Psa summary

National Energy Map for India:Technology Vision 2030

Summary for policy-makers

The Energy and Resources Institute Office of the Principal Scientific Adviser, Government of India

ISBN 81-7993-064-5

Published by

TERI PressThe Energy and Resources InstituteDarbari Seth BlockIHC Complex, Lodhi RoadNew Delhi – 110 003, India

Tel. 2468 2100 or 2468 2111Fax 2468 2144 or 2468 2145

India +91 • Delhi (0)11E-mail [email protected]

Web www.teriin.org

Office of the Principal Scientific Adviser,Government of India

318, Vigyan Bhavan AnnexeMaulana Azad Road, New Delhi – 110 011India

Tel. 2302 2112Fax 2302 2113

India +91 • Delhi (0)11Web www.psa.gov.in

Preface .............................................................................................................. 5

Acknowledgements ........................................................................................... 7

Project team ..................................................................................................... 9

Introduction ................................................................................................... 11

Approach ........................................................................................................ 11

Energy scenarios ............................................................................................. 13

Key findings ................................................................................................... 14

Transport sector options................................................................................. 18

Recommendations .......................................................................................... 21

Contents

Preface

India has recorded impressive rates of eco-nomic growth in recent years, which providethe basis for more ambitious achievementsin the future. However, a healthy rate of eco-nomic growth equalling or exceeding thecurrent rate of 8% per annum would requiremajor provision of infrastructure and en-hanced supply of input such as energy. Higheconomic growth would create much largerdemand for energy and this would presentthe country with a variety of choices in termsof supply possibilities. Technology would bean important element of future energy strat-egy for the country, because related to arange of future demand and supply scenariowould be issues of technological choicesboth on the supply and demand sides, whichneed to be understood at this stage, if theyare to become an important part of India’senergy solution in the future.

The Indian government aims to achievean economic growth rate of over 8% in thenext two decades in order to be able to meetits development objectives. However, rapideconomic growth would also imply the needfor structural changes in the economy as wellas for induced shifts in the patterns of end-use demands. To meet the needs of the In-dian populace in the most effective manner,it is important to map out the energy de-mand and supply dynamics in the country.This study estimates alternative trajectoriesof energy requirements and examines thelikely fuel mix for the country under variousresource and technological constraints overa 30-year time frame.

This study has been commissioned andsupported by the office of the PSA (Princi-pal Scientific Advisor) to the Government ofIndia. The two-year study has drawn inputfrom several organizations and sectoral ex-perts across the country to gauge the likeli-hood of technological progress and availabil-ity of energy resources in the future.

The MARKAL model used in this studyis a widely used integrated energy systemoptimization framework that enables policy-makers and researchers to examine the besttechnological options for each stage of en-ergy processing, conversion, and use. Thismodelling framework was used to representa detailed technological database for the In-dian energy sector with regard to energy re-sources (indigenous extraction, imports, andconversion) as well as energy use across thefive major end-use sectors (agricultural, com-mercial, residential, transport, and industrial).

The report discusses the data, assump-tions, and methodological framework usedto estimate useful energy requirements ofthe country based on demographic and eco-nomic drivers. Technological assessments ofresources and energy conversion processeshave been described in the report. Economicand technological scenarios have been devel-oped within the integrated modelling frame-work to assess the best energy mix during themodelling time frame. Based on the scenarioassessment, the report provides directions tovarious stakeholders associated with the In-dian energy sector including policy-makers,technologists, and investors.

The report clearly points towards thecountry’s increasing import dependence ofall fossil fuels. It also indicates that coalwould continue to play a key role in meetingthe country’s energy requirements. How-ever, the indigenous availability of coal is ex-pected to plateau in the next couple of de-cades with the current exploitation plansand technology. The need for energy effi-ciency in the end-use sectors and radicalpolicy changes in the transport sector is also

highlighted. The study points towardsfocussing efforts simultaneously on the de-mand and supply sides for the economy toattain the most efficient utilization of avail-able resources.

(R K Pachauri)Director-General, TERI

Acknowledgements

TERI acknowledges the high-level technicalinput and guidance provided by various na-tional experts in the development of themodel. TERI specially thanks the followingexperts: R Chidambaram, Kirit Parikh, A KKolar, Kamal Kapoor, Brahma Deo, V KSharma, R B Grover, Srinivas Shetty, H SKamath, V K Agarwal, L M Das, P K Sen,Adish Jain, Arun Kumar, Surya P Sethi,Arvinder S Sachdeva, Prodipto Ghosh, DilipChenoy, Sudhinder Thakur, P K Modi, AlokSaxena, and S Nand.

