Energy Scene in India

Transcription

1 1 Energy Scene in India Pradeep Chaturvedi Vice-Chairman (Energy Committee) World Federation of Engineering Organisations India s Integrated Energy Policy 2008 The Integrated Energy Policy (IEP) Committee Report states that India s strategies to meet energy requirement are constrained by country s energy resources and import possibilities. India is not well endowed with natural energy resources. Reserves of oil, gas and Uranium are small though India has large reserves of thorium. While coal is abundant, it is regionally concentrated and is of low calorific and high ash content, though it has the advantage of low sulphur content. The extractable reserves, based on current extraction technology, remain limited. Hydro potential is significant, but small compared to India needs and its contribution in terms of energy is likely to remain small. Further, the need to mitigate environmental and social impact of storage schemes often delays hydro development thereby causing huge cost overruns. India s Energy Reserves Table 1: India s Hydrocarbon Energy Reserves Resource Unit Proved Inferred Indicated Production In Net Imports in Reserve Production Ratio P/Q (P+I)/Q (P) (I) (Q) (M) Coal(as on Mtoe ) Extractable Coal** Mtoe Lignite(as on Mtoe ) Extractable Mtoe Lignite Oil (2005) Mtoe 786* Gas (2005) Mtoe 1101* (LNG) Coal Bed Mtoe Methane In-situ Coal?? Gasification*** * Balance Recoverable Reserves ** Extractable coal from proved reserves has been calculated by considering 90% of geological reserve as mineable and dividing mineable reserve by Reserve to Production ratio (2.543 has been used in Coal Vision 2005 for CIL blocks); and range for extractable coal from prognosticated reserves has been arrived at by taking 70% of indicated and 40% of inferred reserve as mineable and dividing mineable reserve by R.P. ratios (2.543 for CIL blocks and 4.7 for non-cil blocks as per Coal Vision 2025 ). *** From deep seated coal (not included in extractable coal reserves) Note: Indicated Gas resource includes 320 Mtoe claimed by Reliance Energy but excludes the 360 Mtoe of reserves indicated by GSPCL as the same have not yet been certified by DGH. Source: Integrated Energy Policy Committee Report 2006

2 2 Coal Production, Demand and Supply Integrated Energy Policy has observed that the proved reserves of coal at the current level (2006) of consumption can last for about 80 years. If all the inferred reserves also materialize then coal and lignite can last for over 140 years at the current rate of extraction. Of course, coal and lignite consumption will increase in the future and the reserves would last for far fewer years. If domestic coal production continues to grow at 5% per year, the total (including proven, indicated and inferred) extractable coal reserves will run out in around 45 years. However, only about 45% of the potential coal bearing area has currently been covered by regional surveys. India s coal dependence is borne from the fact that 54% of the total installed electricity generation capacity is coal based and 67% of the capacity planned to be added during the 11 th Five Year Plan period ( ) is coal based. In order to achieve economic growth of 8% to 9% in terms of GDP, country s total coal demand has been projected to increase from the present 730 mt in to 2,000 mt in Of this, about 75% of coal would go to power plants. Given the projected increase in coal requirement, the domestic coal industry alone cannot fully meet the demand. Present demand-supply gap is around 85 mt and it is expected to increase gradually to nearly 140 mt by On the domestic production front, Coal India Limited is the largest contributor accounting for 81% of country s coal production. Of the balance 9.5% comes from Singarni Collieries Company Ltd and the remaining comes from privately operated collieries and captive coal mines. Small mines in the North-Eastern State of Meghalaya also add 6 mt to the total production. Presently the country imports about 85 mt of coal. Out of this about 25 mt is metallurgical coking coal for the iron and steel industry. The balance is thermal coal used by power plants (50%), cement industry (17%), and other industries (33%). Presently the main sources of thermal coal imports are Indonesia, Australia, New Zealand and South Africa. In addition, the emerging supply sources include Canada, Mozambique and the USA. Present coal handling capacity at the ports is around 85 to 90 mt per annum, and has to be augmented to at least 120 mt per annum in next two years. Coal Resources As on April 2010, India s inventory of coal resource was 277 billion tonnes, comprising of proven 110 billion tonnes; indicated billion tonnes and inferred - 36 billion tonnes. Captive Mining Policy With over 90% of coal production coming from government controlled mines, the present institutional structure is a near government monopoly. Although the government has allocated over 200 coal blocks for development by private/public entities outside the government owned coal companies, the progress has not been promising. In order to

