Energy Scenario in India by Prayaas


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Energy Scenario in India by Prayaas (Ashwini Chitnis) at Sambhaavnaa Institute

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  • New infrastructure will be with us for 100 years How cities and transportation networks are organized Buildings, power plants, roads, factories, etc. It is an opportunity that India can leap-frog and shape its energy future Limits on pace of adding power plants Between 2027-32 we need to add 40,000 MW / year Siting of power plants is already vey difficult Environmental, displacement, land and water concerns Resource constraints Increased import dependence even of coal (no coal plan addition possible after 2030 on domestic coal) Global environmental constraints 
  • Energy Scenario in India by Prayaas

    1. 1. The Energy Scenario in India- Placing Nuke in Context Ashwini Chitnis & Ashwin Gambhir Prayas (Energy Group), Pune NUCLEAR ENERGY: Examining the impacts, conflicts and controversies Sambhavnaa: The Institute of Public Policy & Politics Dec 17-19, 2011, Palampur, HP
    2. 2. About Prayas Energy Group (PEG) <ul><ul><li>‘ Prayas’ means ‘Focused Effort’ </li></ul></ul><ul><ul><li>Voluntary Org, based at Pune, India </li></ul></ul><ul><ul><li>PEG works on theoretical, conceptual and policy issues in the energy and electricity sectors. </li></ul></ul><ul><ul><li>Based on a comprehensive, analysis-based approach for furthering the ‘public interest’. </li></ul></ul><ul><ul><li>Research & Interventions (regulatory, policy). </li></ul></ul><ul><ul><li>Civil Society training, awareness, and support. </li></ul></ul>
    3. 3. Outline of discussion <ul><li>Snap shot of present Energy/Power Sector </li></ul><ul><li>Energy & Poor </li></ul><ul><li>Demand growth estimates / forecasts </li></ul><ul><li>Supply Options for meeting the growth in demand </li></ul><ul><li>Placing Nuclear energy in the overall context </li></ul><ul><li>Concluding remarks </li></ul>
    4. 4. In comparison US,EU and China spend ~ 2% of GDP on fossil imports
    5. 5. Power Sector Status <ul><li>Present Installed capacity ~ 183 GW ( Nuclear 2% ) </li></ul><ul><li>2010-11 Generation ~ 950 BU (incl captive) ( nuclear 2.7% ) </li></ul><ul><li>Un electrified population ~ 25-30 cr </li></ul><ul><li>Un electrified villages ~ 10% or 60,000 </li></ul><ul><li>Per capita usage of electricity very low ~ 566 kWh (2008) </li></ul><ul><li>Peak Load shortage -13% ; Electricity Shortage ~10% </li></ul><ul><li>RGGVY – 1.8 cr HHs electrified since 2005 </li></ul><ul><li>Coal shortages and price increases with rising imports </li></ul><ul><li>Limited Nat Gas and Hydro Potential </li></ul><ul><li>Financial health of Utilities worsening (~70,000 cr losses in 2010-11) </li></ul>
    6. 6. Break-up of Installed Generation Capacity of 210 GW (2010-11) Break-up of Actual Generation of 900 TWh (2009-10)
    7. 7. Energy & Poor
    8. 8. Electricity–HDI linkage: International Experience <ul><li>(a) India is in the region where steep increase in HDI is seen with increase in electricity use, (b) Several countries have managed to achieve high HDI with similar electricity use as that of India  need for direct action for improved HDI. </li></ul>
    9. 9. Households by electricity use (kWh/month) Very highly skewed distribution! Only 10% Households have monthly electricity bills more than ~ Rs 300. Source: Prayas analysis of State ERC orders
    10. 10. Electricity and Poor <ul><li>2/3 rd population does not have access to reliable electricity. </li></ul><ul><ul><li>More than 1/4 th of population is without electricity connection </li></ul></ul><ul><ul><li>Another third does not get it when it wants is </li></ul></ul><ul><li>~ 20-30 GW would provide basic services to all un-electrified houses and associated public services. </li></ul><ul><li>Urgent attention, structural provisions for reliable supply to poor is required </li></ul>
