Renewables and efficiency in the power sector, oct 18th new delhi ag csd

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  • Indian coal production faltering (various reasons). Production consistently below targets.Extractable coal reserves far less than stated geological resources.Steeply rising imports; at high price; India swing importer in world market soon.Captive coal mining not picked upQuality of coal worsening
  • 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)
  • New infrastructure will be with us for 100 yearsHow 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 futureLimits on pace of adding power plantsBetween 2027-32 we need to add 40,000 MW / yearSiting of power plants is already vey difficult Environmental, displacement, land and water concernsResource constraintsIncreased import dependence even of coal (no coal plan addition possible after 2030 on domestic coal)Global environmental constraints
  • Increasing stock of appliances due to booming sales caused by consistent high economic growthSuper efficient appliances (SEA), 40-70% more efficient than the current stock, are commercially available in international markets
  • Solar prices dropping sharply from Rs 18/kWh, last auction of 350 MWs discovered an average price of Rs 8.7/kWh, bids as low as 7.5.Significant price drop in the last 2-3 years; globally and in India. Studies suggesting grid parity in India by 2016-18.
  • Renewables and efficiency in the power sector, oct 18th new delhi ag csd

    1. 1. Equity and Environment:Two imperatives for Indian Electricity Policy The role of Renewables and Energy Efficiency Ashwin Gambhir Prayas (Energy Group), Pune Contestations at Koodankulam: legitimacy and constraints Discussion at Council for Social Development, October 18th 2012, New Delhi Prayas Energy Group, Pune
    2. 2. About Prayas Energy GroupPrayas is a Voluntary Org, based at Pune, India– PEG works on theoretical, conceptual and policy issues in the energy and electricity sectors.– Based on a comprehensive, analysis-based approach for furthering the ‘public interest’.– Research & Interventions (regulatory, policy).– Civil Society training, awareness, and support. 2
    3. 3. Outline• A macro look at the power sector in India• Three problems of present energy paradigm – Inequity, – Resource limitation and – Environmental damage• Way towards a solution – Policy options promoting equity – Energy efficiency – Renewables• Conclusions 3
    4. 4. Electricity–HDI linkage: Intl experience 1.00 Cuba Ecuador 0.90 Sri Lanka y = 0.094ln(x) + 0.076 0.80 R² = 0.838 0.70 Human Development Index (HDI, 2007) HDI=0.8; Elec use = 2210 kWh/capita according to the regression fit. 0.60 0.50 India (2007); HDI=0.612; Elec use = 542 kWh/capita 0.40 0.30 0.20 0.10 HDI vs electricity consumption per capita/yr 0.00 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Electricity consumption in kWh per capita per year (2007)(a) India is in the elastic region where steep increase in HDI is seen with increase inelectricity use, (b) Several countries have managed to achieve high HDI with similarelectricity use as that of India  need for direct action for improved HDI. 4
    5. 5. Electrification & Economic Development 100 AP Gujarat Maharashtra 90Percentage of Total Electrified Households Chattisgarh 80 MP Rajasthan 70 60 West Bengal Orissa 50 Jharkhand UP 40 30 Bihar 20 10 Data for 2009-10 0 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 State per Capita Domestic Product 5
    6. 6. Power Sector Status• Present Installed capacity ~ 207 GW (RE- 25 GW, 12%)• 2010-11 Generation ~ 950 BU (incl captive) (RE ~ 50 BU, 5%)• Un electrified population 33% (~40 cr); villages ~ 6% or (35,000)• Peak Load shortage -13% ; Electricity ~10%; unreliable service.• Financial health of Utilities worsening (~70,000 cr losses in 2010-11)• 6-7% growth in electricity use; projected to double in 2020; largest growth in Industry and commercial/residential.• Rising energy imports and electricity tariffs 6
    7. 7. Power Generation Capacity including captive,percentage shares of 210 GW (2010-11) Coal 13% 0% Gas turbines1% 1% Diesel gen-sets Large Hydro 7% Indian Nuclear 47%2% Wind power Small Hydro Biomass + Bagasse Cogen 18% Solar (PV, Thermal) Captive 8% 1% 7
    8. 8. Share of Generation including captive of atotal of 900 TWh (2009-10) 10.9% Thermal 5.0% Large Hydro 2.7% Indian Nuclear 11.9% Renewables 69.4% Captive 8
