11

Strategies For low Carbon Strategies For low Carbon growthgrowth

Pradeep Kumar Dadhich, Ph.DPradeep Kumar Dadhich, Ph.DSenior Fellow, TERI, New Delhi, IndiaSenior Fellow, TERI, New Delhi, India

Climate Change Round Table Climate Change Round Table

Infraline Research and information ServicesInfraline Research and information Services

7 May 20087 May 2008

Venue: Conference Hall -II, India International Centre Venue: Conference Hall -II, India International Centre New DelhiNew Delhi

22

OutlineOutline Key findings of AR4 (IPCC 4Key findings of AR4 (IPCC 4thth

assessment report)assessment report) Overview of India’s Energy SectorOverview of India’s Energy Sector GHG mitigation potential – Scenario GHG mitigation potential – Scenario

AnalysisAnalysis Cost implicationsCost implications ConclusionsConclusions

Observed climate changeObserved climate change

Warming of the climate system is unequivocal, evident from increasing air and ocean temperatures, melting of snow and ice, and rising sea level.

ObservationsObservations

Warmest 12 years:1998, 2005, 2003, 2002, 2004, 2006, 2001, 1997, 1995, 1999, 1990, 2000

Sea-level has risen 3.1mm/year since 1993, 1.8mm/year since 1961.

Widespread retreat of glaciers, snow cover, and Arctic sea ice

Sea-level has risen 3.1mm/year since 1993, 1.8mm/year since 1961.20th century rise faster than 19th century rise.

• Temperature• Precipitation• Storm tracks, weather

patterns• Sea-level• Extremes

Projected climate changes

• Temperature• Precipitation• Storm tracks, weather

patterns• Sea-level• Extremes

Projected climate changesWe have already determined the climate in which we will retireWe have already determined the climate in which we will retireWe can still choose the climate in which our grandchildren will liveWe can still choose the climate in which our grandchildren will live

Long-term

Near-term

• Temperature• Precipitation• Storm tracks, weather

patterns• Sea-level• Extremes

Projected climate changesWe are committed to further warming even if concentrations of greenhouse gases could We are committed to further warming even if concentrations of greenhouse gases could be held constant at year 2000 levelsbe held constant at year 2000 levels

Stabilisation of greenhouse Stabilisation of greenhouse gasesgases

Stab level (ppm CO2-

eq)

Global mean temp. increase at equilibrium (ºC)

Year global CO2 needs to peak

Year global CO2 emissions back at 2000 level

Reduction in 2050 global CO2 emissions compared to 2000

445 – 490 2.0 – 2.4 2000 - 2015

2000- 2030 -85 to -50

490 – 535 2.4 – 2.8 2000 - 2020

2000- 2040 -60 to -30

535 – 590 2.8 – 3.2 2010 - 2030

2020- 2060 -30 to +5

590 – 710 3.2 – 4.0 2020 - 2060

2050- 2100 +10 to +60

710 – 855 4.0 – 4.9 2050 - 2080

+25 to +85

855 – 1130 4.9 – 6.1 2060 - 2090

+90 to +140

Mitigation efforts over the next two to three decades will have a large impact on opportunity to achieve lower stabilization levels

India’s GHG Emissions (NATCOM I)

60% of the GHG emissions are from the energy sector

29 % of the GHG emissions – energy conversion (Power & Petroleum Refining)

Overview of the Indian Overview of the Indian Energy SectorEnergy Sector

1111

Domestic coal availability Domestic coal availability

Fuels 2001 2036

Coking coal (million tonnes) 27 50

Non-coking coal (million tonnes) 299 550

Lignite (million tonnes) 25 50

1212

Natural gas availabilityNatural gas availability

2006 2011 2016 2021 2026 Domestic availability 84 123 125 125 125 LNG import 25 65 95 125 135 Transnational Pipelines Iran-Pakistan-India 0 30 90 90 90 Myanmar-India 0 0 30 30 30 Total imports 25 95 215 245 255 Total 109 218 340 370 380

Natural Gas availability (MMSCMD)

1313

End-Use ConsumptionEnd-Use Consumption

Industry sector contributes about 25 % of Industry sector contributes about 25 % of India's GDP for the year 2002-03India's GDP for the year 2002-03

Industry sector is the largest consumer of Industry sector is the largest consumer of commercial energy in Indian economy (40% commercial energy in Indian economy (40% share of commercial energy during 2003-04)share of commercial energy during 2003-04)

Seven energy intensive industries: Iron and Seven energy intensive industries: Iron and Steel, Cement, Aluminum, Fertilizer, Pulp Steel, Cement, Aluminum, Fertilizer, Pulp and Paper, Fertilizers, Cotton textile, Chlor-and Paper, Fertilizers, Cotton textile, Chlor-alkali are analyzed in detailsalkali are analyzed in details

Accounts of more than 60% of Accounts of more than 60% of commercial energy consumption of commercial energy consumption of industry sector.industry sector.

