Why there is power cut?

Anybody who has lived in rural parts of India or in any developing nation may have experienced long durations of power shortage, specially during summer hours. At least recent power shortage events in India would have brought the memory of those candle (or lantern) light dinners. 

Now, thanks to our huge experience of working in the power industry, we have understood the causes more than the others. While the actual causes are different at different times, and in different situations, we can probably attempt to highlight few key reasons. First, lets just be clear: the power cut has mostly nothing to do with the lower generation capacity, or poor maintenance or power theft issue! It simply boils down to economics!

Let me explain!. Power generators operate based on the demand requirement which varies during peak/off peak hours, industrial activities in the area etc. Normally, the utilization factor of these power generating plants range between low (say 40%) and high (say 80%). On most of the occasion this low utilization of the plant depends upon one key factor: What is the cost of electricity that these generating plants have agreed to sell to the distribution company in your region?.

In most of the typical practice, the distribution company signs the power purchase agreement (PPA) with generators based on variable fuel prices. Therefore, as the fuel becomes expensive for whatever reasons they have to pay more money to generators. Because distribution companies can not immediately revise tariff to end users, in turn they tend not to ask to operate such plants despite the fact that they can actually produce power. Result, we the end user suffer those long hours!

Normally, the fuel cost is a major component of the electricity cost in a traditional fossil-fuel based plants. So if your region (say Rajasthan, or UP) is far away from the fuel (coal, gas, oil) source, (say Chhattisgarh) then naturally, the price of electricity in those regions will be more expensive. Not only that, since those regions do not have fuel source, they tend to remain on mercy of either fuel supply from source or electricity supply from national grids. Now enters politics, and which govt is controlling where tend to decide whether you will have power cut or not!. Obviously, how effective is management of your state distribution board also decide whether you will have shortage or not because if they owe lot of money to fuel suppliers, then we can safely bet that your state is not likely to receive fuel!

Naturally the solution to avoid power cut lies in the fact that whether your region has enough independent (renewable based) power generation capacity so you don’t depends upon other regions! Next time, if you face power shortage/cuts, ask yourself: why?. Are your provincial/state politicians or policy makers doing right things to mitigate this problem!

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