Global Power Shifting East?

[RiazHaq]

Here are excerpts of a Wall Street Journal story on energy crisis in India:

India is facing an energy crisis that is slowing economic growth in the world's largest democracy.

At stake is India's ability to bring electricity to 400 million rural residents—a third of the population—as well as keep the lights on at corporate office towers and provide enough fuel for 1.5 million new vehicles added to the roads each month.
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Vast tracts of rural India lack electricity. Even in such business hubs as Delhi's suburb of Gurgaon, companies employ backup generators because of regular outages. Factories are forced to curtail production. And vaccines that require refrigeration go bad because of spotty service.
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Energy imports will be costly for India's already shaky public finances, economists say, and the government will have to pass on higher costs to consumers and businesses. That won't be easy. Residents depend on government subsidies to lower prices for electricity, auto fuels and cooking gas.

Last month, Standard & Poor's cited India's yawning 5.8% budget deficit and inability to reform fuel subsidies as reasons it was considering downgrading the country's debt from investment-grade to junk status. Fitch, another ratings firm, later joined S&P in cutting its outlook on India's sovereign debt from "stable" to "negative."

"India has a very distorted system of subsidies," Jaipal Reddy, minister for petroleum and natural gas, said. "But how, in a vibrant democracy like in India, do you change the system suddenly?"

The country's energy crunch can be overcome, he said: "We'll have to pay for more, that's about all. It does not weaken the long-term growth story."
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India's efforts in April to strike a long-term gas supply deal with Qatar faltered over price, about $20 per million British thermal units, or more than triple the cost of Indian domestic gas.

Exploration for gas and oil discoveries isn't going well. Since 1998, the government has issued 87 exploration blocks to companies through competitive bidding. Only three blocks have gone into production.

Interest in India is waning among the global oil companies that dominate exploration: Eight of the 37 companies that bid in the last round of auctions were foreign companies, down from 21 in 2008.

Mr. Reddy, the oil and gas minister, said he was considering allowing firms to sell what they produce at higher prices to attract more investment. Companies complain that government price caps are too low.

Policy makers are resigned to costly imports for now. "In all probability the import dependence in primary energy is going to increase," said Mr. Ahluwalia of the Planning Commission. "The real issue is, 'Can we pay for that energy?' "

Grinding Energy Shortage - WSJ.com

 

[IndoCarib]

We are doing our bit overcome energy shortages by means of nuclear energy and renewable energy.
At present, seven nuclear power reactors are in various stages of construction. After completion of these projects, India's nuclear power capacity is expected touch 10,080 MW by 2017.

Engineers Begin Key Inspection of Kudankulam N-Plant | news.outlookindia.com


India’s National Solar Mission, launched in June 2008, has set an objective of producing 20,000 MW power generation from solar technologies by 2022.

India expands fastest on solar energy | SmartPlanet

 

[RiazHaq]

We are doing our bit overcome energy shortages by means of nuclear energy and renewable energy.
At present, seven nuclear power reactors are in various stages of construction. After completion of these projects, India's nuclear power capacity is expected touch 10,080 MW by 2017.

Engineers Begin Key Inspection of Kudankulam N-Plant | news.outlookindia.com


India’s National Solar Mission, launched in June 2008, has set an objective of producing 20,000 MW power generation from solar technologies by 2022.

India expands fastest on solar energy | SmartPlanet

Wall Street Journal article is talking about primary energy, not just electricity....you and the rest of South Asians are still going to need lots of oil and gas and coal etc for the foreseeable future.

Haq's Musings: Affordable Fuel Shortage Hurts Power Sector in South Asia

 

[RiazHaq]

Here's a Wall Street Journal story on falling Indian rupee:

For almost a year, India's central bank has spent billions of dollars to support the beleaguered rupee. And yet the currency is Asia's worst-performing against the U.S. dollar over the past year.

The fruitless efforts by the Reserve Bank of India shows how central banks, especially in emerging markets, often are powerless to manage pressures on their currencies if international market forces are ranged against them.

The rupee has been declining partly because of flight of capital from emerging markets, but also because of concerns over India's deteriorating financial health. The country's current-account deficit recently hit its highest level ever, and the federal government's heavy spending has widened its budget deficit.
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Things worsened for the rupee after March, when the Indian government introduced tax rules in the federal budget that could potentially hurt foreign investors. Spooked, foreign funds pulled money out of the economy.

Between April and June, for instance, foreign institutional investors pulled out $350 million from Indian stocks versus net inflows of $1.15 billion in the same period a year earlier.

Meanwhile, the bank came under intense pressure from the government to cut rates. Growth in India fell to 5.3% in the first three months of 2012, its slowest rate in almost a decade.

In April, the central bank cut rates for the first time in three years. But it hasn't followed with additional cuts, citing inflation and currency risks.

In May, the bank stepped up its actions, ordering exporters to convert half their foreign-currency earnings held onshore into rupees within two weeks. The move failed to lift the rupee as exporters were able to keep their earnings overseas.

At other times, the government has raised hopes of enacting strong measures to boost the rupee, or foreign inflows, but failed to deliver.

"There have been a lot of dashed expectations," said Killol Pandya, head of fixed income at Daiwa Asset Management in Mumbai.

India Struggles to Cushion Rupee's Fall - WSJ.com

 

[RiazHaq]

Mary Kay Magistad of NPR's The World reported that China has reacted strongly to the Pentagon report on China's military growth and modernization with its first aircraft carrier, several nuclear submarines and stealth aircraft.

Magistead reported that Xinhua has for the first time talked about China as a global economic power with global interests and it needs a blue water navy to protect a tremendous number of sea-lanes.

Pentagon Report Points at China's Military Ambitions | @pritheworld