india: growing energy needs and mitigation options · india is at the early stages of...

1Power for All by 2012

India: Growing Energy Needs

and

Mitigation Options

Gireesh B. Pradhan, IASAdditional Secretary,

Ministry of Power, Government of India.5th May 2008


Eradicate extreme Poverty and Hunger.

Achieve universal primary education.

Promote gender equality and empower women.

Reduce child mortality.

Improve maternal health.

Combat HIV/ AIDS, malaria and other diseases.

Ensure environmental sustainability.

Develop a global partnership for development.

According to UN, all the MDGs, except for the last one, have links with

Energy Services (including electricity)

Millennium Development Goals (MDGs)


Commercial Energy Use and Human Development Indicators

INDICATOR 0-20% 21-40% 41-100%

Average Life Expectancy At Birth 59.8 69 69.5

Probability Not Surviving To 40 (Yrs)

21.7 9.4 9.1

Gross Enrollment Ratio 52.4 65.4 76.9

Children Underweight (%) 40.9 15.1 11.9

Population Without Access To Improved Water (%)

22.9 20.9 12.8


The Energy Implications Of Halving Poverty In Developing Countries By 2015

PEOPLE WITHOUT ELECTRICITY

0200400600800

10001200140016001800

2002 2015 RS 2015 MDG

MIL

LIO

NPE

OPL

E

PEOPLE RELYING ON TRADITIONAL BIOMASS

0

500

1000

1500

2000

2500

3000

2002 2015 RS 2015 MDG

MIL

LIO

NPE

OPL

E


India has been able to achieve an economic growth rate of 8%per annum during last few years; and after achieving 8.7 %growth during 2007-08, could aim at a double digit growthrate.

Growth of Industrial sector recorded 9% in the last 3 yearsand has touched a growth rate of 9.4% in 2007-08.

Gross domestic saving rate rising and reached about 35%.

There has been phenomenal growth in gross domesticinvestment which has reached 33.8%.

Foreign exchange reserves are at a very comfortable level ofabout USD 200 billion.

Strengths of Indian Economy


PARAMETERS 1991-92 1996-97 2007-08

PLF (%) 57.1 64.4 78.2

Energy Shortage (%) 7.9 11.5 9.8

Peaking Shortage (%) 16.7 18.0 16.6

Households Access to Electricity (%)

42.0 42.0 56.0

Rural Households Coverage (%)

31.0 31.0 44.0

GROWTH IN POWER SECTOR


Growth Potential in Indian Power sector

16 3584

131238

408

592 631

1000

0

200

400

600

800

1000

1200

1950 1960 1970 1980 1990 2001 2004 2006 2012

14,057

8,3197,258 6,755 6,303

2,246 1,6002,707

18,329

0

3,000

6,000

9,000

12,000

15,000

18,000

Canada USA FranceGermany UK Russia WorldAverage

Brazil China

Uni

ts

India: Low Per Capita Consumption

Growth in India’s Per Capita consumption

Projected

Uni

ts

Demand & Supply of Electricity

Growth Projections (at 9% GDP)

Particulars 2006 2012 2017 2022 2027

GenerationCapacity (GW)

124 216 333 512 790

Per capita consumption (kWh)

631 1000 1300 1900 2800

Source: Central Electricity Authority

Above figures are as on 31st March of the respective Years

Source: Planning Commission – Integrated Energy Policy, Aug 2006

Source:U.N. Development Programme, Human Development Indicators 2006

Source: Central Electricity Authority

500

700

900

1100

2 0 0 7 2 0 0 8 2 0 0 9 2 0 10 2 0 11 2 0 12

----Availibility -----Demand


GROWTH PROJECTIONS

CAPACITY REQUIREMENT (IN GW)

544

763655

962

1212

388276197

446303

206

512787

333216

0

200

400

600

800

1000

1200

1400

2011-12 2016-17 2021-22 2026-27 2031-32

7%8%9%

GENERATION (IN BU)

