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This is a ppt about India Energy sector.
INDIAN ENERGY FUTURE
ISSUES framework of the Indian Energy Sector in India. Reform ? Existing
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process: rules and structures for investment and the market for energy as a commodity; Transitional phase. India?s economic performance exceptional, for over two and a half decades, (Y.K.Alagh, 2006a,) but energy and agriculture in the last decade have been the soft spots and may become critical constraints: slack in the system largely used up. Serious recognition of the problem (Planning Commission, 2006) India? energy futures demand: Quantum breaks, not incremental changes (Y.K.Alagh, 2006a,b). Domestic and a global impact: Economic growth, distributional and life style changes, energy demand management policies, impact on energy demand. Supply possibilities: „Sustainable? and „Business as usual? scenarios. India?s domestic fuel resources; Within country regional and sectoral demand: Domestic vs. trade options. Domestic and global aspects of alternative policy options
INDIA?S ENERGY ENDOWMENTS Resource
Hydro-electric Conventional Pumped Storage Micro
Unit
MW
Potential
84,000(at 60% Load Factor) 93920 5000.
Coal
Lignite
BlnMT
BlnMT
186
26
Crude Oil
Natural Gas Uranium Thorium
MMT
BM MWe MWe
728
3686 10000 900000(a px.) 6000 20000
Biomass Non-conventional
MWe MWe
Source: Y.K.Alagh, 1997a.
Only 6% of the total hydro-electric potential of the world; Largely in the ecologically sensitive Himalayas. ? Substantial Coal and lignite reserves: low sulphur content but high ash content. ? Coal-bed methane in some regions. Gas hydrates in the ocean bed ? Established oil and gas resources largely available in offshore areas. Less than 1% of the total hydrocarbon reserves of the world. Similar reserves recently reported discovered in the Deccan Plateaux, but yet not fully substantiated. ? Limited uranium reserves, but large thorium, which can sustain 300,000 MWe of electricity generating capacity for 300 years. ? Thorium based nuclear power relaxes non-renewable constraints in any sensible decision making period (See Y.K.Alagh, 1997b, NuPower, for details).
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ENERGY RESERVES
THE INDIAN ELECTRICITY REFORM PROCESS
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Inherited model was a Centrally planned system: largely publicly owned and operated: Substantial Central Government capacity and the rest in State Electricity Boards (SEBs). Driving force: generation targets and meeting administrative and political, rather than commercial objectives (Joel Ruet,Ecole de Mines, 2005.) Appropriately titled “Thirteen Years of Power Sector Reform in India: Are We Still Groping in the Dark?” highlights the reform process by Kandula Subrahmaniam published by the Center for the Advanced Study of India (CASI) of the University of Pennsylvania (K.Subrahmaniam, 2004). India has been growing fast; many achievements but the energy sector a soft spot and is often referred to as the infrastructure constraint. Reform process from the beginning not very successful.
GENERATION CAPACITY MODELS
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Investment in the private sector through the IPP route designed in 1992 unsuccessful. Fast Track Projects. Subsequently counter guarantees on returns to the investors introduced as a matter of State policy, but not implemented. The wag was that the Indian government accountant who would issue a cheque to a company for not producing power (the „deemed? generation benefit to meet fixed costs was not born). The initial reform process was described as a failure by its authors. Kandula Subrahmanian “These protracted negotiations lasted through the tenure of the I. K. Gujaral government when Y. K. Alagh was the minister of state for power. However, during this period, the counter-guarantee issue did not involve a fight between the finance and power ministries. Prior to that, …the power ministry was always at loggerheads with the finance ministry on the issue of counterguarantees.” This was the situation in the mid Nineties. Two Channels; Investment by IPPs in Fast Tracks; Independent and different policies for so called Large Projects.The Finance Minister in 1996 came back with an offer from Germany for two large projects to be set up at less than the global competitive cost. An Eminent Persons Group was set up to negotiate these and later developed into A Mega Project Policy.
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TRANSMISSION associated transmission projects was also Private investments in
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allowed as the Draft Transmission Bill had received support from a Parliamentary Committee, in 1997. In 1997 FDI approvals reached Twenty Five billion rupees ( approx. US $ 675 million) from less than a tenth of that earlier and actual inflows reached around Ten billion rupees from nothing earlier (In 1997/98 the exchange rate was US $1=Rs.37.17). Subrahmaniam notes that The National Grid of the UK, was to execute the Mangalore transmission project and this is the only foreign utility company in India maintaining operations to date. Mangalore project was sanctioned in 1997. With a change in Government the policy was renamed the Mega Project Policy, but lost it operating teeth. Foreign Direct investments dried up in the period 1999/2005 and already by 2001 was close to zero. Approvals declined to less than a tenth by 1998 and reached close to nothing by 2004 and so did actuals. Recently again (2006) an Empowered Group of Ministers to review each scheme and by now ten mega projects are under consideration. Also there are associated Transmission Projects with private and/or PPP modes. The first large project has been sanctioned, although the original successful bidder for which a shell company was set up to obtain financial and technical clearance was disqualified by a Group of Ministers and the second lowest bidder awarded the project. This led to some unease, but the sanctioned project is at low tariff rates and is successful in that sense. Ten more projects are under consideration. A number of Large Transmission projects have also been sanctioned in PPP mode.
STOP/GO AND LIMITED SUCCESSES
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There is stop/go in policy which emerges from political interference. There are fewer instances of political pursuit of legislation for reform with management of differences to arrive at consensus. When these were tried there was limited success in the reform process. The highest political levels in India interfere in contracts and appointments rather than building consensus around reforms. When they do so they get limited success.
OUTCOMES
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Substantial slow down in expansion of capacity. Thermal capacity grew by 160.23% in the decade 1980/91 only went up by 60.70% in the decade of reform . With a hike in the growth rate thermal capacity growth was 38% of the decade before privatisation.
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Growth of Capacity and Generation of Electricity (%Growth in Decade) S,No Period Generation Capacity Electricity Generation Hydro+wdThermalNuclearTotal Hydro+wdThermalNuclearTotal 0 1 2 3 4 5 6 7 8 9 1 1980/81 -1990/9 159.32 160.23 61.67 118,15 26.90 204.24 103.3118.79 2. 1990/91 -2000/01 33.51 60.70 93.3 58.71 3.2000/012005/06 28.69 20.36 17.2 22.34 Source: GOI, 2006a, p.S 26 34.09 23.99 2.36 24.77 3.9 118.32 177.05 88.99
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WORSENING AND REDEEMING FEATURES ? How did India manage higher growth?
