Reasons for this paradox:

♤ Poor financial health of state distribution companies (Discoms): Therefore, they are not buying power. Because of this, plants are running at only 60% of their capacity. This is the biggest reason for supply-demand mismatch.

♤ Reasons for this state of affairs: Irrational tariffs i.e. tariffs are lower than production cost; populist measures by states, like waver of electricity bills; free powers to some sections; non-payment of subsidy by states to Discoms; high AT&C losses etc.

♤ Underutilized renewable energy: It is because of technical difficulties in power from renewable plants (solar) on conventional grids and high tariffs..

♤ Irrational Tariffs: There is huge disparity in power tariffs across states, resulting in subdued demand in some states. Further, there are multiple commercial tariffs for different industries making it complex for Discoms to recover the price, while on the other hand, big consumers go for captive power generation.

So it is misleading to say that India has excess power. Statistics show the extent to which power supply falls short of demand by only those connected to the grid. With about 1/3rd of total households still not having electricity connection, the numbers underestimate the extent. Also, it does not capture the quality of power supplied. There are no metrics to estimate the potential power requirement according to standards of living.