37993263

4793

6036

1377

27091931

982

15112221

1029

16572550

3923

1077

0

1000

2000

3000

4000

5000

6000

7000

2011-12 2016-17 2021-22 2026-27 2031-32

7%8%9%


300

22 30

COAL CRUDE OIL NATURAL GAS

Years

Years Years

# Hydro Potential of over 1,50,000 MW still to be exploited; mostlyin the North and North East

Reserve / Production (R/P) ratio

RESOURSE BASE


INDIA AND THE REST OF THE WORLD

PARAMETERS INDIA OECD WORLD

Energy Supply (Mtoe)

537.31 5548 11434

Energy Intensity (Kgoe/$PPP GDP)

0.16 0.20 0.32

Per Capita Electricity Consumption (kWh)

672 8365 2596

Per Capita CO2 Emissions (Tonnes)

1.05 11.02 4.22

Mtoe : Million tons of oil equivalent, Kgoe : Kilo gram oil equivalent


Economic Growth and Carbon Intensity

Source – Wikipedia, for the year 2004

GDP per CO2 Emissions (in thousands of US$ per metric ton)

1.936

0.497

5.373

3.670 3.663

India France U.K. Japan U.S.


Currently, India’s per-capita GHG emissions are 24% of globalaverage, 5% of the US, 12% of EU, 11% of Japan.

In cumulative terms,, India has 2% of global GHG emissions.According to World Energy Outlook’s projections, China’sshare in cumulative emissions between 1900 to 2030 would riseto 16% approaching that of the US (25%) and the EU (18%).India’s cumulative emissions are projected to reach 4% whichwould be comparable to those of Japan.

Our GHG emissions now, and for many decades to come willremain within any reasonable measure of our legitimateenvironmental space.

India’s Overall Perspective


Overarching Principles of the UNFCCC:

Article 4.7 of the UNFCCC recognizes that economic and socialdevelopment and poverty eradication are the first andoverriding priorities of the developing country Parties.

The Preamble also recognizes that the share of global emissionsoriginating in developing countries will grow to meet their socialand development needs, and that their per-capita emissions arestill relatively low.

Non-negotiated initiatives outside the UNFCCC process inwhich all Parties are not necessarily represented cannot furnishinputs to the UNFCCC process : Reference is to “RenewablesInitiative” (Germany), “Energy Initiative” (UK), etc.

India’s Overall Perspective: Cont..


India’s per-capita consumption of electricity and per capita CO2

emissions amongst the lowest in the world.

A large proportion of the country’s population lives below

poverty line (BPL).

Over 50% of population without access to electricity. Some 70

households use traditional biomass for cooking.

India is at the early stages of industrialization and the economic

development – Convergence in per capita income level, energy

consumption and CO2 emission would happen as development

reaches the level of OECD countries.


Contd…


Feasible hydro potential shall be fully developed. All hydro

irrespective of size is renewable. We have negotiated hard

against narrower definition which excludes large hydro.

Strong programme for development of other renewable and

non- conventional sources also. Good achievement in exploiting

wind energy potential – Fourth largest in the world.

Electricity Act gives preferential treatment to energy from non-

conventional resources.

Access to fuel remains the key issue for development of nuclear


Contd…


Dependence on fossil fuels would remain in the short andmedium term - IEA also projects this.Availability and pricing issues for usage of gas.Abundant coal reserves, future electricity needs to be metprimarily from coal.Usage of clean coal technologies if cost effective. (IGCC)Energy efficiency is being promoted vigorously.Super Critical Technology : NTPC, UMPP.Tariff Policy lays down road - map for reduction of crosssubsidies.



Improved Efficiencies Reduce Carbon Emissions

Current U.S. Plants

Today’s State-of-Art

DOE’s 2020Goal

Gas Turbine

Gas TurbineCombined Cycle

% Efficiency, HHV

Tons

CO

2pe

r MW

h

0.2

0.6

1.0

1.4

20 30 40 50 60

Coal-Fueled Natural Gas


The Goal

Need to develop tailor made

TechnologiesTransfer of

TechnologyDevelopment of

indigenous base

Efficient Power

Reliability

Efficiency

Clean Power

SPM Level

CO2 Seqs

The Impediment

The Coal

The Climate

The Technology

Hot Climate:♦ Low Condenser Vacuum & Boiler Eff♦ No requirement of District Heating

♦ Very High Ash Content: 40% - 50%♦ Low Heating Value: 2500–3500 Kcal/Kg

Th

eS o l u t i on

Projected scenario for future


Deployment of CCS ??