TERI also acknowledges the input pro-vided by the following organizations: De-partment of Atomic Energy, Nuclear Power

Corporation of India Ltd, Bharat HeavyElectricals Ltd, National Thermal PowerCorporation Ltd, National Hydro PowerCorporation, North Indian Textiles Manu-facturers Association, Indian Railways, Oiland Natural Gas Corporation Ltd, Engi-neers India Ltd, Indian Aluminum Manu-facturers Association, Steel Authority of In-dia Ltd, Fertilizer Association of India, Ce-ment Manufacturers Association, Confed-eration of Indian Industries, and IndianPaper Manufacturers Association.

Thanks are due to Mr Rakesh Kumar Arorafor his invaluable secretarial assistance.

Principal investigator Leena Srivastava

Core team Ritu Mathur, Pradeep K Dadhich, Atul Kumar,Sakshi Marwah, Pooja Goel

Sector experts in TERI Amit Kumar, Shirish S Garud, Mahesh Vipradas,V V N Kishore, Pradeep Kumar, Alok Adholeya,Girish Sethi, N Vasudevan, Shashank Jain, Abhishek Nath,Upasna Gaur, Ananya Sengupta, Parimita Mohanty,K Rajeshwari, Ranjan K Bose, Sudip Mitra, R C Pal

Advisors R K Pachauri, R K Batra, Y P Abbi, S K Chand,K Ramanathan, Preety M Bhandari

Project review monitoring S P Sukhatme, S K Sikka, E A S Sarma, Y S R Prasad,committee R P Gupta, Chandan Roy, R K Saigal

Editorial and production Ambika Shankar, Archana Singh, Gopalakrishnan,team Jaya Kapur, K P Eashwar, Richa Sharma, R K Joshi,

R Ajith Kumar, Subrat K Sahu, T Radhakrishnan

Project team

Summary for policy-makers

Introduction

The GoI (Government of India) plans toachieve a GDP (gross domestic product)growth rate of 10% in the Eleventh Five YearPlan and maintain an average growth rate ofabout 8% in the next 15 years (Planning Com-mission 2002). Given the plans for rapid eco-nomic growth, it is evident that the country’srequirements for energy and supporting in-frastructure would increase rapidly as well.In order to enable policy-makers to under-take timely decisions, it is extremely impor-tant to estimate the magnitude of total en-ergy requirements as well as examine theeconomic, environmental, and geopoliticalimplications of India’s alternative energypathways in the next few decades. While fac-tors such as demographic profile, change inlifestyle, and consumer preferences dictate thelevel of useful energy demands, the availabilityand prices of resources and technologies influ-ence the levels and patterns of final energy re-quirements in the future.

Realizing the importance of examiningthe role of various energy technology optionsfor India’s energy sector under alternativepolicy scenarios, the Office of the PrincipalScientific Adviser to the GoI entrusted thisstudy entitled ‘National Energy Map: Tech-nology Vision 2030’ to TERI (The Energyand Resources Institute).

Approach

The key focus of this study was to examinethe role that various technological optionscould play under alternative scenarios ofeconomic growth and development, re-source availabilities, and technologicalprogress. For this purpose, it was importantto choose an integrated energy-modellingframework that would facilitate the creationand analysis of various scenarios of energydemand and supply at the national level, aswell as provide a detailed representation andanalysis at the technological level for eachcategory of resource as well as sectoral end-use demand.

After an extensive survey of existing mod-els, the MARKAL (MARKet ALlocation)model was selected to examine the pathwaysfor optimal energy supply to meet the end-use services in the five energy-consumingsectors (agriculture, commercial, residen-tial, industrial, and transport) under variousscenarios. MARKAL is a dynamic linear-programming representation of a general-ized energy system. Exogenously estimateduseful energy demands were provided to themodel over a modelling time frame of 2001–31. Apart from indicating the minimized to-tal system cost of the energy sector undervarious scenarios, the model results provideinformation regarding the level of uptake of

12 National Energy Map for India: Technology Vision 2030

total energy resources, their distributionacross the consuming sectors, the choice oftechnological options at the resource supply,conversion and end-use levels, investmentlevels, an indication of capacity additionsand retirements, emission level associatedwith resource supply, and end-use technologi-cal options adopted. The overall methodologyis schematically described in Figure 1.

The availability and timeline of possibletechnological options (existing and futuris-tic) included in the model and their techno-logical characterization were evolved on thebasis of an extensive literature review. Addi-tionally, it was important to draw on theknowledge base of experts from various en-ergy consuming and supplying sectors to beable to provide input of adequate quality tothe model. Therefore, several rounds of de-

liberations and focused interactions withsectoral experts, researchers, industry asso-ciations, R&D (research and development)institutions, government agencies, andpolicy-makers in each of the individual sec-tors were held via workshops to finalize theinput data to the model.

Energy demands categorized by end usein each of the five major energy sectors wereestimated using regression equations estab-lished using population and GDP as the keydrivers to growth.