First generating units were run better, not only in the Central Public Sector, but also in the States. The plant load factor in the electricity sector improved and generation was growing faster than capacity. ? Second „efficiency led economy level growth? was accompanied by substantial gains in energy efficiency in the power consuming sectors. For the manufacturing sector this emerged partly as a matter of strategy since the second half of the Eighties of the last century and partly from the X efficiency factor. ? Third there was a substantial increase in capacity in the non-utilities captive power sector as the grid failed to supply power.
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VISUALLY
Capacity and Generation
140 120
Generation Growth
100 80 60 40 20 0 0 50 100 150 Capacity Growth Capacity & Generation
SLACK USED UP
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Capacity growth at around 120% in the decade of the Eighties (top right hand side of chart) went down to around 60% in the decade of the Nineties and was only around 20% in the period 2000/06. Generation growth was also around 120% in the Eighties and so capacity use was roughly constant (far right point in Chart1). But in the Nineties at around 90% it was much higher than expansion of capacity at 60%, showing a substantial increase in Plant Load Factors (mid point in Chart1). In the present decade slack seems to have been used up and both capacity and generation growth are similar at around 20% (far left point in Chart1). The Plant Load Factor on an average is around 75% for an average hydel year and this is high since planned shutdown for repair is also necessary. Generation growth is now low at less than 5% annual as compared to around 9% in the last decade and a near crisis situation is emerging.
ENERGY EFFICIENCY
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Industrial reform of the Indian economy as Arvind Panagriya ( 2005) brings out started in the Eighties. Technological change through scale economies and higher capacity use. Huge energy saving potential in a single product continuous process industry, where technology mattered and start up costs of unplanned shutdowns were high. This actually happened in the great energy guzzlers, cement, paper, steel, aluminium, petrochemicals and fertilizer. The Eighth Plan paper presented to Rajiv Gandhi in 1989 said that reform would mean higher factor productivity and lower capital cost for rupee of output. Energy use for cement would on the basis of investments underway by the private sector go down from 1.3 giga. Cal per tonne to 1.0, for aluminium from 19000 kwhs/tonne to 17000, steel from 700 kwhs to 415/tonne and so on ( Y.K.Alagh, 1991, p.215). The Bureau of Energy Efficiency showed that this actually happened and recently Prodipto Ghosh (2007) has argued with their latest data that it has continued. For the decade 1995/05 his calculations show that specific energy consumption has gone down by 3.5% annual in steel, 7.5% in cement and1.8% in aluminium.
GLOBALLY EFFICIENT
This happened in many other areas like public transportation, lighting and so on. ? In terms of kgoe/$2000 of GDP in purchasing power parity terms, China, for example, has an energy consumption of 0.23 in 2003 as compared to a global average of 0.21 and India at 0.16 compares well with 0.14 in UK, 0.15 in Japan and 0.22 in the USA. ? The larger Indian reform, therefore turned adversity to advantage. For if energy reform is slow, energy demand can reform faster at the user end. This was a case of so called harmonisation of reform, with developments outside the sector, in this case energy, determining outcomes within it.
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GLOBAL COMPARISONS
Selected Energy Indicators for 2003 Country TPES Per Capita (Kgoe) 1090 1094 3852 439 3906 7835 4052 TPES /GDP (Kgoe/$-2000 PPP) 0.23 0.15 0.13 0.16 0.14 0.22 0.15
China Brazil Denmark India UK US Japan
World INDIA 2031-32
1688 1065-1279
0.21 IEP estimate for India 31-32
•Source : Key Energy Indicators-2005, IEA.
DECREASING ENERGY INTENSITY BEHIND INDIA?S SUSTAINABLE DEVELOPMENT
Ene rgy inte ns ity of GDP (k goe /$ 2000 PPP) bas e d on IEA data
TPES (kgoe)/GDP ($2000 PPP)
0.31 0.29 0.27 0.25 0.23 0.21 0.19 0.17 0.15
1971
1975
1980
1985
1990
1995
1999
2000
2001
2002
Source: Plg. Comm. 2006
2003
Source: BEE, 2007
Source: BEE, 2007
Source: BEE, 2007
CO2 emission from food sector--from Field (production) to Table (processed food)-excluding cooking
Production related CO2 emission (tonne CO2/million kcal of food energy) Processing related CO2 emissions (tonne CO2/million kcal of food energy) Total CO2 emissions (tonne CO2/million kcal of food energy)
2.50
ton CO2/m kcal of food energy
2.25 2.00 1.75 1.50 1.25 1.00 0.75 0.50 0.25 0.00
India China United Kingdom Germany
1.7
1.8
1.9
2.0
2.2
0.1
0.1
Netherlands Australia United States
Source: TERI analysis (various data sources)
Municipal solid waste
Average rate of recycling (%) (excl. re-use)
80 60 40 20 0
US Germany Japan India
70 47.3 30 53
GHG emissions from waste (gm/’000$GDPppp)
25 20 15 10 5 0
USA UK Germany India
23
10
8 4
Source: TERI Analysis, based on National Communications of different countries
Estimated CO2 emissions from passenger transport
(gm/passenger-km)
250 200 150 100 50 0
India EU (15 countries)
193 118 16
USA
Source: TERI Analysis, various data sources
LESSONS FROM THE PAST ? Rule Based Policies in creating Capacity; Selling power and in
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transmission and Distribution still works The Indian electricity regulator when he was a professional strongly recommended a long run marginal cost pricing policy for the power sector rather than the existing cost plus pricing setup. (See CERC, 2000). Also the Maharashtra Electricity Regulator did not, for example allow the cost plus price of Enron?s Dabhol plant for interregional transmission, but allowed the Tata Power cost as an “availaibility” tariff, as suggested by the present author (See Alagh, 1991 and 1998 and MERC, 2000 ). Once the basic parameters are set by policy, including taxes and incentives, modern bidding procedures can mimic these processes and allow for the basic principles to work out. For political economy reasons, these principles and practices were not allowed to work themselves out in practice. However the sanction now of a Mega project at competitive rates from a tariff bidding mechanism is an encouraging sign and may augur well for the future.
THE FAST TRACK
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look at the Economy/then energy nested in it. ? India will grow between 6 to 8% annual and will become the third or fifth largest economy of the World in this period. Investment rate and productivity growth will be the drivers. For example around a third of India?s GDP growth in 97/03 is technology driven. Trade will also matterwill become around 4%
SOURCES
? Growth
of Output, Factors of Production and TFP in India: 1970-2000
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(Percentage) ? Period GDP Capital Labour TFP ? 1970-80 2.60 3.59 1.98 0.49 ? 1980-90 5.67 4.41 1.13 4.21 ? 1990-00 5.73 5.97 1.82 3.68 ? Source: Y.K.Alagh, UNU,2000
THE DRIVERS
? Investment
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and Productivity: Knowledge ? Trade and Competition ? Productivity growth analysis Scenarios indicate that in order to sustain a high growth of the economy of the order of 8 to 9 per cent TFP has to grow by 5 per cent or more. Trade and Competition will give the edge Frugality needs investment rates of 28%
APPROACH PAPER DIFFERENT
The Planning Commission has been more diplomatic. It has said that savings, investment and factor productivity must go up. It has spelt out only the savings and investment. This is perhaps the reason it wants the savings rate to go up more than other models. ? The Planning Commission is perhaps more realistic. With an Indian cultural mind set it is perhaps easier to be more frugal than be more efficient. ? The savings rate of 28% has actually already been achieved and the implicit understanding of the Commission that the growth potential has only marginally improved and the real task lies ahead is perhaps correct.