    9. 9. 16 Range of Tariffs in Rs/kWh for all sources14 RE tariffs are as per CERC. Range for solar tariffs is from competitive bidding. Other prices are from Prayas estimates and are only indicative1210 8 6 4 2 0 Coal Gas Diesel Large Indian Imported Wind Small Biomass Bagasse Solar PV Solar CSP turbines gen-sets Hydro Nuclear Nuclear power Hydro Cogen 9
    10. 10. Three problems of Energy Paradigm Inequity Limitation of conventional energy resources Socio - Environmental issues (local and global) Prayas Energy Group, Pune
    11. 11. The two faces of India 11
    12. 12. First face is far more prevalent Households by electricity use (kWh/month) > 100 U Highly skewed distribution! No Connection 50 - 100 U Only 10-12% HHs have monthly electricity consumption > 100 kWh. < 50 USource: Prayas analysis of State ERC orders 12
    13. 13. Energy and infrastructure deficit and inequity 80 % households with access to 70 60 50 40 30 20 10 0 Concrete/brick Toilets Electricity Clean energy for walls cooking 2001 2011 % of expenditure spent on accessing modern energy 14 12 10 8 6 4 2 0 0 - 10 10-20 20 - 30 30 - 40 40 - 50 50 - 60 60 - 70 70 - 80 80 - 90 90 - 100 Expenditure deciles of population 13
    14. 14. Equity and its various facets• Significant population is modern energy poor, constraining their economic development. Modern Energy a must for all.• However this argument is cynically used many a time to justify each and every large power project, even without broad local acceptance; argued in larger national interest.• Unfortunate history of resource curse (Coal/Hydro) and increasingly for most proposed nuclear sites.• Renewable energy is argued for overcoming shortages and providing supply for all, however not much attention to the equity aspect of the incremental costs. 14
    15. 15. Energy Imports India net energy import cost ~ 5% of GDP (~ 2% by USA, EU or China) Indian import bill likely to increase due to: – Higher coal imports & high/increasing prices, Re depreciation.300 160 Production, Import of Coal (MTOE) Production, Import of Oil (MT) 140 $100 Bn (09-10), 75% Import dependence250 120200 Production 100 Production150 Consumption 80 Consumption100 6050 40 20 0 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 0 15
    16. 16. Production and Consumption of Fossil Fuels (Oil, Gas and Coal) in Mtoe India from 1981-2010500450400350300250200150 Import Dependency - 38%100 50 Production Consumption 0 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 16
    17. 17. Global and local Environment• India not responsible for global problem of climate change – with 15% population has emitted only 2.5% of GHG emissions. – very low per-capita emissions (~ 2 t/cap/yr; world average of ~4)• Limited carbon space remaining and India will face major impacts of climate change; highly vulnerable – Long coastline; very rainfall dependent• Local pollution of water, land and air as well as water scarcity is resulting in popular opposition to power plants in most locations. 17
    18. 18. Local environment Ambient Air Quality Monitored at Ghuggus (Jan 2007- Aug 2012) 1400 2000 1800 1200 1600RSPM (microgram/m3) SPM (microgram/m3) 1000 1400 1200 800 1000 600 800 400 600 400 200 200 0 0 2007 2008 2009 2010 2011 2012 RSPM (µg/m3) Standards RSPM (µg/m3) Actual conc. SPM (µg/m3) Standards SPM (µg/m3) Actual conc.  Similarly problems with water resources too – pollution as well as conflicts  Rising resistance to mining, power plants etc. because of environmental damage, weak adherence to expected norms, weak government monitoring 18
    19. 19. So Business-As-Usual growth isimpractical and undesirable Way towards Solution Prayas Energy Group, Pune
    20. 20. Go back to Basics for a New Paradigm Development  Growth  Energy  GHG emissionsThree flexible links• Improved developmental policies• Efficiency of energy use• Non-GHG emitting energy sources; benign on local environment.• Policies and structures required to increasingly de- couple the links. 20
    21. 21. RGGVY• National Electricity Policy, 2005 recognizes electricity as a major driver of rural development and hence poverty alleviation. Target to provide access to all HHs and ensure minimum lifeline consumption of 1 kWh/day/HH as a merit good by 2012.• RGGVY launched in 2005, addresses two components – developing distribution infrastructure – free connections to all Below Poverty Line (BPL HHs)• Critique and concerns – Inability to supply adequate power; APL connections; quality and adequacy of network; timelines and delays; emphasis on HHs. 21
