energy crisis in ndia
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7/29/2019 Energy Crisis in Ndia
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Crisis to opportunity and innovation
India power needs are immense
Supply Continuously falls short of demand
Govt and private sectors are increasingly truing to hydropower over coal
The 150 dams planned for Arunachal Pradesh threaten to wipe out swathes of forests, dozens of
tribal cultures, and some of the world’s best white-waters.
An energy crisis could choke growth
On July 30 and 31, the electric power grid in north and eastern India crashed twice, leaving half of the South
Asian nation literally in the dark. In what was the largest power outage in world history, 18 states and two
territories lost electricity. An estimated 670 million people were affected. Railways, including the Delhi Metro
(subway), screeched to a halt. Traffic lights went dark, creating massive traffic jams. Factories and hospitalsswitched to diesel-powered backup generators, and resourceful Indians turned to other power sources or just
endured the sweltering summer night. In eastern India, more than 200 miners were stranded below ground for
several hours when elevators stopped functioning. All were later rescued.
The western and southern parts of India were unaffected, and power was about 80 percent restored by late on
the 31st. However, the outage caused financial losses to Indian businesses estimated in the hundreds of millions
of dollars—and significant embarrassment for Asia‘s third-largest economy. India‘s government undertook an
investigation of what caused the grid‘s collapse. The recent outages resulted when parts of the grid were shut
down for upgrading, and other circuits became overloaded. The complex network of electric transmission
systems requires coordination and discipline on the part of all members.
The underlying cause was obvious enough: the country‘s aging electrical infrastructure and shortage of power -
generation capacity. Not all Indians enjoy reliable access to electricity, and many are used to regularly scheduled
blackouts. Many villages in rural areas have no electricity. But demand is outstripping supply as economic growth
makes electricity consumers of an ever-growing share of the country‘s 1.2 billion people. Some experts say that
massive investment will be needed in India‘s power infrastructure to avoid similar power failures in the future.
It has become a common sight that angry citizens take to the streets in protesting
against the abysmal power situation. Some of the areas receive only an hour of
electricity every day. Police has to control the law and order situation on account of people’s
agitation.
State governments blame Centre for not allocating enough electricity to their states. The
Governments try to blame its predecessor. The people do not buy this excuse. Who is to blame for
the abysmal power situation this summer?
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Those in Government find it easiest to pass the buck. The states blame the Centre. The Centre
blames the states. Power is on the Concurrent List of the Constitution. Both the Centre
and states must share the blame.
The Centre must take the rap for the shortage in generation of power. The peak
power deficit-the gap between demand and supply in the summer of 2010-accordingto the Government's own calculations was 10.8 per cent. The responsibility for
distributing available power inefficiently falls on the states. Losses in distribution
average over 30 per cent across India.
At the Centre, the power, environment, coal and heavy industries ministries have in various ways
acted as obstacles to the addition of capacity. In the states, populist governments and spineless
electricity regulators have done little to reform ailing distribution networks. The situation is expected to
get worse before it gets better.
The Central Electricity Authority (CEA), the main advisory body to the Union power
minister, has set a target of 100,000 mw of additional power generation in the period
of the 12th five-year plan between 2012 and 2017. That is what is needed to meet
the power demand of an economy forecast to grow at 9 per cent per annum. The
Planning Commission accepts this target but Environment Ministry does not which
says that the target is "ecologically unsustainable".
Environment Ministry is worried about the impact this additional generation will have on climate
change. Seventy per cent of this additional capacity is to be added through coal-based thermal power.
Given the dismal record over the past 20 years, Environment Ministry need not worry about the
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Government m eeting its target. According to
Planning Commission estimates, only an average of 50.5 per cent of overall targets were met in the
eighth, ninth and tenth five-year plans between 1992 and 2007.
Every major political formation has governed the country in that period none has much to be proud of
in terms of performance in the power sector. The target for the 11th plan (2007-2012) has already
been revised downwards from 78,700 mw to 62,374 mw. With a year and a half to go until the end of
2012, only around 50 per cent of that revised target has been achieved. Realistically speaking, the
Government will do well to hit 60 per cent of its original target by the end of 2012.
The most serious bottleneck in generation is the shortage of coal. At the end of
2007, the gap between the demand and supply of coal was 35 million tonnes. It is
expected to be around 83 million tonnes at the end of 2012. Says the mid-term
appraisal document of the Planning Commission: "The shortage would have been
even more had all the planned coal-based power plants been commissioned on
time." By 2017, the shortage is forecast to be 200 million tonnes.
As per the government the shortage of domestic/imported coal affected thermal generation. Some of
the blame for the shortage can be laid at the door of the environment minister whose controversial
'no-go' policy announced in 2009 imposed a ban on mining in heavily forested areas. It declared 35
per cent of forest area in nine major coal-mining zones as 'no-go' zones. That led to an immediate halt
of mining activity in 203 blocks which had a potential capacity of over 600 million tonnes.
Coal Ministery argued that this ban could affect power generation to the tune of
1,30,000 mw. The matter is now before a Group of Ministers (GOM) on mining.
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The fallout of the nuclear accident in Japan means that thermal power is back at the forefront.
Hydro pow er continues to flounder because
of concerns over rehabilitation and resettlement.
Another serious bottleneck to generation is the shortage of equipment. According to a 2010 report
prepared by consulting firm KPMG on the power sector, equipment shortages have been
a significant reason for India missing its capacity addition targets for the 10th five-
year plan. The shortage has been primarily in the core components of boilers,
turbines and generators.
What may also deter private investors in the future is the inability of state electricity boards (SEB) to
buy power at commercially viable rates. When India's largest thermal power generator, the
Government-owned National Thermal Power Corporation (NTPC) recorded a mere 1 per cent growth
in net profits in 2010-11, NTPC made the power stations available, but the SEBs did not
draw power from those projects. This led to less generation of power and therefore
less revenue. The drawdown in generation by NTPC led to a loss of 13 billion units
(bu) of electricity in 2010-11. India's annual generation of power is estimated at
around 800 billion units. NTPC's drawdown is 1.6 per cent of this total. If selling
power to SEBs is a problem for NTPC, it is likely to be a problem for everyone else.
The combined losses of SEBs currently stands at Rs 70,000 crore. The 13th Finance Commissionhas forecast this figure rising to over Rs 1 lakh crore by 2014.
We cannot sustain the improvement in the quality of power supply unless tariffs are
revised. Delhi's distribution companies lose Rs 1.79-1.93 per unit of power supplied
to consumers. Planning Commission calculations of the financial performance of
distribution companies in 20 major states (excluding Delhi and Orissa) shows that
the average loss per unit supplied to the consumer was 90 paise in 2009-10. The
loss per unit sold has hovered steadily between 80 paise and Re 1 between 2005and 2010. Contrary to popular perception, Indian consumers on average pay much
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less for a unit of electricity than countries which are richer, both in terms of income
and resources. In India, the average tariff charged is eight US cents per unit
compared to 12-15 cents in Canada, South Africa and the US and 19-20 cents
in much of Europe and the developing world.
India will have to start thinking like a developed country. It is imperative that tariffs are
regularized.
A committee headed by former Comptroller and Auditor General V.K. Shunglu is
working to recommend ways to reduce losses suffered by distribution companies. On
top of the list of recommendations is reportedly the need to take action against
inactive state electricity regulatory authorities which actually set the tariff.
The regulatory authorities have statutory independence but usually act under
pressure from state governments. In Tamil Nadu, for example, tariffs have not been
revised for seven years. In Delhi, they have not been revised for three years. That
needs to change. Politicians, regulators and citizens need to recognize the need for
viable tariffs.
The transmission network needs to be strengthened to encourage private investors
is the principle of "open access" where they are not captive to any one SEB for
sales. SEBs are also free to look outside their state to buy electricity.
posted by srijan at 3:34 am 1 comment: links to this post email thisblogthis!share to twittershare to facebook
wednesday, may 25, 2011
ROLE OF ESCO IN ENERGY CONSERVAION
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Seeing the huge scope of energy conservation the GoI with state governments is promoting
investments through public-private partnerships in tapping renewable energy resources from mini
hydro, solar, biomass, urban/industrial waste, cogeneration, etc. For this purpose the State
Governments are notifying nodal agencies for carbon credits under the Clean Development
Mechanism (CDM).
All project developers (private as well as Government) can have assistance of these designated
agencies in terms of seeking carbon credits under CDM for both supply new and renewable sources of
energy as well as demand (energy efficiency) side projects.
With a view to intensifying efforts towards Energy Conservation Action Plan to pursue a
harmonious growth in energy efficiency different state government has nominated different
organization to act as nodal agency the purpose of these is to implement energy efficiency
programmes as per guide lines of BEE.
The major objectives of the Energy Conservation Action Plan are to:
Raise the profile of energy conservation movement with the active participation of the stakeholders, in
consonance with the national objectives of reducing the energy intensity of the economy.
Identify and implement cost-effective energy efficiency programs through a sustainable mechanism;
Encourage energy efficiency activities by drawing upon the prevailing best practices relevant to the state
and keeping in mind the national programs and activities being launched by BEE. These include the
concerns of state electricity regulator in the domain of energy end-use efficiencies and focused
demand-side man agement (DSM) initiatives.
Encourage a spurt towards professional activities with adequate emphasis on self regulation and market
principles, and monitoring and evaluation of programs through quantitative metrics (performance
indicators).
Create consumer awareness vis-à-vis energy conservation and energy efficiency consumer information
and provide training opportunities for key professionals such as energy managers and auditors,
building designers, government officials, and facility managers.
Protect and enhance the local, national and global environment.
Towards the implementation of the Energy Efficiency Program the different states are taking up
Governmental Buildings to begin with. The governmental building sector offers substantial energy
saving potential in both new and existing building constructions. One of the major drivers for energy
efficiency will come from the Energy Conservation Building Code (ECBC) launched by BEE in May
2007. The Governments are announcing the mandatory following measures applicable to the
governmental sector:-
Issuing notifications regarding the mandatory use of solar water heating systems,
Use of compact fluorescent lamps, Use of BIS marked pump sets in government and private buildings, including industries and
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Use of solar water heating systems made mandatory in buildings having an area of more than 500 sq
yard.
