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AGRICULTURAL & RESOURCE

ECONOMICS

Information, articles, and organizations

dealing with agricultural economicsand natural resources.

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Growth of Indias Agriculture

Sector

0

20

40

60

80

100

120

140

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

InstalledG

enerationCapacity(GW

)

0

100

200

300

400

500

600

700

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

Year

Per

CapitaConsumption(kWh

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

1940 1950 1960 1970 1980 1990 2000 2010 2020

NumberofVillagesElectrifie (Projected)

Serious Growth after 60s Generation 6th largest in world

Per capita consumption low

Close to 95% villages electrified

Ministry of Power, Government of India

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The Status

Coal

67166

Gas

11840

Diesel

1196

Hydro

30135

Nuclear

2720Wind

2488 Installed Capacity > 120 GW

Gross Generation: 620 billion kWh

Per Capita Consumption ~ 600 kWh

Coal dominant energy source (58%)

Ministry of Power, Government of India

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Indias Future Growth

India needs sustained economicgrowth > 8% to radicallyimprove its HDI

Growth in last few years ~ 5%-7%

Growth hampered byinfrastructure: electric power Peak shortfall

Average shortfall

High T&D Losses:

Unscheduled black-outs,especially in rural areas

Supply to agriculture sector notmetered and almost free

Source: Groningen Growth and Development CenterTotal Economy Database, http://www.ggdc.net/.

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Growth Areas

Present growth is skills or resource driven(exports: software, gems and jewels, garment manufacture)

Future Growth will have to be on value addition & engineering

Rural sector to play a major role

(agricultural and dairy produce; minimizing wastage and improvingefficiency)

Infrastructure building(roads, buildings, railroads etc.,)

Manufacturing

The elasticity has to be greater than 1 for poweringfuture growth

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Elasticity and Electric Power Needs

Target economic growth ~ 8%

Elasticity of electricity with GDPstabilizing at ~ 1.2

Implications for future electricpower requirements by 2015:

Capacity addition

Investments

Fuel mix

Pricing and Policies T&D reforms

0

1

2

3

4

5

6

1951-

56

1956-

61

1961-

66

1969-

74

1974-

78

1980-

85

1985-

90

1992-

97

ElasticityofGeneration

vsGDP

Review of State Electricity Boards

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Agricultural Sector Requirements

Generation

(billionkWh)

Year2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

600

800

1000

1200

1400

1600

1800

2000

Key GDP Growth Rate0.050.060.07

0.080.090.1

Required for 8% economic growth by 2015:

Installed Capacity 250 GW

Generation 1500 billion kWh

Per Capita Consumption 1000 kWh

CapacityNeeded(GW)

Year2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

100

120

140

160

180

200

220

240

260

280

300

Key GDP Growth Rate0.050.060.07

0.080.090.1

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The Task Ahead

Need to add 135 GW in ten years

13,500 MW required per annum

~ One power plant per month

China adds one per week !!

Maximum added till now is

4,600 MW (One in four months)0

5000

10000

15000

20000

25000

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

AnnualCapacityAddition(MW

Annual added capacity

Total Capacity addition required

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Fuel Supply: Options for Future

Coal Conventional

Gasification

Natural Gas

Hydro

Nuclear PHWR + FB + AHWR

PLWR

Wind On-shore

Off-shore

Biomass Solar

Photo voltaic

Concentrating Solar Power

Fuel Present In 2015

Coal 67,166 MW ?

Gas 11,840 MW ?

Hydro 30,135 MW ?

Nuclear 2,720 MW ?

Wind 2,488 MW ?

Biomass 1,000 MW ?

Solar - ?

TOTAL 115,035 MW 250,000 MW

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King Coal !

Reserves

Proven 91 billion Tons

Indicated 116 billion Tons

Inferred 37 billion Tons

TOTAL 245 billion Tons

Coal reserves: > 250 years at present

levels of consumption

Concentrated in Eastern India

Madhya

Pradesh7%

Others

13%

Jharkhand

29%

Chattisgarh

16%

West Bengal

11%

Orissa

24%

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Indian Coal Quality

High ash: 25%-45%

Low sulfur < 0.5%

Low energy content

CO2 emissions > 1 kg per kWh

Issues with coal:

Ash disposal: annual ashgeneration > 90 million tons

CO2 emissions

HeatingValue

(BTU/lb)

AshContent

(%)

Sulfur

(%)