Energy scenarios

Seven alternative scenarios were set upagainst the BAU (business-as-usual) sce-nario to examine variations with regard to

Figure 1 Schematic representation of methodological framework

Resource-wise

final energy

requirement

Population projections

GDP projectionsSupply side

technology

deployment

Demand side

technology

deployment

Investments required in

(1) technologies and

(2) fuel

Emissions

Supply side:

techno-economic and

performance parameters

(resources and

conversion options)

Demand side:

techno-economic and

performance parameters

(end use technologies)

Imported energy

resources and prices

Indigenous energy

resource availability

and prices

MARKAL

model

Transport

Industrial

Residential

Commercial

Agriculture

Sectoral

demands

Model inputs Model outputs

Summary for policy-makers 13

economic growth and technologicalprogress. Box 1 provides a brief de-scription of these scenarios.

During the course of the study, itwas felt that there was a strong need tofocus attention on energy policy op-tions in the transport sector on two ac-counts.P Increasing trends of inefficiency in

the sector due to the use of personalvehicles for passenger movementand enhanced road transportationfor freight movement.

P Relatively low scope for supply-sidealternatives to the use of gasolineand diesel, at least in the short term.

Accordingly, an additional set ofpolicy scenarios was developed specifi-cally for the transport sector in view ofthe country’s high dependence on oilimport and the concerns due to risingoil prices (Table 1).

Box 1 Description of scenarios

P LG (low growth) represents low GDP (grossdomestic product) growth rate of 6.7%

P BAU (business-as-usual) represents energydevelopment as per current governmentplans and policies, representing a GDPgrowth rate of 8%

P HG (high growth) represents a high GDPgrowth rate of 10%

P EFF (high efficiency) includes energy-effi-ciency measures spanning across all sectors

P REN (aggressive renewable energy) repre-sents a high penetration of renewable en-ergy forms

P NUC (high nuclear capacity) scenario con-siders an aggressive pursuit of nuclear-basedpower generation

P HYB (hybrid) scenario is a combination of theBAU, EFF, REN, and NUC scenarios

P HG-cum-HHYB (high-growth hybrid) repre-sents a high growth rate of 10% in addition tothe hybrid scenario

Table 1 Description of energy-efficiency scenarios for the transport sector

Scenario Description

Enhanced share of public transport Share of public transport increased to 60% in 2036 as

(PUB-PVT) against 51% in the BAU scenario

Increased share of rail in passenger P Railway freight share increased from 37% in 2001

and freight movement vis-à-vis road to 50% in 2036 as against 17% in the BAU scenario

(RAIL-ROAD) P Railway passenger share increased from 23% in 2001

to 35% in 2036 as against 23% in the BAU scenario

P Share of electric traction increased for rail passenger

and freight to 80% by 2036 instead of 60% in the BAU

scenario

Fuel efficiency improvements Fuel efficiency of all existing motorized transport modes

(FUEL EFF) increase by 50% from 2001 till 2036

Enhanced use of bio-diesel in Penetration of bio-diesel to 65 Mtoe by 2036

transport sector (BIO-DSL)

Transport sector hybrid (TPT-HYB) Incorporates all the above-mentioned measures in addi-

tion to BAU

Mtoe – million tonnes of oil equivalent; BAU – business-as-usual


Key findings

The main findings of this study are dis-cussed below.

Total commercial energyrequirements

Table 2 presents the commercial energy re-quirements across various scenarios. In theBAU scenario, the total commercial energyconsumption is estimated to increase by 7.5times over the 30-year modelling periodfrom a level of 285 Mtoe (million tonnes ofoil equivalent) in 2001 to 2123 Mtoe in2031. A comparison of energy requirementsacross the alternative economic growth sce-narios indicates that if the economy grows ata slower pace of 6.7%, as characterized bythe LG (low-growth) scenario, commercialenergy requirement would increase to onlyabout 1579 Mtoe by 2031 (5.9% GDPgrowth), while the energy requirementscould be as high as 3351 Mtoe (8.6% GDPgrowth) by 2031 with a growth rate of 10%as represented by the HG (high-growth)scenario.

Although, the Indian government hasplans for enhancing the exploitation of itshydro power, nuclear energy, and renewable

energy resources, the analysis indicates thatthe impact of these supply-side alternativesis minor when compared with the total re-quirements of commercial energy by 2031,as indicated in the REN (aggressive renew-able energy) and NUC (high nuclear capac-ity) scenarios. Although the contribution ofhydro, nuclear, and renewable energy formstogether increases by about six times during2001–31, these sources can at most contrib-ute to a mere 4.5% of the total commercialenergy requirements over the modelling timeframe. It is, therefore, evident that the pressureon the three conventional energy forms, that iscoal, oil, and gas will continue to remain highat least in the next few decades.

