May 4, 2011

Empowering Kashmir

Economic development needs reliable electricity supply

In his recent column in DNA, Nitin Pai argues that the way to wean away young, urban, Kashmiri Muslim from their anti-Govt agitations is by raising the cost of protesting, as well as the benefits of not protesting. While the former can be tackled by revving up the security machinery, the latter has to be enabled by creating alternative occupations through a ‘guerilla development plan”, he argues.


Photo: Marcatnoc

Any development plan must presuppose the existence of basic infrastructure. The Chinese believed in the philosophy that infrastructure must precede development and went about laying roads, building airports, installing power plants and transmission lines, even in sparsely populated and under-developed areas. This acted as the magnet for attracting more investments and generating more employment.

In India, where providing infrastructure is often an afterthought, almost all states suffer from a shortage of good roads and reliable power supply, but in Kashmir’s case the problem assumes an alarming dimension, one that seriously impacts our national security.

Let’s just look at one of the components of infrastructure—electricity. There is enough empirical evidence from around the world to show that electricity and development have a two-way relationship (or two-way Granger causality). Introduction of reliable electricity in an area speeds up development and increases the GDP. Development, in turn, creates a demand for more electricity—with more people, more devices and higher aspiration acting as multipliers. In the early stages of development, the energy intensity is high. Typically, a 1 percent growth in GDP will need to be fuelled by a 1 percent increase in energy supply.

Jammu & Kashmir has a staggering power deficit, despite a very high hydro potential. The peak shortage for the year 2009-10 was 33.8 percent (760 MW), and the energy shortage (in millions of units) was 24.8 percent, even without factoring in the huge latent demand that is kept suppressed by the absence of power lines and sub-stations. The transmission and distribution losses (T&D) in Kashmir are believed to be over 45 percent. The difficult terrain makes transporting coal or gas a formidable task, which explains why very few thermal plants have come up. Security concerns, both external and internal, and reluctance of the Union government to provide counter-guarantees have kept away prospective private investors.

The state has been pointing out that it has suffered heavily as a result of discriminatory provisions in the Indus Water Treaty, that deny it the right to impound the waters of Indus, Chenab and Jhelum for optimum usage, to take care of the seasonal variations in power demand. This is a valid grievance. The resulting, low annual plant load factor (PLF) makes the state vulnerable to acute seasonal shortages, especially in winter when power demand is at its highest. Though connected to the Northern grid, other states have not been able to come to the rescue; each state has its own litany of power woes.

Not surprisingly, therefore, power cuts stretching over 10-12 hours a day are quite common in Kashmir. This adds to the growing sense of unrest and frustration—and helps breed a ‘protesting’ and ‘anti-national’ mindset.

Most blue prints for the power sector recommend more investments in hydel plants, quicker implementation of such projects and allotting a higher share of the power from such plants to the state. Then there are the usual proponents of renewable energy, especially solar and geothermal, claiming that these are non-polluting and non-threatening to the pristine environment.

The problem with this idealistic approach is that it will take years for meaningful development to kick in. The track record of implementation of hydro projects even in ‘peaceful’ states leaves much to be desired and it would be delusional to presume that it will be any different in Jammu & Kashmir. If and when they do come up, the problem of seasonality will still remain.

Solar energy has its merits but will not be the right answer either in this context. It will not offer the possibility of scaling up in megawatt terms or the comfort of 24 x 7 x 365 supplies, given its weaknesses of intermittency and very low PLF. These projects must be pursued for eventual absorption into the grid, but cannot be expected to provide immediate relief, let alone catalyse development.

So, a “guerrilla development plan’ must look at quick-relief, scalable options with an optimal mix of efficiency, flexibility and environment-friendliness. The paramount consideration must be to provide reliable power round-the-clock and all-year-round.

A technical solution worth exploring is the concept of multiple, decentralised, liquid-fuel based power plants of capacity 100 MW each, close to different load-centres. These rely on heavy-oil that can be sourced from the refineries in Northern India and transported in regular tankers. The plants can come up in quick time (14-18 months). They can be ramped up or down efficiently to suit the seasonal or diurnal load. The deration in output on account of altitude will be low. And, the make-up water requirement for such plants will be almost negligible.

Concurrently, the transmission lines from the Northern grid need to be strengthened and the state grid widened as part of the Accelerated Power Development and Reforms Programme (APRDP). As the generation capacity in the North increases with more Ultra-mega power projects getting commissioned, a disproportionate share must go to Jammu & Kashmir.

Power based on local, liquid fuel plants or from remote thermal plants through long-distance lines will not be cheap. The landed cost of electricity may be around Rs 9-10/kWh, but when gradually blended with more hydel power, the weighted-average will come down. What is urgently needed is reliable power at the best cost that can be achieved, not unreliable power (or no power) at a desired low cost. The ‘opportunity lost’ cost in the absence of electricity, or the back-up generation costs (such as diesel generators) are far higher.

Reliable electricity may well provide the spark that Jammu & Kashmir needs. It will help create a virtuous cycle that will foster development and promote lifestyle changes that could eventually render ‘protests’, in any form, a thing of the past.

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