Townhall Presentation

Transcription

1 Townhall Presentation 1

2 India Infrastructure Report 2010 Infrastructure Development in a Low Carbon Economy Taj Mansingh, New Delhi 2

3 Session - I Energy for a Low Carbon Economy Topic for Discussion The Road to Low Carbon Energy 3

4 India s CO2 emission status India emits 1.7 bill tons CO2 & 4 th largest emitter globally Electricity accounts for 65% of emission from energy sector & 38% of total GHG Per capita emission at 1.5 tons is One-fourth world avg (US > 20 tons) Carbon intensity is 0.33kg/GDP Lower than world avg of 0.47kgs Low carbon footprint not due to magic strategy or efficiency 78 mill households without electricity access & 1.2 lakh villages unelectrified Avg annual elec consm 630 kwh in rural and 1200kwh in urban (NSSO 61 st Round) Energy intensity 3.7 times of Japan and 1.5 times of US Large power deficit & high T&D loss Composition of our GDP Source- India: GHG Emissions 2007, MoEF, May

5 Challenges & energy strategy Energy security Electricity access to all Provide efficient and reliable energy at affordable rates Meet our huge power demand Reduce vulnerability to external shocks Water security Improve efficiency extraction, distribution and use Food security Adapting to climate change Continue to stay on the low carbon path Voluntary but non-binding commitment to reduce emission intensity by 20-25% of 2005 level by Several studies Integrated Energy Policy (2006) projected alternate development paths arising from alternate portfolio of diverse energy sources Coal dominant fuel (>40%) in to meet 5-6 times higher power requirements, even in the low carbon scenarios Recognize efficiency improvements & energy conservation as cost effective and fast route to reduce CO2 Renewable play key role in providing electricity access and reduce emission Importance of nuclear & coal efficient technology GoI declaration of NAPCC (2008) Climate modeling studies (2009) Shows continuous decline of energy & carbon intensity till 2030 with 8% GDP Estimate CO2 emission at about 4 bill tons & percapita about 3 tons in

6 India Infrastructure Report 2010 Issues impeding effective Realization of efficiency improvement and conservation of electricity Harnessing renewable energy potential Rural access through Decentralized Distributed Generation Possible speed breakers along low carbon path Large and growing fossil fuel (coal & diesel) based captive plants for residential, commercial and industrial use Technology critical for sustaining low carbon path & related issues Renewable (Grid supply), particularly Solar Clean coal technologies (pre-combustion, combustion, conversion and post-combustion tech) Nuclear (3-phase strategy to use India s large thorium reserves in a closed cycle & use spent fuel after enrichment & reprocessing; scaling up by importing fuel between ) 6

7 Efficiency Improvements Supply Side Regulators specifying generation norms and T&D loss targets to determine tariffs to incentivize performance Key Recommendations Forum of regulators drafting regulation for compliance audit to better monitor directives should also ensure enforcement 40 GW of widely dispersed fossil fuel based small captive plants are largely operating at low capacity utilization levels Of 200 thermal power plants of different sizes in operation (largely owned by State Gencos) more than 40% are older than 20 years. Efficiency of these plants < 30%. Promote group captives and aggregation of smaller units to improve capacity utilization Encourage surplus power sale to grid and to third party by reducing cross-subsidy charge to promote larger captive & better utilization Improve efficiency of older plants a 1% increase in efficiency can yield about 2-3% reduction in emissions 7

8 Efficiency Improvements.contd Demand Side 172 mt CO2 emission reduction possible (~ 23% of total current emissions from the power sector) Ministry of Power has put in place ambitions plans of adding 25000MW effective capacity through efficiency improvement Most ERCs yet to provide directives for DSM and conservation Mandatory performance standards & norms lacking BEEs ECBC & TERI s GRIHA standards are voluntary; BEE in process of setting standards Proposal for introduction of Energy Efficiency Certificates under EEE Mission Bachat Lamp Yojana (program of replacement with CFLs) is world s largest carbon credit project under CDM Key Recommendations Allow Discoms to earn additional return on equity through tariffs for doing DSM Govt. extend financial support to utilities, as retail tariffs would be rise by 10-15p/unit ERCs facilitate creation of database on deemed savings possible, costs, payback periods, avoided power purchase cost, etc Introduce mandatory energy consum. norms for all buildings; not just input oriented Incentives for retrofitting and upgradation Adapt innovative financing mechanisms Pooling bonds & funds efficiency improvement with other infra projects; energy saving insurance; tax exempt municipal leasing; lower interest rates for energy efficient new res. Construction Remove distortions in energy prices Remove information asymmetries Rectify legal insufficiencies in intellectual property, code, policy directives and contract law enforcement must be rectified 8

9 Renewable Energy RE potential ~85,000 MW (not including solar) 45,000 MW from Wind; 15,000 MW from small hydro; and 25,000 MW from biomass and wastes But contributes only 10% of total power capacity (~16000MW) Could provide off-grid and grid supply Off-grid could play key role DDG could provide access to 78 million people Hybrid solution of diesel and solar could bring down energy costs significantly (Case Study in IIR) So far policy has been the key driver compared to technology in harnessing RE Regulatory interventions through RPOs, FiT played big role. CERC introduced RECs Huge untapped solar potential (~50MW/sq km) Technology not yet eco viable Huge land & water requirement (for solar thermal) Key Recommendations RECs introduced by CERC need refinement Rather than categorising solar & non-solar RECs, there should be a single market for RECs and multiplying factor could be used for different RE sources to participate in a common market Need to define a buy-out price for RECs Very high floor and forbearance price for RECs Include off-grid & distribution utilities Need comprehensive RE policy or action plan Improved regulatory framework at state level and clarity on incentives Amend power distribution licenses to include fulfillment of RPO Create indigenous manufacturing capability & supply chain, develop equipment standards, carry out detailed assessments of resource potential even for viable RE technologies Greater thrust on R&D for improvement of commercial viability of technologies such as solar for large scale electricity generation and storage 9