The EFF (high-efficiency) scenario, how-ever, indicates that there exists a significantscope for reducing energy (~ 581 Mtoe in2031) if efficiency measures are deployed onboth the demand as well as the supply side.

These reduction possibilities exist prima-rily in the power, industrial, and transportsectors, and can lead to energy displacementduring the modelling period mainly interms of coal (~ 337 Mtoe in 2031) and oil(~ 244 Mtoe in 2031).

The HYB (hybrid) scenario indicates thatenergy requirements by the year 2031 wouldbe of the order of those in the LG scenario,

Table 2 Variation in commercial energy consumption across various scenarios (Mtoe)

Scenario 2001/02 2006/07 2011/12 2016/17 2021/22 2026/27 2031/32

BAU 285 391 527 749 1046 1497 2123

REN 285 391 524 740 1033 1479 2097

NUC 285 391 527 749 1030 1455 2061

EFF 285 379 479 623 838 1131 1542

HYB 285 379 478 619 823 1101 1503

LG 285 361 456 605 816 1134 1579

HG 285 435 638 962 1438 2186 3351

HHYB 285 405 544 760 1087 1576 2320

BAU – business-as-usual; REN – aggressive renewable energy; NUC – high nuclear capacity; EFF – high efficiency;

HYB – hybrid; LG – low growth; HG – high growth; HHYB – high-growth hybrid; Mtoe – million tonnes of oil equivalent


Figure 2 Fuel-wise commercial energy consumption in 2011, 2021, and 2031 in alternativeenergy scenarios

242217

242 238199

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BAU EFF NUC REN LG HG

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Commercial energy consumption

(million tonnes of oil equivalent)





Renewable energy Nuclear energy Hydro power (large + small) Natural gas Oil Coal

Projections for 2011 Projections for 2021 Projections for 2031

BAU–business-as-usual; EFF–high efficiency; NUC–high nuclear capacity; REN–aggressive renewable energy;

LG–low growth; HG–high growth

Scenario Scenario Scenario

while those in the HHYB (high-growth hy-brid) scenario would be in the range of re-quirements in the BAU scenario.

Gas is a preferred option for power gen-eration as well as fertilizer production. How-ever, while the domestic availability of natu-ral gas is estimated to plateau at about 44Mtoe by 2012, imports of gas are fraughtwith uncertainty. Accordingly, coal and oilare expected to remain the dominant fuels inthe next couple of decades. In the BAU sce-nario, the share of coal in commercial energyranges between 45% and 55% during theentire modelling time frame, while the shareof oil ranges between 36% and 40% (Figure2). However, the HYB scenario indicates thepotential to reduce coal and oil require-ments as compared to the BAU scenarioduring the modelling time frame with ad-equate and timely policy and technologicalintervention.

Identification of main demand- andsupply-side interventions for India’senergy sector

Based on the analysis of the model results,the key interventions can be delineated asfollows.P Enhancing end-use efficiencies (interven-

tion 1, I-1).P Adopting advanced coal- and gas-based

power generating technologies (interven-tion 2, I-2).

P Enhancing the exploitation of renewableenergy and nuclear energy resources (in-tervention 3, I-3).

P Enhancing efficiency in the transport sec-tor by modal shifts (intervention 4, I-4).

Accordingly, Figure 3 shows the possibili-ties of reducing commercial energy require-ments over the 30-year modelling time frame


Figure 3 Scope for reducing commercial energyrequirements

against the above-mentioned set of interven-tions. It is observed that from a level of2123 Mtoe in 2031 in the BAU scenario,commercial energy requirements can be re-duced significantly to 1503 Mtoe in the I-4scenario. Thus, a reduction of about 620Mtoe (more than twice the total commercialenergy requirements in 2001) can beachieved by undertaking an integrated ap-proach of adopting demand-side as well assupply-side alternatives in the energy sector.

As indicated in Figure 3, the scope for en-ergy reduction is the maximum from end-use efficiencies in the demand sectors as rep-resented by the area between BAU and I-1.In 2031, each of the end-use sectors has apotential to reduce energy consumption be-tween 15% and 25% of the energy use in theBAU scenario. However, given the relativeweight of each sector in the total energy use,the industry and transport sectors have thehighest potential for energy savings,amounting to 44% and 41% in 2011, respec-tively, 42% and 44% in 2021, respectively,and 41% and 47%, respectively, in 2031.

The potential savings due toend-use efficiency alone in-crease from about 28 Mtoe in2011 to 106 Mtoe in 2021,and 294 Mtoe in 2031across all the sectors.

The possibility of com-mercial energy saving due toadvanced coal- and gas-based power generatingtechnologies is representedby the area between I-1 andI-2 in Figure 3.