3 3 bring about competition and transparency, the government is working hard and getting effective regulatory framework in place. Captive Mining Policy was introduced in For various reasons out of over 200 coal blocks containing coal reserve of over 50 billion tonnes and with an aggregate ultimate annual production capacity for about 550 million tonnes have not yielded expected coal production. Only 30 odd mines have commenced production that contributed mt in the financial year against the target of 104 mt. This shortfall in mining has led to shortfall in the availability of coal in the country. Institutional Set Up and Coal Sector Reforms With a view to reform the coal sector, government has decided to allocate further coal blocks to a transparent coking bidding system. Presently, government is engaged in consulting all the stakeholders for framing the rules for introduction of auction based allocation of coal blocks. Issues pertaining to captive mining that require immediate resolution and attention of the government and other stakeholders are also being addressed at the highest level. The government is reportedly working towards opening up of the coal sector without any restriction on marketing of coal. Coal Quality Management Indian coal by its very nature is high in ash content but low in sulphur content. The government has now decided that all coal supplied to power plants (except for pit head stations) should be washed at the mine mouth. Coal India has initiated a mega plan of setting up of some 20 odd coal washeries of an aggregate throughput capacity of over 110 mt /year. These washeries could be set up on build, operate and maintain basis. Coal Regulator Demand supply gap of coal is a matter of serious concern and has a bearing on the long-term energy security. A strong domestic coal production and delivery system is being emphasized to achieve energy self-sufficiency and long-term energy security. An independent coal regulator is being considered to create confidence in the mind of private investors and provide them a level playing field. Oil Production, Demand and Supply Integrated Energy Policy has observed that the reserves of crude oil are merely 786 mt. This can sustain the current level of production for 23 years (from 2006) and are less than only 7 years worth of our level of consumption in There has been no significant step-up in crude oil reserves during the last decade in spite of large investments in exploration activities. The Directorate General of Hydrocarbons has estimated the country s resource base for Coal Bed Methane (CBM) to be between 1400 BCM (1260 mtoe) and 2600

4 4 BCM (2340 mtoe). To give impetus to exploration and production, the government has formulated CBM Policy. With around 80% of total oil consumption in the country being met through import ( ), the dependence on imports for petroleum and petroleum products continues to be high. Annual domestic supply of crude oil remains around 34 mmt and natural gas at about 32 bcmt during 2006 to During , production of crude oil was mmt, which is about 13% higher than the actual crude oil production of mmt in This is primarily due to increase in crude oil production from Rajasthan and the Krishna-Godavari deep waters. Projected production for natural gas (including coal bed methane for is BCM which is 12.8% higher than the actual production of BCM in The increase in natural gas production is primarily from the KG deepwater block. The refinery capacity was mmt by 1 April 2011 and is expected to go up to mmt by the end of During the financial year , import of crude oil has been 163 MMT valued at Rs.4559 billion (US$ 100 billion). This marked an increase of 2.8% during in quantity terms but increase by 21.45% in value terms. New Exploration Licensing Policy (NELP) New Exploration Licensing Policy (NELP) provides an international class fiscal and contract framework for Exploration and Production of Hydrocarbons. In the first eight rounds of NELP spanning , Production Sharing Contracts (PSCs) for 2235 exploration blocks have been signed. Under NELP, 90 oil and gas discoveries have been made by private/joint venture (JV) companies in 26 blocks. As exploration activities are progressing, new oil and gas discoveries are likely to come in future. Investment commitment under NELP is about US$ 11 billion on exploration, against which actual expenditure so far under NELP is about US$ 7.37 billion investment has been made on development of discoveries. Thus actual investment made by E&P companies under NELP is of the order of US$ billion. With a view to accelerate further the pace of exploration, in the Ninth round of NELP (NELP-IX), 34 exploration blocks are on offer. Equity Oil Overseas The government has been encouraging national oil companies to pursue equity oil and gas opportunities overseas. ONGC Videsh Limited is expected to have produced about 8.7 MMT of oil and equivalent year from its assets abroad in Sudan, Vietnam, Russia, Syria, Columbia and Venezuela. Enhancing Oil Reserves for Energy Security In order to ensure energy security in the country government has given in principle approval for constructing a strategic storage of crude oil of 15 MMT. This strategic storage would be in addition to the existing storages of crude oil and petroleum

