India's Achilles

August 1, 2012: 3:13 PM ET

Will Blackout Tuesday be the nation's infrastructure wake up call?

By Ryan Bradley, senior editor

FORTUNE -- In India, a power outage is not a big deal. On my first day at the newsmagazine India Today, when the lights cut out and my computer zapped to black, no one seemed to skip a beat. And why would they? This happens all the time in Delhi, and -- my coworkers assured me -- everywhere else in India. Moments later, our Chai wallahs had left their post by the steaming cauldron of milky tea to start the generators, which were kept on hand because this happened all the time and was not a big deal. By the time I left the country I was similarly inured to the regular irregularities of life there.

So it's amazing that so much of the Indian response to the largest single power outage in world history, which left nearly a tenth of the world's population powerless, is anger, tinged with embarrassment. It's a terribly irresponsible thing to make generalizations about a democracy of 1.2 billion with 35 regional languages, but allow me one: Indians are supremely unflappable. They have to be. The power cuts out, the water does not run, and the most basic tasks can quickly turn Sisyphean in the face of a crazy-complex bureaucracy. The Times of India captured the situation perfectly in a report on power minister Veerappa Moily. Moily was just appointed on Tuesday, during the crises, and in the middle of a television appearance to restore public confidence in the government his interview was cut off...by a blackout.

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India's energy problems are probably only going to get worse before they get better. Though the exact cause of Monday and Tuesday's outages are unclear, the national demand has outpaced capacity, and energy is sold for less than the cost to produce it. The system is still heavily reliant on coal -- which, ironically, it cannot mine when the power goes out; miners were trapped on Tuesday -- and hydroelectric. An estimated 20% of India's grid comes from dams, which rely on the seasonal monsoon, a dicey proposition in a changing climate. The rains have not come on as strong this year, and may not again next year. India's constant outages caused a loss in sales of at least 6.6% in 2006, the most recent year statistics are available, the World Bank reported. It is likely a greater loss of sales in 2012.

So what to do besides complain and shrug this off as yet another failing of an ineffective government? Have a backup plan -- and one better than a diesel generator. Green energy is a great possibility, and many Indian startups are already beginning to instal micro-grids to distribute solar and wind power to villages. A company called Selco makes and installs solar panels for about $200, while another, called Simpra Networks, will sell the excess energy generated by these panels to customers who place orders on their phones. These aren't simply a viable replacement to the bulky, noisy engines that powered up my office in Delhi, but a way to begin to bring electricity to the 300 million Indians who don't have access to it in the first place. To them, Blackout Tuesday didn't even register, but it might be just the sort of disaster required for everyone else to wake up, get angry, and start fixing things.

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