Energy crisis


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Energy crisis

  1. 1. An energy crisis is any great bottleneck (or price rise) in the supply of energy resources to an economy. In popular literature though, it often refers to one of the energy sources used at a certain time and place, particularly those that supply national electricity grids or serve as fuel for vehicles. There has been an enormous increase in the global demand for energy in recent years as a result of industrial development and population growth. Supply of energy is, therefore, far less than the actual demand.<br />Causes<br />Market failure is possible when monopoly manipulation of markets occurs. A crisis can develop due to industrial actions like union organized strikes and government embargoes. The cause may beover-consumption, aging infrastructure, choke point disruption or bottlenecks at oil refineries and port facilities that restrict fuel supply. An emergency may emerge during unusually cold winters due to increased consumption of energy.<br />Pipeline failures and other accidents may cause minor interruptions to energy supplies. A crisis could possibly emerge after infrastructure damage from severe weather. Attacks by terrorists or  HYPERLINK "" o "Militia" militiaon important infrastructure are a possible problem for energy consumers, with a successful strike on a Middle East facility potentially causing global shortages. Political events, for example, when governments change due to regime change, monarchy collapse, military occupation, and coup may disrupt oil and gas production and create shortages<br />Future and alternative energy sources<br />In response to the petroleum crisis, the principles of green energy and sustainable living movements gain popularity. This has led to increasing interest in alternate power/fuel research such as fuel cell technology, liquid nitrogen economy, hydrogen fuel, methanol, biodiesel,  HYPERLINK "" o "Karrick process" Karrick process, solar energy, artificial photosynthesis, geothermal energy, Space-based solar power, tidal energy, wave power, and wind energy, and fusion power. To date, only hydroelectricity and nuclear power have been significant alternatives to fossil fuel.<br />Hydrogen gas is currently produced at a net energy loss from natural gas, which is also experiencing declining production in North America and elsewhere. When not produced from natural gas, hydrogen still needs another source of energy to create it, also at a loss during the process. This has led to hydrogen being regarded as a 'carrier' of energy, like electricity, rather than a 'source'. The unproven dehydrogenating process has also been suggested for the use water as an energy source.<br />Efficiency mechanisms such as  HYPERLINK "" o "Negawatt power" Negawatt power can encourage significantly more effective use of current generating capacity. It is a term used to describe the trading of increased efficiency, using consumption efficiency to increase available market supply rather than by increasing plant generation capacity. As such, it is a demand-side as opposed to a supply-side measure.<br />Biomass materials have been in use since man’s cave-dwelling days for meeting various human needs including energy. The main sources of biomass energy are trees, agricultural products and animal waste. Until the middle of 19th century, biomass dominated the global energy supply with about seventy percent share. Biomass remains the primary energy source in the developing countries in Asia even today. Share of biomass in energy varies – from a very high over 75 in Nepal, Laos, Bhutan, Cambodia, Sri Lanka and Myanmar; nearly 50 percent in Vietnam, Pakistan and Philippines; nearly 33 percent in India and Indonesia, to a low 10 percent in China and 7 percent in Malaysia as reported by FAO.<br />Abundant Raw Material available for Biomass Energy in Rural Bihar<br />India has a long history of energy planning and programme interventions. Programmes for promoting biogas and improved cookimg stoves began as early as 1940’s. Afforestation and rural electrification programmes are being pursued since 1950’s. A decade before the oil crisis of 1973, India appointed the Energy Survey Committee. The national biomass policy originated later, in the decade of 1970’s, as a component of rural and renewable energy policies as a response to rural energy crisis and oil imports.<br />Among the biomass energy sources, wood fuels are the most prominent. With rapid increase in fossil fuel use, the share of biomass in total energy declined steadily through substitution by coal in the nineteenth century and later by refined oil and gas during the twentieth century. Despite its declining share in energy, global consumption of wood energy has continued to grow. In coming times biomass can meet some of this increasing energy demand, particularly in rural India as agriculture is the major source of livelihood. Biomass is generated in very huge quantity through agriculture, but it is not being managed properly. In this context the main questions are:<br />1. What will be production costs for a specific utilization path in a region?<br />2. Is it possible to produce the biomass-based energy competitively?<br />3. How to attract investments in Biomass Energy Sector?<br />4. What plant sizes should be practical and viable?<br />5. How many production sites are reasonable in any specific area?<br />6. What is better, a central plant or a decentralized concept with transportation of raw material and product?<br />According to a recent document published by Climate Change Community of Solution Exchange over 1.5 billion people are dependent on biomass for fulfilling their energy needs worldwide. India imports fossil fuels worth US $ 100 billion to meet 70% of its energy requirements. Exploring the potential of renewable energy is crucial for energy, economic security and also for Climate Change mitigation. Biomass contributes to around 30% of the total primary energy consumed in India and has potential of about 78,500 MW.