Towards the beginning the state governments are going ahead with replacement of incandescent bulbs
with compact fluorescent lights (CFLs) in all government buildings and offices, including government
guest houses, offices of board, corporations, cooperative organizations and municipalities. Further the
SDAs are adopting strategies related to existing buildings in addition to ECBC to tap the energy saving
potential in new construction/ existing buildings
SDAs play an important role in developing better guidance on conducting building energy
audits and developing commercial building energy use benchmarks (kWh/sq. m.) that would help in
screening potential retrofit projects and help organizations set performance targets against peer
benchmarks.
There is a vast scope to improve energy efficiency in office buildings, hospitals, schools and
universities. Several studies have shown that avenues to curtail energy use to the extent of 30-50% in
end uses such as lighting, cooling, ventilation, refrigeration, etc. The potential is largely untapped
partly because of lack of an effective delivery mechanism. Performance contracting through ESCOs is
an innovative process.
An energy service company (acronym: ESCO or ESCo) is a commercial business providing a
broad range of comprehensive energy solutions including designs and implementation of energy
savings projects, energy conservation, energy infrastructure outsourcing, power generation and
energy supply, and risk management.
The ESCO performs an in-depth analysis of the property, designs an energy efficient solution,
installs the required elements, and maintains the system to ensure energy savings during the payback
period. The savings in energy costs is often used to pay back the capital investment of the project over
a five- to twenty-year period, or reinvested into the building to allow for capital upgrades that may
otherwise be unfeasible. If the project does not provide returns on the investment, the ESCO is often
responsible to pay the difference.
There is a draw back in this concept particularly to energy sector in India as in most of the
cases the base line data of energy consumption is not available, for example if the ESCO is appointed
say for replacement of all agriculture pumps with energy efficient pump sets (EEPS), investment is to
be made by ESCO, it has to replace all inefficient pumps and then also it has to take care of their
replacement within specified payback period, the saving thus achieved is to be distributed between
ESCO and the employing agency. But here comes the main problem who will tell the saving? How the
saving can be calculated as the base line data is not available. Most of the supply in agriculture sector
is un-metered at consumer end even the sub station meters of secondary substation are not having
proper metering. Even if the meter is working properly then there is no maintenance of records.Further most of the feeders has a mixed load so there is no method to calculate the net saving in
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energy after energy efficient device is installed by the ESCO. Same is the case with street lights where
lies a huge potential by replacing sodium vapor lamps with LED, here again base line data is not
available for the purpose of evaluation.
posted by srijan at 6:42 am 1 comment: links to this post email thisblogthis!share to twittershare to facebook
monday, april 18, 2011
Energy Efficiency In SME Sector
As per the energy policy of GoI power to be made available to all by 2012. One of
the strategies to improve power scenario includes promotion of energy efficiency and
its conservation in the country, this is found to be the most cost effective option to
augment the gap between demand and supply. Nearly 25,000 MW of capacity
creation through energy efficiency in the electricity sector alone has been estimated
in India.
National Productivity Council (NPC), an autonomous organization under the Ministry
of Commerce, Government of India, was asked by BEE to undertake the study of
energy saving potential in all 35 states / UTs. The study focused only on estimation
of the total electricity consumption and saving potential in different sectors of each
state / UT. The potential for savings is about 15% of the electricity consumption. The
sector wise aggregated potential at the national level is as under:
S.No. Sector Consumption(Billion KWh)
Saving Potential (BillionKWh)
1. Agriculture Pumping 92.33 27.79
2. Commercial Buildings/
Establishments with
connected load > 500 KW
9.92 1.98
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3. Municipalities 12.45 2.88
4. Domestic 120.92 24.16
5. Industry (Including SMEs) 265.38 18.57
Total 501.00 75.36
The BEE study pertaining to SME revealed the overall saving potential of the
clusters is about 72,432 TOE (Tonnes of oil equivalents) which is 27.4 per cent of
the total energy consumption in SMEs.
Though, large numbers of SMEs, located in clusters in various states of the
countries, have large potential for energy savings, there is not much authentic
information and data available with respect to their energy consumption and energy
saving opportunities.
Energy Efficiency in the SME sector assumes importance because of the prevailing
high costs of energy and supply related concerns.
Bureau of Energy Efficiency (BEE) is implementing a program (BEE‘s SME Program)
to improve the energy performance in selected SME clusters.
The project will conduct situation assessment of 35 (maximum) clusters in the
country to assess the situation vis-à-vis the number of operating units, energy usage,
potential for saving energy and probable impact of intervention. This will lead to
identification of clusters for intervention. A Technology and Energy Use Analysis in
identified clusters will be carried out that will identify in detail the prevalent
technologies in the sector, audits them for energy use on a sample basis and identify
opportunities for energy saving through either changes in technology or through bestpractices. This study will also identify possible sources of technology and/or
expertise in different clusters as the case may be.
Because of the similar characteristics like geographical location, markets, products
manufactured, technology, development issues and common pool of resources,
cluster based approach has been undertaken while working with SMEs. Generally
this has been found to be resource efficient and effective.
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The project will pool available resources as those from WB and UNDP which have
already shown interest in partnerships with BEE for undertaking work on EE with the
MSME sector in India. Thus the project will limit drawing of GoI to such levels as may
be required after financing from WB UNDP-GEF has been made available
Ministry of Micro, Small and Medium Enterprises (MoMSME) has agreed in principal
to capitalise on the DP Rs prepared under the BEE’s SME program. MoMSME
proposes to provide financial support for implementation of the technologies
identified in these DPRs .
Small Industries Development Bank of India (SIDBI) will also act on similar lines and
will provide subsidized finance for implementation of energy efficiency technologies
as identified in the DPRs. A MoU in this regard has already been signed.
BEE is also the Implementing Agency for GEF (Global Environment
Facility) ‗Programmatic Framework for Energy Efficiency in India in which World
Bank & UNIDO are the GEF agencies working on Energy Efficiency in SME clusters.
World Bank would work in 5 clusters & UNIDO in 12 clusters.
Bureau of Energy efficiency has taken a nationwide energy efficiency program
covering 25 SME clusters. Which include Cold Storage, Carpet, Pottery, Brass,
Foundry and Glass Clusters.
Stake Holders for implementing EE in SME are-
Government.
Development Agencies.
Energy Consultants.
ESCOs.
Manufacturing Companies
Lenders.
Role of the Government is to encourage the SME to adapt EE measures, educate
them, give them incentives for taking up energy efficiency, encourage them to
identify EE projects The role of ESCO is also very important as it has to adopt
modern technology for implementation of the EE project it has to educate the SME
by telling him the benefits of the EE project. ESCO has to prepare the DPR withsimple calculation for the payback and debt serving feasibility. The DPR should be
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easily understood by SME and the lender. The most important stake holder is the
SME, as he is the ultimate beneficiary. Therefore he must have the orientation to
implement the EE program and motivation and inclination towards EE program, he
must understand the project. It is therefore important to-
motivate the SME.
motivate other stakeholders.
posted by srijan at 7:12 am 1 comment: links to this post email thisblogthis!share to twittershare to facebook
sunday, march 27, 2011
Agriculture Demand Side Management (Ag DSM)
Bureau of Energy Efficiency (BEE) is a statutory body under Ministry of Power, Government of India. The mission of BEE is to institutionalize energy
efficiency services, enable delivery mechanism in the country and provide leadership
to energy efficiency in all the sectors. The primary goal of the Bureau is to reduce the
energy intensity in the Indian economy.
Seeing the supply and demand gap the DSM has become the need of thehour. Maharastra State Electricity Distribution Co. Ltd (MSEDCL), calledMahadiscom or Mahavitran in short has taken a lead towards DSM, the company started taking measures towards load management in 2005 by increasing the tariff for increased consumption and decrease in tariff for reduced consumption compared
to the last year . The Maharastra Electricity Regulatory Commission has provided for a Charge
as well as a Rebate, consumers were incentivised to reduce demand through better
planning and utilization of electricity, rather than by fiat. Since then the MSEDCL hasa provision of LMC (Load Management Charges) in its tariff. It has been observed
that rural areas has a tremendous scope in load management as the pump sets
used for irrigation purpose are highly inefficient and since the tariff applicable for
them is flat rate tariff the farmers have least interest in efficiency of the equipmentshence there is a need of Agriculture DSM. State of UP has yet to incorporate LMC..
UPERC in its tariff order has emphasized the need of DSM, as per ERC “The effect
of Demand Side Management should reflect in lesser purchase of costly power due to effective energy conservation measures. This shall reduce the revenue
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requirement of the DISCOMS. The cost of such DSM projects would be offset by the savings in power purchase cost due to reduction in demand. This should be represented as a separate cost element which shall be allowed by the Commission as a part of the Annual Revenue Requirement of the DISCOM S”.
In order to accelerate energy efficiency measures in agriculture sector, BEE
has initiated an Agriculture Demand Side Management (Ag DSM) programme inwhich pump set efficiency upgradation would be carried out through Public Private
Partnership (PPP) mode. The objective of the program is to create appropriate
framework for market based interventions in agricultural pumping sector by
facilitating conducive policy environment to promote Public Private Partnership(PPP) to implement the projects.
Under this scheme of BEE, first Pilot Ag DSM project was launched at
Mangalwedha subdivision of Solapur Circle in Maharashtra. This first pilot Ag DSM
project covers 3530 agricultural pumps connected on five feeders (Bramhapuri,Nandeshwar, Borale, Bhose & Kharatwadi) in Mangalwedha & Pandharpur
subdivisions. (All the five feeders are segregated agricultural feeders, feeding power
to mostly agriculture pumps under the service areas)
The Detailed Project Report (DPR) is prepared after an exhaustive survey and
detailed energy audit study of the pump sets in the pilot area. During the energy
audit study detailed information (about all the agricultural consumers) such as details
about pumps (number, Type, make, age and rating), water requirements /
consumption, status of meter installation, number of harvesting
cycles, cropping pattern, underground water level in different seasons, power supply
pattern and socio-economic conditions etc. is collected and analyzed.