    22. 22. RGGVY – What about electricity? • Physical infrastructure – 105,851 villages electrified (90% of target) – 20 Million HHs electrified (81% of target) • Hrs. of supply often < 6 hrs./ day • Structural disincentive (loss of Rs 3.5/kWh of sale to HH) • Restructuring of RGGVY – GoI to allocate low cost power to RGGVY consumers – Need only 14 GW capacity to address structural disincentive (likely addition in next 5 yrs ~ 100 GW) – Extremely limited C emissionsSource: Roundtable on Electricity for All : Challenges and Approaches, by PEG and PIC at Pune on 18th Feb 2012) 22
    23. 23. Energy Efficiency; reduce energy requirement• Significant potential; needs to be actualized• EE should be seen as indispensable as power plants, in avoiding shortages, facilitating inclusive growth and maintaining competitiveness while reducing emissions.• Long term locked in savings.• Need for National large scale programs.• Link energy tariffs to consumption norm for commercial blds.• Discourage setting up of inefficient new Industries. 23
    24. 24. categories, 2020 (TWh) Change Nature of Discourse on EE Saving Potential by categories, 2020 (TWh) 2020 (TWh Saving Potential by categories, 160 New Additions 140 Retrofit 120 100al Industrial 80 Others New A 60 Retrof 40 20 0 Agriculture Commercial Residential Industrial Others 70% of infrastructure that will be in place by 2030 – is still to be built ! Prioritize industry & residential/commercial, beginning with new addition. Numbers are only indicative (to show implications of consideration). 24
    25. 25. Radical Change in Efficiency Policy Super efficient appliances consuming 40-50% less than 5- star models, are commercially available internationally. Assist manufacturers to introduce Super Efficient Appliances (as poorconsumers are very cost sensitive)If 60% of stock for only 4 appliances in 2020 is super-efficient, we can save 60BU and avoid peak capacity of 20000 MW over the business as usual scenario. 25
    26. 26. Electricity Demand Projection – IEP, PC 5000 5000 Nuclear 1300 BU increase in 5 years = Hydro 200,000 MW additional capacity 4000 4000 Thermal 3000 3000 B kWh 2000 2000 Addition of ~185 GW of Base Load Thermal capacity 1000 1000 0 0 2004 2007 2012 2017 2022 2027 2032Assumes - 63 GW from nuclear power (recently revised to 27 GW by 2025) and 150 GW fromhydro power in 2031-32. 26 *Source Integrated Energy Policy (PC, GoI) 2006, numbers are indicative 26
    27. 27. Placing Nuclear in context• Marginal role in Indian power sector, unlikely to reverse.• Various targets; 12th (2.8 GW)/13th plan highly optimistic (18 GW).• 2011 – global nuclear capacity fell by 10 GW, while just the wind and solar PV increased by 44 GW and 23 GW, 67 GW in total vs (- 10) GW.• Nuclear (10 yr. gestation) not a panacea for today’s electricity shortages.• The Climate argument- the window for action is the coming decade.• A true cost comparison with nuclear plants starting construction today should be with wind and solar prices in 2020.• Notwithstanding all fundamental arguments against nuclear, economics of RE beats nuclear and even solar better considering gestation period. 27
    28. 28. Cumulative Capacity of Nuclear and New Renewables25000 Nuclear New Renewables2000015000 Additionally by 2017, RE will likely reach 55,000 MW while Nuclear is planned to reach upto 4780 + 2800 = 7580 MW100005000 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 28
    29. 29. Total Electricity Generation (TWh) from Nuclear and New Renewables Total Electricity Generation (TWh) from Nuclear and New Renewables 60 Nuclear 50 New Renewables 40 30 20 10 0 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12Source: CEA Monthly Statistics , Monthly generation report (Renewables sources) 2012-13 29
    30. 30. Comparing solar PV and nuclear costsSource: Blackburn & Cunningham, 2010. Solar and Nuclear Costs – the historic crossover. 30