<br />Biomass Energy Production – Husk Power System<br />Agricultural residues can be utilized in India in mass scale for generating Biomass energy. About 225 million Tons of agricultural residue is burnt in fields every year. Technologies are available to utilize them as raw material for generation of Biomass energy, but awareness, technical and financial support is essential for dissemination. Involvement of Self Help Groups for managing agricultural residues is very important in adopting this alternative energy source. Equally important is development of transmission line for biomass energy. There are many challenges in promotion and popularization of Biomass Energy:<br />Restrictive perception of biomass as a traditional fuel for meeting rural energy needs and focus on the supply-side push.<br />Since energy markets are non-existent or weak in rural areas, the traditional approach did not consider any role for market in promoting biomass supply or efficient use.<br />Limited capacity to assess and adopt technological options.<br />Lack of funds for research and development.<br />Few incentives for investment in biomass energy sector.<br />Limited number of skilled professionals.<br />High charges by the distribution company preventing third party sale.<br />Husk Power System working in Bihar for supply of Biomass Power is one of great success stories in this field .This company illuminated the first village from its first 100% biomass based power plant that uses discarded rice husks to generate electricity in August 2007, and today it is the leading company to promote Biomass Energy for Rural India. Beginning with Tamkuha in Bihar, the ‘Husk Power System’ designed by NRI entrepreneur Gyanesh Pandey has gone on to dispel darkness in a large number of villages since its inception in India. Husk Power’s technology is simple by design: It utilizes waste from rice paddies as raw material and through biomass gasification process a clean fuel is produced to run a generator. Gasification is a technology that was developed since a century ago. Gasification technology developed quite well during the Second World War. However, this technology given up when liquid fuel became easily available at cheaper rate. Now again this technology is gaining popularity because of environmental and economic factors. Gasification is basically a thermo chemical process that converts biomass into gaseous fuel through a gasification medium in the form of air, moisture or oxygen. Gas products in Gasification are commonly described as syngas or synthesis gas.<br />The prestigious Ashden Awards for Sustainable Energy recognized Husk Power Systems last month for its work in rural electrification and empowerment in Bihar, India. It is estimated that the company has set up 65 rice husk based power generation plants, which serve over 25,000 households in one of the poorest regions of India. The company’s mission is ‘Tamaso ma jyotir gamaya’ or ‘From darkness to light’. Husk Power system is leading a revolution in electrification, helping the low-income people of Bihar out of the oppressive cycle of poverty by lighting their lives. With some more technological innovations and adaptations to local conditions the model of Husk Power System may be replicated on a large scale in rural Bihar and it may be a very significant tool for poverty alleviation. I Congratulate Mr.Gyanesh Panday and Husk Power system for their innovation and initiative to provide clean and green energy to rural Bihar, and also for Ashden Award.<br />Future of biomass energy in India depends on providing reliable energy services at competitive cost. India has a Potential of 5000 MW of bagasse based and 16881 MW of agro residue based power production , but only 1338 MW and 861 MW respectively has been achieved till March, 2010.This gap can bridged only only if biomass energy services can compete on a fair market. Equally important is establishment of reliable transmission line for uninterrupted power supply. Policy priorities should be to orient biomass energy services towards market demand and forces. Most economical option for generation of biomass energy is utilization of waste materials. However, biomass waste is not sufficient to support the growing demands for biomass resources. Sustained supply of biomass shall require production of energy crops and wood plantations for meeting growing non-energy needs. Land supply, enhanced biomass productivity, economic operations of plantations and logistics infrastructure are critical areas which will decide the future of biomass energy in India.<br />Growing concern & Energy crisisPower in India, way to go Prime Minister Atal Bihari Vajpayee's recent china visit was forget to note that, the less and less power cuts even in remotest parts of the country. Though the visit was debated more for the political and strategic reasons, India has to learn a lot from china on how to electrify remote villages. This is so particularly when India has come out with a radical electricity generation bill that allows everybody to generate and distribute power.The country's per capita consumption of electricity is about 400 kw/hr. We need to add over 1,00,000 mw in next10 years. According to the government, that electricity made available for all villages by 2012. And 41,000 mw of electricity will be generated during the 10 th plan and about 60,000 mw during the next five years.Above all to follow the Chaina's electrification policy and example like the very neighboring country Nepal . Electricity has to be used locally to