India Expects Surplus Electricity This Year as Blackouts Persist

The power ministry forecast surplus electricity supply in the year ending March, highlighting improvements in electricity generation and transmission capacity.

The country is expected to have an 8.8 percent electricity supply surplus, Central Electricity Authority, the planning wing of the union power ministry said in its Load Generation Balance Report for the year. Peak availability is forecast to surpass demand by 6.8 percent. The New Delhi-based agency had forecast 1.1 percent excess supply in the past fiscal year, which ended up with a shortage of 0.7 percent. The shortage during the year was the lowest ever, the CEA said.

The projections for the surplus, based on consultations with states and consumption trends for existing users, mask the inadequacies of the power system in India, where about 45 million rural households still don't have access to electricity and several cities face blackouts as money-losing provincial retailers curtail supplies.

"The biggest problem we're facing is low demand," said Ashok Khurana, director general at Association of Power Producers, a lobby group of private-sector generation companies. "In the past 10 years, generation capacity addition has accelerated much faster than the demand for power. That's the reason we have so much of surplus capacity."

Peak electricity demand for the year has been projected at 169.13 gigawatts. That's about half the country's installed capacity of 329 gigawatts as of April 30.