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THE PROJECTIONS
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Table 3: Alternative Scenarios for 11th Plan Target GDP Growth Rate in 11th Plan 7.0% 9.0% Average investment rate 29.1 35.1 Average CAD as % of GDP 2.0 2.8 Domestic Savings Rate: of which 27.1 32.3 (a) Household 20.1 (b) Corporate (c) PSEs (d) Government 5.0 5.5 3.1 -1.1
8.0% 32.0 2.4
29.6
20.5 6.1 3.1 0.5 21.0
2.8 2.4
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Approach Paper, p.10
SCEPTICS
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But there are sceptics, for example, “An idea of the task ahead might be gauged from the following explicit calculations of Y K Alagh “…a one per cent increase in real inputs led to a 3.8 per cent increase in output in the 80s and a slightly lower increase in the 90s. This has now to go up to 5 per cent so that the dream of 8 per cent growth is achieved” (The Financial Express, July 3, 2006).” D.M.Nachane, Approach Paper to the Eleventh Five-Year Plan, A Sceptical Note, Economic and Political Weekly, July, 22, 2006, p.3141 Nachane, one of India’s more serious macro-economists, sums up “The growth forecast for 2007-12 in the draft approach paper to the Eleventh Plan is based on unrealistic levels of private investment and productivity growth.”, Ibid.,p.3141
ENERGY FUTURES MODELS
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The Indian Energy Future can only be discussed in policy alternative “Iff/Then” terms. Energy efficiency in user industries, the household sector and transport will probably continue and will be state of the art on the global plane. Use of existing plant for energy generation will also be probably highly efficient. Failures have been in developing models of private and private public partnerships in generation capacity expansion and transmission and distribution. In these areas advances in the past fifteen years have been sporadic, but it is hoped that lessons will be learnt and recent advances will endure. A suitable regulatory structure must start working at the earliest. Given these uncertainties the Projection Scenarios are in terms of alternatives. There is in different models a BAU Scenario; Business As Usual and an EFF Scenario; Efficiency. BRICSAM models were in a sense Growth made Easy demand generated models, in which difficulties like water or energy did not come in the way. This was true of the early Goldman Sachs models and the CIA?s India model
INDIAN ENERGY FUTURES MODELS
The present author with Kirit Parikh produced an India 2020 model for the RIO Plus 10 Conference at Johannesburg which modeled energy and water constraints (UNU 2003, and Y.K.Alagh, 2006). ? Kirit Parikh has recently updated the work as a member of the Indian Planning Commission upto 2030 in an authoritative up to date report (Planning Commission, 2006b). ? In between The Planning Commission had also produced a Vision 2020 model with energy as a part (Planning Commission, 2003). ? The French Institutes in India, predating Joel Ruet?s work had produced a framework for strategic policy choices in the Indian Energy sector with models upto 2020 and 2050 (See P.Audinet, P.R.Shukla, and F.Grare, 2000).
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METHODS
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Apart from a BAU and EFF structure all these models use energy elasticities w.r.t. economic growth and/or end use methods to project demand. The EFF models, set alternatives in terms of demand management, energy efficiency, improved distribution systems, use of renewables and technological choices, Apart from the Planning Commission 2003 model (corrected by the recent 2006 work) they all get at the central issue of fuel for power in India being in short supply particularly if environment sustainability considerations are introduced. Apart from hydel options and renewables like photo voltaic and wind power where India is already highly developed, alternatives involving dramatic choices like thorium based fast breeder reactors, coal gasification, coal bed methane, ocean bed gas hydrates, interregional gas transportation, are brought into the picture.
INDIA PROJECTIONS FOR THE YEAR 2020
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POPULATION 1330 million URBAN POPULATION Low : 465 million; High : 590 million SLUM POPULATION Low : 85 million; High : 130 million SOLID WASTE DISPOSAL 100 to 110 million tonnes DEMAND FOR COAL FOR Low : 817 million tonnes; High : 2016 million tonnes POWER GENERATION Low:2200 bn.kwhrs; High 3000 bn.kwhrs CROPPING INTENSITY More than 1.5 NET AREA SOWN Constant at 141 million hectares since the nineties IRRIGATION INTENSITY Around 1.75 WATER SHORTAGE Around 10% to 25% between the years 2020/50 NOISE LEVELS Twice the norms in trend forecast AIR POLLUTION Two to two and a half times the norms in trend forecast Source: Y.K.Alagh, Sustainable Development India:2020, Tokyo, UNU, 2001, as quoted in,Y.K.Alagh, Global Sustainable Future and
FRENCH-SWISS AND OTHER ENERGY MODELS
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S.No. Fuel Source
0 1 %age share of : 1. Coal 30 38 35 33 32 2.Oil& Natural Gas 24 50 50 62 61 3.Renewables 46 12 16 5 7 [In (3) fuelwood falls,solar,wind,hydel,nuclear increases] 4.%growth over 1996 of Primary Energy 327 263 853 683 Source: O.Scwank, T.vonStokar and N.North, 2000,p.135,in P.Audinet, et.al., ( ed. ), 2000, p.135. Also see Foreword by Yoginder K. Alagh
1996 2020 2050 Actual Bu Eff Bu Eff 2 3 4 5 6
MESSAGES ? The UN Country case studies on large countries
brought out the severity of constraints being faced and the need to make a beginning to “favourable” paths immediately. China and India were two examples. ? Growth in large countries underlined the quantum jumps being faced. If bad coal of over a billion tonnes was not to be burnt for power needs of around 3000bn.kwhrs, alternative energy management styles would have to be implemented and hydel and nuclear options considered, in addition to a major focus on renewables. ? The glaring magnitudes indicated the long-haul for improving the living standards and brought into sharp focus the hazards of following an unbridled consumerist path both at the global and national levels.