avoid transmission loss, micro and mini-projects and the community participation for the suitable implementation. The rural electrification programme in India faced a similar challenge of electrifying vast inaccessible areas.In 1960s, Chaina implemented to electrify around 48% of its total remote areas. It adopted the now-famous self-construction, self-management and self-consumption policy where the local administration owned and implemented small hydropower projects. The money comes from the local sources only. Unlike India , the Chaina government limited its role to that of an observer. Simultaneously it enforced technical standards and funded research into new technologies. The result was amazing: around 300 million people in rural areas got electricity through small hydropower station they built and maintained. In 1975, only 50.6 percent of villages were electrified, unbelievably in 1996 it reached to 94.3 percent.In 1985 Chain's ministry of water resources launched an energy based poverty alleviation programme to electrify 300 counties by 2000. They implemented small hydropower projects and fused irrigation and flood control works with electricity projects.China's rural decentralized electrification drive has helped its rural poverty substantially. Chaina has crossed the stage of institutionalization of its decentralized electricity generation programme. Now looking forward to better management of its power.By taking example another neighboring country, Nepal is the first South Asian country to privatise its power sector. In 1985 it delicensed projects up to 100 kw to upgrade the ghatts (traditional water mills). Even for hydro projects in Nepal , the Agricultural Developmental Bank (ADB) funding extensively. The communities can also decide on the distribution and the cost of power. The government does not take any royalty or tax from these projects. Instead, it gives soft loans, subsidies and tax exemptions on electrical machines as incentives.In 1977, the government decided to form Small Hydel Development Board for supplying electricity to remote areas. In 1981, the ministry of water resources prepared a national development strategy 'through the utilization of water and hydropower generation. Then the started funding microhydel projects in 1981 and now supports 80 percent of the microhydel projects in the country. In 1984, the government was decided to delicense all electricity installation under 100 kw capacity. In 1985 - 86, the government announced a subsidy on the electrification costs of the private installation. It made electrification more attractive; also exclusive power generation units come up.Decentralized and community-based rural energy programme started in 1996 and has emerged as a model for other countries to emulate. This community organization is a self-governing board based institution.Shock at home:Community based electricity generation remains a distant dream for India , mostly in the Himalayan range could not be linked with the national grid, despite their huge potential for generating in their backyard.In India , the Central Electricity Act, 1948, does not allow individuals, communities or cooperatives to take up electricity generation and distribution. Only a private bound to sell power. Alone in Uttaranchal about, 3,000villages are yet to be electrified, Ironically, these are the villages with huge potential for hydropower.Rural electrification in India comes under the jurisdiction of state electricity boards. But the nodal agency is the Rural Electrification Corporation (REC) which implements national programmes through the state boards. The share of hydelpower in the total installed capacity in India has been declining in successive plans. In 1967-68, hydro projects had a 46 percent, which has already declined to 24 percent in 1998. Only one third electric supply is consumed in the rural areas, despite the fact that three-forth of total population is living in rural areas.Despite the government's apathy, many states are realizing that the community based run of the river hydel projects can do away with their power crisis. States such as Kerala and Himachal pradesh have initiated their own version of decentralization in power generation.A country like India must commit itself to sustainable of generation and consumption of energy, so as to ensure energy to the future generation.<br />Introduction<br /> <br />It is a matter of shame that after 60 years of independence around 60% of our rural population live in very primitive conditions.  Consider the following:<br /> <br />1)      They have no electricity and their lives are in darkness.  They use inefficient kerosene lanterns for light and primitive and ancient biomass cook stoves for cooking.  Modern technology somehow has not touched their lives.  Besides their poor quality, these devices used by them create tremendous household pollution. Thus there are estimates that around 1.5 million deaths per year in rural areas are attributable to inhaling smoke from the inefficient and primitive biomass stoves.<br /> <br />2)      Around 54% of India’s population is below 25 years of age and most of them live in rural areas and are unemployed. Creation of rural based enterprises is the best way to create wealth, improve their quality of life and bring these people into mainstream of development.  Our leaders are talking about making India the third biggest economy by 2012.  Unless the lives of rural population are improved this will not be possible.    <br /> <br />3)      There is tremendous poverty in rural areas.  Continuous suicides of farmers attests to it.  In the last 10 years about 1,20,000 farmers have committed suicide. Farming is presently non-remunerative.  