    31. 31. Large grid connected Renewables• Energy security, price rise in fossil fuels; focus on climate has made RE an extremely important supply option for the future.• RE moving from margins to mainstream. – existing capacity 5 X nuclear and generation ~ 2 X• $ 9.5 billion (50,000 cr) invested in large RE in India in 2011. – Fastest growing energy sector, 22% CAGR past decade.• Significant Policy and regulatory push (State and Central) (RPOs, RECs, NAPCC (15% by 2020); State specific policies, SIPS, Green levies; NCEF etc) – 12th Plan; RE ~ 30/40 GW (10 solar, 15/25 Wind) 31
    32. 32. RE capacityREaddition from from 2002-2012 Capacity Addition (MW) 2002-1230000 Solar CAGR (02-12): 22%25000 WTE SHP20000 Bagasse Cogen15000 Biomass Wind100005000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 32
    33. 33. Grid Connected Renewable Capacity; March-12 941, 4% 3395, 14% Wind1985, 8% Biomass Bagasse1150, 4% 17353, 70% Small Hydro Energy from Waste Solar 33
    34. 34. Wind Potential Estimates (GW) for India2500 Revised wind power potential significantly different from earlier estimates; from 50 GW to 500-1000 GW. > 200020001500 ~ 14001000 700-1000500 102 49 0 CWET old CWET revised (2012) Phadle A. et al, 2011 Xi Lu et al, 2010 Hossain J. et al, 2011 34
    35. 35. Increasing economic competitiveness of wind Overall Cost of generation of conventional fuel based vs Wind Tariffs Source: Rs/Unit Cost of Generation - imported Coal 4.1 Cost of Generation- Gas (60%) & R-LNG (40%) 4.4 Cost of Generation - Domestic Coal (50%) and Imported Coal (50%) 3.8 Wind (CERC based @ 23% PLF) Maharashtra 4.7 Wind Tariff - Tamil Nadu 3.4 Wind Tariff - Andhra Pradesh 3.5 Wind Tariff - Gujarat 3.6 Wind Tariff - Karnataka 3.7 Wind Tariff - Rajasthan 4.2 RE (non-solar) is quite cost competitive with new conventional capacity addition. In the range of ~ 4/kWh. (can reduce with competitive bidding).Source: ICRA, 2011 35
    36. 36. The Solar story• Practically unlimited potential, subject to land availability.• Significant efficiency improvement possible, on track• All industry estimates point to further price drop, parity expected much faster.• Exponential Growth worldwide (~27 GW PV in 2011) 36
    37. 37. Competitive Bidding for solar in India 20 17.91 17.91 18 15.61 15.39 Bidding Range: 10.95 - 12.76; 16 Avg tariff of 12.16/kWh, 32% < CERC benchmark 15.32 14.50 14Solar PV Tariff in Rs/kWh Bidding Range: 7.49 - 9.39; 12.54 Avg tariff of 8.77/kWh, 12 12.16 43% < CERC benchmark 10.59 7.9 - 9.59 10 10.39 7.94 - 8.5 8.77 8 8.13 8.34 7 6 State Solar Bidding 4 2 0 CERC 09 MERC 10 MERC 11 CERC 10-11 RERC 10 KERC 10 GERC 10 Batch I, CERC 12 GERC 2012 Batch II, Orissa Karnataka MP Bidding JNNSM draft JNNSM Bidding Bidding 37
    38. 38. Land and Water use Land for Total Consumptive Total Water Use (- Land for mining (30 Generation (30 Land for Total land ) / Saving (+) power yr life, 80% Yrs for coal, 25Source Power Plant. land / per over entire plant PLF) / for wind and (3% for MW TWh life (Million (Acre/MW) Submerge solar) in TWh wind) (BU) Litres) nce (BU) 4.6-Coal 0.9-1.4 0.9-1.4 3.7 0.21 22-24 -1176 5.1Wind 28 0.84 0 0.84 0.05 15 306Solar PV 5 5 0 5 0.04 114 245Large - 12.5 12.5 12.5 0.11 116 -3984Hydro 38
    39. 39. Distributed Renewables – green access• An important option for quick access, especially in remote areas.• Presently largely limited to lighting service• Significant emerging option for solar for critical social infrastructure (PHCs, Schools, drinking water schemes etc)• Higher Costs due to scale and larger O&M needs• Innovative policy options to reduce consumer tariffs under consideration of FOR.• Move to grid interactive (feed in and isolation) DRE 39
    40. 40. Green Access/Green Grid• NAPCC Grid connected RE target ~15% by 2020 (~ 250 TWh)• Grid essential for harnessing large scale RE – Geographically un-equal distribution – Varying generation, needs balancing mechanism• Enables large investments, better monitoring, less drain on government finances• Grid RE needed (2010-2010) – 75 GW / 160 TWh (BU) – Equivalent to powering 100 mil. HH @ 100 units / month 40
    41. 41. What needs to be done for RE• Cost reduction through efficient procurement (Competitive Bidding).• Protect poor from high cost (financial, environmental or social); equitable sharing of incremental costs.• Promote Indian manufacturing (energy security, jobs & cost reduction)• 15% RE by 2020 will need doubling the rate of RE capacity addition (3,500 MW/year  8,000 MW/year) 41