The model results indi-cate that in order of eco-nomic merit, the preferredpower generation technolo-gies are: (1) large hydro;(2) refinery-residue-basedIGCC (integrated gasifica-

tion combined cycle); (3) imported-coal-based IGCC; (4) high-efficiency CCGT(combined cycle gas turbine) (H-frame gasturbine); (5) indigenous-coal-based IGCC;(6) normal CCGT; (7) ultra-supercriticalboiler; and (8) supercritical boiler.

Although the government already hasplans to exploit its hydro power potential,additional efforts should be directed to-wards replacing the sub-critical coal-basedpower generation technology with efficientoptions such as IGCC and H-frame CCGT,which can play a significant role in reducingthe country’s coal requirement. It is ob-served that about 122 Mtoe of coal con-sumption could be reduced by 2031 by mov-ing to these more efficient power generationoptions (Figure 4).

Further, another 72 Mtoe of coal forpower generation could be displaced by en-hanced nuclear-energy and renewable-energy-based power generation, which isrepresented by the area between I-2 and thetrajectory I-3 in Figure 4.


Although the requirement for total elec-tricity reduces only due to end-use efficien-cies in each of the consuming sectors, theprimary commercial energy requirementsare determined also by the choice of powergenerating technology. Inthe BAU scenario, powergeneration capacity in-creases to 795 GW (giga-watts) by 2031. The modelresults indicate that withthe end-use efficienciesalone, power generating ca-pacity could reduce by 128GW in 2031 (which is ofthe order of total powergenerating capacity in2001). IGCC and H-frameCCGT are almost equallypreferred options for powergeneration and their intro-duction leads to the dis-placement of the coal sub-critical technology.

With the likely growth inenergy demands and it isclear that the maximum an-nual production potential ofall the conventional energyforms will be fully exploitedby 2016, and the countrywould need to increase itsimports of coal, oil, and gasin the future.

Moreover, as indicated inFigure 5, in the BAU sce-nario, imports of all the con-ventional energy formswould increase significantlyfrom the 2001 levels. Al-though the scope for reduc-ing import dependencyseems minor even in theHYB scenario, all effortsneed to be focused towards

this end, which have implications on energysecurity as well as foreign exchange outflowsof the economy.

Figure 4 Coal consumption across various interventions andscenarios

Figure 5 Fuel-wise import dependency


Transport sector options

The consumption patterns in the transportsector indicate that despite rising oil prices,demands for passenger and freight move-ment have been rather inelastic with regardto fuel prices.

In the BAU scenario, the total energyconsumption in the transport sector is esti-mated to increase by about 14 times from 34Mtoe in 2001 to 461 Mtoe in 2031 (Figure 6).

The analysis of the transport sector indi-cates that although much of the fuel reduc-tion possibility in this sector can be relatedto autonomous efficiency improvements ofthe transportation modes, efforts should bemade to enhance rail-based movement andthe use of public transportation. This will goa long way in reducing the transport sector’sdependence on oil. By targeting action onthe demand as well as supply sides in thetransport sector in the TPT-HYB scenario, areduction of about 190 Mtoe of energy canbe achieved in 2031 as compared to the BAUscenario.

Figure 6 Comparison of energy consumption in thetransport sector across various scenarios

The Sankey diagram shown in Figure 7depicts the Indian energy balance for 2001in the BAU scenario, which amounts to11 917 PJ (petajoules). It is observed thatthe highest losses occur during the genera-tion of coal-based power and account forabout 2924 PJ representing 25% of the totalenergy supply. The second-largest energyloss occurs in the transmission and distribu-tion of electricity, amounting to 590 PJ (5%of the total energy supply to the economy),which is higher than any of the electricityconsuming sectors. Fuel and oil losses ac-count for about 316 PJ, followed by conver-sion losses related to gas-based power gen-eration (amounting to 219 PJ).

Figure 8 depicts the energy flows in theIndian economy in the BAU scenario in2031 amounting to 88 879 PJ. Conversionlosses related to coal-based power genera-tion are still the highest, constituting about21% of the total energy supply. Power trans-mission and distribution losses continue tobe significant (amounting to 2864 PJ or 3%of the energy supplied), followed by conver-

sion losses in gas-basedpower generation, and fueland oil losses representing2037 PJ (1.7% of the energysupply) and 2089 PJ (1.8%of the energy supply), re-spectively.

The Sankey diagramshown in Figure 9 representsthe energy flow in the Indianeconomy under the EFFscenario in the year 2031.Total energy requirementsare 27% lower than in theBAU scenario amounting to64 574 PJ. Conversion lossesrelated to coal-based powergeneration constitute only14% (8798 PJ) of the totalenergy supply, while lossesin the transmission and dis-


Figure 7 Sankey diagram for the business-as-usual scenario (2001)

Figure 8 Sankey diagram for the business-as-usual scenario (2031)


tribution of power account for 3% (2143 PJ)of the total energy supply. The fuel and oillosses in the refining and gas-based powergeneration are 2.6% (1702 PJ) and 2%(1338 PJ), respectively, of the total energysupply.