    11. 11. Demand growth estimates / forecasts
    12. 12. Power Sector Demand Forecast <ul><li>Approximately 100% increase in capacity by 2020 based on various forecasts </li></ul>117 GW of thermal projects (mainly coal) under construction (as on 16 th Nov 2010) GW TWh 2009-10 Generation 186 914 2020 Demand Projection World Bank Low Carbon report 426 2020 Mckinsey Report; Ref case   1870 CSE Report; BAU   1751 CEA 17th EPS projection   1914   IEP (8% growth) 425 2118
    13. 13. Electricity Demand Projection – IEP, PC Assumes - 63 GW from nuclear power and 150 GW from hydro power in 2031-32 Addition of ~185 GW of Base Load Thermal capacity *Source Integrated Energy Policy (PC, GoI) 2006, numbers are indicative
    14. 14. Supply options to meet the increasing demand
    15. 15. Electricity – Options <ul><li>Large Hydro: limited role </li></ul><ul><li>Coal: Production Constraints, but resource constraint remains (after 2030, possibly earlier); high cost imports rising steeply </li></ul><ul><li>Gas: limited availability </li></ul><ul><li>Efficiency : Large low-cost potential (60-90 GW by 2020), institutional and implementation barriers </li></ul><ul><li>Rnewable Energy (RE) : </li></ul><ul><ul><li>Already a high installed capacity. </li></ul></ul><ul><ul><li>Push by private profits, Govt projecting low cost impact to avoid opposition. </li></ul></ul><ul><ul><li>Going forward cost reduction, deployment for appropriate use, and preventing the poor from tariff impact </li></ul></ul><ul><li>Nuclear: Limited role in medium term, long term is highly uncertain </li></ul>
    16. 16. Role of renewable energy
    17. 17. RE potential and prices <ul><li>Revised wind power potential significantly different from earlier estimates; from 50 GW to 500-1000 GW. </li></ul><ul><li>PV prices are plummeting. Studies suggesting grid parity in India by 2017-20. Resource practically unlimited. </li></ul><ul><li>NAPCC has recommended 15% target by 2020. What level of RE targets to support; what level of tariff impact ok? 15% RE by 2022 will have impact of ~ 15 p/kWh; absolute additional requirement of Rs 25,000 cr </li></ul><ul><li>RE (non-solar) is quite cost competitive with new conventional capacity addition. In the range of ~ 4/kWh. </li></ul><ul><li>Solar prices are dropping sharply, last auction of 350 MWs discovered an average price of Rs 8.7/kWh, bids as low as 7.5. </li></ul>
    18. 18. The flip side of RE <ul><li>Who will bear the higher incremental cost of RE, especially at a time when the DISCOMs are 70,000 cr in losses? </li></ul><ul><li>There is need for a equitable sharing of this cost where in high use consumers (industrial, commercial and high use residential) pay for RE through Green Cess or differential pricing through Tariff Policy </li></ul><ul><li>RE is not just about deployment, but the country needs to focus as much on Manufacturing. </li></ul><ul><li>There is a need for long term integrated planning with far greater coordination between MNRE, MoP, ERCs, CEA etc. (ex: Tx infra planning, equity in state RPOs etc) </li></ul><ul><li>Efficient Procurement policies based on competitive bidding to lower retail tariff impacts on consumer, which in turn will help increase targets. </li></ul>
    19. 19. RE principles <ul><li>Why RE? (energy security, mitigate local pollution, </li></ul><ul><ul><li>mitigate GHG emissions, augment supply, </li></ul></ul><ul><ul><li>promote Indian manufacturing and industry, reduce price volatility etc) </li></ul></ul><ul><li>How much RE? (National target – based on clear principles and priorities, </li></ul><ul><ul><li>RE targets linked to reasonable tariff impacts, </li></ul></ul><ul><ul><li>sustainable growth, grid handling capacity etc) </li></ul></ul><ul><li>How to do RE? (Ensure socially equitable tariff impact across consumers and fair burden sharing of the national objective amongst all states, </li></ul><ul><ul><li>Incentivizing cost and price reduction of RE through transparent and efficient procurement mechanisms, </li></ul></ul><ul><ul><li>ensuring social inclusion and protection of local environment, </li></ul></ul><ul><ul><li>c reate level playing field within renewables, </li></ul></ul><ul><ul><li>RE development needs to be strategic – integral to technology-industry-manufacturing policy, incentivize generation equipment over consumption equip.) </li></ul></ul>
