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Summary:

The worst blackout in a decade hit Northern India on Monday forcing 370 million people to go without power. While blackouts are a huge problem for the country, they’re a massive opportunity for next-generation energy technologies like clean power, and the smart grid.

Power grid Old Delhi

Power grid Old Delhi

The worst blackout in a decade hit Northern India on Monday forcing 370 million people to go without power, and disabling crucial infrastructure like the train system. The reality is that the country’s growing desire for power — to support its booming economy — is outpacing the country’s ability to build and manage more power.

While this is a huge problem for the country, it’s a massive opportunity for next-generation energy technologies like clean power, and the smart grid. Unlike in the U.S., where clean power and smart grid technologies are often times replacing current infrastructure, in India many times they are the first build-out of energy infrastructure.

Power grid Old Delhi

I, and others, have said this before. At an industry event last year, investor Ira Ehrenpreis (who backed such investments like Tesla) said it’s the worst time to be in greentech in the U.S. and the best time to be in greentech in many countries outside the U.S.

When I traveled to India last December, rolling blackouts were common place even in the major metropolitan cities like Delhi and Mumbai. And beyond the grid, there’s distributed power opportunities, too. Many villages are looking at ways to add distributed solar power and microgrids through groups like Simpa Networks, and Mera Gao Power.

The rapidly growing Indian middle class will soon want to consume similar amounts of power to the U.S. and Europe, and that will require this massive power infrastructure buildout. The country has plans to add 100 GW of power generation over the next five years, and that will be made up by mostly coal and clean power.

But India’s domestic coal industry is a mess. The New York Times described it as having “clumsy policies,” “poor management,” “environmental concerns,” and “retail electricity prices that are lower than the cost of producing power.” Eighty percent of domestic coal production is managed by the government-controlled Coal India.

That’s why solar and wind power could thrive in India. India is expected to install 3 GW of solar by 2016, compared with the 54 MW of solar installed in 2010.

Next-gen energy startups and companies — if India isn’t on your radar, it should be.

For more on my writing about India and energy check out:

  1. Having seen a failed smart grid venture in India, that had excellent technology, a global tech giant as an investor and a good management team, I can safely say that although from a macro point of view (legacy infra, tons of issues, growing economy etc), I would not put India on my radar due to bottom less corruption and utter lack of integrity among Indian politicians and energy utilities. This firm (the one I saw) were repeatedly told that their proposition was the every best India has seen but without filling the pockets, they would not even make to the RFP qualification.

    So, unless one has a big time local and corrupt business group (such as Reliance Group..the most corrupt and dishonest business folks in India) or tons of local mafia behind them..don’t waste your money and precious time.

  2. Forest Donkey Monday, July 30, 2012

    Yes, theoretically India would be a great place to try out this technology, but their level of corruption and bureaucracy would make it a failure.

  3. nPower® PEG Tuesday, July 31, 2012

    Hey Katie,

    Wanted to let you know about a new crowdfunding project we just launched to put mobile power in the hands of crisis mappers off the grid in developing nations.

    http://igg.me/p/186431?a=928069

    If we reach our goal, 100 nPower® PEG mobile chargers will be hand-delivered to Crisis Mapper projects in high-risk populations off the grid, so they can report, map, record, and observe, powered by their own kinetic energy. CrisisMappers.net has reached out to its network of over 4000 people worldwide to identify an initial group of projects off the grid that need mobile power. Here are some sample requests for nPower® PEGs technology, that will be used to help power projects as diverse as:

    Food security in Sudan & South Sudan
    Studying health care patterns in Haiti
    Monitoring nutrition in rural Uganda
    Tracking nomadic at-risk populations in Darfur

    If the Indiegogo community exceeds our goal, we will continue to work with The International Network of Crisis Mappers to identify more projects that need mobile power, and send them more PEGs.

    We’d love to send some to India.

    If you can share the project among your networks (tweet, Facebook, email, etc.), that’d be awesome. Thanks again.

  4. India would be a natural for stationary neighborhood fuel cells, powered by hydrogen generated by solar. With ample sunshine and many small villages each could have an independent power plant like those from Fuel Cell Systems.

  5. It’s not the corruption that’s the major stopper. That comes later. It’s the tariffs, plain and simple. Cogen is banned, as is wheeling. Only solar receives most-favored nation pricing, but the 5 MW nation-wide cap per commercial operator is anti-business and anti-consumer. California-style provisions for premium rates for green power are outlawed, regardless of service-level reliability. Storage is outlawed, as is appropriate technology.

    We can expect dark franchise growth as a means for circumventing tariff limitations, whereby operators avoid contact with the parastatals’ grids. But dark franchises are vulnerable to extortion and impossible to scale.

    One of the big enablers of the current mess is the World Bank, which has been providing financial assistance to coal parastatals (CIL and its subsidiaries) and helping to keep the energy sector afloat despite massive circular debts. The Bank’s loans are off-book for GoI, thereby escaping normal budgetary reviews and legislative oversight. Not that reviews would have been helpful, but without the World Bank the collapse of the grid would have occurred sooner and the tariff system would most likely have been liberalized already (at least somewhat).

    Problems related to how the Bank works against U.S. business interests are beyond the scope of this discussion but they need to be addressed if markets such as India’s are to be opened.

    GoI has racked up huge loan debts from the World Bank, with inadequate energy infrastructure to show for it. That infrastructure is needed to pay down the loans.

    In the interim, businesses in the best position to take advantage of India’s power shortfall are Australian coal exporters. The tariff structure for domestic Indian coal does not provide price disadvantages for shipping rocks, which is what the SEBs (powerplant operators) receive a lot of, thereby damaging their equipment. CIL has resisted improvements in mine design and operation because that would result in job losses. The World Bank has resisted reforms because there is little pressure for them to do otherwise.

    We Americans are quick to point fingers at the Indians, but much of the responsibility for the current mess can be traced back to too much money and not enough common sense coming out of Washington D.C.

    Beyond the occasional conference, the U.S. government has shown little interest in removing barriers to exports of U.S. energy equipment and services to India, especially from U.S. SMEs with no experience in India and scant sales resources. Perhaps India’s onerous and unpredictable tax systems are simply too discouraging for U.S. officials to think about challenging, without considering the other hurdles mentioned above.

    The United States’ mantra of “institution building” overseas has not been translated into stable, effective institutions for promoting clean-tech exports abroad. Combine that with U.S. money going through the World Bank to prop up India’s broken energy system and you have a perfect storm that shows no signs of abating.

  6. I am from Mumbai. I am not even certain what rolling blackouts mean. We have regular power. At least in Mumbai, though most cities are like that now. Sure, we have power problems, lots of them, but that part about rolling blackouts in Mumbai and Delhi? I don’t remember them for Mumbai at least. Also the failure is unlikely to be about consumption, since it has also recovered without additional power being added.

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