India's love of appliances boosts power consumption

In India air conditioners have "witnessed a paradigm shift" in recent years from luxury product to domestic...

Afp August 05, 2012

NEW DEHLI: Every evening before Indian executive Sushmita Rao leaves her Delhi office, she phones her maid to switch on the air conditioner so her apartment is refreshingly cool when she reaches home.

"I work in an air-conditioned office and I suffocate if my place isn't cool," said Rao, one of hundreds of millions of Indians who went without electricity last week in the world's worst-ever blackout.

The monster grid failure was blamed on greedy states consuming more than their allotted power quotas as they sought to meet spikes in demand.

Part of the demand surge comes from Indians' adopting electricity-guzzling lifestyles which adds to the strain on the grid from industrial users and businesses in Asia's third-largest economy.

"As India's middle class broadens, there's a heavier burden on energy demand as people buy appliances for a better quality of life," Will Pearson, global energy analyst at London-based Eurasia Group, told AFP.

Experts warn blackouts like those that knocked out power to one half of India's 1.2 population last Monday and Tuesday, could be the way of the future unless the government fixes the creaking electricity sector.

"We're growing through a major societal transformation... we will need more and more power to fuel our industries, consumer goods, our malls, our offices," said Arvind Singhal, chairman of leading retail consultancy Technopak.

"Unless planners recognise this, we're going to see many more failures on the scale of the ones we saw."

There are 470 million people in what global consultancy PwC calls the "emerging middle class" - those sandwiched between the lowest income group and the middle class.

Though they earn modest sums, collectively they have large purchasing power, PwC says.

The middle class numbers 160 million according to India's National Council for Applied Economic Research - bigger than the populations of Russia or Japan - and is seen rising to 267 million by 2016.

Air conditioners, microwave ovens, toasters and washing machines are possessions that distinguish India's upwardly mobile and have become increasingly available and affordable since pro-market reforms of the 1990s.

Consumer attitudes in India to air conditioners have "witnessed a paradigm shift" in recent years from luxury product to domestic necessity, consultancy TechSci noted, forecasting the AC market will expand annually by 14 percent for the next five years.

Indian summers see the mercury rise above 50 degrees Centigrade (122 degrees Fahrenheit) in many areas, and these are followed by the sticky, humid monsoon season.

Ad manager Rao is one of an increasing number of Indians who work in air-conditioned offices, shop in air-conditioned malls and dine in air-conditioned restaurants.

Rao, who lives alone, says she has a washing machine - "it's easier for my maid" - two TVs, air conditioners in every room, an entertainment system, laptop, hairdryer and a host of other electronic devices.

"I use a lot of electricity but it's my lifestyle - I like to be comfortable," she says.

She's not alone in her assortment of appliances.

"I have everything my parents didn't have," said Sheila Krishna, wife of a government bureaucrat.

Experts say last week's blackouts served to focus minds on how India will meet the fast-growing needs of its citizens, industry and businesses.

The power failure was "a wake-up call", says Technopak's Singhal. "This country already has 900 million mobile phones - it sounds like a small thing - but these all need to be charged every day."

Power cuts are a daily occurrence in India which runs a peak-hour electricity shortfall of around 12 percent - despite the fact that about a third of Indians have no connection to the grid.

As of 2009, just 66.3 percent of Indians had access to electricity, compared with 98.3 percent for Brazil and 99.4 percent for China, according to the latest World Development Indicators.

"It is imperative our basic infrastructure requirements are in keeping with India's aspirations," said Chandrajit Banerjee, director general of the Confederation of Indian Industry.