India’s blackout exposes choice between water & electricity

Power grid Old Delhi

Let’s take a snapshot of India right now.

  1. In India, there is a drought. This year’s poor monsoon is likely to lead to the third drought in 10 years. But two-thirds of the water India receives is wasted because of inadequate storage and management.
  2. India just had a power outage affecting 650 million people, a population twice as large at the U.S.  Most cities in the state of Punjab faced an acute water shortage due to lack of proper co-ordination between the power and the municipal corporations.
  3. Water tensions are increasing between countries like India and Pakistan.
  4. Before the power grid outage India was “staring at a water drinking shortage.”
  5. There is a race to tap India’s coal resources to fuel a whopping 519 GW – nearly 500 power plants – leaving behind massive deforestation and water contamination that could have a ripple effect on the environment and health inside the world’s second most-populous country and neighboring Bangladesh.  Despite places like coal mining in the Jaintia Hills of India being one of the wettest places on earth, much of the water from the Ummutha River that flows through it is no longer drinkable.

According to Andrew Revkin, The New York Times blogger: “It’d be great to think that renewable energy sources and distributed electricity generation could solve such problems, and they’re great where they work. (And India is ramping up an ambitious effort to expand solar energy.) But the reality is that grids and central power plants are a mainstay of increasingly urbanized economies. In India, that means coal will be an economic keystone for decades.”

Leaving aside the flat out failure of grid extension in India, let’s focus on a more stark reality.  The World Bank estimates that 21 percent of communicable diseases in India are water related. In India, diarrhea alone causes more than 1,600 deaths daily.

So, India’s power outage underscores a larger problem facing us.  If you had to choose between power and water, what would you choose?

Revkin’s blog might suggest he chooses power. I would choose water. But, instead, can’t we deploy solutions where we have both?

Albert Einstein said, “We can’t solve problems by using the same kind of thinking we used when we created them.”

Power grid Old Delhi

The most amazing part of the Indian blackout story is that the country’s infrastructure did not grind to a halt. A key reason is that most of India’s most important infrastructure is backed up by diesel generators – at a cost of over US$0.45/kWh (4X what most Indian’s pay for electricity). This is by definition distributed generation. India citizens depend upon diesel because the Indian central grid is a failure. The added problem is that diesel-distributed generation is very expensive, noisy, and bad for people’s health.  Most importantly diesel subsidies in India are expected to cost the country over $24 billion this year.

This choice for distributed generation is simply the only solution that individual consumers can choose without relying on the oft-maligned Indian bureaucracy.  In the past, Indian consumers chose diesel because of their low upfront costs.   But today, the improvements in financing are allowing consumers to switch to clean energy —  gasified biomass, wind, solar and other distributed approaches at a 50 percent discount to the cost of diesel.

Regarding coal as a solution, it was reported this year that India has overtaken China as the World’s largest importer of coal.  India is building coal generation facilities as fast as it can.   But, if history is any guide, India never meets its goals on coal generation.  This is not because Indians don’t know how to build coal or because they can’t afford new coal (though costs are skyrocketing); it’s because building large new infrastructure is hard in India based on topography alone. So Andrew Revkin and others insist on poking India in the eye when they suggest that India’s solution to the recent blackouts are new coal plants.

But clearly, Revkin also misses the point on water. Water is literally killing India.

The power grid in Old Delhi

In India, like in the United States, the power sector is the single largest user of water – more than agriculture. Presuming that India could solve its problems and build more coal, they would run out of fresh water even faster.

Ten years from now, writers like Revkin will be publishing an article about how climate change and coal led to water shortages in India.  As a result, India needs to buy expensive desalinization plants. In fact, today, The World Resources Institute has a report on growing water scarcity and declining water quality, on thermal and hydroelectric power generation plants in Asia.

The sad reality is that “Utility 1.0” is more than 100 years old.  The model was a good one and gave us the economy that we enjoy today, but it has its problems. Coal is much more expensive today than it was 20 years ago, so much so that Ratan Tata, chairman of the Tata companies, recently admitted that new coal power from the proposed Tata Mundra project is coming in at roughly the same cost as new solar today in India.

Worse the Tata Mundra project is in such bad shape financially from skyrocketing coal costs, he has described it as a ‘non performing asset.’ Plus, practically speaking, India simply cannot afford to pay for the infrastructure necessary to provide 100 percent household electrification using the command and control practices of the last 100 years.

Revkin is using 20th century thinking to solve 21st century problems. If India, and other industrialized countries had a comprehensive energy plan that included installing the least cost renewables, perhaps our choice will not come down to water or electricity.  I think we could have water and electricity – but that is not that plan that is being executed.  Others are suggesting that India execute a plan that could execute itself.

Jigar Shah is CEO of Jigar Shah Consulting and a partner with Inerjys. Shah founded SunEdison in 2003 with a new business model, the solar power services agreement business (SPSA). SunEdison now has more solar energy systems and megawatts under management than any other company.

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