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Journal of Management
(IJM), ISSN 0976
6502(Print), ISSN 0976(IJM)
- 6510(Online),
INTERNATIONAL
JOURNAL
OF MANAGEMENT
Volume 5, Issue 11, November (2014), pp. 01-20 IAEME
IJM
IAEME
R.T.M.NAGPUR UNIVERSITY,
NAGPUR INDIA
1. ABSTRACT
Any countrys growth is dependent on its ability to provide affordable and sustainable supply
of energy. India is set to witness one of the highest growths in energy demand, largely based on
buoyant economy and rising population. There is a strong linkage between economic growth and
energy demand. Coal is a pre-dominant source of energy in India and constitutes the largest share in
Indias energy production and consumption. Despite the recent focus on promoting other energy
sources (in particular renewables), it is clear that the current coal-centric energy structure will
continue for at least next few decades owing to technical and cost-related factors. The coal sector in
India, in the past few years, has been subject to various controversies and issues, which raise
question on the overall governance of the energy sector. These governance issues, if unaddressed,
can hamper the sustainable growth of the sector and in turn the overall growth and development of
the economy.
Presently we are using various sources of energy mainly, fossil fuels, hydro, nuclear etc. but
three centuries ago, we used nothing but renewables, with a fully sustainable energy system
consisting of wind power (windmills), hydro power (water mills) and bio-fuels (wood stoves and
animal power) and some are still in use. But these renewables have their limitations and could not
give its major share in growing economics in increasing energy demands. The fossil fuels
particularly coal has given boost particularly to power generation which has contributed major share
in energy mix in Indian scenario. On contrary Coal industry has an environmental adverse impact
which includes the issues such as land use, waste management, water and air pollution etc., caused
by the coal mining, processing and the use of its products. Now we are trying to return to the past i.e.
renewables, with the addition of a few new sources such as solar and geothermal. In the interim our
population has increased many fold and economic activities by several orders in magnitude.
International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 - 6510(Online),
Volume 5, Issue 11, November (2014), pp. 01-20 IAEME
But the role of renewables to replace the conventional energy sources e.g. fossil fuels was not
seriously and systematically thought of. The first discussion of renewables in economics was in the
post-73 oil shock era, when we rediscovered Hotellings work on resource depletion and refined it in
various ways. The need for renewables, in the sense of energy from non-exhaustible sources having
no environmental footprint, was also recognized. Then the phrase backstop technology, was used
i.e. a technology that would eventually replace exhaustible resources with energy sources such as
nuclear fusion, or solar or wind energy, continuing forever. The need to act on climate change,
coupled with the realization that there are no silver bullets like nuclear fusion, has forced policy
makers to grapple with the merits of alternative energy and consider the consequences of moving to
carbon-free energy within a few decades. Of course, carbon-free is not the same as renewable:
nuclear is carbon-free, but probably not what most people have in mind as renewable, and coal with
carbon capture and storage (CCS) is also carbon-free at the output level, and again not as renewable.
It does seem uncontroversial that at least one of nuclear, coal with CCS and renewables has to be
adopted on a very large scale for a sustainable future, and we may conclude that either nuclear or
coal with CCS must be in the mix as well as many types of renewables, at least for the foreseeable
future.
In this paper, both types of energy i.e. renewable and nonrenewable are studied with their
advantages & disadvantages and to have proper energy mix of these sources for environment
friendly sustainable growth. The emphasis is given to evaluate the role of renewable resources in
energy mix in the energy scenario of India.
2. INTRODUCTION
In laymans language, energy means amount of force or power when applied can move one
object from one position to another or in other terms Energy defines the capacity of a system to do
work. It exists in everybody whether they are human beings or animals or non living things for e.g.:
Jet, Light, Machines etc. It exists in many forms like kinetic, potential, light, sound, gravitational,
elastic, electromagnetic or nuclear. As per to the law of conservation of energy, the total energy
remains the same, only it changes its form i.e. it can be converted from one form into another form.
The many different natural and renewable energy technologies are by no means breakthrough. Many
of the renewable energy technologies have been around for years, and as time go by, are increasing
in efficiency. Here, energy is broadly classified into two main groups: Renewable and Nonrenewable.
Non-Renewable Energy is taken from the sources that are available on the earth in limited
quantity and will vanish shortly may be in fifty-sixty years from now. Non-renewable sources are not
environmental friendly and can have serious affect on our health. They are called non-renewable
because they cannot be re-generated within a short span of time. Non-renewable sources exist in the
form of fossil fuels i.e. coal, natural gas and oil.
Renewable energy is generated from natural sources e.g. sun, wind, rain, tides and can be
generated again and again as and when required. They are available in plenty and by far most the
cleanest sources of energy available on this planet. For e.g.: energy that we receive from the sun can
be used to generate electricity. Similarly, energy from wind, geothermal, biomass from plants, tides
can be used to fulfill our daily energy demands.
Renewables come in many different flavors: they may not be limited to only hydro, solar
(photovoltaic and thermal), wind, geothermal, tidal, biofuels, and waste-to-energy processes.