Illinois # 6 10,900 11.00 3.25

Wyodak 11,960 5.97 0.40

WPC Utah 11,240 5.32 0.61

Indian Coal 6,500 25-45

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Coal: Future Scenarios

Projections of coal demand (2015):

High growth : 580 MT

BAU scenario : 380 MT

Domestic production will not be

enough. Imports needed

Issues:

Ash generation > 200 million Tons

CO2 emissions > 850 Million Tons

Particulate and NOx emissions

(presently not regulated)

Coal transportation bottleneck: Rail

transportation stagnation

0

100

200

300

400

500

600

700

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

CoalRequirementinPo

werSector(MillionTons

Coal Transport by Railways

Business as Usual

Accelerated growth scenario

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Indias CO2 Emissions

Indias fossil based CO2 emissions in2003:

Coal 666 MMT

Petroleum 305 MMT

Natural Gas 53 MMT

Indias CO2 emissions rapidly growing Trebled during 1981-2001

India and China presently not subject tomandatory cuts in CO2 However future may not be so

0%

5%

10%

15%

20%

25%

30%

35%

1980 1985 1990 1995 2000 2005

ShareofGlobalCO2Em

issions(%)

US

Western Europe

China

India

EIA, US Department of Energy

India China Total

1980 1.64% 7.83% 9.47%

2003 5.60% 19.34% 24.93%

Share of global emissions

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Options with Coal

Coals dominance will undoubtedly continue. Availability

Cheap

The question is: How much do we want to add with coal given the constraints

of quality, transportation, carbon emissions and environmental issues.

Installed

Capacity of Coal

(GW)

Coal Required

(Million MT)

CO2 Emissions

(Million MT)

Upper Case Coal stillcontributes 60%

of capacity

~ 150 GW 580 MMT 850 MMT

Lower Case Aggressive

deployment of

nuclear and

natural gastechnologies

~ 120 GW 470 MMT 690 MMT

Coal scenarios for high economic growth ~ 8%

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Hydro-Electricity

Inferred potential > 120 GW

Installed capacity 30 GW

Most big projects are in North-Eastern states of Arunachal Pradesh,

Sikkim, Uttaranchal and J&K

Problems of rehabilitation and

resettlement with large projects

Environmental issues

Water sharing agreements with

neighbors

National Hydro Power Corporation, Government of India

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Hydro-Electric Potential

State Capacity

(MW)

Dulhasti J&K 390

Dhauliganga Stage - I * Uttaranchal 140

Teesta Stage V Sikkim 510

Loktak Downstream Manipur 90

Parbati-II Himachal Pradesh 800

Sewa-II J&K 120

Subansiri Lower Arunachal Pradesh 2000

Teesta Lower Dam-III West Bengal 132

Omkareshwar Madhya Pradesh 520

TOTAL 4702

Details of projects under construction

Projects awaiting

clearance and

government approval

2,570 MW

Projects at DPR and

infrastructure

development stage

11,620 MW

Projects under survey

and investigation

11,000 MW

Ongoing and Planned Projects

Possible to add 10,000 MW by 2015

http://www.nhpcindia.com/english/dul.htmhttp://www.nhpcindia.com/english/dhauli.htmhttp://www.nhpcindia.com/english/dhauli.htmhttp://www.nhpcindia.com/english/dhauli.htmhttp://www.nhpcindia.com/english/dhauli.htmhttp://www.nhpcindia.com/english/dhauli.htmhttp://www.nhpcindia.com/english/dul.htm

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Natural Gas

Fastest growing primary fuel, worldwide Indian statistics (2004-05):

Consumption: > 31 BCM/year

Primary uses:

Power 41%

Fertilizer 32%

Sponge Iron 4%

Other 23%

Growing needs for transportation (and some cooking)

Latent demand estimated as high as 80 BCM (depends onprice, of course)

CENTGASTurkmenistan

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Natural Gas

Pipelines

Indore

- onwardsto India

TAPS

TAPS(across water)

CENTGAS

- to Pakistan

Indore

Baroda333333333

KarachiGwadar

222222222

444444444

Gas supplyConsumptioncenter

New Delhi

Multan

1 Turkmenistan 2 Iran 3 Oman 4 Qatar1 Turkmenistan 2 Iran 3 Oman 4 Qatar1 Turkmenistan 2 Iran 3 Oman 4 Qatar1 Turkmenistan 2 Iran 3 Oman 4 Qatar1 Turkmenistan 2 Iran 3 Oman 4 Qatar1 Turkmenistan 2 Iran 3 Oman 4 Qatar1 Turkmenistan 2 Iran 3 Oman 4 Qatar1 Turkmenistan 2 Iran 3 Oman 4 Qatar1 Turkmenistan 2 Iran 3 Oman 4 Qatar

