India's post-pandemic electricity generation growth outpaced peers

Like India, multiple lower middle income countries face power outages

India’s per capita electricity generation is higher compared to its 2019 levels than many other lower middle income countries.

The World Bank defines a lower middle income economy as one in which the per capita gross national income (GNI), or the total amount earned per person, was between $1,046 and $4,095 in 2020. India falls in this category along with nearby countries, including Sri Lanka, Pakistan and Mongolia, which have faced power cuts amid higher energy prices.

India’s per capita electricity generation is up 3.8 per cent in 2021 over 2019. It is up only 0.2 per cent for lower-middle-income countries in general.

India’s per capita electricity generation had dropped from 1,173 kilowatt-hours in 2019 to 1,131 kilowatt-hours in 2020. It rose to 1,218 kilowatt-hours in 2021. The change varied for the other lower middle income countries with available data. Some registered a decline of over 10 per cent in 2021 compared to 2019, while others registered a double-digit growth. The median number, however, was just above 2019 levels.

The analysis looked at the median number for 12 nations in the group and compared it to India. The countries with available data included Bangladesh, Bolivia, El Salvador, Kenya, Mongolia, Pakistan, the Philippines, Senegal, Tajikistan, Tunisia, Ukraine and Vietnam. It used numbers from tracker, Our World in Data, which had collated statistics from the BP Statistical Review of World Energy, Ember Global Electricity Review (2022) and Ember European Electricity Review (2022).

Both rural and urban areas are facing power shortages in Pakistan, leading to a scheduled power cut of at least 3.5 hours per day. Mongolia has imposed usage restrictions for its industrial sector since March, while Sri Lanka too saw similar instances of power shortage like India. 

“As an economy we need to find energy solutions from time to time, depending on our requirements. We are going at a faster pace compared to a lot of other countries. We are a large country and in capacity terms will be third or fourth in the world. These numbers will be dependent on how fast the economy and the manufacturing sector grows,” said Mohit Kumar, a research analyst at IDFC Securities. Experts indicate that the sector has grown by only 4-5 per cent compared to an expectation of around 6-7 per cent in India.

Industry analysts are also blaming the lack of additional firm coal-based capacity as a major reason why there is a shortage of power now. “If generation is not enough, there will be a shortage. Shortages happen from time to time because we are not adding firm capacity, coal-based capacity. We are looking at renewables which are not available all the time,” Kumar added. 

Higher per capita electricity generation is in keeping with India’s track record over the last decade or so. It has consistently had higher per capita electricity generation than other lower middle income countries. It exceeded their per capita electricity consumption in 2011. It was 8.58 per cent higher as of 2020.

A degree of convergence in the per capita consumption of electricity has been noted by earlier studies, including a 2008 one entitled, ‘The world per capita electricity consumption distribution: Signs of convergence?’ from authors Adolfo Maza and José Villaverde of the University of Cantabria (Spain), but this was expected to take time to play out fully.  

“…distribution on per capita electricity consumption indicates that large cross-country disparities will persist in the long-run,” the study said.

An analysis of the data shows that lower middle income countries had per capita electricity generation of 1,041 kilowatt-hours in 2020. It was 1,131 kilowatt-hours for India. For high income countries, it was 8,728 kilowatt hours.

A kilowatt-hour is the amount of electricity required to have a 100-watt bulb burning for 10 hours in the night. For every such bulb that an Indian can turn on, the resident of a high income country can turn on nine.