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Power shortages cost India $68 billion in GDP

Transmission bottlenecks are an important reason for these shortages

September 27, 2013

India loses $68 billion, or about Rs. 4,14,800 crore of its Gross Domestic Product due to electricity shortage, says a report.

“There is strong correlation between power consumption and the GDP of the country. Power shortages currently cost India a GDP loss of $68 billion (0.4% of total GDP),” said a FICCI report on Power Transmission.

Transmission bottlenecks are an important reason for these shortages. Since demand and generation capacity are both expected to increase in the future, transmission constraints need to be addressed urgently, said the report.

The transmission sector is already lacking in investments made so far. Although 50 per cent of the amount invested in power generation should be invested in transmission, in India this figure stands at a mere 30 per cent.

The report said that one of the important reasons for the lagging transmission capacity in the country is the Aggregate Technical and Commercial losses being faced by the sector.

AT&C losses in India stood at 26 per cent, which was much higher than the global average of 9 per cent in 2010.

“Another important issue in the transmission sector has been the inability to evacuate excess power from surplus regions and channel it to regions that face shortages,” it said.

With the future investments in the sector planned to be $75 billion for the two Five Year Plans (from 2012 to 2022), the investments in the transmission sector certainly need to be jacked up significantly, the report added.

The investment required in the power transmission sector is about $35 billion, out of which about $19 billion is planned to come from Power Grid Corp. The remaining $16 billion would have to be secured from private players, the report further added.

 

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