Spain's blackout is a wake-up call for India

Mint

05-05-2025

For Spain and Portugal, last week's nationwide blackout may have felt unprecedented. But in India, we have lived through these already. In July 2012, a grid collapse caused 400 million Indians to lose access to power, many of them for days. Most assume that, as the country grows richer and energy becomes more abundant, such problems won't recur.
But, as Europe has learned, preventing grid collapse is a constant endeavor, not a battle that you only fight once. India's government has prioritized energy access, vastly expanding availability to households and building more generation capacity. It is now time for it to work on grid stability as well.
As your energy choices change, your grid and how you manage it must too. We don't yet know what caused the initial disruption to Spain's grid that made it to lose its connection to France's more stable electricity network, but the additional variability introduced to its system by renewables — particularly on a sunny day — probably did not help. That should worry India's regulators.
This is not an argument against renewable energy, especially not in India. Politicians in New Delhi have correctly noted that solar and wind power meet three requirements they view as crucial. First, they might end our crippling dependence on imported fossil fuels; second, grid-scale solar energy is now quite cheap; and third, off-grid renewables can sometimes reach where the regular grid does not.
As a consequence, they have prioritized building out renewable energy capacity. Of the 34 gigawatts of generation added last year, 85% was renewables, with 24 gigawatts from solar power alone. Another 300 gigawatts is planned by the end of the decade.
Much of this is driven by private capital and entrepreneurial energy at every level. At one end of the scale, street markets in the poorest states are full of cheap rooftop solar sets. And at the other, highly valued companies like ReNew Power Pvt. and Tata Power Co. have soaked up investor dollars, promising to benefit from the nation's vast solar ambitions. This week, the United Arab Emirates-led green private capital fund ALTÉRRA and Brookfield Asset Management Ltd. announced plans to invest $100 million in the solar project developer Evren.
All of this sounds great. India does best on those tragically few occasions when its consumers and companies are left to make the right choices, and are given access to capital and supportive regulations. That is how the country became an IT superpower that now has the cheapest high-speed data in the world.
Yet the government has responsibilities, too. It has to ensure the grid can manage the additional requirements — both new consumers and new sources. This will cost money, but not even the government knows how much. Predictions vary from $107 billion to $500 billion, and even the lower end seems unaffordable at the moment. New Delhi hates spending money, but it is going to have to construct a workable plan for investment into the grid, and soon.
The government's tasks don't stop there. It must also try and figure out what's actually getting installed in terms of solar power, and who is doing the building.
Self-consumption electricity systems of various kinds — whether off grid, or the sort that can provide power to the grid as well as taking it out — come with very special issues that must be addressed. As BNEF Research has pointed out, one of the problems that Spain faces is that authorities there don't know enough about solar power generation in the country; it may have 10.5 gigawatts more photovoltaic modules installed than official data suggest.
Grid management becomes very complex under such circumstances. Ideally, you should be able to forecast electricity demand, when it will peak and who will put how much into the network under various circumstances. But a lack of clarity about self-consumption means predictions lose accuracy, and the grid turns vulnerable.
It has also become clear that all is not well even among India's large corporate champions of renewable power. One such, Gensol Engineering Ltd., has just run into trouble after the misbehavior of its founders came to light. Government raids on Genpact offices and various other problems have eroded 70% of its value in two months, and sent shock-waves through the solar sector. Clearly, it can't stay the Wild West forever. Regulators have realized that it is now systemically important, and corporate governance standards need to reflect that.
India's per-capita consumption of energy is still very low by global standards — 1,331 kilowatt-hours in 2022-23, compared to 6,257 kilowatt-hours a year in China. The government, responding to the demands of its voters, is determined to narrow that gap. We may not know how much and when, but there it is absolutely certain that more new generation capacity will be installed in India than anywhere else in the world in the next few decades. And the majority of that will come from renewables.
For a build-out without blackouts, regulators and the government will also need to work on better data, a more robust grid, and better-run companies. As Europe's grid collapse showed, some problems aren't magically solved when you get rich.
First Published: 5 May 2025, 02:07 PM IST