10 Decentralized Distributed Generation 78 million households with no access to electricity could be provided access Grid extension would be expensive and entail about 50mT CO2 emission Several success stories, including involvement of corporate sector Several barriers to effective penetration Key Recommendations Appointment of a single nodal agency to plan and coordinate all rural electrification efforts Develop a database of DDG systems to facilitate development of viable business models. Provision of capital subsidy/grant to ensure financial viability. Subsidy disbursal must be linked to generation of power. DDG systems should take into consideration the location specific conditions (including availability of feedstock, create revenue earning opportunity) Involve panchayats/local society/ngos/mfi Institutional strengthening & capacity building at the local level Source- India: GHG Emissions 2007, MoEF, May

11 Key technologies for long-term LC path Efficient coal combustion Coal to be dominant fuel till Coal requirements would be ~1.2BT by even with large RE exploitation Domestic coal getting dirtier & costly Large number of inefficient plants operational could be retired in another decade Indian coal not very suited to technology developed elsewhere Generation efficiency is critical to allow for carbon capture at later date, as CCS is energy intensive 3-stage nuclear program 10,000MW added through indigenous uranium if taken through 3-stage program could multiply to 200,000MW With import till 2020, possible enrichment & reuse, and taking it through 3-stage program the scope of capacity is phenomenally high 11

12 Clean Coal Technologies Indian coal is high on ash and of low calorific value Coal washing is a key infra issue between coal producers & users Presently the IGCC is not viable, Internationally deployed versions are not suitable for high ash Indian coal Cost about 21% higher than pulverized coal technologies and about 12% higher than ultra supercritical R&D focus more on IGCC than CFBC despite viable & suitable In process of setting up several super-critical plants (660MW & 800MW unit sizes) - welcome step Key Recommendations Near term focus on coal beneficiation, R&M inefficient plants with remaining plant life, super-critical technologies, ongoing R&D in IGCC, pilot studies in coal liquefaction, and efforts in enhanced energy recovery from coal (CBM, CMM, etc) Coal beneficiation can reduce CO2 by about 18%. Coal prices based on calorific value encourage to develop coal beneficiation infrastructure. Circulating fluidized bed combustion (CFBC) which caters to poor quality coal need to be encouraged. Medium term focus on IGCC, PFBC and ultra -supercritical technologies, commercial scale CTL, scale up RD&D in CCS & zero emission Long-term CCT policy to address the above strategy, RD&D, and transfer of technology. Joint research ventures with countries that have made significant progress in CCTs should be considered for technology transfer Source- CCT India: can GHG become Emissions an instrument 2007, MoEF, for technology May 2010 transfer in bilateral and international agreements 12

13 Coal likely to be energy security issue 300 Price Indices Coal Mining Thermal Coal Domestic coal production not able to keep pace with demand; (CEA recently assigned key responsibility for capacity addition slippage) Domestic coal quality to further deteriorate By 2017 more than 50% of coal need would have to be imported Coal bill could be $40bn by 2020 & $240bn by 2032 (Forbes India, April 2010) 13

14 Nuclear Energy World over a major resurgence After three decades of no nuclear plants, US nuclear regulator has applications of 20 new plants Italy and Germany are reconsidering now. UK plans to build 4 more nuclear plants with help from France, with the first likely to be commissioned in 2017 Asia, China has plans to be largest producer of nuclear power at 130GW by GW of additional installed nuclear capacity projected for Asia, 24GW is alone projected for China &12GW each from India and Korea India can import fuel &technology subsequent to the nuclear coop agreement. This could potentially help add about 60GW by Even without enrichment & reuse this could potentially displace ~64GW of coal & save 492 mt of CO2 Key Recommendations Nuclear safety and security Accelerated R&D focus on utilization of indigenous thorium. Greater public awareness on the merits of nuclear energy Legislative changes commensurate to industrial investments Stronger linkages with university and training institutes for manpower requirements Extending the regulatory framework to oversee and assess the implementation of safety measures. Strengthening the capability of Atomic Energy Regulatory Board (AERB) through induction of trained manpower to cater to increased activity in this area Source- India: GHG Emissions 2007, MoEF, May

15 Government RD&D expenditure in IEA member countries, /22/2010 Any unauthorized disclosure, copying or distribution of the contents of 15

16 Is India doing enough & in right tech? Total energy RD&D for LCETs by country (million 2008 USD) IEA

17 Way forward To stay on LC path where do focus our attention now to meet our huge power requirements? Greater clarity in choice of LC interventions over the next decade or two To continue on LC high growth path beyond , would depend on investment decisions taken now (particularly RD&D) Complexity in prioritizing attention Who pays for the technology development? How do you compare the risks associated with each of these broad interventions for prioritizing investment decisions now? Given limited funds, in which source of energy development (CCT, solar, nuclear) should they be focused? 17