Unit 4 Macro: Erratic Energy Supplies Threatens Indian Growth

This news video report from the Wall Street Journal is superb in highlighting the economic consequences of the chronic shortages of energy and fuel in the fast-growing Indian economy. The focus is on a newly opened coal-fired power station (note the investment in it from Hong Kong and China) which has already had to close dow production twice because it has run out of coal supplies.

Erratic electric power forces people to rely on more expensive fuels such as diesel - it is a persistent problem facing many Indian businesses from poor farmers to chemists who need reliable power supplies to keep their drugs cool. The Indian economy too becomes more reliant on imports of oil, coal and gas worsening their trade balance.

Here is the video

The long term weaknesses of energy / power infrastructure in India are prompting huge investment in renewable energies. More than 400m people still lack access to electricity, and the International Energy Agency estimates that India’s consumption demands are likely to double by 2035. Early progress on scaling up renewable energy in the Indian economy looks promising - see here

India looks for alternative energy options