MORE
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Modelling experiments illustrate that apart from issues within the energy sector, life style and development policy options outside the sector were important . The two way relationship between transport and energy in India is shown above. In a business as usual scenario ( BAU ) , coal demand rises to 2 billion tonnes . Energy and transport are strongly interlinked . Coal for power generation is a significant part of bulk transport movements. Import of oil and gas and pithead vs. demand oriented locations of power stations determine transport need. In a BAU Indian coal demand is 2 billion tonnes. In an efficiency scenario, it is 0.8 billion tonnes. Demand management, energy efficiency, optimal location of energy generation facilities and transport policies, lead to this outcome. Indian power grade coal is plentiful, but of poor quality and so the environmental consequences of linkage policies are high. Trade and globalisation would also have to grapple with these questions. Regional arrangements could well be a part of the answer. In fact good Indian modelling work shows that fuel development and international trade are options in an efficient pursuit of energy options.
PLANNING COMMISSION
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this first study the Planning Commission used very genteel energy forecasts. They were criticised as the energy importers paradise. ? The Planning Commission „s 2003 model has been revised by them now under the leadership of Kirit Parikh who also codirected the UNU study. ? The terminal year has slipped as compared to the earlier forecasts, but so has the base levels since growth in the first half of the decade has been very low.
THE LATEST STORY
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(M t OE) S.No. Fuel Requirements
Scenario Coal Dominant BAU ?
0 1. 2. 3. 4. 5. 6. 7.
1
2
Scenario EFF? Nuclear, Hydel, Gas,Renewables Demand SideManagement EFF/Rail/Coal/Transport 3 350 150 632 35 98 87 185 1536
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Crude Oil 486 Natural Gas 104 Coal 1022 Hydro 13 Nuclear 76 Renewables 2 Non Commercial 185 Total 1887 Source: Planning Commission, 2006, p.44
THE MORALS NOW
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Coal demand in the Coal Based Scenario ( Kirit Parikh now does not call it a BAU, I suspect since the Coal Ministry is a part of the exercise) ranges from a high of 1022 million tonnes of oil equivalent (MtOE) to 632 MtOE. This is in oil equivalents so the BAU is above 2 billion tonnes of coal and the EFF is around 1.3 billion tonnes. To get domestic production around a quarter could be imported. Natural Gas imports in the EFF are higher than in the BAU arising from environmental considerations. The efficiency scenarios emphasize the maximum exploitation of renewables, which here would be photovoltaics, human and vegetable waste recycling, and bio fuels, since by that time wind power potential would be used up. There would still be scope for demand side management . Nuclear and hydel power alternatives would have been exploited. In the Indian case this would largely be thorium based nuclear power.
THE OPTIONS
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India?s energy future depends on thorium based nuclear power as it is the only way of completing the energy cycle with domestic fuel.. In the most optimistic sustainable energy variant, energy based on renewable fuel like wind power, photovoltaics and biomass can meet around five percent of the estimated demand. India is already a super wind power and sites are getting more difficult to find. Energy based on the sun has more scope. Mini hydel has potential as also large scale hydel projects but they go only so far. The activists stop good projects and bad ones with large environmental costs have to be stopped anyway. A little more credit can be taken when the Indians are in a good mood, for technological change and energy efficiency, but the horror of depending for a younger, richer and growth charged population on fossil supplies in the main remains. India has plenty of power grade coal, but it is a nightmare from the environmental perspective and futures in which you burn two billion tonnes of bad coal are not on. India?s lungs will give up and of course the World wont let it do it. China is doing it, but India would be doing it incrementally and it will be stopped. A way out is better technology for burning coal. Indians have done well with this technology, but the US and some other OECD countries are much better at it for they can burn almost anything to produce electricity and do it well and India would be strongly advised to cooperate with them. As always it is not just the technology, but ways of organizing it or management and systemic cooperation. When I was Power and Science and Technology Minister and the Americans would come and want to invest in power, I would tell them that if they productionised fluid bed coal burning Indian technology experimentally available at a CSIR lab in Hyderabad, I would take the development costs of the first boiler as Science and Technology Minister.
THORIUM BASED Npower is the POWER UCLEAR only demonstrable India ? Thorium based nuclear
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has of completing the fuel cycle. It produced an experimental fast breeder on the thorium route, called it Kamini and it works at Rameshwaram. But upgrading it to 500 MW is costly. P. Rodrigues,(2003) gives the example the present author gave him of the cost of the steam generator for the PHWR manufactured by BHEL was brought down in a dispute between BHEL and NPCIL. BHEL took 1,679 days to manufacture the first PHWR steam generator, the manufacturing time of the eighth steam generator came down to 258 days.This cost will be tabilizing at 57.7 per reactor for 12 plants on three sites. It is this stabilized cost of FBR that one should be talking about (and not the cost of the FOAK PFBR), when the cost is compared with other mature, stabilized technologies. In many regions in India nuclear power after the initial front up costs are met would be a viable option economically if transportation and other costs are accounted and could be a part of business like cooperation options.
LONG RUN MARGINAL COST OF SUPPLY PER UNIT OF ENERGY AT CONSUMER POINT - 1999-00 PRICES.
BASE LOAD
UNIT : Rs/KWh
HYDRO
COAL LC COAL PH IMPORTED COA L LIGNITE NUCLEAR 500 MWe GAS LC C. C. WH FUEL oil OC
Min
Max
NORTH
0.988
0.978
--
0.938
1.099
0.937
0.993 (0.92 7)
1.217
0.84 3
1.50 0
WEST
0.892
0.942
1.051
0.940
1.045
0.860
0.860
1.171 (0.92 7) 1.189 (0.89 8)
0.86 7
1.56 6
SOUTH
0.928
0.928
1.069
0.964
1.066
1.002
0.911
0.89
1.45
2
8
EAST
0.840
0.933
1.067
--
--
0.924
1.159
1.187 (0.89 5)
1.289 (0.98 8)
1.05
3
1.48
0
NORTH E AST
1.302
--
--
--
--
0.876
1.039
1.03 0
1.73 0
Cost of Import of Base Load Power from Northeast. Gas C.C. = 0.962, Hydro Min = 1.078, Hydro Max = 1.473 C.C. = Combined Cycle, O.C. = Open Cycle (Figures in Brackets Correspond to 1987-88 Prices of Petroleum Products). Source: Y,K,Alagh, 1997.
CONCLUSION ? The Indian energy outcomes will not only sustain
faster and more widespread economic growth of its large population, but will to an extent intertwine with larger sustainability outcomes on a global plane. ? The whole question of better performance of its energy sector on a PPP mode involves international investments for which progress in India is slow but sure. ? These are not just in Thorium based PFBRs, better ways of burning coal and so on, but in the more complex areas of cementing the reform that has taken place, reinforcing efficiency with users and building efficient distribution systems. ? As always, purchase of equipment is easy. Performing with it is complex. However profitable opportunities for cooperation are almost limitless.
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doc_281879609.ppt
This is a ppt about India Energy sector.
