ENERGY AND SUSTAINABLE DEVELOPMENT

By

A. Anantha

GM, REC

Sustainable Development

Sustainable Development means ‘Development that meets the needs of the present day without compromising the ability of future generations to meet their needs’

Background

In the last 50 years Global GDP grew around fourfold Despite high population growth rates in

developing countries average per capita increase by about 30%

Adult illiteracy and infant mortality in developing countries cut by half

Concerns

Growing social stresses due to conflicts and inequality, poverty etc

Environmental degradation

For Next 50 years

The global economy may grow further more than four folds

Poverty may reduce considerably

Govt. Attention Needed

To reduce poverty Maintain Growth Improve social cohesion Protecting Environment

Energy Consumption worldwide P rimary Energy Consumption

Population Per Capita Energy Consumption

Million tonnes oil millions Kgoe

USA 2298.7 292.6 7856

China 1204.2 1,300.0 926

Russian Federation 656.9 144.6 4543

J apan 504.9 127.7 3954

India 350.4 1,070.8 327

Germany 332.1 82.6 4021

Canada 302.3 31.6 9566

France 259.6 60.0 4327

United Kingdom 225.4 59.3 3801

South Korea 211.8 47.5 4459

Italy 181.0 58.0 3121

Brazil 180.0 181.4 992

World Average 9800.8 6313.8 1552

India is 5th largest energy consumer. Per Capita energy consumption is very low. Source: BP Stats 2005

Energy Consumption in India

Consumption in million

tonnes of oil equivalent

% of total

Oil 113.1 32.3

Natural Gas 26.9 7.7

Coal 190.6 54.4

Nuclear 4.1 1.2

Hydro 15.7 4.5

Total 350.4 100

Consumption by energy type in 2003 Source: BP Stats 2005

Energy Challenges

Improve access to energy which is Sustainable Reliable Affordable

In order to Alleviate poverty Promote energy savings Promote renewable and sustainable technologies

Energy Challenges for Sustainable Development

Tackling climate change Promoting environmentally sound energy Use of efficient technologies Meeting growing energy needs Capacity building

Energy Efficiency and DSM

Energy efficient technologies Compulsory energy audit annually End use efficiency Demand Side Management measures like

peak saving, time of the day metering etc

Energy Needs

For Urban areas- High Demand For Rural areas- Varies from life line to

medium demand

Sources of Energy

In rural Areas (villages) Fuel wood, biomass, biogas, kerosene etc Decentralised electricity generation locally Electricity supply through grid

The status of village electrification in India as on 31.03.2004

Total No. of census villages – 587556 Total No. of census villages electrified –474982

(81%) Balance villages to be electrified – 112401 *

(19%)

* As per the new definition of village electrification (effective from 2004-05) total no. Of un-electrified villages is estimated to be 1,25,000

The status of household electrification in India

Total No. of households – 13.8 Cr. (2001 census) Total No. of household electrified – 6.02 Cr. (44%) Balance household to be electrified – 7.78 Cr.

(56%)

Rajiv Gandhi Gramin Vidyutikaran Yojana (2005)

Create Rural Electricity Backbone

Wire villages/hamlets

Power to all BPL families – last mile connectivity

Electrify public places

Develop franchisees

Policy TargetsAs per Rajiv Gandhi Grameen Vidyutikaran

Yojna, April 2005.in 5 years….

Electrify all villages and habitants Provide access to electricity to all households Give electricity connection to Below Poverty Line

(BPL) families free of charge. Through creation of :

Rural Electricity Distribution Backbone (REDB) with at least one 33/11 kV (or 66/11kV) sub station in each block.

Village Electrification Infrastructure (VEI) with at least one distribution transformer in each village/habitation.

Decentralised Distributed Generation (DDG) system where Grid supply is not feasible or cost effective.

Work in hand

States 22Districts 196Villages 51,284 unelectrified +

74,615 electrifiedHouseholds 72,78,758As on 31.03.06 Additional 10,000 villages electrified under RGGVY

(05-06)

581 207 0 122 76510000

40000

230000220000

50000

20000

350

35000

0

50000

100000

150000

200000

250000

00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09

Electrification of Unelectrified Villages

Intensive Electrification

Electrification of Villages

(Projected)

38

Achievements/ Targets

10,000 villages electrified by March 2006

40,000 villages targeted to be electrified by March 2007

Additional 25,000 villages targeted for intensive electrification

Funds required Rs. 7500 crores i.e. about Rs. 600 crores per month

Challenges

Timely flow of funds

Holding price line of equipments

Creation of viable franchisees

Availability of reliable power

Sl.No. State / Utility 2002-03 2003-04 2004-051a APCPDCL (Andhra Pradesh) 29.68* 19.12* 23.95b APEPDCL (Andhra Pradesh) 19.32* 17.79* 14.27c APNPDCL (Andhra Pradesh) 26.84* 10.41* 21.91d APSPDCL (Andhra Pradesh) 27.26* 17.17* 20.552 Arunachal Pradesh 61.8 16.26* 37.263 Assam 39.44 43.35 40.40*4 Bihar 77.64 77 74.095 Chattisgarh 38.68* 38.87* 45.07*