However the focus is normally on those that can be used to generate electricity, or to replace it. Most
of them have certain economic characteristics in common large fixed costs and low or no variable
costs, and consequently average costs that are very dependent on output levels. Solar, wind, hydro,
geothermal, tidal and waste-to-energy all require substantial up-front capital expenditures before any
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International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 - 6510(Online),
Volume 5, Issue 11, November (2014), pp. 01-20 IAEME
Coal
Oil
8,263 1,111
942.6 126.7
41%
5%
Natural Gas
4,301
490.7
21%
16%
3%
100%
International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 - 6510(Online),
Volume 5, Issue 11, November (2014), pp. 01-20 IAEME
International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 - 6510(Online),
Volume 5, Issue 11, November (2014), pp. 01-20 IAEME
ONGC, is the prime Oil & Natural Gas Producing Company, is global leader in integrated
energy business through sustainable growth, knowledge excellence and exemplary governance
practices, and has aimed to abide commitment to safety, health and environment to enrich quality of
community life.
GAIL (Gas Authority India Limited)s Mission is to accelerate and optimize the effective and
economic use of Natural Gas and its fractions for the benefit of the national economy. And its Vision
is Be the leading company in Natural Gas and beyond, with Global Focus, Committed to Customer
Care, Value Creation for all Stakeholders and Environmental Responsibility.
CIL (Coal India Limited) a coal producing giant company in India has set its vision as To
emerge as a global player in the primary energy sector committed to provide energy security to the
country by attaining environmentally & socially sustainable growth through best practices from mine
to market and the mission as To produce and market the planned quantity of coal and coal products
efficiently and economically in an eco-friendly manner with due regard to safety, conservation and
quality.
Presently crude oil, coal and gas are the main resources for world energy supply. The size of
fossil fuel reserves and the dilemma that when non-renewable energy will be diminished, is a
fundamental and doubtful question that needs to be answered. Here a new formula for calculating
when fossil fuel reserves are likely to be depleted is presented along with an econometrics model to
demonstrate the relationship between fossil fuel reserves and some main variables (Shahriar Shafiee
et.al. 2009). The new formula is modified from the Klass model and thus assumes a continuous
compound rate and computes fossil fuel reserve depletion times for oil, coal and gas of
approximately 35, 107 and 37 years, respectively. This means that coal reserves are available up to
2112, and will be the only fossil fuel remaining after 2050.
Above statistics indicates that there is comfortable reserves position which reflected in the
long-term price trends of fossil fuels and has declined in real terms since the 1970s. In fact, fossil
fuel prices in real terms are lower now than they were in the 1940s.
In view of above it can be concluded that Fossil fuels are not disappearing in a hurry. Ergo,
whats the hurry in imposing renewable sources of energy on consumers when the markets are not
ready to accept them?
Although the minable fossil fuels are enough to cater the demand till beginning of 22nd
century, we cannot ignore the effort to find out the alternative sources of energy. This is the time to
make all our efforts to find out various affordable alternatives to fossil fuels. Moreover, the longer
use of fossil fuels at growing demand will endanger the nature and life on earth.
Therefore the sincere efforts are needed to work out the strategy to evaluate all other energy
sources and put them in use at global level so that the nature will be saved for our future generations.
Natural Gas: The government has been the sole authority for fixing the price of natural gas in the
country. It has also been taking decisions on the allocation of gas to various competing consumers.
Natural gas has always been a supply-constraint market in India. The most prolific gas producing
fields include Bombay High which is operated by ONGC and contributed ~34% of the total gas
production in 2011-12, KG-D6 offshore which is operated by Reliance Industries Ltd and
contributed ~33% of the total gas production in 2011-12. The total offshore gas production accounts
for 88% of the total production in India. The share of the private sector and JVs in the countrys total
gas production is expected to increase, owing to recent gas discoveries expected to be monetized by
the companies.
This study estimates alternative trajectories of energy requirements and examines the likely
fuel mix for the country under various resource and technological constraints over a 30-year time
frame Economic and technological scenarios have been developed within the integrated modeling
framework to assess the best energy mix during the modeling time frame. Based on the scenario
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International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 - 6510(Online),
Volume 5, Issue 11, November (2014), pp. 01-20 IAEME
International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 - 6510(Online),
Volume 5, Issue 11, November (2014), pp. 01-20 IAEME
coal. The share of import of coal in total apparent consumption has in fact grown from 2.2% in 19891990 to 11.1% in 2010-2011. The unit prices of imports of coal by India also rose during the period
1989-1990 to 2010-2011 in both nominal dollars and rupees, particularly since 2000, at the
respective annual rates of 10.8% and 11.4%. The rise in the import price of coal in its turn eroded the
relative cost benefit of imports of such coal.
In the light of various questions raised regarding pollution, global warming, depletion of coal
reserve due to extensive use of coal, CCS & IGCC are the methods which may find solution to these
issues.
