strategies to achieve low carbon growth

Strategies to achieve low Carbon Strategies to achieve low Carbon growthgrowth

PradeepPradeep Kumar Kumar DadhichDadhich, , Ph.DPh.DSenior Fellow, TERI, New Delhi, IndiaSenior Fellow, TERI, New Delhi, India

Presented At the Seminar onPresented At the Seminar onClimate Change: Opportunities and Challenges for the Climate Change: Opportunities and Challenges for the

CorporateCorporateIndian Institute of Management, Indian Institute of Management, LucknowLucknow

2929--30 March 200830 March 2008Venue: IIM Venue: IIM LucknowLucknow

11

OutlineOutlineKey findings of AR4 (IPCC 4Key findings of AR4 (IPCC 4thth assessment assessment report)report)Overview of IndiaOverview of India’’s Energy Sectors Energy SectorGHG mitigation potential GHG mitigation potential –– Scenario Scenario AnalysisAnalysisCost implicationsCost implicationsCCS potentialCCS potentialBarriers to CCS Barriers to CCS ConclusionsConclusions

22

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.

Attributing climate changeAttributing climate change

Do we understand the causes of the observed climate changes?

Most of the observed increase in globally averaged temperatures since the mid-20th century is very likely due to the observed increase in anthropogenic greenhouse gas concentrations.

Attributing climate changeAttributing climate change

Observations

Simulationwith natural forcings only

Simulations with natural and anthropogenic forcings

Global Annual Average TemperaturesEffects of observed climate changesEffects of observed climate changes

• Many natural systems are being affected by regional climate changes, particularly temperature increases (snow and ice, ecosystems, water)

• Effects on managed and human systems are emerging, but difficult to distinguish due to adaptation and other drivers of change

• Anthropogenic warming has likely had a discernible influence on many physical and biological systems at the global scale – but difficulties remain with attributing local changes

Figure by S. Solomon

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 We can still choose the climate in which our grandchildren will livelive

Long-term

Near-term


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

Global Annual Average TemperaturesEffects of observed climate changesEffects of observed climate changes

• Many natural systems are being affected by regional climate changes, particularly temperature increases (snow and ice, ecosystems, water)

• Effects on managed and human systems are emerging, but difficult to distinguish due to adaptation and other drivers of change

• Anthropogenic warming has likely had a discernible influence on many physical and biological systems at the global scale – but difficulties remain with attributing local changes

Figure by S. Solomon

Projected climate changes



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 We can still choose the climate in which our grandchildren will livelive

Long-term

Near-term


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

Stabilisation of greenhouse gasesStabilisation of greenhouse gases

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 CO2emissions 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

Greenhouse gas Greenhouse gas emissions/mitigationemissions/mitigation

• What are recent trends and projections of greenhouse gas emissions?

• What is the global mitigation potential?• What is the macroeconomic cost

of mitigation?• What are the key mitigation

technologies?• International cooperation

Between 1970 and 2004 global greenhouse gas Between 1970 and 2004 global greenhouse gas emissions have increased by 70 %emissions have increased by 70 %

• CO2 is the largest contributor to the growth in GHG emissions

• With current policies and practices, global GHG emissions will continue to grow by 25-90% over the next few decades

Mitigation potentialMitigation potential

Mitigation potential:Emission reduction, relative to emission baselines, that is economically attractive at a given “price of carbon”

Market potential:Based on private costs and private rates of returnExpected to occur under forecast market conditionsIncluding policies and measures currently in place Barriers limit actual uptake

Economic potential:Takes into account social costs and benefits and social rates of return, Assumes that market efficiency is improved by policies and measures and all existing barriers are removed

Economic mitigation potential could offset the Economic mitigation potential could offset the projected growth of global emissions, or reduce projected growth of global emissions, or reduce

emissions below current levelsemissions below current levels

Top-down models are consistent with bottom-up models on the overall mitigation potential, but differ at the sectoral level.

Overview of the Indian Energy Overview of the Indian Energy SectorSector

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

2121

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)

2222

EndEnd--Use ConsumptionUse Consumption

Industry sector contributes about 25 % of Industry sector contributes about 25 % of India's GDP for the year 2002India's GDP for the year 2002--0303

Industry sector is the largest consumer of Industry sector is the largest consumer of commercial energy in Indian economy commercial energy in Indian economy (40% share of commercial energy during (40% share of commercial energy during 20032003--04)04)

Seven energy intensive industries: Iron and Seven energy intensive industries: Iron and Steel, Cement, Steel, Cement, AluminiumAluminium, Fertilizer, Pulp , Fertilizer, Pulp and Paper, Fertilizers, Cotton textile, and Paper, Fertilizers, Cotton textile, ChlorChlor--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%

Sectoral Energy Consumption (2003-04)

2323

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)