6a BSES Rajdhani (Delhi) 47.40* 45.07* 40.64*b BSED Yamuna (Delhi) 61.89* 54.29* 50.12*c NPDL (Delhi) 47.79* 44.86* 33.79*7 Goa 22.98 21.28 17.278 Gujarat 31.24 30.98 30.32

9a DHBVNL (Haryana) 41.39 48.68* 36.39b UHBVNL (Haryana) 42.54 52.84* 43.12

10 Himachal Pradesh 29.52 9.27 21.7111 Jammu & Kashmir 61.71* 67.56* 68.3312 Jharkhand 53.00* 65.00* 69.23

13a BESCOM (Karnataka) 35.7 28.91 24.83b GESCOM (Karnataka) 43.54 43.86 42.99c HESCOM (Karnataka) 47.73 31.66 41.64d MESCOM (Karnataka) 35.68 25.82 26.62

14 Kerala 29.08* 27.44* 32.1215a Poorva KVVCL (MP) 34.05 42.68* 44.37*

b Pashchim KVVNL (MP) 43.41* 45.66* 38.86*c Madhya KVVCL (MP) 51.13* 57.06* 53.17*

AT&C Losses-Present statusAT&C Losses-Present status ( (All India AT&C loss )

Source: MOP site/Power Finance Corporation / * State Electricity Regulatory Commission

Sl.No. State / Utility 2002-03 2003-04 2004-0516 Maharashtra 44.3 44.18* 26.6217 Manipur 76.86 69.73 88.5018 Meghalaya 42.34 39.31 38.1619 Mizoram 49.55 40.75 22.1120 Nagaland 53.82 55.59 39.53

21a CESCO (Orissa) 55.04* 51.10* 49.37*b NESCO (Orissa) 52.25* 50.36* 42.96*c SESCO (Orissa) 49.76* 51.56* 45.71*d WESCO (Orissa) 47.30* 46.18* 40.60*

22 Pondicherry 41.66 41.01 40.4923 Punjab 23.19 22.40* 20.62*

24a AVVNL (Rajasthan) 41.22* 44.57* 49.75b JDVVNL (Rajasthan) 41.97* 41.56* 47.56c JVVNL (Rajasthan) 39.99* 38.62* 43.22

25 Sikkim 80.43 66.54 63.6026 Tamilnadu 18.00* 18.00* 18.00*27 Tripura 34.31 31.53 30.87

28a Dakhinachal VVN (U.P) 48.00* 43.21* 48.00*b Madhayanchal VVN (U.P) 48.00* 43.21* 38.00*c Pashchimanchal VVN (U.P) 48.00* 43.21* 43.00*d Poorvanchal VVN (U.P) 48.00* 43.21* 38.00*

29 Uttaranchal 40.74 43.38 42.8530a West Bengal 34.53* 43.92* 35.66*

b CESC (WB) 19.30* 17.90* 16.80*

AT&C Losses-Present statusAT&C Losses-Present statusAll India AT&C loss (contd..)

Source: MOP site/Power Finance Corporation / * State Electricity Regulatory Commission

Less than 20%

Between 20% and 30%

Between 30% and 40%

Above 40%

Goa Andhra Pradesh Karnataka Delhi Tamil Nadu West Bengal Kerala UP Himachal

Pradesh Assam Bihar

Maharashtra Meghalaya J harkhand Punjab Arunachal MP Mizoram Gujarat Uttaranachal Nagaland Rajasthan Tripura Haryana Manipur Assam J &K Chattisgarh Orissa Pondicherry Sikkim

AT&C Loss % of various states (based on 04-05 figures)

Year Billion kWhr Installed Capacity (GW)

7% 8% 7% 8%

2006-07 700 700 140500 140500

2011-12 982 1029 197060 206440

2016-17 1377 1511 276385 303330

2021-22 1931 2221 387645 445690

2026-27 2709 3263 543690 654865

2031-32 3799 4793 762555 962210

Projections for Electricity requirement by MOP

1010

Source: Draft Integrated Energy Policy document

Plan-wise Projected Installed Capacity (MW)

0

50000

100000

150000

200000

250000

XI Plan(2007-12)

XII Plan(2012-17)

XIII Plan(2017-22)

IVX Plan(2022-27)

VX Plan(2027-32)

7% 8%

1111

Source: Draft Integrated Energy Policy document

Fuel Type Physical Units MTOE

Rural Urban Total Rural Urban Total

Fire Wood & chips (Mt.)