Need for an integrated energyplanning approach

Figure 10 depicts the trends in energy inten-sity in each of the alternative scenarios de-veloped in this study against the BAU sce-nario. It is observed that even in the BAUscenario, energy intensity exhibits a declin-ing trend, from 0.022 kgoe (kilogram of oilequivalent)/rupee of GDP in 2001 to 0.017kgoe/rupee of GDP in 2031 (a decrease of23%). This implies that even with a GDPgrowth rate of 8%, and government plansand policies materializing as planned, the

Indian economy is already expected to beprogressing along an energy-efficient path.

The second observation is that much ofthe scope for further reduction in energyintensity exists due to the adoption of effi-ciency measures rather than the supply-sideoptions such as the enhanced pursuit ofnuclear-energy- and renewable-energy-based power generation technologies. In theEFF scenario, energy intensity could de-crease from 0.022 kgoe/rupee of GDP in2001 to 0.012 kgoe/rupee of GDP in 2031.

An analysis of the two integrated energypolicy scenarios, that is, the HYB (repre-senting an integrated policy approach at 8%GDP growth) and the HHYB (representingan integrated policy approach at 10% GDPgrowth) suggest that supply-side optionsalone would not be able to reduce energy in-tensity significantly. It is, therefore, neces-sary to simultaneously adopt measures on

Figure 9 Sankey diagram for the high-efficiency scenario (2031)


the demand and supply sides. Moreover, it isbest for the economy to pursue a high eco-nomic growth (10% GDP) while targetingexploitation of alternative energy forms aswell as efficient technology options from thedemand as well as supply side. With this ap-proach, the economy would not only be ableto meet its developmental goals but also en-sure rapid economic growth, making surethat this growth is achieved with the lowestpossible energy intensity (reaching 0.011kgoe/rupee of GDP by 2031 in the HHYBscenario).

Recommendations

The results of the modelling exercise indi-cate that from the viewpoint of energy secu-rity and the need to reduce its dependenceon imports of all the conventional energy fu-els, the country needs to undertake all pos-sible options on the demand and supply sidesimultaneously to reduce its total energy re-

quirements as well as diversifyits fuel resource mix. Towardsthis end, the economy wouldneed to pursue an integrated ap-proach to energy planning. Thekey elements that should consti-tute such an integrated planningexercise are suggested in the fol-lowing sections along with agraded classification scale tohelp delineate the immediatepriority areas from the other op-tions.

Provide a thrust to explora-tion and production of coal

The study clearly indicates thatcoal would continue to be themainstay, accounting for about45%–55% of India’s commer-

cial energy mix throughout the modellingtime frame in each of the scenarios.

By 2031, imports of coal in the BAU sce-nario are expected to be about 1176 Mtoe.Even at the current price of 60 dollars/tonnefor imported coal, this would translate to aforeign exchange outflow of about 400 thou-sand crore rupees.

With coal demand expected to increase inthe Asian market, prices of coal may also in-crease rapidly, exerting greater pressure onthe economy. Therefore, it is extremely im-portant to reduce the import dependency ofcoal by gearing up the exploration and pro-duction activity in this sector with a view toincrease the extractable coal reserves. Forthis, a multi-pronged approach consisting offollowing elements would need to be adopted.P Bringing about technological up-grada-

tion of mining technologies.P Opening up of the coal sector to private

investors. A policy similar to the new ex-ploration policy of the Ministry of Petro-leum and Natural Gas, GoI, may be

Figure 10 Trends in energy intensity from 2001 to 2031


adopted after modifications to suit thecoal sector requirements.

P Strengthening the CMPDIL (CentralMine Planning and Design Institute Ltd)to undertake greater R&D (research anddevelopment) efforts, and scale up its ef-forts to improve coal extraction technol-ogy and methods, especially beyond 300-m (metre) depth.

P Undertaking joint ventures for extractionof coal from deep coal seams with a viewto upgrade technology and improveproductivity

P Adopting advanced exploration and pro-duction technologies to identify and pro-duce coal from seams beyond 300 m.

Involving private sector in explorationand production of hydrocarbons

Although the initiatives taken by the DGH(Directorate-General of Hydrocarbons) arealready producing results in the explorationand production area, recent findings by theReliance and other joint venture operationsindicate possibilities of much greater find-ings in the oil and gas sector. NELP-V (NewExploration and Licensing Policy-V) is astep in the right direction but it is importantto continue pursuing exploratory efforts fortapping indigenous oil and gas.

Steps towards energy security inhydrocarbons

India’s high dependence on oil import re-flected in various scenarios indicates theeconomy’s vulnerability to oil supply disrup-tions (emanating from external factors suchas wars and political instability) and adverseimpacts of sudden oil price shocks.