    42. 42. Facilitative role from Govt:• Effective land policy (solar parks, create level playing field, social inclusion (land lease limited to footprint, profit sharing must for sustained growth)• Mandate EIA/ SIAs for RE projects• Mandate solar purchase only for rich (proportional to the industry, commercial & high residential consumption)• Finance is a major issue. Facilitate low cost finance availability.• Grid Integration of large scale RE, long term Tx evacuation planning urgently needed; Power Sector Resistance.• Focus solar PV initially on critical social infrastructure.• R&D (basic and applied) key for continued cost reduction 42
    43. 43. Sources of Electricity, 2020 (IEP and Low-C Gr)2000 Efficiency1500 Renewable Two Official forecasts show TWh Increasing role of1000 - Efficiency and RE Coal Reduced500 - Energy Demand Forecast - Role of Nuclear Nuclear Hydro 0 IEP (Scenario-5) LowC 2020 2020 43
    44. 44. Long Term Energy Planning- a crying need• BAU is simply impractical and unsustainable. – Relook at type of industrialisation - future development paradigm – Tariff policy to discourage excessive, luxury use of energy.• Need for a more realistic and rational energy supply and demand projection studies (comprehensively considering various factors)• More electricity needed, but – Earnest action for Energy Efficiency (>> gas, nuclear, hydro put together) – Immediate attention to needs of poor (RGGVY, reserve low cost coal)• Link policy to specific objective goals. – RE for energy security and supply / not for global climate – Multi-criteria framework for assessing mitigation options. 44
    45. 45. Conclusions• Paradigm change – from growth to development – supply to demand side thinking, – from fossil and nuclear to EE/RE. – Forward looking planning • comprehensive and truly integrated • With emphasis on governance 45
    46. 46. A parting message • “Limits to available energy resources are hurting economies and curtailing development in poorer countries. India, being more vulnerable to energy shortages than most other countries, needs to urgently implement a multi-dimensional solution to avoid a crisis… To avert economic hardship and work towards mitigating climate change, we must find answers to the energy conundrum soon. This is possible through a three-pronged strategy to ‘replace, improve, and reduce.” (replace fossil fuel based energy sources with renewables, improve end use efficiency and reduce consumption, especially of the rich).Source: Girish Sant, Handling the Energy Crisis, the Hindu Business line, 30th January 2012 46
    47. 47. THANK YOUashwin [at] prayaspune [dot] orgPrayas Energy Groupwww.prayaspune.org/peg 47
    48. 48. Lifecycle water use of electricity (Gallons/MWh)Source: Wilson et al, 2012. Burning our Rivers: The water footprint of electricity 48
    49. 49. Plan wise (past and future proposed) RE and Conventional power generation capacity addition (MWs)160000 RE Capacity addition 35%140000 Conventional Capacity addition120000 50000 28% The percentage values are for RE100000 capacity addition as a fraction of 30000 total capacity addition.80000 22%60000 14657 9300040000 76000 24% 12% 50804 680220000 2467 18377 21151 0 9th (1997-02) 10th (2002-07) 11th (2007-12) 12th (2012-17); 13th (2017-22); needed Proposed for NAPCC target 49
    50. 50. Rooftop Solar: in situ generation for self consumptionConsumer category Energy charges (Rs./kWh) in major cities Bengaluru Hyderabad Kolkata Mumbai New Delhi PuneDomestic (High end 5.60 6.75 (301-500 7.75 (> 300 4.40 (Tatapower); 5.30 (BEST); 4.80 (0- 400 kWh); 7.92 (300-500 kWh);consumption) (> 200 kWh) kWh); 7.25 kWh) 9.16 (Rinfra) (all > 300 kWh) 6.40 (> 400 kWh) 8.78 (500-1000 kWh); (>500 kWh) 5.30 (Tatapower); 6.80 (BEST); 9.50 (> 1000 kWh) 10.61 (Rinfra) (all > 500 kWh)Commercial 7.20 7.00 7.80 (> 300 5.05 (Tata power); 9.80 (BEST); 7.25 – 8.50 (subject 8.38 (0-20 kW; >200 (> 50 kWh) (> 100 kWh) kWh) 10.91 (Rinfra) to load demand) kWh); 8.44 (20-50 kW); (all >50 kW) 10.91 (>50 kW) Mumbai Summer & Winter Load Curves and PV generation profiles in April and December 100 0.8 90 0.7 PV generaiton profile in kWh/kWp 80 0.6 70 0.5 % of peak load 60 0.4 50 0.3 40 0.2 30 20 0.1 10 0 0 -0.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Summer Load Winter Load PV Generation in Dec PV generation in April 50

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