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India's Traditional Power Sources on Razor Edge of Supply

The biggest economic story of the 21st century has been the dramatic emergence in the last decade of the “BRICs” – Brazil, Russia, India and China.

Their dramatic emergence onto the world’s global economic stage has produced a middle class in all BRIC countries, whose growing clout wants reliable 24/7 power. The Russian Federation is awash in oil and natural gas, Brazil after the 1973 oil embargo developed ethanol alternatives and last year became an oil exporter, which leave energy and resource-starved China and India scrabbling to meet the expectations of their rising bourgeoisie for reliable energy. While their political systems are vastly different – India is the world’s largest shambolic capitalist market and China is an “authoritarian command” economy, they both face the issue of satisfying their rising middle class expectations for reliable energy, a prospect that both New Delhi and Beijing find daunting, given that their energy generating capabilities are still largely rooted in traditional and inefficient hydrocarbon and coal-based sources.

As rising consumer demand exceeds incremental power output increases, the need to satisfy those demands for middle class power to power everything from air conditioners to clothes dryers has officials seeking any and all alternatives.

Accordingly, current power generation capabilities in both countries are attempting to stay ahead of the curve, with mixed results. China has already announced that the country may experience power brownouts and blackouts this summer, but the bell-weather announcement about the scrabble for power has recently come from India, where the Central Electricity Authority (CEA) announced on 30 April that as many as 33 Indian coal-fired power plants out of the country’s 89 have diminished coal stocks which perhaps could generate power for seven days, with 18 of the 33 facilities having coal stocks only sufficient to generate power for four days.

While Coal India, the monopoly supplier of coal, is located in eastern India, the region has nine stations with dire supply shortages according to CEA data. The CEA reports that other generating facilities with low coal inventories include Badarpur Thermal Power Stations (TPS), Unchahar TPS, Ukai TPS, Bhusawal TPS and Talcher TPS, all suffering from reduced imports.

So, where to turn for coal imports?

Australia, the world’s leading coal exporter, has seen exports rise more than 50 percent since 1991, making coal Australia’s second largest export commodity. These coal exports go primarily to Asia, with India in 2011 purchasing 31.92 million tons.

So, given that imports cost, boost local production?

Well, maybe not.

On 2 May a trade union associated with the Nationalist Congress Party threatened to go on strike beginning 10 July against alleged irregularities in the allocation of coal blocks to private firms and the ongoing exploitation of coal workers. National Front of India Trade president Deepak Jaiswal told reporters, "We will launch an agitation and go on an all-India coal strike from July 10.Our strike is against the government's move to privatize coal mines. There are huge irregularities in the allocation process and we are demanding cancellation of all the licenses."

Which leaves what for indigenous energy resources?

Why, nuclear, of course!

Department of Atomic Energy Secretary Srikumar Banerjee has told reporters that India can now produce the world's cheapest nuclear reactors, even undercutting South Korea. Briefing journalists Banerjee said, "We are now the world's most economical manufacturer of nuclear reactors. Our cost per unit, of $1,700 (million, for a 700 megawatt reactor) is substantially less than our nearest competitors. The average international cost is now between $2,500 and $3,000 (million, for a 1,000 megawatt reactor). South Korea demonstrated its ability to build nuclear reactors for less when it wrested a massive reactor deal for the UAE from French giant, Areva, a couple of years ago.”

Banerjee emphasized that despite 11 March 2011 Fukushima nuclear catastrophe, countries like India will have a high and increasing demand for nuclear energy, commenting, "In the months after Fukushima, we have received expressions of interest from Haryana, Rajasthan and Madhya Pradesh to set up nuclear power plants. We will do all of them."

Whether or not this is a wise policy will be up to India’s voters, who have a rather freer vote than their compatriots in China.

By. John C.K. Daly of Oilprice.com

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