5 5 products with the oil companies, provide an emergency response mechanism in case of short-term supply disruptions. Nuclear Energy Resources and Production Uranium supply in India can fuel only 10,000 MW of the Pressurised Heavy Water Reactors (PHWR). Further, India is extracting Uranium from extremely low grade ores (as low as 0.1% Uranium) compared to ores with up to 12-14% Uranium in certain resources abroad. This makes Indian nuclear fuel 2-3 times costlier than international supplies. The substantial Thorium reserves can be used but that requires that the fertile Thorium be converted to fissile material. In this context, a three-stage nuclear power programme is envisaged. This programme consists of setting up of Pressurised Heavy Water Reactors (PHWRs) in the first stage, Fast Breeder Reactors (FBRs) in the second stage and reactors based on the Uranium 233-Thorium 232 cycle in the third stage. FBR technology is critical to developing stage two of India s nuclear power programme. Without developing the wide-scale use of FBR technology, India will find it difficult to go beyond 10,000 MWe nuclear capacity based on known indigenous Uranium resources. Use of FBR technology would enable indigenous Uranium resources to support a 20,000 MWe nuclear power programme by the year Such a FBR programme is critical to developing the Thorium-based third stage of India s nuclear power programme. Table 2: Potential from Nuclear Energy Particulars Amount Thermal Energy Electricity TWh GW-yr. GWe-yr. MWe Uranium Metal 61,000-t In PHWR 7, ,000 In FBR 1,027, ,308 42, ,000 Thorium-Metal 2,25,000-t In Breeders 3,783, ,950 1,50,000 Very Large Source: Department of Atomic Energy Current Status of Nuclear Power in India The operating nuclear power plants in India are given in Table-3. Table 3 : Nuclear Power Plants in Operation Plant Unit Type Tarapur Atomic Power Station Maharashtra (TAPS) Rajasthan Atomic Power Station Capacity (MW) Date Of Commercial Operation 1 BWR 160 October 28, BWR 160 October 28, PHWR 540 August 18, PHWR 540 September 12, PHWR 100 December 16, PHWR 200 April 1,1981

6 6 Rajasthan (RAPS) 3 PHWR 220 June 1, PHWR 220 December 23, PHWR 220 February 4, PHWR 220 March 31, 2010 Madras Atomic Power Station 1 PHWR 220 January 27,1984 Tamil Nadu (MAPS) 2 PHWR 220 March 21, PHWR 220 November 16, 2000 Kaiga Generating Station 2 PHWR 220 March 16, 2000 Karnataka (KGS) 3 PHWR 220 May 6, PHWR 220 January 20, 2011 Narora Atomic Power Station 1 PHWR 220 January 1,1991 Uttar Pradesh (NAPS) 2 PHWR 220 July 1,1992 Kakrapar Atomic Power Station 1 PHWR 220 May 6, 1993 Gujarat (KAPS) 2 PHWR 220 September 1,1995 Total Nuclear Power Plant Capacity : 4780 MW Performance of Nuclear Power Plants NPCIL achieved power generation of 26,473 million units - the highest ever, in the year This was an increase of 41% over the power generation in the previous year. During the year , thirteen of the twenty operating units achieved availability factor of more than 85%. The operating reactors have registered over 340 reactors-years of safe operation so far. Capacity under Construction In addition to the 20 operating reactors, 7 reactors units with total capacity of 5300 MW are under construction as shown in Table-4. Table 4 : Nuclear Power Plants under Construction Project Capacity Expected Commercial Operation Kudankulam Atomic Power 2 x 1000 MW Unit ,Unit Project units 1&2 LWRs Fast Breeder Reactor 500 MW 2013 Kakrapar Atomic Power Project 2 x 700 MW units 7&8 PHWRs Rajasthan Atomic Power Project Units 7&8 2 x 700 MW PHWRs Total Nuclear Capacity under Construction: 5300 MW Both the reactors of Kudankulam Nuclear Power Project-1&2 (2x1000 MW) are being set up in technical collaboration with Russian Federation.