111111111

Pakistan

Afghanistan

Iran

Turkmenistan

QatarIndia

Oman

Gas Authority of India Limited

Indias Gas Pipelines

Possible Gas Imports (Tongia & Arunachalam, 1999)

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Imports of Gas

LNG growing (5+ million tons/annum), but pricesremain high 1 ton LNG can power ~ 1 GW of power

1 BCM gas ~ .8 GW of power

thus, 20 BCM ~ 16,000 MW of gas power

Initial imports wont necessarily add to elec. capacity

Will substitute naphtha in power plants and find other usesas well More than half the fertilizer feedstock is gas

Industry has already claimed the bulk of current LNG supplies

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Biomass

India predominantly agriculturalcountry.

Annual production of agro-forest and

processing residues: 350 million tons

Power generation potential > 22,000

MW Advantages:

Decentralized generation: close to

rural load centers.

Technology reasonably well

developed Environmentally friendly: No net CO2

emissions

Feedstock Examples Potential Installed

Agro-forest

residues

Wood chips,

mulberry,

coconutshells

17,000 MW 50 MW

Processing

residues

Rice husk,

sugarcane

bagasse

5,000 MW 1000 MW

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Biomass Conversion Technologies

Gasifier-reciprocating engine Power plants of 5 kW100 kW possible

Diesel engine needs ~ 15%-20% for

ignition

Cost of electricity is high

Gas engine can operate on 100% syngas

Overall efficiency ~ 20%

Largest gasifier 100 kW

Fluidized bed combustion boilers

Rice husk and bagasse

25%-30%

Power plants of 5 MW35 MW operating in

various sugar mills

Producing electricity is sweeter than sugar !!

50 kW biomass gasifier power plant in Karnataka

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Biomass for Decentralized Rural

Power

Electric power requirement of typical Indian village < 100 kW ~ 75% is irrigation pumps

Presently these get virtually free, un-metered grid supply of poor quality, few

hours a day

Locally available biomass can sustain a plant of 25 kW-100 kW

Gasifier-reciprocating engine technology is fairly robust

Cost of generation reasonable

$ 0.06-0.07 per kWh

BUT, still widespread dissemination not visible:

Economics unviable due to low PLF

People not willing to pay when state gives free !

Loss of organic fertilizer on land

Good potential from bagasse and husk:

Can expect to add 3000 MW by 2015.

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Wind Energy

Gross potential : 45,000 MW(assuming 1% land availability in potential areas) Technical potential : 13,000 MW

(assuming 20% grid penetration in potential areas)

Rapid growth in installed capacityfrom 1990s

India ranks 5th in the world Present installed capacity ~ 3000

MW

Site selection issues:

More from fiscal benefits than frompower

Many plants not operating

Low average load factor~13%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Germany

Spain

US

Denmark

India

Italy

Netherlands

UK

Japan

China

InstalledCapacity(MW

Global Wind Energy Council

World Wind Installed Capacity (2005)

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Wind Speed Maps of Selected

Countries

Denmark

In general, wind speeds lower (~200W/m2)

in India as compared to Europe (350 W/m2)

and US US

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Off-shore Wind in Europe

Europe and US have taken up several off-shore projects.

Wind speeds higher

Distance from shore in some cases ~ 3040 km !

Country Capacity Depth (m) Distance

from Shore

(km)

Remarks

Denmark 160 MW 612 m 1420 km Completed

UK 60 MW 48 m 2.3 km Completed

Denmark 23 MW 20 m 3.5 km Completed

Denmark 5 MW 35 m 6 km Completed

Sweden 10 MW 610 m 5 km Completed

Germany 1040 MW 30 m 4350 km PlannedNetherlands 120 MW 2024 m 23 km Planned

Germany 240 MW 20 m 34 km Planned

Ireland 520 MW 25 m 10 km Partly

complete

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India: Off Shore Wind Scenario

0 200 400 600 800 1000 1200 1400 1600 1800 2000 2200 2400

Distance (Km)

0 200 400 600 800 1000 1200 1400 1600 1800 2000 2200 2400

Distance (Km)

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2200

2400

D

istance(Km)

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2200

2400

D

istance(Km)

