How outages waste money

  • HT Correspondent, New Delhi
  • |
  • Updated: Aug 26, 2009 23:39 IST

Indians are forced to spend around Rs 30,000 crore (Rs 300 billion) every year on inverters and generators, as the country doesn’t generate enough and outages are frequent and widespread.

And if invested in building new plants, the Rs 30,000 crore can help build a 8,000- MW capacity – enough for lighting Delhi twice over.

What’s more, residential and commercial users in India so far spent Rs 1 lakh crore (Rs 1,000 billion) on buying inverters and generators. This amount could have helped generate enough for six cities the size of Delhi.

A study released on Thursday said inverters and generators add to air pollution, emitting nearly 2 million tonne of carbon dioxide.

Besides, power outages cost 6 per cent of gross domestic product, or approximately $60 billion (Rs 2.88 lakh crore or Rs 2880 billion) every year – enough to raise the country’s 150,000-MW existing capacity by almost 50 per cent.

The study also said Gurgaon, Noida and Pune, which rank high on the list of desired destinations for foreign investors, are among the most power-starved in the country.

Commissioned by Wartsila, a Finnish power equipment maker and service provider, the study was conducted across 21 cities over a five-week period in May-June and covered 1,500 respondents, including both residential and commercial users of back-up equipment. 

Wartsila India managing director Rakesh Sarin said, “Higher outages lead to higher reliance on power-backup systems, which, in turn, lead to higher premiums over basic grid power usage.”

He said users in Gurgaon, Faridabad, Noida and Kanpur pay the highest premiums  – sometimes 100 per cent more than the cost of their regular power supply.

The study also said the huge sum spent on power back-up equipment was reflected in the growth of the companies that make inverters and batteries.

“Our business turnover has increased from Rs 100 crore to Rs 1,000 crore over the last four years,” said Rakesh Malhotra, group managing director of Luminous, a leading inverter manufacturer.

He said, “The inverter industry as whole has been growing at 25 per cent for the last five years and its penetration in urban areas, including the tier II and tier III cities is 30 per cent.”

Exide, one of India’s largest storage battery manufacturers, too saw its turnover rise 51 per cent to Rs 3,606 crore in 2007-08 and 17 per cent in 2008-09 to Rs 4,233 crore.


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