7 7 Electricity Generation Electricity generation has not kept pace with demand. To overcome this hurdle the government introduced electricity sector reforms with the following objectives: promote competition, ensure effective and transparent regulations, attract investment in this sector to improve quality, reliability of power supply at competitive price to the consumers, and thereby ensure adequacy, quality and reliability of supply. The enactment of the Electricity Act 2003 provides the necessary framework to achieve the objectives of reforms process. Further to the Act, Government of India has notified the National Electricity Policy, Tariff Policy, various Rules and Regulations and established Central Regulatory Commission, Appellate Tribunals and State Regulatory Commissions. 15 States have also restructured the government owned State Electricity Boards, SEBs. Vertically integrated SEBs have been unbundled into generation, transmission and distribution. Electricity Generation Capacity The installed electricity generation capacity in India on 30 June 2011 was 181,507.0 MW as given in Table 5. In addition a captive electricity generation capacity of 25,000 MW was also created. Table 5: Installed Generation Capacity (as on 31 March 2011) All Thermal Nuclear Hydro RES@ Grand India Coal Gas Diesel Total (Renewables) (MNRE) Total MW %age Based on data as on Electricity generation by power utilities went up by 5.55% in and reached bkwh. Coal based generation of power constituted around 70% of thermal generation while in terms of installed capacity coal represents 54%. Power sector is a major consumer of coal using 74% of coal production. Coal based power generation was constrained by shortage in domestic supply of coal and non-materialization of planned imports. Electricity consumption per capita in the country is a misnomer as it is averaged out even for the population that does not have access to electricity. Table 6 gives electricity consumption at 704 kwh per capita per person for the year , which is abysmally low compared to other industrialized and industrializing countries. Impressive industrial growth gives a different story.

8 8 Table 6: All India Annual per Capita Consumption of Electricity Year Per Capita Consumption (kwh) (As per U.N. methodology) Challenges for the Electricity Sector in Capacity Additions The 11 th Five Year Plan ( ) envisages a capacity addition of 78,700 MW of which 19.9 % is hydel, 75.8% is thermal and the rest is nuclear. There have been slippages in achieving the power capacity additions in the recent past. This has been revised to 62,374 MW now comprising 8237 MW hydro, 50,757MW thermal, and 3380 MW nuclear power. Table 7: Capacity Addition Target during 11 th Plan Hydro Thermal Nuclear Total MW %age Private Sector Participation in Power Sector The Electricity Act 2003 has also done away with the requirement of approval/clearance of any authority for setting up a captive generating plant. Nondiscriminatory open access in transmission and distribution has also been envisaged as per the Act. The move in intended to encourage competition among generators and distributor and trading in power from surplus to deficit region. Automatic approval for 100% foreign equity is permitted in generation, transmission and distribution and trading in power sector without any upper sealing on the quantum of investment. To accelerate capacity addition several policy initiatives have been undertaken by the Ministry of Power which include: National Electricity Policy; Ultra Mega Power Project Policy; Mega Power Policy; Tariff Policy; and New Hydro Policy The government has also launched an initiative for the development of coal based Ultra Mega Power Projects, each with a capacity of 4000 MW. The objective of the initiative is to obtain cheaper tariff utilizing economies of scale and to mitigate the risk relating to tie-up of land, fuel, water and other statutory clearances. The projects are awarded to developers on the basis of tariff based competitive bidding. Private Sector Participation in Transmission Transmission projects continue to be accorded a high priority in the context of the need to evacuate power from generating stations to load centres strengthening and creation of National Grid. Establishment of an integrated national power grid in the