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 20312424

Energy Security: High Import Energy Security: High Import DependencyDependency

2525

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 MTImport dependency: 93%

Gas import: 93 BCMImport dependency: 67%

Time trend of Import dependency

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

SectoralSectoral Commercial Energy 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

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

2626

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

Electricity Generation CapacityElectricity Generation CapacityGeneration Capacity

74 100175

466

1431

118

137

2769

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)

2727

Scenarios AnalysisScenarios Analysis

2828

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)

2929

3030

Total Primary Commercial Energy Total Primary Commercial Energy RequirementRequirement

Increase in primary energy by 20317.5 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 2001

Between 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

285 405 544760

1087

1576

2320

285

0

500

1000

1500

2000

2500

3000

3500

4000

2001 2006 2011 2016 2021 2026 2031 2036Year

(mto

e)

LG BAU REN NUC

EFF HYB HG HHYB

620

1031

Fuel wise Total Commercial Energy Fuel wise Total Commercial Energy SupplySupply

Commercial Energy supply in 2031

1176767

2008

1364

757

484

1152

709136

136

136

13140

41

40

41

0

500

1000

1500

2000

2500

3000

3500

4000

BAU HYB HG HHYB

(mto

e)

Coal Oil Natural Gas Hydro Nuclear Solar, w ind and Biodiesel

Difference in commercial energy consumption by 2031 in hybrid scenario vis-à-vis BAU: 620 mtoe, high growth vis-à-vis

Difference in coal consumption 409 mtoe(1.4 times of total commercial energy consumption in 2001)

Difference in Oil consumption 273 mtoe(96% of total commercial energy consumption in 2001)

Difference in commercial energy consumption by 2031 in hybrid scenario vis-à-vis BAU: 1031 mtoe

Difference in coal consumption 645 mtoe (2.3 times of total commercial energy consumption in 2001)

Difference in Oil consumption 444 mtoe (1.6 times of total commercial energy consumption in 2001)3131

SectoralSectoral Coal ConsumptionCoal Consumption

Coal consumption in 2031

663296

1148

581

285

146

490

253

137

219

231

37091

106

139

160

0

300

600

900

1200

1500

1800

2100

BAU HYB HG HHYB

(mto

e)

Pow er Industry (Process heating ) Ore-reduction Industry (Captive)

Maximum share of power sector in coal consumption across all scenarios followed by the industrial sector for process heating and captive power generation

Coking coal consumption is the highest in the hybrid scenario due to increased iron making through the blast furnace route

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Power sector exhibits highest reduction potential, followed by process heating in industry

Difference in coal consumption in the power sector in 2031

Hybrid vis-à-vis BAU: 367 mtoe (55% reduction)

High growth hybrid vis-à-vis high growth scenario: 568 mtoe (49% reduction)

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 2036Year

(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

3333

Analysis of COAnalysis of CO22 EmissionsEmissions

3434

Cumulative COCumulative CO22 EmissionsEmissions

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

3535

CO2 Emissions by Fuels (BAU) CO2 Emissions by Fuels (BAU)

60% 57% 54% 55% 54% 59% 64% 67%

34% 37% 38% 38% 37% 34% 32% 30%

6% 7% 7% 7% 9% 6% 4% 3%

0%

20%

40%

60%

80%

100%

2001 2006 2011 2016 2021 2026 2031 2036

Year

Per

cent

age

Gas

Oil

Coal

3636

CO2 Emissions by SectorsCO2 Emissions by Sectors

42% 39% 36% 36% 34% 38% 40%

38% 37% 39% 39% 41% 39% 39%

11% 16% 19% 20% 21% 20% 19%

0%

20%

40%

60%

80%

100%

2001 2006 2011 2016 2021 2026 2031

Year

Perc

enta

ge

Power Industry TransportResidential Agriculture Commercial

3737

CO2 Emissions Reduction CO2 Emissions Reduction ScenariosScenarios-- Without CCSWithout CCS

3838

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


1370 1328 1194 1174

1124689

597 401

686

495499

496

152

153153

150

3332

26652443

2221

0

500

1000

1500

2000

2500

3000

3500


mill

ion

tonn

es


2830 2557 2465 1971

2879

1473827

694

1377

874885

786

181

183183

183

7267

50874360

3634

0

1000

2000

3000

4000

5000

6000

7000

8000


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.)

Uptake of Power Generating Technologies Uptake of Power Generating Technologies at Various CO2 mitigation scenarios:at Various CO2 mitigation scenarios:

Without CCSWithout CCS

3939

Power Generating Technologies in 2011

8054 50 51

3

8 3 0

2326 34

20

00 0

0

6969 69

69

48 8

8

77 7

7

0

40

80

120

160

200


GW


11255 42 27

5

13 90

114

3830

16

0

49 7396

116

116 116 118

4

11 12 12

21

40 40 40

0

50

100

150

200

250

300

350

400


GW


327

55 43 28

10

146

22 5

157

86

229

0

49

237 298

158

158 160 160

4

15 15 17

21

70 70 70

0

150

300

450

600

750

BAU 30% 40% 50%

Scenario

GW

Conventional coal Clean coal Gas based H-frame Gas based

Hydro Renewables Nuclear

Power sector presents the greatest opportunity to implement CCS. With the increase of clean coal technology uptake from 10 GW in the BAU Scenario to 146 GW in the 30% reduction scenario.