This detailed project report provides an insight to Pump manufacturers /
Energy Service Company for making investments in implementing energy efficiencymeasures on rural pump set feeders. The intervention would lead to lower energy
supply on the feeder, and hence, could result in lower subsidized energy sale by
utilities and lessen the subsidy to be paid by the State Government.
The salient features of the DPR are as below-
• Most of the pump motors (60-70%) have been rewound one or two times.
• Low voltage up to 290 V at consumer end is observed for few DTR.
• The workmanship quality for pump set installation was poor. No capacitors
Connected to agricultural pumps.
• Even though the power availability is for 10 to 12 hours, intermittent power failuresare observed frequently.
• It is also observed that most of the DTR‘s are overloaded leading to frequent
transformer failures.
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• The major reasons for pump set failure and lower discharge output was erratic
power supply and cases of extreme low voltage.
Due to huge gap in the demand – supply situation of the state power grid, theagriculture feeders are faced with severe load shedding.Thus, whenever power is
available most of the pump sets are automatically switched ON to supply water for irrigation. The farmers have made provisions for automatic starting of pumps . This is
carried out either by auto-starter or starter is kept in on condition, continuously during
the season, defeating interlocks.
Actual Pump set rating higher than name plate rating: It is also been observed that even though sanctioned demand is 3 HP or 5 HP, power rating of most of the pump sets is higher than sanctioned demand. The reason for measured power consumption rating higher than sanctioned demand is that most of the farmers have rewound the pump sets suitably to draw more power and deliver higher water
discharge. Since farmers are charged on flat HP basis this results in potential revenue loss to DISCOM . This is the major reason for no encouragement for
deployment of more efficient pumps. It is difficult to make the farmers agree to have their pumps replaced, as it requires repeated efforts to make the farmers fully conversant to the objectives of the project. Hence social opposition is expected for metering of power supply at pump level. But there will not be that much opposition for metering at transformer level.
The farmers have reported extreme low voltage as the major cause for motor
burnouts and lower pump output. The pump set selection by farmers is mainly driven
by voltage constraint (Voltage imbalance) and water level variations.
Pump set Installations: The pump sets installation is inappropriate with lackof proper foundation and footings. The ground surface water pump sets are merelyplaced on wooden planks and not properly anchored to the ground. The pump sets are observed with high vibration levels, which also contribute to lower operating efficiency.
The efficiency measured for these pumps is in the range of 15 % to 30 %. Only a small fraction of pump sets have efficiency below 10 % and above 55%.
Pumps with efficiency below 10% are due to a combination of several factors like use of frequently rewound motors, non standard pumps, no maintenance, poor selection of pump, extremely low water depth, low voltage supply leading to lower
output and higher power consumption. Pumps with higher efficiency than 55 % aredue to recent installations and are very few in numbers.
Parameters Affecting Pump Set Efficiency Performance
There are various parameters that could affect the pump set efficiency
performance. Parameters identified that could affect the pump performance are
listed below -
• Energy Inefficient Pump Sets
• Improper pump selection and usage.
• Undersized pipes.
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• Suction head Variations and large discharge lengths.
• Ineff icient foot valves and piping system.
• Motor rewinding and low voltage profile
• Water table variations
• Other common causes
Energy Inefficient Pump Sets
Due to lack of awareness about energy efficiency and flat HP based tariff structure for agricultural sector, energy aspect is overlooked by the farmers
while selecting the pump sets.
For conventional pump sets the efficiency variation with respect to change inflow and head is very high. At both the extreme ends of the pump curves
(head Vs flow) the efficiency of the pump set is low. However better designed
Energy Efficient Pump Sets (EEPS) have a flat top efficiency characteristic, so
that any reduction in efficiency away from the ‗Best Efficiency Point‘ (BEP) issmall. As guaranteed by energy efficient pump manufacturers the difference
in best efficiency of a good design is marginal and at the most up to 3% to
4%. The energy efficient pump sets could be selected to match the capacity
and head requirements and to operate at BEP during the normal operatingconditions. This will result in maximum energy savings, as compared to
present inefficient pumps. Improper Pump Selection and Usage
The educational level of the Indian farmers is not adequate to understand the technological aspects of pump operation. This leads to lack of awareness on pump selection, operation & maintenance . The improper selection and
operation leads to poor efficiencies and wastage of energy.
Field study has indicated that average overall efficiency of the pump sets is
around 28%.
The lower efficiency is also due to improper selection of pumps andmismatching prime movers and due to inferior quality of the pumps being
marketed. The selection of the pumps should be governed by the
characteristic curves i.e. the efficiencies in the various ranges of flow and
head valves and for normal operating condition, the efficiency should bemaximum.
Baseline Energy Consumption
For implementing the Ag DSM it is most important to know the base line energy
consumption (BEC) of specified pump sets connected on pilot project feeder. TheBEC was estimated for FY 2009 (Base year) by two different approaches
specified below. One approach is based on past consumption data whereas other
approach will be based on the detailed audit study undertaken in the region.
1. Approach 1: Here baseline energy consumption of existing pump sets connected
on pilot project feeder lines is estimated based on last three year annual
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consumption data and monthly consumption data of metered consumers in the
region (Mangalvedha sub division).
In this approach the average consumption norms for metered consumers areapplied to the non metered consumers in pilot project to arrive at their monthly
consumption. This approach is also approved by MERC in determining thetariff of agricultural consumers.
The baseline energy consumption for 2221 agriculture pumps operating under
the 4 feeders has been arrived based on data available from MSEDCL.
The metered consumers are categorized on the basis of sanctioned HP loadand their monthly average consumption is taken as representative for that
particular HP category pump consumption norms to arrive at the total
consumption of 2221 pump sets considered under the pilot project. For thepurpose, 2221 pump sets are segregated based on their sanctioned
demand on HP basis.
The baseline energy consumption arrived at Approach 1 is cross verifiedbased on last three year annual energy consumption by project feeder
lines. The four pilot project feeders are segregated agricultural feeders
supplying power to agriculture consumers. However there are few
residential consumers that are also connected on these feeders.
The annual energy consumption for all the four project feeder lines for last 3
years is provided by MSEDCL. The last three year average energy
consumption and average distribution loss levels for Maharashtra state isused for estimating the baseline energy consumption, the annual average
energy consumption for all four project feeder lines is 21.16 MU at theMSEDCL substation end which also includes distribution losses. MSEDCL
average distribution losses are 26.2 %. The baseline consumptionattributable for 2221 pump sets is arrived at after deducting the losses
from last three year annual energy consumption. Thus the baseline
consumption is about 15.62 MU.
2. Approach 2: As per this approach, baseline energy consumption of existing
pump sets of pilot Ag DSM project is estimated based on detailed audit study.
The average operating efficiency and average input power in kW, for existing
pump sets of different types such as monoblock, submersible and flexible
coupling and for different HP ratings are estimated after analyzing the fieldstudy measurements.
This average energy efficiency and average input power norms along
with assumptions of average operating hours has been applied to totalno of pump sets categorized as per their ratings and types to arrive at
baseline energy consumption by total 2221 number of pumps sets
connected on project feeder lines.
As discussed in earlier sections, even though the supply isavailable for 8 to 10 hours on daily basis, not all the pump sets operate continuously.The reasons identified for not all the pump sets operating continuously
are, varying irrigation requirements, non availability of water in the well,non availability of farmer to switch the pump set on and pump sets
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under repairs. Hence annual average operating hours are used to estimate the baseline energy consumption of all the pump sets connected on project feeder lines .
Based on last 3 years annual average energy consumption of 21.16 MU
recorded at the substation end of project feeder lines and MSEDCLdistribution losses of 26.2% the energy consumption for 2221 pump
sets is arrived at 15.62 MU. Where as baseline energy consumption as
per approach 1 is 16.49 MU. The sum of average input power for all
the pump sets is around 9523 kW based on energy audit study.
Average operating hours for all the pump sets is estimated based onthis information as provided below,
Annual Average Operating Hours=Energy Consumption ,15.62 MU *10^6
= 1640
Sum of average input power for all the pump sets, 9523 kW
Annual Average Operating Hours =Energy Consumption ,16.49 MU * 10^6=
1732
Sum of average input power for all the pump sets, 9523 kW
Thus the annual average operating hours for all the pump sets connected on
project feeder lines are estimated as 1640 and 1732. However, to be on
conservative side average operating hours are assumed to be 1640.
The annual average operating hours of 1640 are multiplied by the average inputpower per pump set and total number of pump sets for each categorized
based on rating and type to estimate the baseline energy consumption. As per load shedding protocol electricity supply hours of MSEDCL can not be
less than 8 hours per day i.e. 2920 hrs per annum. In addition analysis of
historical data for past several years with regards to water availability,
seasonal variation and cropping pattern, indicate that the water availabilityand seasonal variation will remain the same in future years and will not have
any impact on pump set operating hours. Hence the assumption of 1640
annual average operating hours stands appropriately.
Thus the baseline energy consumption based on approach 2 is 15.23 MU.
Since the baseline consumption estimate based on approach 2 is on very
conservative side it is used in the preceding sections to estimate energysaving potential.
Estimates of Energy Saving Potential
1. The energy could be saved by improving the overall system efficiency either by
partial rectification or by complete replacement.
2. The partial rectification covers the options other than replacement of pump sets
(Motor & Pump) as listed below,
• Replacement of inefficient foot valves
• Removal of unnecessary pipe lengths
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• Removal of unnecessary bends
• Reduction in height of pipe above the ground
• Replacement of GI pipes with HDPE/PVC pipes
• Installation of capacitor banks for improving power factor
3. With partial replacement, farmers benefit in terms of more water discharge from
the existing pumping system. However the reduction in energy requirement ismarginal.
4. The complete replacement also covers the replacement of existing pump set
with energy efficient pump set along with the options covered under partial
rectification. Even though the complete rectification requires huge investment
it leads to significant energy savings and reduced line loadings. In the DPR
the option of replacement of exiting pump sets with energy efficient pump sets
along with the replacement of foot valves is considered.