INDIAN ENERGY FUTURE
ISSUES framework of the Indian Energy Sector in India. Reform ? Existing
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process: rules and structures for investment and the market for energy as a commodity; Transitional phase. India?s economic performance exceptional, for over two and a half decades, (Y.K.Alagh, 2006a,) but energy and agriculture in the last decade have been the soft spots and may become critical constraints: slack in the system largely used up. Serious recognition of the problem (Planning Commission, 2006) India? energy futures demand: Quantum breaks, not incremental changes (Y.K.Alagh, 2006a,b). Domestic and a global impact: Economic growth, distributional and life style changes, energy demand management policies, impact on energy demand. Supply possibilities: „Sustainable? and „Business as usual? scenarios. India?s domestic fuel resources; Within country regional and sectoral demand: Domestic vs. trade options. Domestic and global aspects of alternative policy options
INDIA?S ENERGY ENDOWMENTS Resource
Hydro-electric Conventional Pumped Storage Micro
Unit
MW
Potential
84,000(at 60% Load Factor) 93920 5000.
Coal
Lignite
BlnMT
BlnMT
186
26
Crude Oil
Natural Gas Uranium Thorium
MMT
BM MWe MWe
728
3686 10000 900000(a px.) 6000 20000
Biomass Non-conventional
MWe MWe
Source: Y.K.Alagh, 1997a.
Only 6% of the total hydro-electric potential of the world; Largely in the ecologically sensitive Himalayas. ? Substantial Coal and lignite reserves: low sulphur content but high ash content. ? Coal-bed methane in some regions. Gas hydrates in the ocean bed ? Established oil and gas resources largely available in offshore areas. Less than 1% of the total hydrocarbon reserves of the world. Similar reserves recently reported discovered in the Deccan Plateaux, but yet not fully substantiated. ? Limited uranium reserves, but large thorium, which can sustain 300,000 MWe of electricity generating capacity for 300 years. ? Thorium based nuclear power relaxes non-renewable constraints in any sensible decision making period (See Y.K.Alagh, 1997b, NuPower, for details).
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ENERGY RESERVES
THE INDIAN ELECTRICITY REFORM PROCESS
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Inherited model was a Centrally planned system: largely publicly owned and operated: Substantial Central Government capacity and the rest in State Electricity Boards (SEBs). Driving force: generation targets and meeting administrative and political, rather than commercial objectives (Joel Ruet,Ecole de Mines, 2005.) Appropriately titled “Thirteen Years of Power Sector Reform in India: Are We Still Groping in the Dark?” highlights the reform process by Kandula Subrahmaniam published by the Center for the Advanced Study of India (CASI) of the University of Pennsylvania (K.Subrahmaniam, 2004). India has been growing fast; many achievements but the energy sector a soft spot and is often referred to as the infrastructure constraint. Reform process from the beginning not very successful.
GENERATION CAPACITY MODELS
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Investment in the private sector through the IPP route designed in 1992 unsuccessful. Fast Track Projects. Subsequently counter guarantees on returns to the investors introduced as a matter of State policy, but not implemented. The wag was that the Indian government accountant who would issue a cheque to a company for not producing power (the „deemed? generation benefit to meet fixed costs was not born). The initial reform process was described as a failure by its authors. Kandula Subrahmanian “These protracted negotiations lasted through the tenure of the I. K. Gujaral government when Y. K. Alagh was the minister of state for power. However, during this period, the counter-guarantee issue did not involve a fight between the finance and power ministries. Prior to that, …the power ministry was always at loggerheads with the finance ministry on the issue of counterguarantees.” This was the situation in the mid Nineties. Two Channels; Investment by IPPs in Fast Tracks; Independent and different policies for so called Large Projects.The Finance Minister in 1996 came back with an offer from Germany for two large projects to be set up at less than the global competitive cost. An Eminent Persons Group was set up to negotiate these and later developed into A Mega Project Policy.
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TRANSMISSION associated transmission projects was also Private investments in
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allowed as the Draft Transmission Bill had received support from a Parliamentary Committee, in 1997. In 1997 FDI approvals reached Twenty Five billion rupees ( approx. US $ 675 million) from less than a tenth of that earlier and actual inflows reached around Ten billion rupees from nothing earlier (In 1997/98 the exchange rate was US $1=Rs.37.17). Subrahmaniam notes that The National Grid of the UK, was to execute the Mangalore transmission project and this is the only foreign utility company in India maintaining operations to date. Mangalore project was sanctioned in 1997. With a change in Government the policy was renamed the Mega Project Policy, but lost it operating teeth. Foreign Direct investments dried up in the period 1999/2005 and already by 2001 was close to zero. Approvals declined to less than a tenth by 1998 and reached close to nothing by 2004 and so did actuals. Recently again (2006) an Empowered Group of Ministers to review each scheme and by now ten mega projects are under consideration. Also there are associated Transmission Projects with private and/or PPP modes. The first large project has been sanctioned, although the original successful bidder for which a shell company was set up to obtain financial and technical clearance was disqualified by a Group of Ministers and the second lowest bidder awarded the project. This led to some unease, but the sanctioned project is at low tariff rates and is successful in that sense. Ten more projects are under consideration. A number of Large Transmission projects have also been sanctioned in PPP mode.
STOP/GO AND LIMITED SUCCESSES
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There is stop/go in policy which emerges from political interference. There are fewer instances of political pursuit of legislation for reform with management of differences to arrive at consensus. When these were tried there was limited success in the reform process. The highest political levels in India interfere in contracts and appointments rather than building consensus around reforms. When they do so they get limited success.
OUTCOMES
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Substantial slow down in expansion of capacity. Thermal capacity grew by 160.23% in the decade 1980/91 only went up by 60.70% in the decade of reform . With a hike in the growth rate thermal capacity growth was 38% of the decade before privatisation.
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Growth of Capacity and Generation of Electricity (%Growth in Decade) S,No Period Generation Capacity Electricity Generation Hydro+wdThermalNuclearTotal Hydro+wdThermalNuclearTotal 0 1 2 3 4 5 6 7 8 9 1 1980/81 -1990/9 159.32 160.23 61.67 118,15 26.90 204.24 103.3118.79 2. 1990/91 -2000/01 33.51 60.70 93.3 58.71 3.2000/012005/06 28.69 20.36 17.2 22.34 Source: GOI, 2006a, p.S 26 34.09 23.99 2.36 24.77 3.9 118.32 177.05 88.99
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WORSENING AND REDEEMING FEATURES ? How did India manage higher growth?