Industry40%

Transport17%

Residential13%

Agriculture8%

Commercial9%

Non-energy uses13%

Major industries are already moving towards energy efficiency pathIron and steel: Average SEC of integrated steel plants is reduced from 9.29 Gcal/tsc in 1990-91 to 7.28 Gcal/tcs in 2004-05 (22% reduction)Cement: Specific heat consumption of clinker production is reduced from 1300-1600 kcal/kg in 1950-60s to 665-800 kcal/kg of clinker at presentAverage SEC of ammonia production is reduced from 13.7 Gcal/tonne in 1985-86 to 9.30 Gcal/tonnes in 2002-03 (32% reduction)

Sectoral Energy Consumption (2003-04)

1414

Total Primary Commercial Energy Total Primary Commercial Energy RequirementRequirement

Energy use in BAU

0

500

1000

1500

2000

2500

2001 2006 2011 2016 2021 2026 2031

Year

(mto

e)

Solar +w ind

Nuclear

Hydro (large +small)

Natural Gas

Oil

Coal

Total primary commercial energy increases 7.5 times 2001 to 2031(285 mtoe to 2123 mtoe) (CAGR: 6.9%)

Share of traditional fuels to total primary energy consumption decreases by 35% to 4% (in year 2001 to 2031)

Coal and Oil remains the dominant fuels

Share of Coal: 55% in 2031

Share of Oil: 36% in 2031

Share of hydro in total commercial supply is only 2% in 2031

1515

Energy Security: High Import Energy Security: High Import DependencyDependency

75 222660

1688

285527

1046

2123

27%

42%

63%

80%

0

500

1000

1500

2000

2500

2001 2011 2021 2031

Year

mto

e

20%

30%

40%

50%

60%

70%

80%

90%

Import Consumption Import Dependency

Fuel Import in 2031Coal import: 1438 MT

~4 times of consumption in 2001

Import dependency: 78%

Oil import: 680 MT

Import dependency: 93%

Gas import: 93 BCM

Import dependency: 67%

Time trend of Import dependency

Maximum indigenous production levels for all fuels is achieved by the year 2016

1616

Sectoral Commercial Energy Sectoral Commercial Energy ConsumptionConsumption

Sectorw ise Commercial Energy Consumption in BAU

0

300

600

900

1200

1500

1800

2001 2006 2011 2016 2021 2026 2031

Year

(mto

e)

Industry Transport Residential Agriculture Commercial

Commercial energy consumption from the end-use side increases 7.5 times (in 2001-2031) (CAGR: 7%)

Share of residential sector in total final energy (including non-commercial energy) consumption decreases due to shift towards more efficient commercial fuels

The highest growth rate in oil consumption in the transport sector increases by 13.6 times (CAGR: 9%)

Shift towards more energy intensive modes of transportations both for passenger and freight movement

Trends of Sectoral Shares in Final Energy Consumption (including non-commercial)

40% 44%49% 53% 56% 58% 60%

9%

14%

18%21%

23%24% 25%45%

37%27%

20%16% 13% 11%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2001 2006 2011 2016 2021 2026 2031

Year

( %

)

Industry Transport Residential Agriculture Commercial

1717

Electricity Generation Electricity Generation CapacityCapacity

Generation Capacity

74 100175

466

1431

118

137

27

69

116

158

125

216

441

795

0

100

200

300

400

500

600

700

800

900

2001 2011 2021 2031

Year

GW

Coal Natural Gas Hydro Nuclear

Renew able Diesel Total

Total installed capacity increases by 6.34 times (CGAR: 6.3%)

Coal based capacity will remain dominant (59% in 2031) followed by hydro (20%)

Decentralized capacity will contribute 19% of the total generation capacity by 2031

Total installed capacity in 2031: 795 GW (Draft Integrated Energy Policy: 778 GW, Ministry of Power: 962 GW)

1818

Scenarios AnalysisScenarios Analysis

1919

Economy-Wide Scenarios

Socio-Economic Technology-Deployment

BAU scenario - 8% GDP growth rate (BAU)

Low-growth scenario- 6.7% GDP growth rate (LG)

High-growth scenario-10% GDP growth rate (HG)

BAU scenario (BAU)

High-nuclear capacity (NUC)

Aggressive renewable energy (REN)

High-Efficiency scenario (EFF)

Hybrid scenario (8% GDP) (HYB)

High hybrid scenario (10% GDP) (HHYB)

2020

Total Primary Commercial Energy Total Primary Commercial Energy RequirementRequirement

Increase in primary energy by 2031 7.5 times (BAU) 5.3 times (Hybrid)11.8 times (High growth) 8.2 times (High growth hybrid)

Energy consumption in hybrid scenario (8% GDP) is even less than that in low growth scenario (6.7% GDP)

Difference in commercial energy consumption

Between BAU and Hybrid in 2031 is double the total commercial energy consumption in 2001Between High-growth and High-growth hybrid in 2031 is 3.6 times the total commercial energy consumption in 2001