5. The rating of energy efficient pump sets for the replacement of existing pumpsets is arrived at after analyzing the maximum possible head and current
water discharge requirement. With the help of pump set manufacturers each
pump set data is analyzed to propose energy efficient pump set along with its
efficiency value. The energy efficient pump sets are selected in a way so as tooperate in the range where the pump set efficiency curve is almost flat. As per
the pump manufacturers, the maximum variation in the efficiency of these new
pump sets will not be more than 3% to 4 %. The overall weighted average
operating efficiency for energy efficient pump sets is arrived at 48.9%.
However, to be on conservative side overall average operating efficiency for energy efficient pump sets is considered as 45 % (whereas that of non
standard pump set is only 28%) to estimate the energy saving potential by
replacement of all 2221 pump sets. The assumption of 45 % of overall
average operating efficiency which is 4 % less than the actual, provides
enough margin for the actual efficiency variation due to water level variations.
6. The overall average operating efficiency of 45% is used to arrive at revised
average input power rating for energy efficient pump sets. The energy savingpotential is estimated only for improvement in the system efficiency due to
replacement of existing pump sets with energy efficient pump sets. The detail
estimates of energy saving potential shows that the Overall consumption of existing pump sets is work out to be 15,617,923 units, where as with energy
efficient pump sets the consumption will go down to 9,487,825 units for same
average operating hours. This leads to the savings of 6,130,098 units i.e. 6.13
MU, The replacement of existing pump sets with energy efficient pump sets
would lead to energy saving.
The percentage energy saving is calculated based on estimates-
Percentage Energy Savings= [(Energy Consumption by Existing Pump sets –
Energy Consumption by Energy Efficient Pump Sets ) * 100]/(Energy
Consumption by Existing Pump sets)= 40%
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Thus implementations of Ag DSM projects offer opportunity to reduce overall energy consumption, cut down energy bill to the farmers,reduces subsidy burdens on then distribution companies and state governments and mitigate the energy short situation while improving the water extraction efficiency. However for sustainable investment in
Ag DSM projects it is required to develop business models to assure sustainability of the savings for loan repayments and to provide adequate incentives to the investors.
MSEDCL utilizes a part of Load Management Charge (LMC) Fund collected
under a tariff regulation for replacement of old inefficient pumps with new
higher energy efficiency pump sets and contract out repair and maintenanceof pumps and certain aspects of project works to a project contractor
(DISCOM Mode).
7. With the above-noted background in mind and after taken in to account the
possible financing options, different business models have been developedand categorized as DISCOM Mode, ESCO Mode and HYBRID Mode as
described below,
MSEDCL utilizes a part of Load Management Charge (LMC) Fund collectedunder a tariff regulation for replacement of old inefficient pumps with new
higher energy efficiency pump sets and contract out repair and maintenance
of pumps and certain aspects of project works to a project contractor
(DISCOM Mode). (100% investment by the DISCOM)
An ESCO which has a contract with MSEDCL finances and implements the
project; the ESCO would borrow the project debt and repay it from project
revenues (ESCO Mode). (100% investment by the ESCO). In this modelbenefit savings to be retained by ESCO is 95%.
ESCO provides part of project funds through debt & equity and sign a contract
with MSEDCL, whereas part of the project fund would be contributed by
MSEDCL through LMC fund (HYBRID Mode). (67% investment by the
DISCOM, 33% investment by the ESCO). In this model benefit savings to be
retained by ESCO is 55%.
Since HVDS has not been implemented on the selected feeders, electricmotors may burn out frequently due to poor voltage profile. Therefore, the
risks involved for ESCOs/Project Contractors in the above discussed business
models (DISCOM Mode and ESCO Mode) are high, which may lead to low
participation from the interested bidders (ESCOs) for project implementation.
8. In order to motivate ESCOs to undertake the project, a hybrid solution has
been proposed in which MSEDCL will be required to contribute upfront a
portion of total investment from the LMC fund so that ESCOs and their
lenders‘ risks are minimized. This would be a significant amount and may bean important factor for an ESCO to get loan from the lender.
Monetary Savings/ Benefit to MSEDCL
1. The major benefit of pump set efficiency improvement is to farmers by way of
either increased water discharge output per unit of power consumed or samewater discharge with lower power consumption.
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2. Replacement of existing pump sets with correctly selected, better designed
energy efficient pumps having higher efficiency for the same head range will
give same water output and consumes lesser power. Benefits to MSEDCLdue to lower power consumption by energy efficient agriculture pumps are
estimated for sale of energy to all consumers at an average cost of supply.
3. MSEDCL revenue billed per unit is used as a proxy to average tariff. Average
Cost of Supply for FY 08 is estimated from actual revenue from sale of power and actual energy sales to all consumers as provided comes out to be Rs
3.62 / kWh. Agricultural consumers are supplied at subsidized metered tariff
of Rs 1.10 per kWh whereas average power tariff is Rs 3.62 / kWh. Hence
MSEDCL is benefited due to reduction in agricultural energy consumption. Inaddition to this the revenue realization or collection efficiency from agricultural
consumers in Mangalvedha sub division is only 18 %, which also leads to
additional financial losses to MSEDCL, and could be avoided due to saved
energy. Thus the saved energy could be sold to other consumers at an
average rate of Rs. 3.62 per kWh (FY 08 Actual). The benefit analysis fromMSEDCL‘s perspectives, considering the benefits of sale of saved energy to
other consumers and reduction in financial losses pertaining to lower
collection efficiency from agricultural consumers is provided in Table 31
below. However, at conservative side the collection efficiency of 60 % is
assumed to estimate revenue collection loss due to saved energy.
As per calculations in the DPR the total investment needed for replacement of
2,221 existing pump sets will be Rs 432.8 Lakh, whereas MSEDCL‘s revenuefrom sale of saved energy to other consumers at Rs 3.62 / kWh is Rs. 221.91
Lakh. However there is reduction in MSEDCL‘s revenue at collection
efficiency of 60 %, due to reduction in energy sale to agricultural consumersdue to energy saved. At unit rate of Rs 1.10 /kWh for agricultural consumersand at collection efficiency of 60 % revenue from agricultural consumers
comes out to be Rs. 40.46 Lakh. In addition to this, to ensure sustainable
savings MSEDCL has to ensure proper R&M. The annual R&M cost is Rs
35.72 Lakhs, employee cost is Rs 6.6 Lakh and annual testing cost is Rs. 1.1Lakh. Thus the net annual benefit to MSEDCL is Rs. 138.02 Lakh. This work
out to be a simple payback period of 3 years.
PILOT AG-DSM PROJECT AT SOLAPUR
Based on these estimates, the detailed project financial analysis for a periodof 10 years is carried out for project implementation through ESCO Mode and
DISCOM Mode, whereas for HYBRID Mode financial analysis is carried out
for 5 years. The project cash flows and summary benefits for all the three
business models is provided in sections below.
1. The financial model indicates the economic viability for implementation of Ag
DSM pilot project through ESCO Mode with Project IRR of 19.21% for a
project cycle of 10 years(Simple payback Period – 5 years). Where as project
implementation through DISCOM Mode by MSEDCL utilising LMC fund,the Project IRR is 33.5% for a project cycle of 10 years (Simple Pay Back
Period – 3 years).
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2. Implementation of project through HYBRID Mode, where ESCO invests 33% of
total investment (Rs. 4.33 Crores) and retains 55% of net savings, the
project IRR is 27.27% for ESCO where as for MSEDCL the project IRR is12.83% for a project cycle of 5 years (Simple Pay Back Period – 4 years).
3.
1 The cash flow statements over a ten year period for ESCO Mode & DISCOMMode business model have been worked out. Where as for HYBRID Mode
business model the cash flow statements are worked out for five year period .
4. For all the three business models, provision of tax on profits has been
considered at the rate of 33.99%. Project implementation through HYBRIDE
Mode business model provides a reasonable IRR of 27.27 % for ESCO &
12.83 % for DISCOM for project cycle period of five years. Where as for other business models the project cycle is 10 years. Hence HYBRIDE Mode business model indicate good financial viability and ensures minimum risk for project investors.
5. In the context of the agricultural DSM project, energy consumption in thebaseline and project scenarios and consequently energy savings can be
determined under two different approaches:
One is the project monitoring and verification (M&V) approachthat
determines energy savings based on monitored values of efficiency
parameters like head, flow and energy consumption.
Other approach uses standard values of pumping efficiency (baseline andproject pumps) and usage hours to arrive at energy savings called
the deemed savings approachContractually; ESCOs must stand behind
technical performance and specific efficiency of the systems and equipment
they install. These are key values in the M&V savings calculation. Other values in the savings equation, i.e., operating hours can be estimated using
baseline energy consumption data and then stipulated in the project contract.
In this way, the ESCO is not exposed to uncontrollable risks, but does
assume responsibility for system efficiency. The Discom and StateGovernment in effect, assume the uncontrollable risks. If the ESCO is paid
based on the agreed value of its capital investment and delivered services,
this formulation can produce equitable results.
For this reason, from the point of view of the ESCO and its lender, a Deemedsavings approach may be appropriate. This would involve pre- and post
performance demonstration of a sample of pumps by a third-party firm to
estimate savings per pump set basis. This information is then be used to
stipulate savings based on the operating hours estimated using baseline
energy consumption data for the entire project area. Periodic sampling of
pump set efficiencies during the course of the contract period is important to
account for any deterioration of savings and to confirm that the ESCO is
meeting its warranty obligations. Even if a Deemed savings approach is used
to determine payments to the ESCO, the Discom can implement a monitoring
and verification savings approach for all feeders and pump sets to gather the
most accurate information.
Carbon Credit Benefits
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a. The responsibility of registering the pilot project for availing carbon credits
will be with the ESCO.
b. The ESCO shall prepare the Project Design Document and obtain required
approval from the United Nations Framework Convention on ClimateChange (UNFCCC).
c. All required and relevant data, technical support and necessary documents
will be provided to the ESCO by MSEDCL on a timely basis to support
the ESCO‘s application for carbon credit.
d. The benefits of carbon credits as applicable can be solely availed by the
ESCO.
Based on above DPR the MSEDCL invited RFP for implementing Ag DSM inthe state of Maharastra.
