines. 

Fixing the dysfunctional electricity dis­

tribution system will become more urgent

as  India  gets  richer.  Climate  change  will

make  extreme  temperatures  more  com­

mon.  More  Indians  will  install  air­condi­

tioning:  currently  only  one  in  ten  house­

holds has it. The International Energy

Agency,a forecaster,estimatesthattomeet

electricitydemandoverthenext 20 years,

Indiawillhavetoincreaseitsinstalledca­

pacityof 400 gigawattsmorethanthree­

fold,addinganother 950 gw, orroughlythe

sizeoftheeu’spowermarket.Muddling

throughwillnolongerbeanoption.n

D ELHI

The dysfunctional power sector is

struggling to handle surging demand

Karachi

Delhi

Islamabad

Chennai

Mumbai Hyderabad

Kolkata

INDIA

CHINA

PAKISTAN

Karachi

Average land surface temperature<30 35 4540

Apr 23rd-30th 2022, °C

Source: NASA Earth Observations, Land Processes Distributed

Active Archive Centre and MODIS Land Science Team

SouthKoreanpolitics

Dangerous waters

F

or once, the braised shark fin is not the

most  controversial  thing  about  Yeong

Bin Gwan. The grand banquet hall in Seoul,

famed  for  the  dubious  delicacy,  is  where

Yoon  Suk­yeol,  South  Korea’s  incoming

president,  will  have  his  inauguration  on

May  10th.  The  opposition  Minjoo  party

complained  that  the  event’s  3.3bn­won

($2.6m)  budget  makes  it  the  most  expen­

sive  inauguration  ever.  Mr  Yoon’s  people

explained that the venue adds only a mea­

gre 500,000 won to the bill. Still, a Minjoo

spokesman  said  it  was  tantamount  to  de­

claring  South  Korea  a  country  where  “the

president comes first”.

Petty point­scoring is not new to South

Korean politics. High office attracts foren­

sic  scrutiny.  It  will  soon  become  routine

for Mr Yoon. Shark fin or not, he will have a

lot on his plate after inauguration day. He

must tackle many problems, including as­

tronomical housing costs and the frustra­

tions of young people who are well­educat­

ed  but  underemployed.  Mr  Yoon  has  also

promised structural reforms in several ar­

eas,  including  welfare,  corporate  regula­

tion and criminal justice. Even the execu­

tive branch is to be transformed: it will be­

come  an  institution,  his  office  has  said,

that  “has  autonomy,  communicates  and

takes responsibility”. 

And that is just at home. My Yoon must

also deal with a dangerous world. He hopes

to draw closer to America, but also wants to

avoid  antagonising  China,  his  country’s

largest trading partner. He has promised a

harder  line  on  North  Korea,  which  has

been  increasingly  bellicose  in  recent

months, launching yet another missile on

May 4th, just days before the inauguration. 

S EOUL

The incoming president is

already unpopular