This is partly because of the policy of low support price for farm produce by the Government of India, which is the biggest buyer of agricultural commodities. Secondly, increased aspirations of farmers to improve their quality of life has made them get into never ending debts of loan sharks. Thus no amount of soft financial packages will prevent the farmers’ suicides or help the marginal farmers. These are all short-term solutions.  There is a Chinese saying “You can feed a person for a short time by supplying him fish, but if you teach him how to catch fish he will feed himself the rest of his life”. Thus if we create a long term agricultural policy which brings in wealth to the countryside without much government support, then automatically the farmers’ lot will become better and will help in rural development. <br /> <br />4)      There is a serious energy crisis in India.  In various states there is tremendous shortage of electricity.  Thus in Maharashtra (one of the most industrialized state of India) about 4000 MW peak shortfall exists.  Blackouts and brownouts is a regular feature of daily life.  Besides this India imported about Rs. 1,30,000 crores worth of petroleum products this year.  With ever increasing price of crude this number will increase in coming years and will put a heavy burden on balance of payment account. <br /> <br />All the above problems can hopefully be solved by producing energy through agriculture route.  The farming can become remunerative only when it is tied very closely to industry. This can happen when farms also produce energy besides food. Thus when the major demand of fuel and electricity of the country is met by the farm then wealth will automatically flow into rural areas.<br /> <br />Energy Solutions<br /> <br />Three types of fuels can be produced easily via agriculture – liquid fuels like ethanol or biodiesel; gaseous fuels like methane; and electricity. These fuels can be used for transportation, electricity production and motive power for industries.  <br /> <br />The ethanol liquid fuel can be produced from sugar producing agricultural crops like sweet sorghum, sugarbeet, sugarcane etc. while biodiesel can be produced from a horde of oil producing crops like Jatropha, Karanja, Castor etc.  Estimates are that agriculture-based liquid fuel industry can be of an order of about Rs. 40-50,000 crores/year thereby providing increasing wealth to farmers.<br /> <br />In any agriculture only 25-40% of the produce is food. Rest 60-75% are the agricultural residues.  Residues can produce electricity (via biomass-based power plants); ethanol fuel (via enzymatic hydrolysis process); and diesel (via high temperature pyrolysis route). Any marginal farm can produce agricultural residues even if the main food crop fails.  On an average a farmer can get an extra income of Rs. 2000-4000/acre from the residues alone if they are used for producing energy.  This income can give him benefits even in case of a distress sale of his crop.<br /> <br />Today about 600 million tons/year of agricultural residues are produced in India.  Most of these residues are burnt in the fields as a solution to the waste disposal problem. This not only wastes the precious resource but also produces tremendous air pollution. Theoretically these residues can produce 80,000 MW of electric power year round.  This is around 60% of the total installed electricity capacity of India.  Part of these agricultural residues can also be used via the methane (biogas) route to produce fertilizer for the crops and gaseous fuel to either run rural transport, irrigation pumpsets or be used as cooking gas. Similarly agricultural residues can be used to produce diesel via fast pyrolysis process.  The production of electricity via residues will require an investment of about Rs. 160,000 crores.  However it will bring about 10 times more money to rural areas in terms of revenues from electricity generation.  Besides it can potentially create almost 120 million extra jobs in rural areas.<br /> <br />As the industrial demand for fuels and electricity increases, we might see large tracts of farmland coming under fuel crops and food production may suffer.  Thus there is a need to debate the food vs. fuel issues. Consequently R&D needs to be done on crops, which produce both fuel and food from the same piece of land. Sweet sorghum is one such crop.  Nimbkar Agricultural Research Institute (NARI) pioneered the development of this crop in India.  Sweet sorghum produces food (jowar grain) from its earhead, fuel from its stem (the sweet juice can be fermented to produce ethanol) and bagasse and leaves make an excellent fodder for animals or they can also be used as fuel in power plants. Similarly if the agricultural residues can be broken down by suitable enzymes to produce ethanol then both food and fuel can be produced from all food crops.<br /> <br />Policy Issues<br /> <br />A policy has to be made by the Government of India that by 2015 AD around 80% of all our liquid fuel and 30-40% of all our electricity will have to be produced from renewables especially biomass.  This will result in tremendous growth in the farm sector and can provide a solution to the problems of the marginal farmers.  In recent times alcohol economy in Brazil and biogas economy in Europe (where about 3000 MW of electricity is produced from it) has brought prosperity to farmers in these countries.<br /> <br />For farming to increase so that it can carry the major load of food and energy production, adequate water supply has to be assured.  Thus there is a need to change the existing irrigation policy in which the Government owns most of the irrigation water bodies.  A new water act on the similar lines as the Electricity Act of 2003 needs to be enacted so that adequate water can be economically available for agriculture.