Proposed structure of the project
Hybrid Business Model has been proposed with AgIA (Agriculture
Implementing Agency) providing the initial capital investment through debt &equity, whereas MSEDCL would be providing the support through annualpayment from LMC fund and energy savings.( MSEDCL utilizes a part of Load
Management Charge (LMC) Fund collected under a tariff regulation for
replacement of old inefficient pumps with new higher energy efficiency pumpsets and contract out repair and maintenance of pumps and certain aspects of
project works to a project contractor (DISCOM Mode).
Brief Roles and Responsibilities of the AgIA
1. The AgIA shall be responsible for dismantling the existing pump sets, procurement of newEEPS. (Electricity Efficient Pumps)
2. Installation, maintenance and repair/replacement. AgIA shall also be responsible for financing, implementing and operating the Project. The AgIA shall procure EEPS and installthem with following minimum specifications:-
BEE Star rated Pump sets - 4star & above as per the existing availablemodels in the Market
Wide-voltage (should be operating at low voltage) Monoblock , open well submersibleand bore well Submersible pump sets.
The discharge rate of the EEPS shall not be lower than the existing pump sets of thefarmers.
EEPS installed shall be of the same type (Monoblock / Open well Submersible /Borewell Submersible) as the existing pump sets.
Low-friction foot valves conforming to relevant ISI Standard & specification and
3. The AgIA shall install EEPS with capacitor banks of relevant ratings as per the pump set
requirement.
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4. Farmers shall be provided EEPS free of cost. They will also be provided with free installation
of the EEPS. The EEPS shall be procured with a minimum warranty of 12 months (1 year) by
pump set manufactures. The total R&M of 60 months shall be provided with no cost to the
farmers by the AgIA.
5. The AgIA shall dismantle the existing pumps and keep an inventory of old pumps (with proper
tagging of consumer ID) for one year. Disposal of old pumps should then be undertaken in a
manner that precludes their use or reinstallation in any form anywhere in India. The AgIA shall
provide a written assurance to MSEDCL describing the manner of disposal. MSEDCL shall
have the right to audit or hire a third-party auditor to confirm the appropriate disposal of all old
pumps. The disposal of old pumps shall be carried\ out in the following manner:
Photograph of old and new pump-set with consumer details shall be taken
Before disposal of old pump sets, a hole of appropriate size shall be made in
the pump set in the presence of Third Party Request for Proposal Ag DSM
Pilot Project MSEDCL
6. The term of the project shall be for a period of five years from the Effective Date of completion
of replacement of all the existing pumps with EEPS. The start date shall be when all EEPS
have been commissioned by AgIA.
7. The AgIA shall be responsible for dismantling the existing pump sets, planning the
procurement, installation and initial testing of new EEPS within six months from the date of
signing of the contract with MSEDCL.
8. A Third Party agency in the presence of AgIA and MSEDCL shall test all the existing pump
sets as well as the new EEPS at the time of replacement. The base-line and energy savings
for the first six months shall be estimated based on this initial testing & average annual hours
of operation of pump sets - 1640 Hrs (deemed savings approach).
9. For subsequent period of the project, a stratified random sampling technique shall be used to
select the pump sets to be tested. Stratification criteria shall be the type and the rating of the
pump sets. An estimated size of 10% of the total no. of pump sets shall be tested randomly
every year.
10. The sample pump sets shall be tested by Third Party in the presence of MSEDCL and AgIA
annually for demonstrating the savings. The pump sets shall be selected randomly every year
based on the approach mentioned in above clause.
11. This information is then be used to stipulate annual savings based on the estimate of the
average operating hours / annum (1640 Hrs) (Deemed Saving Approach)
12. Third party monitoring and verification agency could be a local NGO / Technical Institute etc.
Support given by MSEDCL
1. MSEDCL shall provide to the AgIA the data and support necessary for
implementing the tasks stated above.
2. MSEDCL shall install meters on all pump sets connected on five project
Feeders.
3. MSEDCL shall make payments on quarterly basis to the AgIA based on
―guaranteed savings demonstrated/achieved as per following-
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a. Energy savings sharing %
The percentage sharing between MSEDCL andAgIA shall be as follow,
Draft Contract/Agreement Ag DSM Pilot Project
1. % retained with MSEDCL: .........70%.................
2. % shared with AgIA: ………30%………..
b. Base level energy consumption
Baseline energy consumption is estimated based on KW measured
at the motor input terminal of all the pumps prior to the replacement
of the existing Pump sets multiplied by operating hours of 1640 Hrs
per annum as specified in bidding documents / DPR. The baseline
established remains same for 5 years of the project. Energy
consumption by EEPS For first six months of the term - based on the
initial testing & average annual hours of operation of pump sets of
1640 Hrs. For subsequent period of the project – based on thetesting of sample of 10% of EEPS selected randomly every year &
average annual hours of operation of pump sets ofb1640 Hrs.
Quantum of energy saved or ―guaranteed annual energy savings‖
Base level energy consumption minus the Energy Consumption by
EEPS (Item no.5-Item no.6)
c. Periods for Demonstration of ―guaranteed annual energy savings
i. Initially, at the time of replacement of all the old pumps by EEPS
ii. After a period of six months from the start date of the project
iii. Then every year from the second demonstration for the balanced project period
d. Pricing of energy savings
i. "Energy savings shall be priced at Rs 2.70 / kWh for a project period of five years
4. MSEDCL shall ensure good power supply quality and load management
system in pilot area.
5. MSEDCL shall provide necessary support to the AgIA at the field level, as may
be required by AgIA from time to time, including, amongst others, regarding
access to consumer premises, replacement of existing pump sets, recoveringold pump sets and signing ownership agreement with the farmer/consumer.
Implementation of Ag DSM in Other States
About 50% of Indian populations are farmers. About 20% of the farmers have
electric pumps. Hence, only 10% of population directly benefit from
agricultural electricity use. Lack of perennial rivers made ground water tapping
a prerequisite in irrigation in south India. This has led to an increase in
consumption of electricity by agricultural sector. 73% of Indian populationdepends directly or indirectly on agriculture.. In most of the states, agricultural
consumption is un-metered. Consumers pay a flat rate tariff which is also
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highly subsidized. As a result there is further wastage of electricity by using
sub standard pump sets.
On the basis of the DPR prepared by Mahrastra for implementing Ag DSM the
potential of energy saving is upto 40% and as per estimation of BEE Overall
electricity savings(from 20 million pumps) all over India is estimated at 62.1billion units annually.
Taking the case of state of Uttar Pradesh ( For the basis of calculation to
apply for all India for analysis purpose) based on the approved ARR, the
average cost of supply for FY 2009-10 works out to Rs. 4.17/kWh (Rs 17,791
cr/ 42,661 MUs). Thus earning by sale of this saved energy to other
consumers can be calculated as following-
ACS= Rs 4.17/unit
Cost of supply to Ag= Rs 1.10 /unit
Cost saving =4.17-1.10=Rs 3.07/unit
Total revenue earning by sale to other consumer = 62.1*10^9*3.07/10^7
= Rs.19065 Cr
For above saving the following investment shall be required towardsimplementing Ag DSM-
As per the DPR of Mahavitran for connected pumping load of 9523 kW
investment required = Rs 583.2 Lakh
Taking the above to be true for India scenario the investment required may be
to the tune of 1,00,000 Cr.
In case the project is implemented through an ESCO mode, the energysavings would be shared between ESCO and Discom. Assuming 95% of the
proposed energy savings is shared with ESCO for 10 years. The financial
model indicates the economic viability for implementation of Ag DSM pilot
project throughESCO Mode with Project IRR of 19.21% for a project cycle of
10 years(Simple payback Period – 5 years). With CDM Benefits taken in to
account the project IRR improves to 22.8%.
posted by srijan at 7:51 am 1 comment: links to this post
An energy crisis could choke growth
Over the last two decades, growth
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in domestic energy production has
failed to keep pace with India’s
exploding energy needs. As a result
of inadequate mining and refinery
capacity, India has yet to unleash
the full potential of its domestic
coal endowment –the third largest
in the world –and it’s estimated
that insufficient coal production
continued to contribute to a third
of the country’s total power deficit
over the last fiscal year
4
. But India’s
energy challenges are not limited to
production shortfalls. Poor distribution
infrastructure also constrains supplyside growth. Not only does India lack
the infrastructural capacity to deliver
more energy to meet rising demand,
inefficiencies in existing distribution
infrastructure has resulted in an
average of 30 percent energy loss
during transmission and distribution –
one of the highest rates in the world
5
.
The demand-side picture is not
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much better, with India’s industrial
sector –one of the world’s most
energy-intensive –continuing to
push domestic energy consumption
upward (industrial output contributes
to 16 percent of India’s GDP while
consuming 45 percent of commercial
energy). The result is a rapidly
yawning gap between domestic
energy supply and demand that is
being filled by increasing energy
imports (the annual value of oil
imports alone is expected to rise
nearly 18 percent in 2012)
6
.
In 2012, weakness in the rupee (the
rupee depreciated almost 20 percent
against the US dollar in the last five
months of 2011) will magnify the
negative impact of foreign energy
dependence on business risk and
profits in India
7
. Though depressed
global consumption may lead to a
slight moderation of global energy
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prices, the rupee’s weakness is likely
to result in a price hike on energy
imports and a higher debt service
burden in rupee terms that would
squeeze domestic profit margins
in 2012
8
.
Curbing energy prices and India’s
dependence on energy imports
requires policy support and reform
to address the country’s supply-side
energy shortcomings. To this end,
the government needs to accelerate
the overhaul in the country’s energy
distribution infrastructure with
investment in technologies such as
the smart grids while supporting the
expansion of new alternative energy
sources. The National Solar Mission
(which aims to generate 20,000 MW
of solar power by 2020) and the
National Mission on Enhanced Energy
Efficiency (which has targeted to
deliver annual fuel savings of about
23 million tons oil equivalent) offer
hope if implementation and funding
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improve in 2012.