Discussions in the context of Clean Coal Technologies

Wide spectrum – supercritical, IGCC ,CCS

Different levels of commercialization and development

Our stand –we will deploy what is cost effective and safe

We are using Supercritical –NTPC, UMPP

IGCC -- yet to become commercial, 30% extra cost

CCS – will double the cost of power generation, concerns about safetyof storage

Demonstration Plants not to be located in densely populateddeveloping countries.

The difference between greener technologies and existing technologiesto be funded by developed countries as part of ‘DifferentiatedResponsibilities’


Energy Efficiency and Demand Side Management relevant for

- Avoiding fresh generating capacity

- Flatten the load curve- Savings of energy and cost

Measures initiated : - CFL programmes in States- Standards and Labeling

program.- Energy Efficiency

programmes in existing buildings

- Energy Conservation Building Codes (ECBC)

- Capacity building of SDAs- Demand Side

Management in Agriculture, Municipality, SMEs

- Designated Consumers and implementation of EC Act

Barriers for EE & DSM to be removed.The State Regulatory Commissions and Utilities to be encouraged to implement the Conservation initiativesEngagement of Stakeholders

Industrial and Commercial users- Regulatory interventions to

promote conservation.- Incentives to industry to adopt

conservation/ efficiency measures

States- Encourage implementation of

DSM programmes in Agriculture/ Municipalities

Domestic consumers- Ensuring availability at low cost

and promoting use of low cost CFLs.

- Awareness

Strategy / Line of Action Issues to be addressed

Energy Conservation potential assessed as at present

- 20000MW

Potential harnessed :

- During Xth Plan period

- 877 * MW

- Target for XIth

Plan period - 10000

MW

* Only as indicated byparticipating units in theNational Energy Conservationaward scheme, for theprevious five years.

Energy Conservation & Efficiency Action Plan


Barriers to the Efficient Use of Energy

Energy conservation, and the choice of energy-efficienttechnologies, are win-win options● Many win-win choices are not easily adopted

Market barriers constrain adoption of win-win options● Comparative energy use information is unavailable● First cost is higher than those of energy-inefficient

options● Costs and benefits accrue to different people● Uncertainty of operating costs, performance and

reliability, especially of new technologies and practices,deters investments by users and financiers


Energy Conservation Act, 2001, addresses some market failuresby enabling:● Setting of minimum energy standards for, and affixing

energy-consumption labels on appliances and equipment● Promulgation of Energy Conservation Building Codes● Energy use monitoring, verification and reporting by large

energy users, and the establishment of energy consumptionnorms for these consumers

BEE set up to promote:● Demand-side management by distribution companies● Enhancing energy conservation in exiting buildings,

especially through Energy Service Companies (ESCOs)● Outreach and awareness programmes

Legal and Policy Interventions to Promote Energy Efficiency


Demand Side Interventions- Potentialand Opportunities

Sectoral Intervention

Potential Energy Savings

Likely Investments by Private Sector

Agriculture+ 60 b KWh 3.75 billion USDMunicipalities* 3.7 b KWh 0.4 billion USD

Buildings* 3.52 b KWh 0.3 billion USD

Industry* 98 b KWh 6 billion USD

Lighting+ 70 b KWh 1 billion USD

+ Source: BEE, Ministry of Power, Government of India

* ADB (2004)


Approach and Methodology- Energy Efficiency Action PlanSector specific approach- barriers being addressed separatelyin each sector- e.g.. Use of CDM to reduce cost of CFL underBLY, creation of DPRs and provision of financing foragriculture/ municipal and buildings, capacity building for useof ECBC for commercial sector.Adopting sectoral approach by facilitating creation of marketsfor energy efficiencyEmphasis on conducive environment, handholding of earlymovers8 Different sector specific schemes being implemented to takenote of this requirement