GHG mitigation scenarios at various GHG mitigation scenarios at various CO2 Prices (without CCS)CO2 Prices (without CCS)

ScenarioScenario 20012001 20112011 20212021 20312031

BAUBAU 917917 16631663 33323332 72677267

$ 5/tonne$ 5/tonne 917917 14571457 24952495 50615061

$ 10/tonne$ 10/tonne 917917 14001400 24722472 49894989

$ 20/tonne$ 20/tonne 917917 13831383 24122412 49724972

Units of CO2 mitigated are in million tonnes4040

Carbon Capture Technologies

Hydrocarbon fuels

IPCC Special Report

1. Concept of Post Combustion CO2 Capture

4242

Concept of Flue Gas CO2 Recovery, Sequestration and EOR

Source: IPCC

Fertilizer Production in India

5. MHI’s Scope in a CCS Project

The CO2 Supply Chain

The supply chain for a complete CCS project is complexRequires integration of a number of industry segments A carbon price creates incentives to drive CCS project executionRegulatory framework is in the pipeline

Long term MonitoringProjects

CO2Injection EOR etc

CO2CompressionDehydration

Flue gaspre-treatment

CO2Capture

CO2CreditGeneration

CO2Transport

PowerPlant / Industrial Source Single Contractor

4343

Geological CO2 Storage PotentialGeological CO2 Storage Potential

Estimated COEstimated CO22 storage potential in storage potential in deep saline reservoirs (on and off shore) estimates ~ deep saline reservoirs (on and off shore) estimates ~ 360 GtCO360 GtCO22

Depleted oil and gas wells estimates ~ 7 GtCODepleted oil and gas wells estimates ~ 7 GtCO2 2

UnUn--mineablemineable coal seams 5 GtCOcoal seams 5 GtCO22

Volcanic rock 200 GtCOVolcanic rock 200 GtCO22

Source: Singh, A.K., Source: Singh, A.K., MendheMendhe, V., , V., GargGarg, A., 2006, , A., 2006, ““CO2 CO2 sequestration potential of geological formations in sequestration potential of geological formations in IndiaIndia””, 8, 8thth International conference on Greenhouse International conference on Greenhouse Gas Control Technologies, GHGTGas Control Technologies, GHGT--8, 8, TrondheimTrondheim, , Norway, June 19Norway, June 19--22, 2006. 22, 2006.

4444

Current CCS Activities in India Current CCS Activities in India

India is a member of CSLF & IEA GHG R&D India is a member of CSLF & IEA GHG R&D ProgrammeProgrammeIt is participating in the Future Gen It is participating in the Future Gen ProgrammeProgrammeThe Government of India has plans to invest in CCS The Government of India has plans to invest in CCS related activities in the XI & XII Five Plan (report of the related activities in the XI & XII Five Plan (report of the working group on R&D for the energy sector)working group on R&D for the energy sector)Institute of Reservoir Studies is carrying out CO2 Institute of Reservoir Studies is carrying out CO2 capture and EOR field studies in Gujaratcapture and EOR field studies in GujaratNGRI is testing the feasibility of storing CO2 in basalt NGRI is testing the feasibility of storing CO2 in basalt formationsformations

4545

Cost Range of CCS componentsCost Range of CCS componentsCCS componentCCS component Cost rangeCost rangeCapture from power plantCapture from power plant 15 15 –– 75 US $/ 75 US $/ mtmt. CO2 net captured. CO2 net captured

Capture from gas processing or Capture from gas processing or NH3 productionNH3 production

5 5 –– 55 US $/ 55 US $/ mtmt. CO2 net captured. CO2 net captured

Capture from industrial sourcesCapture from industrial sources 25 25 –– 55 US $/ 55 US $/ mtmt. CO2 net captured. CO2 net captured

TransportationTransportation 1 1 –– 8 US $/mt.CO2(250 km transported)8 US $/mt.CO2(250 km transported)

Geological storage Geological storage 0.5 0.5 –– 8 US $/8 US $/mtmt. (injected) . (injected)

Ocean storage Ocean storage 5 5 –– 30 US $/30 US $/mtmt. (injected). (injected)

Mineral carbonationMineral carbonation 50 50 –– 100 US $/100 US $/mtmt. (net mitigated). (net mitigated)

Source: IEA-GHG R&D programme (Report 2007/9)4646

Thank youThank you

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strategies to achieve low carbon growth

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