Over the past few years, power cuts in the city seem to be increasing year on year. In the Mysore-Bangalore region, power cuts upto 6 hours in a day are common during summer. In other seasons too, power cuts upto 3 hours can be seen. Such power cuts are not limited to these cities alone. It is a country wide phenomenon and is even worse in some other regions. Rural areas in fact experience 18 hour power cuts! The most obvious reasons for this are:

1. Increasing demand - Government statistics attribute this to growth in economy, population etc. However, there are other factors too which are contributing which cannot be quantified. Most important is changes in lifestyle of people. For example, a city like Bangalore doesn’t really require air conditioners but the changing lifestyle of the people certainly demands air conditioners.
2. Supply not being able to catch up with demand -The per capita electricity generation which was 639KWh in 2005 is one of the lowest in the world, comparable to countries like Vietnam and Mozambique. Although it is set to grow to 1900KWh by 2030, it will still be very low by international standards. This just means that supply will not be on par with demand even  after 20 years!!

Such supply demand imbalance obviously attracts the attention of capitalists. However, India has a separate set of challenges for those planning in the power sector.

1. Power prices are fixed by the government and hence red tape becomes an issue.
2. Power prices are frequently used for political purposes and again works against power generating companies.

However, the situation has improved since 1991’s market reforms and has further improved since 2003’s electricity act which made it easier for private bodies to sell electricity.

Total electricity generation is set to increase 400% by 2030 and this would attract investments of $1.25 trillion. This definitely is an opportunity much larger than India has ever seen. I think the next generation of entrepreneurs would be mostly in the power sector just like it was IT till now.