<br /> <br />IITians can play can important role in rural development by setting up plants to produce liquid fuels and electricity. The technology exists.  What is needed is the desire to help the rural India. Most of the IITians are in corporate sector. Their involvement in rural development can be a shining example of how corporate sector, farmers, NGOs and local government can work together for Bharat Nirman.<br /> <br />When farms start supplying energy besides food it will generate additional wealth for 65% of the population who live in rural areas. Production of energy from agriculture will be the single most important step in bringing prosperity to rural India as well as energy security to the country.<br />Wind<br />Rural electricity supply in India has been lagging in terms of service (measured by hours of supply) as well as <br />Penetration. Distributed generation (DG) is attracting a lot of attention worldwide. Several potential applications of DG are standby power, combined heat and power (CHP), peak shaving, grid support and stand-alone power [4]. Widespread use of DG provides an alternate system architecture for the generation and delivery of heat and electricity with cost savings [5]. The California Energy Commission’s report analyzed the several technical issues pertaining to interconnecting distributed generators to the grid [6]. Distributed power generation and its interfacing with the grid is further facilitated with the use of latest power electronics devices such as Flexible AC Transmission Systems (FACTS) and HVDC Light [7-9]. Distributed power generation also offers the possibility of creating micro-grids (within the utility’s overall framework) to cater the requirements of a group of consumers in a welldefined geographical region. Davis et al (1999) have considered using microturbines for creating isolated zones of power supply for residential, commercial and remote applications [10]. Similarly, National Rural Electric Cooperative Association (NRECA) assessed the economics of different technology options and also discussed formation of rural electric cooperatives using local generation [11]. In the context of rural India, or other developing countries with similar needs, decentralized power generation in rural areas can improve voltage profiles, lower distribution losses and supply reactive power locally. Improved quality of power supply also can assist in creating incentives for tariff reform. Conventional wisdom has indicated that large generation stations offer significantly better economies of scale. However, such calculations must be recalibrated when faced with the state of the power grid in many emerging economies such as India, viz., large distributed (rural) load, high T&D losses (including theft), limited capacity availability, and dramatically poor supply conditions. In such cases, a thorough analysis should be made for the policies, technical specifications, and economic analysis behind use of DG. The Ministry of Non-Conventional Energy Sources (MNES), Government of India, frames the overall guidelines for interconnection of renewable DG units [12], and most utilities interconnect as per the central government’s (nonbinding) norms. Some of these guidelines and the associated contentious issues are discussed below. <br />1. Buy-back of power: The Ministry recommends a buyback tariff of Rs. 2.25/kWh 7 with an annual escalation of 5% effective from 1994-95. This works out to Rs. 3.01/kWh as of now. In most states, this rate is higher than the average cost of electricity purchased from other sources. Fig 1 shows that in the state of Karnataka, while the average cost of purchase of electricity was Rs. 1.40/kWh, the price paid to renewable cogeneration units was Rs. 3.01/kWh. As a result, the cash-strapped utilities are often not enthusiastic to interconnect with DG units, even despite their low total capacity. In many cases, the utilities take an unduly long time, sometimes several months, to pay for the electricity that these units have already generated and supplied to the grid. Needless to say, this is a disincentive to such renewable-based power plants.<br />2. Wheeling: The Ministry has allowed wheeling of power and recommended a 2% charge. However, some states do not allow wheeling, while others have imposed 20% wheeling charges, ostensibly equal to the transmission & distribution losses 8 . The utilities view these third-party generators as a threat as they take away industrial and commercial consumers who currently pay high tariffs and thus cross-subsidize agricultural consumers. Utilities therefore impose high wheeling charges to discourage such sales 9<br />3. Interconnection: The utilities interconnect with the renewable DG generators at high voltages (> 66 kV or > 33 kV, depending on the state’s lowest “transmission” voltage level). This gives the utility the flexibility to divert the power in the grid. However, the local area does not benefit significantly from decentralized generation and moreover, there is no discernible improvement in the power supply or in utility’s revenues even though the utility purchases expensive power from the DG units. In many states, the generator pays for the wiring necessary to connect to the nearest sub-station. The utilities’ policy for DG units appears to be one-sided and overlooks the possible benefits of decentralized power generation in remote rural feeders. In this paper we examine the opportunities with decentralized power generation in rural areas and attempt a more rational basis for framing utilities’ policies towards the DG units. In particular, we address the following issues: <br />1. Impact of DG on the voltage profiles and technical distribution losses. <br />2. Options for economic valuation of reactive power supplied by the DG. <br />3. Balanced approach to estimating wheeling charges.<br />