Total Commercial Primary Energy Supply

2123

1503

3351

285 405544

760

1087

1576

2320

285

0

500

1000

1500

2000

2500

3000

3500

4000

2001 2006 2011 2016 2021 2026 2031 2036

Year

(mtoe

)

LG BAU REN NUC

EFF HYB HG HHYB

620

1031

2121

Total commercial energy 88879 PJ

2222

Total Commercial energy 64574 PJ

2323

Energy IntensityEnergy Intensity

0.010

0.012

0.014

0.016

0.018

0.020

0.022

0.024

2001 2006 2011 2016 2021 2026 2031 2036

Year

(kgo

e/R

s of

GD

P)

LG BAU REN NUC

EFF HYB HG HHYB

BAU: Decline in energy-intensity from 0.022 kgoe/Rs. of GDP in 2001 to 0.017 kgoe/Rs. of GDP by 2031

Decrease of 23%

Even in BAU scenario Indian economy is progressing along an energy-efficient path

Hybrid scenario : Decline in energy-intensity to 0.012 kgoe/Rs. of GDP in 2031 (extent of 29% vis-à-vis BAU in 2031)

High-growth hybrid scenario: Decline in energy-intensity to 0.011 kgoe/Rs. of GDP by 2031 (50% reduction from 2001)

Progression of economy along a declining energy-intensity path if energy-efficiency measures are pursued aggressively even with a high optimistic growth rate of 10% GDP

2424

Analysis of COAnalysis of CO22 Emissions Emissions

2525

Cumulative COCumulative CO22 Emissions Emissions

Cumulative CO2 emissions lower to the extent of 25% and 29% in the high efficiency and hybrid scenarios respectively vis-à-vis the BAU scenario

Cumulative CO2 emissions higher by only 8% in the high-growth hybrid scenario vis-a-vis BAU scenario

Cumulative CO2 Emissions Across Various Scenarios (2001-2036)

12.2

16.2 15.8 15.7

12.1 11.5

25.0

17.5

0

5

10

15

20

25

30

LG BAU REN NUC EFF HYB HG HHYB

Scenario

billio

n to

nnes

2626

CO2 Emissions Reduction CO2 Emissions Reduction Scenarios- Without CCSScenarios- Without CCS

Sector wise CO2 emissions in 2011

641 621 615 621

594 485 436 374

314276 276 276

115115 115 109

16631497 1441 1379

0

300

600

900

1200

1500

1800

BAU 30% 40% 50%

Scenario

mill

ion

tonn

es

Sector wise CO2 emissions in 2021

1370 1328 1194 1174

1124689

597 401

686

495499

496

152

153153

150

3332

26652443

2221

0

500

1000

1500

2000

2500

3000

3500

BAU 30% 40% 50%

Scenario

mill

ion

ton

ne

s

Sector wise CO2 emissions in 2031

2830 2557 2465 1971

2879

1473827

694

1377

874

885786

181

183

183

183

7267

5087

4360

3634

0

1000

2000

3000

4000

5000

6000

7000

8000

BAU 30% 40% 50%

Scenario

mill

ion

tonn

es

Industry Power Transport Others Total

Time Series CO2 emissions (cumulative) reduction targets of 30%, 40% and 50% from the BAU by 2031.

Maximum reduction occurs in the power sector by deployment of clean coal technologies. (70% reduction ~ 2185 million mt.)

Technology Deployment for Power Technology Deployment for Power Generation in BAU and EFF Generation in BAU and EFF

Scenarios for 2021 & 2031 Scenarios for 2021 & 2031 in GWin GW

2727

Technology Year 2021 Year 2031BAU EFF BAU EFF

Coal Sub critical 170 92 456 135Coal Efficient 5 0 10 1Coal IGCC 0 47 0 213Gas based 118 95 137 89CCGT (H Frame GT)

0 10 0 53

Diesel 7 7 8 8Hydro (large & Small)

116 116 158 158

Nuclear 21 21 21 21Renewables 4 4 4 4Total 441 392 795 681

Challenges for India

India needs to add significant energy infrastructure

De-carbonize the energy sector by accelerating deployment of renewable energy technologies Invest in R&D, D in key technologies & energy

efficiency Huge solar energy potential ~ 5000 bn kWh Surplus agro-residue biomass – 139 mn tonnes

( total generation : 546 mn. Tonnes) (17.45% wasteland available for use)

17.0

5.7

2.4

0

4

8

12

16

20

24

28

Billi

on $

Cement

Steel

Power13.0

6.9

1.43.2

0

4

8

12

16

20

24

28

Billi

on $

Ministry ofEnvironment andForests

Department ofWomen and ChildDevelopment

Department ofElementary Educationand Literacy

Department of RuralDevelopment

Additional Investment Requirements (2012-17) for Transition to Low Carbon Path, vis a vis Select Development Outlays of GoI for Tenth Plan

The real challenge ..

3030

Thank youThank you