CDM Based CFL Scheme


CDM Based CFL Scheme- BachatLamp Yojana (BLY)

Scheme seeks to replace estimated 400 million incandescentbulbs by CFLs- could save 6000 MW by 2012

BEE has prepared a Programme of Activities (PoA) as avoluntary coordinated effort to facilitate the scheme in theentire country and reduce transaction costs

18 CFL manufacturers/ suppliers have agreed to participate-14 states have initiated the scheme

Monitoring Plan finalised

2 pilot projects in Haryana and Andhra Pradesh submitted toCDM Executive Board for registration

Leveraging of CDM revenues to remove the high first costbarrier- market transformation in favour of efficient lighting


Standards and Labeling Programme


Standards & Labeling Programme

The National Energy Labeling Programme launched byHon’ble Union Minister of Power on 18th May, 2006.

• To create appropriate legal and regulatory environment forenergy efficient end use products

• To provide the consumer an informed choice about energysaving by using efficient devices

• To gear up Indian industry to compete in markets that havemade/ are making such standards mandatory e.g.. US or EU

• To stimulate market transformation in favour of energyefficient equipments and appliances- both from supply anddemand side

• To reduce overall energy consumption by use of suchequipments/ appliances- 18 BU by 2012 (~3000 MW)

• To provide assistance/ support to Small & MediumManufacturers


• Voluntary labeling for ACs, Refrigerators, Tube lights (TL), motors and Distribution Transformers already in place

• 90% of TL, 80% of Refrigeration and 75% of AC industry on board

• Consumer awareness campaign launched• Independent institutional mechanism for check and

challenge testing on random basis for labeled equipments being conducted.

• Regulation for mandatory labeling under section 14 of the Energy Conservation Act to be notified

• Preliminary results for 2007-08 indicate energy savings by use of these equipments equivalent to about 300 MW of capacity

Standards & Labeling Programme…


Statutory agencies at state level to implement EC Act- key toimplement EC Act at State levelCapacity building necessary to enable them to dischargeregulatory, facilitative and enforcement functions under theActInstitutional capacity limited- both in terms of human andinfrastructure resourcesMost states have notified SDAs in the last 2 yearsHand holding necessary to ensure balanced implementation ofAct30 States have designated their agencies so far

State Designated Agency (SDA)Program


Energy Conservation Building Code (ECBC)


Energy Conservation Building Code (ECBC)

Covers new commercial buildings

Building components included● Building Envelope (Walls, Roofs, Windows)● Lighting (Indoor and Outdoor)● Heating Ventilation and Air Conditioning (HVAC) System● Solar Water Heating and Pumping● Electrical Systems (Power Factor, Transformers)● Potential to save 1.7 billion units annually on mandatory

application● Expected reduction in XI plan 500 MW

ECBC launched by MOP on 27.5.2007 for five climatic zones


Easy to use guides, tip sheets launched Panel of architects prepared to help dissemination of ECBCCurriculum enhancement in architectural institutions taken upCPWD and some other Government agencies taking the lead in ECBC implementationSurvey indicates about 306 buildings being constructed in the country which are ECBC complaint- will result is an estimated avoided capacity addition of 300 MW on completionExisting Buildings Energy Efficiency (EE)Over 500 government buildings being taken up for EE ESCOs being short listed- accreditation of ESCOs by CRISIL/ ICRA being initiated to improve credibilityStandardised performance contract documents developedInnovative financial instruments being developed to mainstream ESCO based EE

ECBC Programme…


Agriculture and Municipal DSM


Agricultural & Municipal DSM

• Over 35% of electricity consumed by Agriculture andMunicipal sector

• High inefficiencies in pumping system- targeted through asubsidy reduction approach

• Business model linked to subsidy reduction being evolved• Shelf of bankable DPRs to be prepared- 10 in each states (total

350) to stimulate the market• Baseline development, conducive regulatory regime and

payment security mechanism being worked out.• Awareness and outreach to local and municipal bodies• Manual for Mu DSM being developed with standard contract

documents to enable easier implementation• Risk mitigation measures for encouraging PPP being evolved

CDM benefits for the scheme being put in.


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