9 9 country by the year 2012 is envisaged with an inter-regional power transfer capacity of about 38,650 MW. Private sector participation in transmission has been promoted through various routes: through tariff based competitive bidding route; competitive bidding route under directions of the Central Electricity Regulatory Commission; and private sector participation through Public Private Partnership (Joint Venture route) Rural Electrification Programme Rural electrification has been regarded as a vital programme for the development of rural areas. Various schemes for rural electrification have been introduced to ensure electrification of villages. Village electrification both through the grid connectivity as well as the distributed power generation route is being encouraged. Energy Conservation Energy conservation programme has been promoted as per the Energy Conservation Act of 2001, which was further amended in Different routes for energy conservation are being followed. Some of the prominent ones include: large scale replacement of incandescent bulbs in household by CFLs; standards and labeling programme; energy conservation building code; energy efficiency in existing buildings; agricultural and municipal demand side management schemes; energy efficiency in small and medium enterprises scheme; strengthening institutional capacity of state designated agencies schemes; and national certification examination for energy manager and energy auditors. National Mission for Enhanced Energy Efficiency The Mission is one of the eight national missions under the National Action Plan on Climate Change. The mission seeks to upscale the efforts to create market for energy efficiency through creation of a conducive regulatory and policy regime to foster innovative and sustainable business models to unlock this market. As a result of implementation of this mission over the next 5 years, it is estimated that at the end of this period, about 23 million tonnes oil equivalent of fuel savings in coal, gas and petroleum products will be achieved along with an expected avoided electricity generation capacity addition of over 19,000 MW. As a consequence, carbon dioxide emission reduction is estimated to be million tonnes annually. The National Mission for Enhanced Energy Efficiency has the following mechanisms: Perform Achieve and Trade - a market based mechanism to enhance cost effectiveness of improvement in energy efficiency, in energy intensive, large industries and facilities, through certification of energy savings that could be traded; Market Transformation for Energy Efficiency a mechanism to accelerate the shift to energy efficient appliances in designated sectors through innovative measures to make the products more affordable; Energy Efficiency Financing Platform an important enabling mechanism which seeks to enable financing of demand side management programmes in all sectors by capturing future energy savings; and framework for energy efficient economic development a mechanism that seeks to develop financial instruments and

10 10 policy measures like the partial risk guarantee fund and venture capital fund for energy efficiency, public procurement of energy efficient goods and services, utility based demand side management etc. The Bureau of Energy Efficiency is the nodal agency for implementation of the mission. In addition a company name as Energy Efficiency Services Ltd (EESL), as a joint venture of four central, public sector undertakings viz. NTPC, PGCIL, REC and PFC has been created to provide implementation leadership in the market. Status of Power Sector Reforms The Electricity Act, 2003, as amended in 2007 presents the framework for power sector reforms. Various instruments developed under the Act include: tariff policy; guidelines for procurement of electricity; operationalisation of open access; setting up power exchanges; reorganization of the State Electricity Boards; distribution reforms; Accelerated Power Development and Reforms Programme was launched in with the objective to reduce transmission and distribution losses and improve quality and reliability of supply. The revised APDRP programme has two components: investment component and incentive component. The APDRP was restructured in 2008 to focus on actual, demonstrable performance of ATMC loss reduction. Projects under the scheme are to be taken up in urban areas towns and cities with population of more than 30,000. The Central Electricity Regulatory Commission is an independent statutory body with quasi-judicial power. It was constitute4d on 25 th July, 1998 under the Electricity Regulatory Commission Act, 1998and has been continued under Electricity Act The Commission consists of a Chairperson and four other members. Renewable Energy Resources and Production IEP has also observed that given the limited amount of domestic conventional energy sources, renewable energy sources gain significance. India s renewable energy sources are summarized in Table 8. It may be noted that many renewables require land. The potential energy generated is assessed independently for each option. If all such options are developed together the combined potential may be less than the sum due to a paucity of available land for energy generation as other competing land uses may dominate. Table 8: Renewable Energy Resources Resources Unit Present Potential Basis o Accessing Potential Hydro-power MW 32,326 1,50,000 Total potential assessed is 84,000 MW** at 60% load actor or 1,50,000 MW at lower load actors. Biomass Wood Mtoe/year * Using 60 million Ha Wasteland yielding (20) MT/Ha/year