Bathymetry of Indian Seas

Depth (metres)

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Nuclear Power: The Present Status

0

2000

4000

6000

8000

10000

12000

14000

1969 1973 1981 1984 1986 1991 1992 1993 1995 2000 2005 2006 2015

InstalledCapacity(MW)

Planned

Presently installed

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Indian Nuclear Program: The

Present Status

12 PHWR & 2 BWR now under operation 4 PHWR and 2 LWR under commission

2950 MW generation & 3000 MW undercommission

Successful experiments with Fast Breeder TestReactor (FBTR)

Prototype Fast Breeder Reactor (PFBR) for500MWe under construction

Advanced Heavy Water Reactor (AHWR) using(Pu-Th) O2 MOX for 300MWe: advanced stage ofdesign approval; construction soon to begin.

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Indian Nuclear Program: The

Constraints

Uranium ore reserves for only 10,000MWe for 40

years

Non-signatory to NPT: no access to globaltechnologies, materials or services

Slow growth of nuclear electric power: ~1000

MWe annually

Major dependence on Pu and U233 MOX for fuel

Complex fuel technologies. Total capacity limited

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Why Cooperate?

India needs electric power now, more thanever, for human development and growth

It must generate power from all energy

sources Excessive and continued dependence on

coal contributes to environmental

degradation & global warming Limitations of renewable energy sources

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Why Cooperate?

Politics of Non-Proliferation: Power &Responsibility

R&D: cooperation and Collaboration

Bilateral trade & economic issues

Sharing global energy resources

Environmental concerns

Shared vision: secular, democratic & caring

society

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Why Cooperate?

Climate change is a greater threat to

humanity than terrorism, and no lessurgent.

---David King, Science Advisor to Prime

Minister of UK

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An Action Plan

Until Nuclear Fusion and Hydrogentechnologies mature

Minimizing wastage; energy conservation;

Development of Energy Plan Installation of nuclear power ( 34GW in 10

years)

Investments in R&D to make renewabletechnologies efficient, sustainable&affordable

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An Action Plan

Strict enforcement of export controls oftechnologies, equipment and services

Nuclear power reactors under international

safeguards Collaboration in developing technologies

for utilizing MOX fuels for electric power

generation Participation in Gen. 4 R&D initiatives

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Indian Energy Scenarios: 2015

Coal

60.44%Gas

14.49%

Diesel

0.48%

Nuclear

5.06%

Hydro

15.96%

Solar thermal

0.40%

Biomass

1.19%Wind

1.99%

Gas

14.49%

Diesel

0.48%

Nuclear

14.60%

Hydro

15.96%

Solar thermal

0.40%

Biomass

1.19%Wind

1.99%

Coal

50.90%

Same Fuel Mix as now Aggressive Nuclear Capacity Addition

Reduction in annual coal consumption ~ 100 Million Tons

Reduction in annual CO2 Emissions > 170 Million Tons ~ Total present CO2 emissions of Netherlands !

P i ti

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Primary energy consumption per

capita

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What If.India & China Were Developedby 2013?

Expected Carbon Emission:

14,400 Million Tons (2.5 times

present global emissions !!)

CO2 concentration > 400 ppm

Temperature rise > 0.5 C0

1000

2000

3000

4000

5000

OECD India China Others

20022013

Global Carbon Emissions (Million Tons per Year)

US > 14,000

India 600

China 1300

Present Electricity Per Capita (kWh)

Target: 14,000 kWh by 2013

(Calculations Based on Data in Climate Change 2001, IPCC)

Wh If

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What If

India & China Guzzle Oil?

0

40

80

120

160

India China US Other

OECD

Others

M

illionBarrelsperDa

2003

2013

Global Oil Consumption (Million Barrels per Day)

US > 750

India 4

China 8

Present Number of Cars per 1000

World Oil Consumption: 387

Million Barrels a Day At Present 77 Million Barrels a Day

Oil reserves deplete in 8 years !! At Present 42 years

Target: 250 Cars per 1000

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I saw God In the smile of the poorMahatmaGandhi

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The cost of Power

0

1

2

3

4

5

6

7

0 50 100 150 200 250 300

Plant Capacity (kW)

CostofGeneratio

n

(RsperkWh)

Utility's Cost of Supply

Residential Tariff

Irrigation Tariff

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Thank U !!!

Sunaina Pamudurthy ,

Dinesh Athikari ,

Ritikaa Bhalla ,

Raghav Mittal ,