Friday, March 26, 2010

Energy scenario in India

I will try to capture the magnitude of problem as far as energy supply and demand needs are concerned in India. While there may be serious generation deficiencies, there is no substitute for conserving the energy, whether or not there is a generation surplus.

Some people are born (energy) conservationists, some achieve conservation, and some have it thrust upon them! Indians today mostly belong to the third category. I will explain why. In my article on carbon paranoia, I made a point that coming from a country like India, where there is a serious lack of energy supply, notions of earth hour and conservation (from an ecological point of view) are very difficult to sell. Many households are forced to face blackouts or load shedding for almost 1-2 hours in best case each day; it can reach a staggering 8-10 hours a day in peak summer time if you are not staying in category A city.

So is the situation all hopeless? Let us look at some statstics, may be not exactly encouraging but something we have to live with. Please focus on the trend rather than the specific numbers which may be debatable.

  • India is world’s 6th largest energy consumer, accounting for 3.5% of global energy consumption. US, on the other hand, consumes 25% of the world’s energy with a share of global GDP at 22%
  • India hopes for an annual 7% economic growth in GDP on moderate terms. Some optimists have talked of double digit growth. Energy requirements and economic growth go hand-in-hand and needless to say that such a high targeted growth would require some serious work on the energy supply side
  • India’s fossil reserves are limited. Known reserves of oil may last for only 18 years while gas reserves may last for 26 years only. On the contrary, India’s coal reserves are huge and may last another 200 years but ash content in coal will raise international eye-brows in the wake of GHG and its impact on global warming.
  • 70% of total petroleum product demand is met by imports, imposing a heavy burden on foreign exchange (Rs 80,000 crore or 20 billion USD per year)
  • Annually, there is a huge energy supply-demand deficit of 7-11%. By 2012, there is a need for an additional 100,000 MW power. Estimates indicate that this may require Rs 8000 billion investment.
  • In last few decades, demand for energy in India has gone up by around 4% annually. Per capita consumption in India is low, but is expected to reach 1000 KWh by 2012, that will further widen the supply demand deficit.
  • Electricity theft, though, accounts for 1.5% of the GDP. Transmission and distribution losses are at a staggering 30-45%

All these numbers are mind boggling. They may be depressing, but are educative alright in nature. They impinge upon us the grave reality of where we are today and where we are headed. It makes us pause and think what we should do.

I come back to my point on conservation being thrust upon many. But honestly, staring at above statistics, we need more awareness than we have shown. We may belong to the 3rd category as I mentioned at the start, but we need to also work on achieving conservation through active community engagement. Let us look at some of the interesting points below (again may be debatable, but please look at the message)

  • The peak (deficit of upto 11%) and average power demand (deficit of 7%) can be both reduced through conservation.
  • One unit saved avoids 2.5 to 3 times of fresh capacity addition.
  • A typical industrial site, by saving up to 20% of its energy consumption, can save up to 50% cost in their electricity bills.

There are power generation issues, more serious transmission and distribution issues, theft issues and monopolies. These issues were sought to be addressed holistically through a new legislation, Energy Conservation Act 2001. While it has changed the way power management is done today, a lot still needs to be done. We all need to conserve energy. There are limited natural resources, limited power generation (renewable energy or otherwise), there is a higher demand and there is an ever increasing base of population that is staking access to energy. Then there is growth aspiration. The equation may never balance itself, but can definitely be left much unbalanced through active energy conservation.

GHG, climate change, global warming may never sell to Indian customers (as yet – who knows about 2020 and later!) but what does is how much of energy conservation can save their electricity cost. That way they can make their businesses more viable or even more profitable. Either way, conservation (forced or voluntary) leads to a win-win situation for both the Indian consumer and the planet Earth at large. We can not escape the scenario; so we have to embrace it. We can help it improve though in many ways, conservation surely being one of them.

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