    20. 20. Large Solar push in India <ul><li>National Solar Mission – 22 GW by 2022 </li></ul><ul><ul><li>Deployment goal by 2013 (1 st Ph): </li></ul></ul><ul><ul><li>500MW Large Thermal, 500MW Large PV, </li></ul></ul><ul><ul><li>100MW Rooftop PV; 200MW Off-grid PV </li></ul></ul><ul><li>States like Gujarat and Rajasthan pushing own solar policies and incentives. Karnataka and TN following. </li></ul><ul><li>Tariff policy changed to include solar specific RPOs with target of 3% by 2022. (Tariff impact crucial for sustainability) </li></ul><ul><li>12 th plan targets quite high. </li></ul><ul><ul><li>~ 10,000 MW grid connected </li></ul></ul><ul><ul><li>~ 2000 MW off-grid </li></ul></ul>
    21. 21. DRE <ul><ul><li>Greater focus is needed on DRE, which can provide quick access in the transition period. Far greater social impact. </li></ul></ul><ul><ul><li>Equity in pricing through regulated prices. </li></ul></ul><ul><ul><li>Move away from capital subsides to performance oriented ones . </li></ul></ul><ul><ul><li>Grid compatibility (feed in/isolate; avoid conflict with grid expansion, more synergy and co-benefits) </li></ul></ul><ul><li>Structured and comprehensive M&V with redefined result framework; </li></ul><ul><ul><li>Focus efforts on results (no of working systems and electricity generated etc) more than activities and inputs (no of installations and installed capacity). </li></ul></ul><ul><ul><li>Ensure accountability and improve effectiveness and sustainability </li></ul></ul><ul><li>High technical standards and warranties & multi year O&M; </li></ul><ul><li>Grievance redressal mechanism via toll free number </li></ul>
    22. 22. Role of Energy efficiency
    23. 23. Why energy efficiency ? <ul><li>More output per unit of energy </li></ul><ul><li>A low cost option to meet energy demand </li></ul><ul><li>Avoided capacity addition = Avoided emissions </li></ul>Cost of energy efficiency is much lower than the cost of another green option of renewable energy Source: LBNL and RAP
    24. 24. Change Nature of Discourse on EE EE should be seen as indispensable as power plants, in avoiding shortages, facilitating growth and maintaining competitiveness. [Resource constraints, Energy security, local social and environmental issues] 70% of infrastructure that will be in place by 2030 – is still to be built ! Numbers are only indicative (to show implications of consideration).
    25. 25. Why energy efficient appliances ? <ul><li>Large efficiency gap – which would not be met without such policy intervention </li></ul><ul><li>Residential consumption from appliances was 21% of the total electricity consumption in 2007-08 (CEA) </li></ul><ul><li>Room air-conditioners(RAC), refrigerators televisions, ceiling fans account for about 50% of this. </li></ul><ul><li>Average life more </li></ul><ul><li>than 10 years </li></ul><ul><li>Long term locked- </li></ul><ul><li>in savings </li></ul>Residential Electricity Consumption distribution for 2008. Source: Prayas Energy group study, 2009
    26. 26. Urgency for promoting super efficient appliances Increasing stock of appliances due to booming sales caused by consistent high economic growth Super efficient appliances (SEA), 40-70% more efficient than the current stock, are commercially available in international markets RAC: Room air-conditioners Large, permanent savings possible if urgent steps are taken to ensure new appliances are super-efficient
    27. 27. Role of Nuclear
    28. 28.