Business implications:
• Invest in energy saving technologies
and processes and develop
alternative sources of energy supply
• Diversify sources of supply by
forging strategic alliances and key
partnerships with suppliers and to
secure resource supply in the
long term
• Utilize free trade agreements
as a platform to cost-effectively
source clean and smarter
energy technologies
• Shape pro-growth approaches
to regulation by working c
INTRODUCTION TO ENERGY CRISIS
Imagine this scenario: One morning you wake up, yawn, scratch yourself, and sit up. Wearily, you
stumble out of bed. You go to your refrigerator for a glass of milk only to discover that the light inside
does not turn on and everything inside it has been sitting at room temperature overnight and is quickly
beginning to spoil. "That's funny, "you think to yourself. When you try to brew a cup of coffee the coffee
maker does not seem to want to start. Your gas stove won't turn on, so it looks like there'll be no bacon
and eggs this morning. As you sit down with your bowl of dry cereal, you glance out the window and
wonder why there is no newspaper. You pick up your cordless phone to call the newspaper and
complain, but it doesn't turn on either. You begin to panic and you run out to the car. It won't start."What's going on?" you think to yourself. "Why doesn't anything work?"
Does this sound like the beginning to some strange science fiction novel? Well, the scenario we just
illustrated could be very real indeed. Together, fossil fuels (coal, petroleum, natural gas, and their
derivatives) provide more than 85% of the energy used by mankind today. Unfortunately, the reserves
of those fuels are not infinite. Scientists predict that within the next two centuries we will run out of
those valuable energy sources. This is you experience energy crisis. Clearly, something must be done.
But what?
Before the Industrial Revolution of the 1890s, human beings had only a moderate need for energy. Man
mostly relied on the energy from brute animal strength to do work. Man first learn to control fire around
1 million BC. Man has used fire to cook food and to warm his shelters ever since. Fire also served as
protection against animals. Thousands of years ago, human beings also learned how to use wind as an
energy source. Wind is produced by an uneven heating by the sun on the surface of the earth because of
the different specific heats of land and water. Hot air has lower pressure than cold air and since high
pressure tries to equalize with low pressure the current called wind is produced. Around 1200 BC, in
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Polynesia, people learned to use this wind energy as a propulsive force for their boats by using a sail.
About 5 thousand years ago, magnetic energy was discovered in China. Magnetic force pulled iron
objects and it also provided useful information to navigators since it always pointed North because of the
Earth's magnetic field. Electric energy was discovered by a Greek philosopher named Thales, about 2500
years ago. Thales found that, when rubbing fur against a piece of amber, a static force that would
attract dust and other particles to the amber was produced which now we know as the "electrostatic
force". Around 1000 BC, the Chinese found coal and started using it as a fuel.An energy crisis is any great shortfall (or price rise) in the supply of energy resources to an economy. It
usually refers to the shortage of oil and additionally to electricity or other natural resources.
The crisis often has effects on the rest of the economy, with many recessions being caused by an energy
crisis in some form. In particular, the production costs of electricity rise, which raises manufacturing
costs.
For the consumer, the price of gasoline (petrol) and diesel for cars and other vehicles rises, leading to
reduced consumer confidence and spending, higher transportation costs and general price rising.
Webster defines crisis as a “decisive moment “or “turning point”. We are now at an extremely critical
stage of using energy beyond a practical limit. We have increased our usage enormously, especially oil,
in the past decade. The consequence is we are quickly exhausting our finite supplies of oil and natural
gas. As a result, we are becoming more dependent on foreign sources of oil to keep our country
functioning. In 1977 the United States with only 6 percent of the world‟s population consumed
approximately 30 percent of the energy produced in the world. These statistics are startling reminders of
our insatiable energy appetite. Some people may ask “do we have an energy crisis”. The answer is a
definite yes. Our next step is to realize we are at a crucial time if we are to reverse our terrible trip
towards energy starvation. We will have to recognize our mounting trouble and act decisively to stem
the tide.
About 60% of all the energy used in the world today comes from burning oil and natural gas. Despite
massive exploration program, very few large outfields have been found in recent years. This could well
mean that most of the world's oil has been already discovered, and that, in the future oil can be run out
faster than anticipated. Today, the world is producing enough oil to meet its present needs. If only wecould use oil at its present rate then world's reverse could last for over 100 years. Unfortunately world's
energy demand has been growing steadily over the past 50 years, and most experts believe that this
trend will continue. No one can exactly tell that how much the energy will cost in the future and no one
can exactly tell that how much the energy will needed in the future. The problem about the world's
future energy supplies is called the world‟s energy crisis.
TYPES OF ENERGY CRISIS
1. NUCLEAR POWER
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Even in the heady days of the 1950s, problems with nuclear power were beginning to arise. For one,
early nuclear technologies were developed in a sort of hothouse that was insulated from commercial
realities. When these technologies were transferred to civilian power sectors, they could not compete
economically with conventional power sources. However, the equipment manufacturers and utilities
believed that additional experience would bring decreases in cost.
One of the main sources of opposition to nuclear power was based on the assumption that it wasinherently unsafe. Many engineers argued that the plants were safe, and that built-in safety features
could prevent and had prevented accidents. The possibility of accidents caused mainly by operator errors
had been repeatedly. The immediate result was long lines at gas pumps, high heating bills, and a
worldwide economic downturn.
Many power utilities had acted in the postwar period as Promoters of increased electric usage among
consumers, through publicity campaigns and the direct sale of electric appliances.
2. HYDROELECTRIC POWER
Man has utilized the power of water for years. Much of the growth of early colonial American industry
can be attributed to hydropower. Because fuel such as coal and wood were not readily available to
inland cities, American settlers were forced to turn to other alternatives. Falling water was ideal for
powering sawmills and grist mills.
As coal became a better-developed source of fuel, however, the importance of hydropower decreased.
When canals began to be built off of the Mississippi River, inland cities became linked to mainstream
commerce. This opened the flow of coal to most areas of America, dealing the final blow to hydropower
in early America.
Water power really didn't stage a major comeback until the 20th century. The development of an electric
generator helped increase hydropower's importance. In the mid-20th century, as Americans began to
move out of the cities and into "suburbia," the demand for electricity increased, as did the role of
hydroelectricity. Hydroelectric power plants were built near large cities to supplement power production.
The problems included frequent floods, erosion, and deforestation. The TVA provided for the building of
several hydroelectric dams. Not only were the dams successful in controlling the flooding, they also
provide electricity to the region. The TVA is an example of successful implementation of hydroelectric
power.
3. FUEL CELLS
The fuel cell is one example of a government-sponsored technology which has, after several decades of research and development effort, produced a viable technology. The fuel cell is a chemical method of
producing electricity, somewhat analogous to an ordinary battery. The difference is that the fuel cell
must be continuously supplied with chemical reagents in order to function. It does not hold a charge like
a battery. The fuel cell derives current from a chemical reaction using oxygen from air and hydrogen
from a fuel source (usually petroleum, synthetic fuels derived from coal, or natural gas, but renewable
fuels such as methanol have been tried).
In operation, fuel cells are silent and produce only water and carbon dioxide as waste products. The
electrochemical process used in a fuel cell was discovered in the early 19th century, although it was not
proposed for commercial purposes until the 1930s. In the 1950s, Westinghouse Electric developed
commercial versions of these devices, but found only niche markets for them. In the 1960s, fuel cells
designed for NASA provided power for the Apollo spacecraft. Early NASA fuel cells supplied by General
Electric Company used an unusual electrolyte composed of a polymer material in the form of a
membrane. The resulting fuel cells were quite expensive. By the 1990s, fuel cells using less expensive
materials and solid fuels were available and put into operation experimentally as part of utility company
power networks. Unfortunately, the U.S. Department of Energy has had difficulty transferring the
financial responsibility for commercializing this technology to the private sector. Additionally, many
utilities remain unconvinced that fuel cells represent an economical alternative to other medium-scale
power sources, especially gas turbines leading to energy crisis.
4. SOLAR POWER
The history of solar energy conversion is another example of a technology that is inextricably linked to
government policy and financial support. While solar cells were developed by the 1950s which could
generate enough electricity directly from sunlight to operate electronic circuits, the amount of current
was small and the price was high.Nonetheless, solar cells found niche applications by the 1960s. The most famous application was in
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space: from the 1960s on, many satellites were powered by solar cells.
A second important application was developed by telephone companies to operate remote repeaters and
other equipment. Solar cells remained inefficient and expensive compared to other methods, and were
suitable only where no other energy source could be used or where cost was not a major consideration.
Solar power for utility applications was given a temporary boost through the government funding of applied research on solar cells and the construction of experimental solar stations. Not all of these solar
stations used solar cells; several large systems used computer-controlled, movable mirrors to focus light
on a boiler, which produced steam to drive a turbine. However, these large-scale plants remained
experimental, and funding eventually dried up.
5. WIND POWER
By far the most successful alternative energy technology has been the exploitation of wind. This form of
small- to medium-scale generation was repeatedly passed over by American utility companies before the
1970s because it was considered unreliable and unsuitable for large scale exploitation. But in time, due
to changes both in the technology and in the business environment, wind power became a part of
established electrical networks.
The use of wind energy to serve various industrial purposes is quite old, dating at least to the 12th
century. Unlike other power sources such as water or steam, wind power was for the most part left
behind in the late 19th century by electric companies looking for ways to drive generators. It was seen
as unreliable and unavailable in sufficient quantities to power larger machines. The energy crisis of the
early 1970s revived interest in wind-powered electric generation, and a number of European firms
quickly moved to the forefront in providing updated versions of this ancient technology. Early emphasis
in America was on the development of multi-megawatt wind turbines, although such designs did not see
much commercial success.
The turning point for alternative energy utilization in the United States, including wind power
technology, was national legislation which in 1978 forced utilities to purchase the power generated by
independent producers. This act, called the Public Utilities Regulatory Policies Act (PURPA), was intended
to advance deregulation in the industry, but also to encourage experimentation with new energy
technologies.