First generating units were run better, not only in the Central Public Sector, but also in the States. The plant load factor in the electricity sector improved and generation was growing faster than capacity. ? Second „efficiency led economy level growth? was accompanied by substantial gains in energy efficiency in the power consuming sectors. For the manufacturing sector this emerged partly as a matter of strategy since the second half of the Eighties of the last century and partly from the X efficiency factor. ? Third there was a substantial increase in capacity in the non-utilities captive power sector as the grid failed to supply power.
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VISUALLY
Capacity and Generation
140 120
Generation Growth
100 80 60 40 20 0 0 50 100 150 Capacity Growth Capacity & Generation
SLACK USED UP
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Capacity growth at around 120% in the decade of the Eighties (top right hand side of chart) went down to around 60% in the decade of the Nineties and was only around 20% in the period 2000/06. Generation growth was also around 120% in the Eighties and so capacity use was roughly constant (far right point in Chart1). But in the Nineties at around 90% it was much higher than expansion of capacity at 60%, showing a substantial increase in Plant Load Factors (mid point in Chart1). In the present decade slack seems to have been used up and both capacity and generation growth are similar at around 20% (far left point in Chart1). The Plant Load Factor on an average is around 75% for an average hydel year and this is high since planned shutdown for repair is also necessary. Generation growth is now low at less than 5% annual as compared to around 9% in the last decade and a near crisis situation is emerging.
ENERGY EFFICIENCY
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Industrial reform of the Indian economy as Arvind Panagriya ( 2005) brings out started in the Eighties. Technological change through scale economies and higher capacity use. Huge energy saving potential in a single product continuous process industry, where technology mattered and start up costs of unplanned shutdowns were high. This actually happened in the great energy guzzlers, cement, paper, steel, aluminium, petrochemicals and fertilizer. The Eighth Plan paper presented to Rajiv Gandhi in 1989 said that reform would mean higher factor productivity and lower capital cost for rupee of output. Energy use for cement would on the basis of investments underway by the private sector go down from 1.3 giga. Cal per tonne to 1.0, for aluminium from 19000 kwhs/tonne to 17000, steel from 700 kwhs to 415/tonne and so on ( Y.K.Alagh, 1991, p.215). The Bureau of Energy Efficiency showed that this actually happened and recently Prodipto Ghosh (2007) has argued with their latest data that it has continued. For the decade 1995/05 his calculations show that specific energy consumption has gone down by 3.5% annual in steel, 7.5% in cement and1.8% in aluminium.
GLOBALLY EFFICIENT
This happened in many other areas like public transportation, lighting and so on. ? In terms of kgoe/$2000 of GDP in purchasing power parity terms, China, for example, has an energy consumption of 0.23 in 2003 as compared to a global average of 0.21 and India at 0.16 compares well with 0.14 in UK, 0.15 in Japan and 0.22 in the USA. ? The larger Indian reform, therefore turned adversity to advantage. For if energy reform is slow, energy demand can reform faster at the user end. This was a case of so called harmonisation of reform, with developments outside the sector, in this case energy, determining outcomes within it.
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GLOBAL COMPARISONS
Selected Energy Indicators for 2003 Country TPES Per Capita (Kgoe) 1090 1094 3852 439 3906 7835 4052 TPES /GDP (Kgoe/$-2000 PPP) 0.23 0.15 0.13 0.16 0.14 0.22 0.15
China Brazil Denmark India UK US Japan
World INDIA 2031-32
1688 1065-1279
0.21 IEP estimate for India 31-32
•Source : Key Energy Indicators-2005, IEA.
DECREASING ENERGY INTENSITY BEHIND INDIA?S SUSTAINABLE DEVELOPMENT
Ene rgy inte ns ity of GDP (k goe /$ 2000 PPP) bas e d on IEA data
TPES (kgoe)/GDP ($2000 PPP)
0.31 0.29 0.27 0.25 0.23 0.21 0.19 0.17 0.15
1971
1975
1980
1985
1990
1995
1999
2000
2001
2002
Source: Plg. Comm. 2006
2003
Source: BEE, 2007
Source: BEE, 2007
Source: BEE, 2007
CO2 emission from food sector--from Field (production) to Table (processed food)-excluding cooking
Production related CO2 emission (tonne CO2/million kcal of food energy) Processing related CO2 emissions (tonne CO2/million kcal of food energy) Total CO2 emissions (tonne CO2/million kcal of food energy)
2.50
ton CO2/m kcal of food energy
2.25 2.00 1.75 1.50 1.25 1.00 0.75 0.50 0.25 0.00
India China United Kingdom Germany
1.7
1.8
1.9
2.0
2.2
0.1
0.1
Netherlands Australia United States
Source: TERI analysis (various data sources)
Municipal solid waste
Average rate of recycling (%) (excl. re-use)
80 60 40 20 0
US Germany Japan India
70 47.3 30 53
GHG emissions from waste (gm/’000$GDPppp)
25 20 15 10 5 0
USA UK Germany India
23
10
8 4
Source: TERI Analysis, based on National Communications of different countries
Estimated CO2 emissions from passenger transport
(gm/passenger-km)
250 200 150 100 50 0
India EU (15 countries)
193 118 16
USA
Source: TERI Analysis, various data sources
LESSONS FROM THE PAST ? Rule Based Policies in creating Capacity; Selling power and in
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transmission and Distribution still works The Indian electricity regulator when he was a professional strongly recommended a long run marginal cost pricing policy for the power sector rather than the existing cost plus pricing setup. (See CERC, 2000). Also the Maharashtra Electricity Regulator did not, for example allow the cost plus price of Enron?s Dabhol plant for interregional transmission, but allowed the Tata Power cost as an “availaibility” tariff, as suggested by the present author (See Alagh, 1991 and 1998 and MERC, 2000 ). Once the basic parameters are set by policy, including taxes and incentives, modern bidding procedures can mimic these processes and allow for the basic principles to work out. For political economy reasons, these principles and practices were not allowed to work themselves out in practice. However the sanction now of a Mega project at competitive rates from a tariff bidding mechanism is an encouraging sign and may augur well for the future.
THE FAST TRACK
? We
look at the Economy/then energy nested in it. ? India will grow between 6 to 8% annual and will become the third or fifth largest economy of the World in this period. Investment rate and productivity growth will be the drivers. For example around a third of India?s GDP growth in 97/03 is technology driven. Trade will also matterwill become around 4%
SOURCES
? Growth
of Output, Factors of Production and TFP in India: 1970-2000
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(Percentage) ? Period GDP Capital Labour TFP ? 1970-80 2.60 3.59 1.98 0.49 ? 1980-90 5.67 4.41 1.13 4.21 ? 1990-00 5.73 5.97 1.82 3.68 ? Source: Y.K.Alagh, UNU,2000
THE DRIVERS
? Investment
? Technology
and Productivity: Knowledge ? Trade and Competition ? Productivity growth analysis Scenarios indicate that in order to sustain a high growth of the economy of the order of 8 to 9 per cent TFP has to grow by 5 per cent or more. Trade and Competition will give the edge Frugality needs investment rates of 28%
APPROACH PAPER DIFFERENT
The Planning Commission has been more diplomatic. It has said that savings, investment and factor productivity must go up. It has spelt out only the savings and investment. This is perhaps the reason it wants the savings rate to go up more than other models. ? The Planning Commission is perhaps more realistic. With an Indian cultural mind set it is perhaps easier to be more frugal than be more efficient. ? The savings rate of 28% has actually already been achieved and the implicit understanding of the Commission that the growth potential has only marginally improved and the real task lies ahead is perhaps correct.