Since the transport sector accounts formost of the oil consumption, it is also themost crucial sector in terms of requiring ac-tion for improving efficiency and enhancing

possibilities of conservation and substitutionthrough the use of alternative fuels and tech-nologies. Enhancing the share of publictransport and rail-based movement; intro-duction of alternative fuels such as CNG(compressed natural gas), bio-diesel, andethanol; and autonomous efficiency im-provements in vehicles could reduce the im-port dependency of petroleum productsfrom about 74%, 81%, and 90% in the BAUscenario to 72%, 76%, and 85% in theHYB scenario for 2011, 2021, and 2031,respectively.

Reduce coal requirements

It is observed that coal would continue to ac-count for 50% of the energy mix, with about70% being used by the power sector. Themodel results indicate that maximum reduc-tion in the energy requirements can beachieved in the power sector on thesupply side.

Since coal-based power generation willcontinue to play a critical role in the next30–50 years, it becomes essential to adoptwell-proven technologies like supercriticaland ultra-supercritical boilers in the imme-diate future, that is, in the Eleventh Five YearPlan instead of using sub-critical technology.The Benson boiler was first designed in1924 (Siemens Power Generation 1995),and since then, these boilers are being de-signed and operated at higher steam proper-ties (for example, pressures of 300 bars andtemperatures greater than 600 °C). It isstrongly recommended that India adopt thistechnology immediately. Experience world-wide has shown that Benson boilers becomecost-effective if the unit size is about 1000MW (megawatts) or more.

Also, it is important to accelerate thetransition to other efficient coal-basedpower generation technologies such as theIGCC technology. For this purpose, demon-


stration plants using IGCC should be set upto address the issue of technology barrier.Faster learning can be achieved by outrightpurchase of technology. A continued effort isrequired in this direction to achieve sus-tained adoption of the emerging technolo-gies. For example, in case of the indigenousdevelopment of supercritical boilers, thephased manner of technology developmentwas adopted.

With increased refining capacity, refineryresidue such as vacuum residue and petro-leum coke will be available on a large scale.It is recommended that refinery-residue-based IGCC power generation plants also beset up. International experience in this tech-nology is already available. Handling refin-ing residue is comparatively easier than han-dling high-ash coal for gasification for the pro-duction of ‘syn’ gas and its use in gas turbinesfor power generation. The government shouldadopt this technology as soon as possible.

Further, adoption of aero-derivative ad-vanced gas turbines like H-frame for powergeneration should be aggressively promoted.In future, it is possible that natural gas re-serves will increase, especially due to the ef-forts of the GoI in deep-sea exploration asalso due to the viability of extracting naturalgas from gas hydrates. Therefore, aggressiveadoption of advanced gas turbine will alsohelp in enhancing the efficiencies of IGCCplants. It will also be helpful if the GoI canadopt a research programme on advancedgas turbine in national research institutionsor laboratories like National AeronauticsLtd and Hindustan Aeronautics Ltd.

Apart from the power sector, the possibil-ity for reducing coal exists in steel reheatingfurnaces, ceramic industry, brick units, andin adoption of blended cements and im-proved technology in coal-based captivepower generation units. Appropriate pricingof energy would play a crucial role in thisregard.

Reduce consumption of petroleumproducts

Since the transport sector accounts fornearly 70% of the total petroleum consump-tion, the following measures are recom-mended to reduce the consumption of petro-leum products and thereby their import de-pendency.P Enhancing the share of public transporta-

tion, promoting MRTS (Mass RapidTransit System), ensuring better connec-tivity of trains to urban areas of the cities,introducing high capacity buses, and so on.

P Electrifying the railway tracks to themaximum extent possible.

P Increasing the share of rail in freightmovement by enhancing container move-ment and providing door-to-door deliv-ery systems.

P Introducing Bharat-III norms across thecountry for road-based personal vehicles

P Introducing cleaner fuels such as low-sulphur diesel, ethanol blending, andbio-diesel.

In the industry sector, given the inefficientdiesel consumption by the DG sets for cap-tive power generation, phasing out the use ofdiesel in industry as well as in the agriculturesector is recommended. Provision of reliablepower supply is imperative to achieve this.

Use of naphtha for fertilizers productionand power generation should be avoided tomake it available for the petrochemicals sec-tor. Natural gas should, therefore, be madeavailable in adequate quantities for off-takeby the fertilizer industry and power plants.

Natural gas to be the preferred fuelfor the country

The study clearly indicates that natural gasis a preferred option for power generation aswell as for the production of nitrogenous fer-tilizer. The availability of natural gas, there-


fore, needs to be facilitated by removinginfrastructural constraints. Besides its highend-use efficiency, it is a cleaner fuel andrelatively much easier to handle than coal. Itis, therefore, important to enhance naturalgas exploration and production from deepsea. Additionally, efforts should be made tosource gas from within the Asian region (in-cluding Turkmenistan, Bangladesh, Iran,and Myanmar).