Others:• Biomass
• Geothermal
• Fusion
6. OIL CRISIS
The world at large and India in particular have moved towards a serious energy crisis in the 1980s .Of
occurs this crisis first cropped up the 70s when the open countries suddenly raised the priories of oil
.The oil price like was coupled with the inefficient supply of conventional flues and the rapid rise in the
demand of energy. While the demand of energy has significantly increased due to rapid industrialization
urbanization transportation and communication development modernization of agriculture and due to
heavy population pressure; the supply position has deteriorated owing to heavy depletion of fissile fuel
reserves and to technological inefficiencies associated with exportation of those reserves. Hence now we
find and unabridged gap between demand and of conventional fuel, which is in, turn worsening the
energy crisis. Though there is turn stability in the oil market at the moment it is deceptive.
World Crude Oil Prices
$ Per barrel
September ‟90 39.00
November ‟98 10.00
March ‟00 34.13
December ‟02 27.86
July ‟04 48.00
October ‟04 55.57
January ‟05 42.55
June 52.48
July 60.70August 67.00
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March 1st „06 61.68
10th 60.73
31 66.57
April 3rd 67.19
17th 70.00
May 3rd 74.99
7. THE DEVELOPMENT OF ALTERNATIVE ENERGY SOURCES
Nuclear power remained the only widely utilized, radically new generating technology from 1945 through
the 1960s, but many other new sources of electricity waited in the wings. The Cold War and the
resulting peacetime buildup of military might indirectly spawned not only nuclear energy, but also all
sorts of energy-related research projects. Especially important in the long term were smaller-scale
generating technologies, such as the solar panels used to provide power to satellites and other small
pieces of electronic equipment. But it was the oil crisis that brought several formerly military or space-
related energy technologies into the public light and made energy research part of the agenda of
national governments worldwide.
The year 1973, which saw a dramatic but short-lived jump in oil prices, marked a real turning point for
electric power technologies.
Many power utilities had acted in the postwar period as promoters of increased electric usage among
consumers, through publicity campaigns and the direct sale of electric appliances.
On the production side, there were widespread calls for greater efficiency and the development of new
fuel sources, including a return to coal, which had fallen out of favor as a boiler fuel by 1945.
Similarly, some industries began burning waste products (such as wood chips in paper manufacturing) to
generate electricity locally.
The fuel, environmental, and regulatory crises that power utilities countries experienced were not
without their counterparts in other nations. In Russia and China, for example, fluctuations in fuel prices
and the world economy drastically affected electrification programs. Where nuclear power seemed to be
a key to future power production, it soon became evident that economical operation of nuclear plants
remained problematical. Developing countries experienced economy wide setbacks during the oil crises,
which retarded the growth of electric power industries.
Western governments in the 1970s began pouring money into research and development efforts aimed
at improving alternative energy sources and ending dependency on foreign oil. These programsexperienced periodic cutbacks, and some were failures, but several resulted in technologies which are
now widely used.
Another interesting proposal was the use of storage batteries to “bottle” excess electricity generated
during off-peak hours for use during periods of heavier load. Late 19th century dc power systems in the
United States and Europe had sometimes used storage batteries for such purposes, but this system did
not work with ac power. Battery storage survived in specialized applications, however. Telephone
systems use battery storage to provide an extremely reliable source of energy to run
telecommunications networks worldwide. The improvement of electronic ac-dc converters after 1945
revived interest in storage batteries, and one line of inquiry investigated the use of a new type of
lithium-sulfur cell for this purpose.
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HOW WE GOT WHERE WE ARE TODAY?
In the aftermath of the 1973 and 1979 energy crises, which were arguably precipitated by international
political actions that upset time-honored economic relationships, oil prices trended downward in real
terms, and the public was lulled into complacency. Sure, they had to pay more for a gallon of gasoline,
but at least they could obtain it readily without waiting in the lines seen during the crises.
Producers of natural gas began to explore for gas in newer areas, often at higher cost than production in
more traditional areas. Simultaneously, new technologies for the use of gas improved the efficiency of
gas use. Environmental concerns increased interest in the use of gas, based on that fuel's "clean" image
and its largely invisible delivery system.
As gas became more popular and gas utilization became more efficient economically, electric utilities
turned increasingly to gas as a fuel for power generation. New, highly efficient gas turbines were
developed by major turbine manufacturers, and gas increased its penetration of the power generation
market steadily.
In the winter of 2000-2001, a number of factors have come together to magnify the problems facing the
energy industries. Among these are a rapid increase in demand for energy commodities, a not-so-rapid
increase in production of energy from new sources (given the lead times needed to develop new
production), a rapid rise in the price of natural gas and petroleum (and a coming rapid escalation of
residential consumer bills), a rapid and continuing increase in the popularity of new gas-fired electric
power generating facilities, and a rapid proliferation of environmental rules affecting the use of some
energy commodities and the relative importance of others.
This combination of ingredients sets the stage for the next energy crisis. This winter has already seen
critical shortages of electric power, followed by the first-ever Federal intervention to essentially force
utilities to continue supplying energy even if they lose money by doing so. The Golden State's three
major electric utilities have moved close to the edge of bankruptcy, caught between extraordinarily high
costs and slow reaction by state regulators to the incipient crisis.
Meanwhile, the costs of natural gas on the spot market have risen to record levels, just as more electricgenerators, both traditional utilities and newer independent power producers, turn increasingly to gas as
a generating fuel.
CAUSES OF HISTORICAL CRISES
1973 oil crisis
Cause: an OPEC oil export embargo by many of the major Arab oil-producing states, in response to
western support of Israel during the Yom Kippur War.
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1979 energy crisis
Cause: the Iranian revolution
1990 spike in the price of oil
Cause: the Gulf War
California electricity crisisCause: failed deregulation, and business corruption.
UK fuel protest (of 2000)
Cause: Rise in the price of crude oil combined with already high taxation on road fuel in the UK.
Oil price increases of 2004-2006
Cause: Tight supply margins in the face of increasing demand, partly from China's demand.
Power shortages
Cutbacks in conservations.
Cutbacks in renewables.
Power plant outages.
OUR COMMENTS FOR SAVINGS IN ENERGY
These types of energy are constantly being renewed or restored. But many of the other forms of energy
we use in our homes and cars are not being replenished. Fossil fuels took millions of years to create.
They cannot be made over night. And there are finite or limited amounts of these non-renewable energy
sources. That means they cannot be renewed or replenished. Once they are gone they cannot be used
again. So, we must all do our part in saving as much energy as we can.
IN HOME:In the home, energy can be saved by turning off appliances, TVs and radios that are not being used,
watched or listened to. The lights should be turned off when no one is in the room. By putting insulation
in walls and attics, the amount of energy it takes to heat or cool our homes can be reduced. Insulating a
home is like putting on a sweater or jacket when we're cold...instead of turning up the heat. The outer
layers trap the heat inside, keeping it nice and warm.
RECYCLING:
To make all of our newspapers, aluminum cans, plastic bottles and other goods takes lots of energy.
Recycling these items -- grinding them up and reusing the material again -- uses less energy than it
takes to make them from brand new, raw material. So, we must all recycle as much as we can.
TAKING CARE OF CARS AND TRUCKS
We can also save energy in our cars and trucks. Make sure the tires are properly inflated. A car that is
tuned up, has clean air and oil filters, and is running right will use less gasoline. Don't over-load a car.
For every extra 100 pounds, one should cut mileage by one mile per gallon. When your parents buy a
new car, tell them to compare. The fuel efficiency of different models and buys a car that gets higher
miles per gallon.
IN THE COLLEGE
Energy can be saved in the college. Each week one can choose an energy monitor who will make sure
energy is being used properly. The energy monitor will turn off the lights during break time and after
class. "Turn It Off" signs should be made for hanging above the light switches as a reminder.
Energy Patrol can be started in the college. One can make sure whether their classmates recycle all
aluminum cans and plastic bottles, and make sure the library is recycling the newspapers and the
college is recycling its paper.
POWER GENERATION FACILITIES
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New power generation facilities, principally gas-fired combustion turbines and combined-cycle units
making more efficient use of gas, can be constructed more quickly than large-scale centralized power
plants, but even they take as long as two years to site, obtain required permits, and build connecting
transmission lines. And that assumes that the state regulatory commissions involved recognize the need
for new construction and act favorably and expeditiously.
NEW TECHNOLOGIESDevelopment of new generation technologies to improve the utilization of energy has improved, but
incrementally, with dramatic new efficiencies unlikely in the immediate future. The prospects for getting
"more bang for the buck" are good in the long term, but not in the near term.
By 2020 we could be dependent on imported energy for three-quarters of our total primary energy
needs ... we may become potentially more vulnerable to price fluctuations and interruptions to supply
caused by regulatory failures, political instability or conflict in other parts of the world.
SOLUTIONS FOR ENERGY CRISIS
1. DRILL DOMESTICALLY WHEREVER WE CAN TO PRODUCE MORE OIL
● Firstly, corral the environmentalists, and drill for oil on land we own, and control, where we KNOW
there is oil. (Florida's west coast).
● As to our energy future, while innovation from new technology will take care of the long-term problem,
the short term must be dealt with by ignoring environmentalists and moving ahead with drilling in
Alaska as well as the various U.S. coasts where it is prohibited.
● There are vast amounts of oil (actually, bitumen, a precursor of oil) in oil shale in the United States,
and new technology (exists) for extracting it with minimal environmental effects.
2. HYDROGEN: THE FUEL OF THE FUTURE
● Build a national network of hydrogen refueling stations (hydrogen gas stations). This should be easy.
After all, Eisenhower was able to build the interstate highway system in the 1950s and 60s, which seems
like a much more complex task.
● The plan to see being the best is hydrogen with water being the exhaust from the vehicles. With the
use of solar panels, we can generate the hydrogen free… well, almost free… but without the need of oil. ● Some of BMW's new 2008 luxury cars will have the ability to run on hydrogen. Keep in mind that these
are not fuel cells. Rather, these are conventional internal combustion engines that have been modified to
burn hydrogen or (and this is key) gasoline. Since the hydrogen infrastructure is very spotty, these
vehicles can use gasoline at the flick of a switch when hydrogen is not available.
3. ETHANOL -- IF THE BRAZILIANS CAN DO IT, WHY CAN'T WE?
● Brazil runs over 50% of its vehicles on ethanol. Ethanol can come from many sources. The production
plants are being built now. (One in my home state of Georgia is purported to be producing ethanol from
trees)
● Get sugar cane fields growing. Sugar cane requires less fertilizer than corn and is easier to make
ethanol out of.