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THE PROJECTIONS
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Table 3: Alternative Scenarios for 11th Plan Target GDP Growth Rate in 11th Plan 7.0% 9.0% Average investment rate 29.1 35.1 Average CAD as % of GDP 2.0 2.8 Domestic Savings Rate: of which 27.1 32.3 (a) Household 20.1 (b) Corporate (c) PSEs (d) Government 5.0 5.5 3.1 -1.1
8.0% 32.0 2.4
29.6
20.5 6.1 3.1 0.5 21.0
2.8 2.4
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Approach Paper, p.10
SCEPTICS
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But there are sceptics, for example, “An idea of the task ahead might be gauged from the following explicit calculations of Y K Alagh “…a one per cent increase in real inputs led to a 3.8 per cent increase in output in the 80s and a slightly lower increase in the 90s. This has now to go up to 5 per cent so that the dream of 8 per cent growth is achieved” (The Financial Express, July 3, 2006).” D.M.Nachane, Approach Paper to the Eleventh Five-Year Plan, A Sceptical Note, Economic and Political Weekly, July, 22, 2006, p.3141 Nachane, one of India’s more serious macro-economists, sums up “The growth forecast for 2007-12 in the draft approach paper to the Eleventh Plan is based on unrealistic levels of private investment and productivity growth.”, Ibid.,p.3141
ENERGY FUTURES MODELS
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The Indian Energy Future can only be discussed in policy alternative “Iff/Then” terms. Energy efficiency in user industries, the household sector and transport will probably continue and will be state of the art on the global plane. Use of existing plant for energy generation will also be probably highly efficient. Failures have been in developing models of private and private public partnerships in generation capacity expansion and transmission and distribution. In these areas advances in the past fifteen years have been sporadic, but it is hoped that lessons will be learnt and recent advances will endure. A suitable regulatory structure must start working at the earliest. Given these uncertainties the Projection Scenarios are in terms of alternatives. There is in different models a BAU Scenario; Business As Usual and an EFF Scenario; Efficiency. BRICSAM models were in a sense Growth made Easy demand generated models, in which difficulties like water or energy did not come in the way. This was true of the early Goldman Sachs models and the CIA?s India model
INDIAN ENERGY FUTURES MODELS
The present author with Kirit Parikh produced an India 2020 model for the RIO Plus 10 Conference at Johannesburg which modeled energy and water constraints (UNU 2003, and Y.K.Alagh, 2006). ? Kirit Parikh has recently updated the work as a member of the Indian Planning Commission upto 2030 in an authoritative up to date report (Planning Commission, 2006b). ? In between The Planning Commission had also produced a Vision 2020 model with energy as a part (Planning Commission, 2003). ? The French Institutes in India, predating Joel Ruet?s work had produced a framework for strategic policy choices in the Indian Energy sector with models upto 2020 and 2050 (See P.Audinet, P.R.Shukla, and F.Grare, 2000).
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METHODS
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Apart from a BAU and EFF structure all these models use energy elasticities w.r.t. economic growth and/or end use methods to project demand. The EFF models, set alternatives in terms of demand management, energy efficiency, improved distribution systems, use of renewables and technological choices, Apart from the Planning Commission 2003 model (corrected by the recent 2006 work) they all get at the central issue of fuel for power in India being in short supply particularly if environment sustainability considerations are introduced. Apart from hydel options and renewables like photo voltaic and wind power where India is already highly developed, alternatives involving dramatic choices like thorium based fast breeder reactors, coal gasification, coal bed methane, ocean bed gas hydrates, interregional gas transportation, are brought into the picture.
INDIA PROJECTIONS FOR THE YEAR 2020
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POPULATION 1330 million URBAN POPULATION Low : 465 million; High : 590 million SLUM POPULATION Low : 85 million; High : 130 million SOLID WASTE DISPOSAL 100 to 110 million tonnes DEMAND FOR COAL FOR Low : 817 million tonnes; High : 2016 million tonnes POWER GENERATION Low:2200 bn.kwhrs; High 3000 bn.kwhrs CROPPING INTENSITY More than 1.5 NET AREA SOWN Constant at 141 million hectares since the nineties IRRIGATION INTENSITY Around 1.75 WATER SHORTAGE Around 10% to 25% between the years 2020/50 NOISE LEVELS Twice the norms in trend forecast AIR POLLUTION Two to two and a half times the norms in trend forecast Source: Y.K.Alagh, Sustainable Development India:2020, Tokyo, UNU, 2001, as quoted in,Y.K.Alagh, Global Sustainable Future and
FRENCH-SWISS AND OTHER ENERGY MODELS
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S.No. Fuel Source
0 1 %age share of : 1. Coal 30 38 35 33 32 2.Oil& Natural Gas 24 50 50 62 61 3.Renewables 46 12 16 5 7 [In (3) fuelwood falls,solar,wind,hydel,nuclear increases] 4.%growth over 1996 of Primary Energy 327 263 853 683 Source: O.Scwank, T.vonStokar and N.North, 2000,p.135,in P.Audinet, et.al., ( ed. ), 2000, p.135. Also see Foreword by Yoginder K. Alagh
1996 2020 2050 Actual Bu Eff Bu Eff 2 3 4 5 6
MESSAGES ? The UN Country case studies on large countries
brought out the severity of constraints being faced and the need to make a beginning to “favourable” paths immediately. China and India were two examples. ? Growth in large countries underlined the quantum jumps being faced. If bad coal of over a billion tonnes was not to be burnt for power needs of around 3000bn.kwhrs, alternative energy management styles would have to be implemented and hydel and nuclear options considered, in addition to a major focus on renewables. ? The glaring magnitudes indicated the long-haul for improving the living standards and brought into sharp focus the hazards of following an unbridled consumerist path both at the global and national levels.
