Saturday, October 31, 2015

Indian air conditioning demand exploding


India is already shaping up to be a huge consumer of air conditioning. The number of cooling degree days when temperatures exceed the human comfort level is already much larger in India’s four largest cities than in Miami or Los Angeles, America’s two hottest cities. Moreover, these four cities have much larger populations. Only 2 percent of Indian households now have air conditioning whereas 87 percent of American households do. However, air conditioning is one of the biggest consumer items of India’s rising middle class and sales are increasing by 20 percent per year. There are now 25 million total units in the country. The load is already putting a strain on the electric grid. During the summer of 2012 there were blackouts lasting 16 hours a day and 600 million people were without power. The government is seeking to impose efficiency standards on air conditioning units that will cut electrical consumption by 14 percent.

This, among other reasons, is why I am so bullish on nuclear power long term. India along with many other countries in Asia and Africa have many decades of urbanization and modernization ahead of them. Once people have enough money to ensure that their dietary needs are sufficient they begin to spend money on other things to make their life more comfortable. These are the long term investable trends that exist for the informed investor. 

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