    29. 29. Placing Nuke in context <ul><li>12/13 th plan targets all over the place, quite misleading, highly optimistic for 13 th plan. </li></ul><ul><li>2011 – global nuclear capacity fell by 10 GW, while just the wind and solar PV capacity is set to increase by 44 GW and 23 GW respectively, 67 GW in total vs – 10 GW. </li></ul><ul><li>Nuclear with a gestation of 10 years is not a panacea for today’s shortages. </li></ul><ul><li>A true cost comparison with nuclear plants starting construction today with wind and solar prices in 2020 (surely much lower than nuclear in that time frame). </li></ul><ul><li>Very marginal role in Indian power sector today, very unlikely that role would reverse for a variety of reasons. </li></ul><ul><li>Pure economics of RE and EE would beat nuclear today and most certainly when the first new nuclear plants come online. </li></ul>
    30. 30. Concluding remarks
    31. 31. Development, Energy, and Climate <ul><li>Indian Energy use and emissions are low compared to industrialized countries…. BUT </li></ul><ul><li>We need to search for Sustainable development options for India, quickly due to factors like </li></ul><ul><ul><li>Constraints on energy use, arising from (a) limited domestic energy resources, (b) climate constraints, and (c) land, water and social issues related to energy projects </li></ul></ul><ul><ul><li>High cost of renewable energy, </li></ul></ul><ul><ul><li>Very high inequity (large population is energy poor) </li></ul></ul>
    32. 32. Reduce Energy Requirement <ul><li>Indian economic growth, wellbeing of people is constrained by energy </li></ul><ul><li>Large potential of Energy Efficiency needs to be actualized </li></ul><ul><ul><li>Link energy tariff to energy consumption norm for Commercial buildings </li></ul></ul><ul><ul><li>Industry: discourage inefficient plants from setting up </li></ul></ul><ul><ul><li>Appliances: Assist manufacturers to introduce Super Efficient Appliances (as poor Indian consumers are very cost sensitive) </li></ul></ul>
    33. 33. Looking beyond 2020 <ul><li>BAU is simply impractical and unsustainable. [Land, water, fuel, climate, other resources] </li></ul><ul><li>Relook at type of industrialisation - future development paradigm </li></ul><ul><li>Tariff policy to discourage excessive, luxury use of energy. </li></ul><ul><li>More electricity needed, but </li></ul><ul><ul><li>Immediate attention to needs of poor </li></ul></ul><ul><ul><li>Earnest action for Energy Efficiency (more important than gas, nuclear, hydro put together) </li></ul></ul><ul><ul><li>Long term planning for Renewables. </li></ul></ul>
    34. 34. Important linkages, are quite flexible <ul><li>Development – Growth – Energy – Emissions </li></ul><ul><li> A B C </li></ul>Very little discussion about the first link of development (Techno-fix v/s political-economy solution). Pro-people policies may lead to faster reduction in poverty than BAU economic growth. 3E (equity - environment - economy approach)
    35. 35. Conclusions <ul><li>Access to modern energy services is a fundamental prerequisite for poverty reduction and sustainable human development - people without access are constrained to a life of poverty. Source: Practical Action (2010) Poor People’s Energy Outlook 2010. Rugby, UK. </li></ul><ul><li>Our priority should be development ( needs of neediest, increasing self reliance and sustainable in the long run, i.e. in harmony with the environment ) and energy plays a very crucial role, an important tool for development. </li></ul><ul><li>Change of paradigm – </li></ul><ul><ul><li>from macro-growth to development (3E), </li></ul></ul><ul><ul><li>from supply to demand side thinking, </li></ul></ul><ul><ul><li>from fossil fuels to EE and RE in the long run. </li></ul></ul>
    36. 36. THANK YOU Prayas Energy Group ashwini [at] prayaspune [dot] org ashwin [at] prayaspune [dot] org