11 11 Biogas Mtoe/year 0.6** 4 In 12 million family sized plants In community based plants I most of the dung is put through them Bio-fuels Bio-diesel Mtoe/year -- 20* Through plantation of 20* million hectares of wasteland or 7* million hectares of intensive cultivation Ethanol Mtoe/year <1 10 From 1.2 million hectares of intensive cultivation with required inputs. Solar Mtoe/year Photovoltaic Mtoe/year -- 1,200 Expected by utilizing 5 million hectares wasteland at an efficiency level of 15 percent for Solar Photovoltaic Cells. Thermal Mtoe/year 1,200 MWe scale power plants using 5 million hectares Wind Energy Mtoe/year <1 10 Onshore potential of 65,00 MWe at 20 percent local factor Small Hydropower Mtoe/year <1 5 * The availability of land and inputs for getting projected yields is a critical constraint. ** based on 50 percent plants under use Source: Respective Line Ministries India traditionally has 30% primary supply of energy from renewable biomass resources like cow dung, agricultural residues, forestry residues and other woody biomass. In addition to these traditional sources of renewable energy, India has also focused on new and renewable sources of energy and has made significant strides over the number of years. The impact of the renewable energy programme is reflected in the Table No. 9. Table 9: Renewable Energy at a Glance Cumulative deployment of various renewable energy systems/devices in India Renewable energy Programme/systems Cumulative achievements (as on 31 March 2011) 1. Power from Renewables A. Grid interactive renewable power In MW Wind Power Small hydro power (u0p to 25MW) Biomass power (Agro residues and plantations Bagasse cogeneration Waste to power (Urban and Industrial) Solar power Sub total (A) B. Off grid/distributed renewable power including captive/chp plants

12 12 Biomass Cogeneration (Non-bagasse) Biomass gasifier Energy recovery from waste Solar PV power plants 8.16 Watermills/microhydel 6.98 Sub total (B) Total (A+B) Decentralised renewable energy systems Family type biogas plants (in lakh) Solar photovoltaic systems Street lighting system (in Nos.) 1,82,200 Home lighting systems (in Nos.) 7,33,245 Solar lanterns (in nos.) 8,31,604 Solar water heating systems collector area (m 2 ) 4.47 million m 2 3 Remote Village Electrification (villages/hamlets) 8104 kw=kilowatt; MW=megawatt; Sq m= square metre Source: Akshay Urja April 2011 Volume-4, Issue-5, MNRE-2011 National Solar Mission The objective of the National Solar Mission is to establish India as a global leader in solar energy, by creating the policy conditions for its diffusion across the country as quickly as possible. The Mission will adopt a three-phase programming spanning up to The immediate aim of the Mission is to focus on setting up an enabling environment for solar technology penetration in the country, both at centralized and decentralized levels. The first phase (up to 2013) will focus on capturing of the long-hanging options in solar thermal; on promoting off-grid systems to serve populations without access to commercial energy and modest capacity addition in grid based systems. In the second phase, after taking into account the experience of the initial years, capacity will be aggressively ramped up to create conditions for up scale and competitive solar energy penetration in the country. To achieve this, the Mission targets are: To create an enabling policy framework for the development of 20,000 MW of solar power by To ramp up capacity of grid-connected solar power generation to 1000 MW within three years by 2013; an additional 3000 MW by 2017 through the mandatory use of the renewable purchase obligation by utilities backed with a preferential tariff. This capacity can be more than doubled reaching 10,000 MW installed power by 2017 or more, based on the enhanced and enabled international finance and technology transfer. The ambitious target for 2022 of 20,000 MW or more, will be dependent on the learning of the first two phases,

13 13 which if successful, could lead to conditions of grid-competitive solar power. The transition could be appropriately up scaled, based on availability of international finance and technology. To crease favourable conditions for solar manufacturing capability, particularly solar thermal for indigenous production and market leadership. To promote programmes for off grid applications, reaching 1000 MW by 2017 and 2000 MW by To achieve 15 million sq meters solar thermal collector area by 2017 and 20 million by To deploy 20 million solar lighting systems for rural areas by Conclusion India realizes the constraints of fossil and commercial sources of energy for meeting its increasing energy demand for socio-economic development. The Integrated Energy Policy therefore lays a thrust on developing all sources of energy in the most cost effective manner emphasizing on energy efficiency and energy conservation.