MORE
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Modelling experiments illustrate that apart from issues within the energy sector, life style and development policy options outside the sector were important . The two way relationship between transport and energy in India is shown above. In a business as usual scenario ( BAU ) , coal demand rises to 2 billion tonnes . Energy and transport are strongly interlinked . Coal for power generation is a significant part of bulk transport movements. Import of oil and gas and pithead vs. demand oriented locations of power stations determine transport need. In a BAU Indian coal demand is 2 billion tonnes. In an efficiency scenario, it is 0.8 billion tonnes. Demand management, energy efficiency, optimal location of energy generation facilities and transport policies, lead to this outcome. Indian power grade coal is plentiful, but of poor quality and so the environmental consequences of linkage policies are high. Trade and globalisation would also have to grapple with these questions. Regional arrangements could well be a part of the answer. In fact good Indian modelling work shows that fuel development and international trade are options in an efficient pursuit of energy options.
PLANNING COMMISSION
? In
this first study the Planning Commission used very genteel energy forecasts. They were criticised as the energy importers paradise. ? The Planning Commission „s 2003 model has been revised by them now under the leadership of Kirit Parikh who also codirected the UNU study. ? The terminal year has slipped as compared to the earlier forecasts, but so has the base levels since growth in the first half of the decade has been very low.
THE LATEST STORY
? ? ? ? ? ? ?
(M t OE) S.No. Fuel Requirements
Scenario Coal Dominant BAU ?
0 1. 2. 3. 4. 5. 6. 7.
1
2
Scenario EFF? Nuclear, Hydel, Gas,Renewables Demand SideManagement EFF/Rail/Coal/Transport 3 350 150 632 35 98 87 185 1536
? ? ? ? ? ? ? ? ?
Crude Oil 486 Natural Gas 104 Coal 1022 Hydro 13 Nuclear 76 Renewables 2 Non Commercial 185 Total 1887 Source: Planning Commission, 2006, p.44
THE MORALS NOW
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Coal demand in the Coal Based Scenario ( Kirit Parikh now does not call it a BAU, I suspect since the Coal Ministry is a part of the exercise) ranges from a high of 1022 million tonnes of oil equivalent (MtOE) to 632 MtOE. This is in oil equivalents so the BAU is above 2 billion tonnes of coal and the EFF is around 1.3 billion tonnes. To get domestic production around a quarter could be imported. Natural Gas imports in the EFF are higher than in the BAU arising from environmental considerations. The efficiency scenarios emphasize the maximum exploitation of renewables, which here would be photovoltaics, human and vegetable waste recycling, and bio fuels, since by that time wind power potential would be used up. There would still be scope for demand side management . Nuclear and hydel power alternatives would have been exploited. In the Indian case this would largely be thorium based nuclear power.
THE OPTIONS
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India?s energy future depends on thorium based nuclear power as it is the only way of completing the energy cycle with domestic fuel.. In the most optimistic sustainable energy variant, energy based on renewable fuel like wind power, photovoltaics and biomass can meet around five percent of the estimated demand. India is already a super wind power and sites are getting more difficult to find. Energy based on the sun has more scope. Mini hydel has potential as also large scale hydel projects but they go only so far. The activists stop good projects and bad ones with large environmental costs have to be stopped anyway. A little more credit can be taken when the Indians are in a good mood, for technological change and energy efficiency, but the horror of depending for a younger, richer and growth charged population on fossil supplies in the main remains. India has plenty of power grade coal, but it is a nightmare from the environmental perspective and futures in which you burn two billion tonnes of bad coal are not on. India?s lungs will give up and of course the World wont let it do it. China is doing it, but India would be doing it incrementally and it will be stopped. A way out is better technology for burning coal. Indians have done well with this technology, but the US and some other OECD countries are much better at it for they can burn almost anything to produce electricity and do it well and India would be strongly advised to cooperate with them. As always it is not just the technology, but ways of organizing it or management and systemic cooperation. When I was Power and Science and Technology Minister and the Americans would come and want to invest in power, I would tell them that if they productionised fluid bed coal burning Indian technology experimentally available at a CSIR lab in Hyderabad, I would take the development costs of the first boiler as Science and Technology Minister.
THORIUM BASED Npower is the POWER UCLEAR only demonstrable India ? Thorium based nuclear
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has of completing the fuel cycle. It produced an experimental fast breeder on the thorium route, called it Kamini and it works at Rameshwaram. But upgrading it to 500 MW is costly. P. Rodrigues,(2003) gives the example the present author gave him of the cost of the steam generator for the PHWR manufactured by BHEL was brought down in a dispute between BHEL and NPCIL. BHEL took 1,679 days to manufacture the first PHWR steam generator, the manufacturing time of the eighth steam generator came down to 258 days.This cost will be tabilizing at 57.7 per reactor for 12 plants on three sites. It is this stabilized cost of FBR that one should be talking about (and not the cost of the FOAK PFBR), when the cost is compared with other mature, stabilized technologies. In many regions in India nuclear power after the initial front up costs are met would be a viable option economically if transportation and other costs are accounted and could be a part of business like cooperation options.
LONG RUN MARGINAL COST OF SUPPLY PER UNIT OF ENERGY AT CONSUMER POINT - 1999-00 PRICES.
BASE LOAD
UNIT : Rs/KWh
HYDRO
COAL LC COAL PH IMPORTED COA L LIGNITE NUCLEAR 500 MWe GAS LC C. C. WH FUEL oil OC
Min
Max
NORTH
0.988
0.978
--
0.938
1.099
0.937
0.993 (0.92 7)
1.217
0.84 3
1.50 0
WEST
0.892
0.942
1.051
0.940
1.045
0.860
0.860
1.171 (0.92 7) 1.189 (0.89 8)
0.86 7
1.56 6
SOUTH
0.928
0.928
1.069
0.964
1.066
1.002
0.911
0.89
1.45
2
8
EAST
0.840
0.933
1.067
--
--
0.924
1.159
1.187 (0.89 5)
1.289 (0.98 8)
1.05
3
1.48
0
NORTH E AST
1.302
--
--
--
--
0.876
1.039
1.03 0
1.73 0
Cost of Import of Base Load Power from Northeast. Gas C.C. = 0.962, Hydro Min = 1.078, Hydro Max = 1.473 C.C. = Combined Cycle, O.C. = Open Cycle (Figures in Brackets Correspond to 1987-88 Prices of Petroleum Products). Source: Y,K,Alagh, 1997.
CONCLUSION ? The Indian energy outcomes will not only sustain
faster and more widespread economic growth of its large population, but will to an extent intertwine with larger sustainability outcomes on a global plane. ? The whole question of better performance of its energy sector on a PPP mode involves international investments for which progress in India is slow but sure. ? These are not just in Thorium based PFBRs, better ways of burning coal and so on, but in the more complex areas of cementing the reform that has taken place, reinforcing efficiency with users and building efficient distribution systems. ? As always, purchase of equipment is easy. Performing with it is complex. However profitable opportunities for cooperation are almost limitless.
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doc_281879609.ppt