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Power outages cost India $9.2bn in 2008

By Nick Taylor , 01-Jun-2009

 

Power outages cost India $9.2bn (€6.5bn) in 2008, according to a report, with the disruptions causing direct losses in numerous sectors, including pharma and biotech.

While the Indian economy has developed quickly in recent years, helped by booming pharma and outsourcing sectors, its infrastructure has struggled to keep pace and scheduled and non-scheduled power outages still occur.

With the gap between power supply and demand predicted to remain the same, companies are increasingly developing contingency plans and alternate power sources, according to Emerson Network Power (India), co-authors of the report.

Sandeep Nair, managing director at Emerson (India), said: "In India, while the metros have a good power supply, the interiors reflect a different picture altogether. As one moves towards the hinterland, one realizes that there are frequent power cuts.

The problem is further compounded by unclean power and other basic constraints like earthing, cabling and lack of a viable infrastructure. This has necessitated deployment of business critical continuity solutions for growing businesses. Today, we are moving towards a borderless world and constant supply of electricity is crucial to stay connected 24/7."

On average power outages last 71 minutes, according to the study, but the pharma and biotech sectors were offline longer than others, contributing to the $164m loss cuts caused in 2008.

Despite these difficulties 78 per cent of respondents believe the situation will improve in the next year, with optimism varying between regions. Even if this occurs it seems unlikely that losses will fall to the level of 2003, when power outages put a $4.7bn dent in the Indian economy.

To asses the effect of power outages the study’s authors interviewed facility managers at over 800 companies, ranging from small to large, in seven major industrial centres and 14 business sectors.

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