● Turn lawn grass, America's largest crop, into ethanol.
● There is no reason that ethanol cannot be our primary fuel. A gradual increase of ethanol/gasoline
mixtures at the pump until the standard fuel is 80%-90% alcohol can be a real possibility within the next
8 to 10 years if someone would actually get it rolling now.
4. BIODIESEL -- PROVEN POWER FROM GARBAGE
● Why not use every bit of waste, i.e., paper sludge; slash piles, veggie by-products (carrot tops, potato
skins, beet peelings, etc.) to make more fuel?
● Biodiesel can provide a major new energy source. If it is made with non-food crops, the yield is far
higher than with soybeans.
● All we really need is car companies to increase the number of cars with diesel engines. … The second
part of this has to be biodiesel stations. Biodiesel fuel can easily be made at home, and it can be made
from used vegetable oil. Currently someone who makes their own biodiesel 40-50 gallons at a time at a
cost of $0.69 a gallon.
● Biodiesel -- There is no reason, other than distribution, why every ship, train, semi-truck, tractor, orpiece of construction equipment with a diesel engine should be burning straight (petroleum-based)
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diesel.
5. SOLAR ENERGY COULD DO THE JOB JUST BY ITSELF
● The United States has thousands of miles of desert and plains that receive enormous amounts of
sunlight every day, often even in winter. It has been said that approximately 100 square miles of solar
panels or a modest multiple thereof (5-10X) could generate enough electricity to accommodate virtually
all of the electric energy needs to the country.
● In Las Vegas the amount of solar energy there is amazing. We could make it mandatory that all newhouses have solar roof tiles instead of regular tiles and give tax credits if people replace their tiles with
solar tiles on their existing homes.
● Solar panels in the southern states, especially Florida and the like, could easily be used to run all the
electricity a house needs. Furthermore, having lived in Florida, it's so sunny that the excess electricity
could either be sold back to the electric companies or the solar package could come with a power supply
to use in charging an electric-powered vehicle.
6. LETTING IN THE RIGHT AMOUNT OF SUN
In a cold climate we welcome the sun's heat and light most of the time. And once we capture the heat,
we don't want to give it up. In a warm climate, we don't want the heat, but we do want the light.
Advances in window technology let us have it both ways.
Less than half of the sun's energy is visible. Longer wavelengths--beyond the red part of the visible
spectrum--are infrared, which is felt as heat. Shorter wavelengths, beyond purple, are ultraviolet (UV).
When the sun's energy strikes a window, visible light, heat and UV are either reflected, absorbed or
transmitted into the building.
7. DEVELOP WIND, SOLAR ENERGY TO MEET POWER CRISIS
Alternative sources like wind and solar energy need to be developed to tide over the power crisis in rural
India. To meet the power crisis of rural India, there is a desperate need to develop wind and solar
energy for power generation. Commenting on the sick Public Sector Units, Centre had planned to make
25 sick units "economically viable" by bailing them out of crisis this fiscal.
We have seen improvements after these units to increase their profitability or they would be shut down
just the way we had closed two sick units in the recent past.
8. AS A WHOLE, ENERGY CRISIS
Conservation is not the total Answer, but it would certainly improve our situation. This would have to be
a conservation program that would encompass all of our consumers. The initial step would be less
driving and more use of mass transportation system. In some parts of the country it would mean adding
more buses and trains, in other parts, it would be modernizing the existing systems. Also it would
include an educational program for the energy consumers to make them aware of how they can save
energy daily. This has already begun and hopefully it will continue.
In addition, the new car manufacturers will have to increase the fuel efficiency of all cars. Another
solution will concern the industrial sector of our economy, to continue their cutbacks and their fuel
efficiency programs without seriously affecting their production.
LONG TERM / FUTURE SOLUTIONS
India needs approximately 100000MW of additional power by 2010 if it is to embark on a high growth
trajectory and emerge as an economic giant by 2020.However, most projections state that at the
current rate of capacity addition we will fall well short of achieving this target.
To address this problem, it helps in understanding the issues involved, there are primarily three of them
they are:1. Finance
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2. Technology
3. Structure of the power grid
FINANCE
As there is a glut of capital in the international markets to the tune of around USD 2 trillion, the power
market in India is one of the few areas in which a part of this can be invested with the prospect of
assured returns for investors (hopefully the government can facilitate this by giving counter-guarantees)
.In addition, we need to move towards a public-private model where the government provides the gridand charges the private sector to use it and privatize the distribution and generation of energy and give
them tax breaks or exemptions to pay for politically desirable (read unprofitable) ventures like
subsidized power for farmers.
TECHNOLOGY
There are 3 technologies which are uniquely suited to the Indian market
1) GAS BASED POWER GENERATION
Gas based power plants are ideal for India as we have recently discovered vast gas reserves in the
Krishna-Godavari basin and other locations. In addition, Russia a non-OPEC Country and currently the
world‟s second largest oil producer in addition to being a long standing ally of India currently has about
50% of the world‟s proven gas reserves, thus, shielding us against any unforeseen price fluctuations like
has been seen in the case of oil due to rising tensions in the middle east.
2) NUCLEAR POWER GENERATION
Nuclear power has a vast potential to fulfill our energy needs. Each nuclear generator generally produces
around 1000MW of power and doesn‟t need to be refueled between 5-10 years (depending on the
design). In addition, it produces no green house gases (one of the reasons the French are „holier than
thou‟ on the Kyoto treaty is because they get 75% of their energy needs from nuclear power).
The problem, of course, is the NPT which prevents companies like France‟s Avera or America‟s GE to
build and/or operate Nuclear power plants in India.
However, the Ministry of Atomic Energy, Russia has a holding company MINATOM which is eager not
only to build power plants in India (which it is already doing) but, for a price, is willing to transfer it to
BHEL and others so that we wouldn‟t be dependant on anyone for building and operating our power
plants. Now these are water-cooled nuclear power plants which are as safe as any in the West at a
fraction of the price not the Sodium cooled ones on which Chernobyl was based so we shouldn‟t beunduly worried about unsafe nuclear power in our backyards. As for the fuel the Russians have some
500 tonnes of U-235 (the byproduct of the former USSR‟s arms buildup) which could be effectively used
for this.
3) HYDROELECTRIC
This is the cheapest source of power but causes massive environmental problems like soil erosion and
takes a long time to build, typically 10 years, without any litigation from the likes of Mrs. Medha Patkar
& Arundhati Roy. However, once a study has conclusively proved the feasibility of a project if should be
brought under an act which makes it immune to frivolous litigation.
4) STRUCTURE OF THE POWER GRID
We, like, most other nations have a unidirectional power grid i.e. one way flow of electricity from the
supplier to the consumer however in India most business houses have captive power generation due to
the lack of reliable power, why not further encourage them to ramp up their captive power production
and let them put the surplus for sale on the power grid? This will lead to reduced prices of power for the
enterprise (economies of scale) and more power to our booming economy.
The most logical today are atomic power by fusion, solar power, reusing waste, and further development
of synthetic fuels.
The atomic fusion power would be a great source if we were able to use hydrogen from the oceans as its
source. There are numerous dangers that would have to be ironed out. And last, possibly the same
Yankee ingenuity that has made this country flourish could take another step for mankind and came up
with some entirely new and effective source of energy.
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RECENT CASES OF ENERGY CRISIS
1. INDIA FACES MAJOR ENERGY CRISIS DUE TO CRUDE OIL REFINING CAPACITY AND COMPLIANCE TO
ENVIRONMENTAL CLEAN UP STANDARDS
India faces more problems that just need for reliable energy supply. Even if the Government is able to
acquire rights to Natural gas and Crude oil supplies all around the world, the problem does not end
there.
India faces a major shortage of refining capacity. As a result prices of diesel, Petrol and Kerosene can go
through the roof even if the Crude oil price moves up slowly.
The refineries all around India are old and mainly acquired from the Soviet Union many tears back. They
need to be replaced soon. They operate at a much lower capacity die to maintenance needs and cause
bad pollution all around. The refinery owned and operated by Reliance is the only one in the country that
is of world class standard and is sophisticated. It was operational approximately 22 months back and is
based on most advanced technologies in the world.
The rest of the 18 refineries are in hopeless condition. Some of those India‟s refineries cannot get rid of
the high sulphur content to produce what is internationally known as sweet crude. Many of the refineries
cannot effectively extract Kerosene through the secondary process, Kerosene is high demand since it
lights up many homes sin India.
Seven of these prehistoric 18 refineries can be modernized. But red tape and lack of operational control
is taking the country to the brink of a major energy crisis.
Raghunath Mashelkar, scientific adviser to the government recently submitted a report on the status of
the refineries to the Government. India‟s 115m-tonne refining capacity needs some major capital
investment, the report clearly mentions about the need of “substantial capital funding” to upgrade or
overhaul processes to meet global standards on quality petrol and diesel fuels.India needs US $6.5 Billion to upgrade these refineries to meet the Euro IV standard of emission by
2010. Stepping up to Euro III emission standards will also require hardship as required by next April.
According to the New Delhi-based Energy and Resources Institute (Teri), fiscal incentives are required
from the Government to move forward towards this capital investment.
2. ENERGY CRISIS FORCES INDIA TO FOCUS ON „SHIFTING THE EMPHASIS FROM PERSONAL
TRANSPORT TO PUBLIC TRANSPORT‟
India has given its go-ahead to Metro Rail projects for Mumbai, Hyderabad and Bangalore and would
provide viability gap funding for the projects in various states, Union Minister for Urban Development
Jaipal Reddy said on Friday.
The choice of deciding about the nature of gauge to be adopted in the metro rail projects has been given
to state governments, Reddy said.
In his inaugural address at ''Cityscapes 2006'', a meet on Urban infrastructure reforms with public-
private linkages, being organized by the FICCI, Reddy said metro rail projects in Hyderabad, Mumbai
and Bangalore can take off immediately.
The project proposals were pending; following the stand of Indian Railways that broad gauge should beadopted for Metro Rail projects, while many state governments preferred standard gauge.--------------
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