Make renewable energy resourcescompetitive, and target their use inremote areas and for decentralizedpower generation

Renewable-energy-based power generationis not a preferred option due to the highupfront costs and low capacity utilization ofthese technologies. However, renewable en-ergy resources play a crucial role to play inproviding decentralized power to remote ar-eas. Apart from continuing to provide sup-port to renewable energy schemes, effortsshould also be directed towards large-scaledeployment of related technologies in orderto further bring down their costs. Decentral-ized power generation, especially in remotelocations where the grid cannot be extended,should necessarily be based on renewableenergy forms to provide these regions withaccess to clean and reliable energy.

Hydro power

Despite its low capacity utilization factor,hydro power is a cheap option as indicatedby the model. Accordingly, investments inhydro power should be accelerated to tapthis perennial source of power.

Nuclear power

Since additional nuclear-based capacity dis-places coal, it is important to enhance thepenetration of this option to the extent pos-

sible. Efforts should be directed to step upnuclear capacity to about 70 GW during themodelling time frame, from 2001 to 2031.However, if the modelling time frame is ex-tended beyond 2030, positive impacts ofnuclear energy in the form of advanced tho-rium-based reactors can be realized, with anestimated potential of about 530 GW.

Recommendations for the industrysector

P Ban import of second-hand machinery,for example, in sponge iron plants andpaper mills

P Use cleaner fuelsP Facilitate shift towards cogeneration, tap-

ping waste heat for process heatP Provide support to large-, medium-, and

small-scale industryP Sub-sectoral technology options that will

result in large-scale energy savings in-clude the following.• Introduce blast furnace with top recov-

ery turbine in integrated steel plants,BOF (basic oxygen furnace) for steelmaking, and continuous casting forfinished steel

• Adopt and improvise COREX processfor integrated steel plants

• New cement plants to adopt six-stagepreheating, and use blending materialslike slag and fly ash

• Move towards larger integrated papermills with continuous digesters, blackliquor boilers, and cogeneration

• Adopt efficient pre-baked electrodes inaluminium manufacturing process

Recommendations for the residentialand commercial sector

P Lighting is the major electricity-consum-ing end-use in the residential sector. Thereplacement of light bulbs with tube


lights and CFLs (compact fluorescentlamps) can bring about huge energy sav-ings. Towards this end, the cost of CFLsneeds to be reduced by promoting theirlarge-scale manufacturing.

P Even with a conservative estimate of effi-ciency improvement possibilities, thereexists tremendous scope for savings in theresidential and commercial space condi-tioning. For this, it is necessary to makeavailable efficient motors as against localmakes, provide incentives to buy fromgovernment certified outlets, and createawareness among consumers.

P Tradition fuels need to be replaced withcleaner fuels. Although traditional fuelssuch as dung, firewood, and crop residueare freely available, the low efficiencies,highly polluting nature, and other socialand environmental impacts associatedwith their use do not make them a sus-tainable option in the long term.Although government initiatives wouldensure that majority of the population isprovided with access to modern fuels(city gas and liquefied petroleum gas),some of the rural poor are expected tocontinue supplementing their energyneeds with freely available traditional fu-els. For the population that has notshifted to cleaner options, programmesfor improved cookstoves, and so onshould be continued.

Rationalize agricultural power tariffs

Power tariffs for the agricultural sectorshould be at least at a level where the cost ofgeneration can be recovered.

Enhance efforts to tap alternativeindigenous energy sources

In order to minimize the levels of import de-pendency in the future, it is imperative tofocus on increasing the supply of indigenousenergy resources. Hence, India should planto enhance efforts in R&D in the explorationand production of energy resources; espe-cially in the area of deep-sea natural gasexploration, extraction of coal from seamsthat are over 300-m deep, in-situ coal gasifi-cation, and gas hydrates.

Transmission and distribution loss

It is also possible to reduce technical trans-mission and distribution losses to the level of8%–12% as against 16%–19% in the coun-try. The technologies for these would be toadopt very high-voltage AC transmissionand HVDC (high-voltage DC transmission).The distribution losses can be reduced byadopting energy-efficient transformers thatuse high-grade steel in the transformer coreto reduce hysterical losses.

Tables 3 and 4 show the pathways that areapparent to achieve these goals over the next30 years.

References

Planning Commission. 2002Tenth Plan DocumentNew Delhi: Planning Commission, Governmentof India

Siemens Power Generation. 1995800/1000-MW Coal-fired Power Plant Unitswith High Efficiency LevelsGermany: Siemens Power Generation

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Psa summary