158.87

18.08 176.95

71.49 8.13 79.62

Electricity (BkWh) 40.76 57.26 98.02 3.51 4.92 8.43

Dung Cake (Mt.) 132.95

8.03 140.98

27.92 1.69 29.61

Kerosene (Mltrs) 7.38 4.51 11.89 6.25 3.82 10.07

Coal (Mt.) 1.20 1.54 2.74 0.49 0.63 1.12

L.P.G. (Mt.) 1.25 4.43 5.68 1.41 5.00 6.41

Household Energy Consumption in India (July 1999- June 2000)

Source: Derived from NSS 55th Round, (July 1999- June 2000 data, National Sample Survey Organisation, Ministry of Statistics and Programme Implementation, Government of India

1212

The Current Situation Large parts of rural India not electrified Poor service levels – 12 to 15 hour power cuts

common in several large states Erratic voltage and rampant breakdowns High AT&C losses

Average Hours of Supply

0

5

10

15

20

25

30

25% 28

%

28%

29% 30%

32% 34

%

35% 38

% 40% 43

% 47% 50

% 55%

56%

56%

68%

70%

80%

80%

81% 83

% 90% 95

%

0%10%20%30%40%50%60%70%80%90%

100%

J&K

K'taka

Guj

TN Chattisgarh

Andaman

Kerala

M'tra

MP

AP Nagaland

Manipur

Uttaranchal

Arunachal

Mizoram

Rajasthan

Tripura

Meghalaya

WB

UP Orissa

Assam

Jharkhand

Bihar

% of Rural Households Unelectrified% of Rural Households Unelectrified

Illustrative Cost structure of SEB Supply

Delivered cost to consumer = 662 P/kWh

AT&C loss of 48% Distribution cost of 60 P/kWh Transmission cost of 20 P/kWh

& 7% losses Cost of generation for servicing

incremental load considered Imperative that economic and

fiscal policies should address the core issue along with the reduction in other underlying costs

11

01

40

34

30

9

(P/kWh)

Distribution Cost & AT&C Loss

Tr. Cost & Loss

Generation Fuel Expense

Generation Capital

Franchisee

The Energy/ Electricity distribution and

collection models should be on the basis of

franchisees for a sustainable development

Indian Energy Scenario

Revenue Collection problems

India- 17% of world population, 4% of primary

energy

Present pattern- predominantly fossil based

56% of households unelectrified

Linkage between energy services and quality

of life

Power Generation Options

Power Generation

Centralized

(Grid Connected)

Decentralized Distributed Generation (Isolated/ Grid

interconnected)

Cogeneration

( Export)

Demand Side Management

(Solar water heater, passive solar, Energy Conservation etc.)

Typical Village Load Profile

Source Prof. Rangan Banerjee, IIT Mumbai

DDG- Issues

Execution at mass level To contain tariff within affordable limits To pursue/encourage private companies and

local bodies Local/ Consumer participation Inconsistent SEBs policy Mapping of energy resources Low load factor Standardization of units

Combination Of Grid And Off Grid Operations

DDG also to support grid power as a supplement

Minimum guarantee of supply hours to be given by the States/ State utilities at normal rates

Balance hours supply through DDG at DDG’s determined tariff

Average cost of supply through grid and off grid to be reasonable and affordable

To improve the PLF, if required, Power may also be exported to the grid or third party by paying wheeling charges, wherever applicable

Regulatory Issues - DDG

As per the Electricity ACT 2003 no license requirement for stand alone generation and distribution in notified rural areas

Interconnection with grid may bring State Regulatory Commissions in picture- Matter needs to be addressed

For stand alone system the tariff can be fixed by the operator, regulatory commission has no jurisdiction in such areas notified as rural

Private operators of DDG systems must follow certain guidelines to be notified by the Govt. of India regarding periodicity of increasing the tariff and the basis of increase

Safety regulations to be followed even for DDG as per the Electricity Act 2003

DDG- Policy Interventions

No Customs or Excise Duty to be charged

Income tax holiday for 10 years

No Electricity Duty or other levies

Talukas as Rural Economic Hubs

Talukas are manageable Talukas can be self sufficient with local resources Talukas may be converted to Rural Economic

Hubs DDG can meet the supplementary energy needs

of the Talukas Employment generation in Talukas would reduce

migration to cities Decentralization would work well for

developmental goals and against economic deprivation

Give equal opportunity to all Talukas Rural industries will get a boost It will be sustainable

REC LTD. SHOULD BE THE APEX AGENCY FOR RURAL DEVELOPMENT AND REFINANCING BEING ALREADY SPREAD ACROSS THE COUNTRY AND BEING CONSIDERED FOR NAVARATNA STATUS

Way Forward…..

Need to improve Rural Energy Delivery systems Encourage DDG as supplementary power option Framing of Decentralised Distributed Generation

Policy at National level Develop talukas/ blocks as rural economic hubs

for sustainability Utilise RGGVY infrastructure for feeding power

through DDG as supplementary power to protect the investments made under RGGVY

Priority to energy efficiency and DSM measures Investments to be made in T&D sector to cut

down AT&C losses drastically Concrete efforts required by all stakeholders for

sustainable development

Conclusion

Growing energy demand and shortage of resources call for the urgency to focus attention on energy efficiency and demand side management besides reducing AT&C losses. Energy generation to be more decentralised also for meeting local needs through grid or off grid. Investments have to be made now with a vision for sustainability. All energy options to be exploited to the extent feasible

Thank You