India’s Impact

India’s great power outage, already being labeled “The Great Blackout,” left more than 600 million people in the dark. What’s more, it could well be repeated in the future.

There are multiple forces that led to this collapse. One is political. A cap on energy prices and limited resources to power generating stations has limited the amount of investment that can be made in the power grid. A second is economic. The explosive growth in India’s tech and manufacturing sectors have greatly increased demand for electricity and taxed the grid beyond its capacity. And finally, there is the environmental impact. The delay of the monsoons has made summer in India almost unbearable, further increasing demand for both air conditioning and water pumps for farmers.

While the environmental issues likely will subside—either the monsoons will arrive or it will cool down as fall approaches—the other problems will not. As India’s economy continues to grow, the demand for electricity to power everything from computers to smart phones continues to grow. Devices may be more efficient than they were even five years ago, but there are many more of them so the net effect is an increase in demand.

Nor is India alone. Much of Asia and Latin America is growing stronger economically, creating similar demand for consumer goods, commercial capacity and growing demand for resources. The greater that demand, the more energy prices increase on a global scale, and the more likelihood there will be similar blackouts or brownouts in other parts of the world.

There are several alternatives available for generation of electricity. One is nuclear, which has fallen out of favor on a global scale after the troubles in Japan. The others involve wind, solar, and fuel cells, which have been largely surviving on government subsidies in the United States and Europe. The additional demand from other parts of the globe, as well as massive economies of scale this demand could bring, would do much to make alternative and sustainable energy sources more cost-effective. And in light of the developments over the past couple of weeks, there will be renewed impetus to make that happen.

Beyond that, the push toward more efficient electronics of all sorts will get a big shot in the arm. A localized power outage is a nuisance. A country-wide power outage is a wakeup call, and one the size of India could prompt much, much bigger changes than anything that has happened so far—particularly as the rest of the developing world begins taking steps to avoid a similar issue.