40,000 MW question

Why ‘sacrifice’ so much for just 40,000 MW, ask some prominent critics of the nuclear deal. Let’s forget the deal for a moment, and let’s ask them back, what is the value of 40,000 MW of power in a power-starved, fast growing economy? What is the opportunity cost of one MW lost for Indian citizens, for most of whom uninterrupted power supply is a fantasy? Or put it another way, what is the opportunity gained for a political party that presides over a big jump in power production? Elections have been lost and will be lost by incumbents who appear powerless to improve the power situation. The macro picture makes it clear. Of the Tenth Plan’s target in power production, the shortfall was 25 per cent. That period saw only 31,000 MW generation and the official target is generating an ambitious 78,000 MW of additional power by 2012. A target that will require around Rs 700,000 crores of investment. India’s per capita power consumption is among the lowest in big/fast growing economies and any economist can predict without thinking that minus a paradigm shift in power generation, a binding electricity constraint on growth is inevitable. So, as we were saying, let’s not cavalierly dismiss the prospect of generating 40,000 MW of power.

A second level argument becoming fashionable: nuclear power plants, that now accounts for only six per cent of India’s energy production, are unviable. Some have rediscovered the marvellously innocent potential of hydel power. One little fact should bother them, 55 per cent of India’s harnessable hydel power is located in one state: Arunachal Pradesh. That kind of geographical concentration adds significantly to the cost of transmission and distribution. Coal produces over 75 per cent of India’s power now. But global warming related negotiations will inevitably in the coming years put pressure on India to go more green in power production. Creating a viable nuclear power supply alternative is therefore an obvious strategy.

There’s a simple moral and political lesson in this: citizens don’t care at the day-to-day level — and why should they? — whether coal or hydel or nuclear power or liquid fuel is powering their homes, offices and businesses. But they care very much if politics deprioritises power generation. 40,000 MW is worth a lot of votes.