Carbon Capture and Storage (CCS): CCS is method to mitigate global warming and the
primary focus of this study. As the name suggests, in this method, CO2 emitted from thermal power
plants and CO2 intensive industries is captured and stored in various reservoirs to lessen their
polluting impact on the atmosphere. CCS is therefore hailed as the technology of the future. As our
dependence on fossil fuels is not expected to decline radically in the near future, CCS can provide an
excellent transition from conventional to non-conventional methods of generating power, such as
solar power, wind power, geothermal energy, etc. CCS is referred to as fictitious reduction, since
there is no decrease in the emission of CO2 from the Earth, but the polluting impact is lessened.
Some suggest that the carbon problem could be solved through the increased use of
renewable energy sources. Even if renewables become cost-competitive, however, which is an open
question, the time it will take them to penetrate the market implies significant continued use of fossil
fuels in the interim. Others see a built-in solution to the problem of fossil-fuel combustion: there is a
limited supply of fossil fuels, and at some point, their use will become too costly, forcing a switch to
alternative energy sources. Thus, the policy should be to wait until the fossil fuel supply is depleted
and allow rising fossil fuel prices to induce the development of renewable energy sources. But this
argument assumes that fossil fuels will become scarce before the gradual atmospheric buildup of
GHGs becomes too costly in terms of its effect on terrestrial ecosystems and human societies Energy
efficiency improvements and switching from fossil fuels toward less carbon-intensive energy sources
were once seen as the only realistic means of reducing carbon dioxide (CO2) emissions. In recent
years, however, analysts and policymakers have begun to recognize the potential for a third option
the development of end-of-pipe technologies that would allow for the continued utilization of
fossil fuel energy sources while significantly reducing carbon emissions. These technologies have
collectively come to be known as carbon capture and storage (CCS) technologies. Using these
technologies, CO2 would be captured from large, stationary sources (e.g., power plant flue gases),
preventing its release to the atmosphere.
Integrated gasification combined cycle (IGCC): IGCC is an integrated gasification combined cycle
(IGCC) is a technology that uses a gasifier to turn coal and other carbon based fuels into gas
synthesis gas (syngas). It then removes impurities from the syngas before it is combusted. Some of
these pollutants, such as sulfur, can be turned into re-usable byproducts. The plant is called
integrated because (1) the syngas produced in the gasification section is used as fuel for the gas
turbine in the combined cycle, and (2) steam produced by the syngas coolers in the gasification
section is used by the steam turbine in the combined cycle. In this example the syngas produced is
used as fuel in a gas turbine which produces electrical power. In a normal combined cycle, so-called
"waste heat" from the gas turbine exhaust is used in a Heat Recovery Steam Generator (HRSG) to
make steam for the steam turbine cycle. An IGCC plant improves the overall process efficiency by
adding the higher-temperature steam produced by the gasification process to the steam turbine cycle.
This steam is then used in steam turbines to produce additional electrical power. This way the
available coal may be preserved & conserved.
International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 - 6510(Online),
Volume 5, Issue 11, November (2014), pp. 01-20 IAEME
International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 - 6510(Online),
Volume 5, Issue 11, November (2014), pp. 01-20 IAEME
International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 - 6510(Online),
Volume 5, Issue 11, November (2014), pp. 01-20 IAEME
Causes of the Energy Crisis- It would be easy to point a finger at one practice or industry and lay
the blame for the entire energy crisis at their door, but that would be a very naive and unrealistic
interpretation of the cause of the crisis.
1. Overconsumption: The energy crisis is a result of many different strains on our natural resources,
not just one. There is a strain on fossil fuels such as oil, gas and coal due to overconsumption
which then in turn can put a strain on our water and oxygen resources by causing pollution.
2. Overpopulation: Another cause of the crisis has been the steady increase in the worlds
population and its demands for fuel and products. No matter what type of food or products you
choose to use from fair trade and organic to those made from petroleum products in a sweatshop
not one of them is made or transported without a significant drain on our energy resources.
3. Poor Infrastructure: Aging infrastructure of power generating equipment is yet another reason
for energy shortage. Most of the energy producing firms keep on using outdated equipment that
restricts the production of energy. It is the responsibility of utilities to keep on upgrading the
infrastructure and set a high standard of performance.
4. Unexplored Renewable Energy Options: Renewable energy still remains unused is most of the
countries. Most of the energy comes from non-renewable sources like coal. It still remains the top
choice to produce energy. Unless we give renewable energy a serious thought, the problem of energy
crisis cannot be solved. Renewable energy sources can reduce our dependance on fossil fuels and
also helps to reduce greenhouse gas emissions.
5. Delay in Commissioning of Power Plants: In few countries, there is a significant delay in
commissioning of new power plants that can fill the gap between demand and supply of energy. The
result is that old plants come under huge stress to meet the daily demand for power. When supply
doesnt matches demand, it results in load shedding and breakdown.
6. Wastage of Energy: In most parts of the world, people do not realize the importance of
conserving energy. It is only limited to books, internet, newspaper ads, lip service and seminars.
Unless we give it a serious thought, things are not going to change anytime sooner. Simple things
like switching off fans and lights when not in use, using maximum daylight, walking instead of
driving for short distances, using CFL instead of traditional bulbs, proper insulation for leakage of
energy can go a long way in saving energy. Read here about 151 ways of saving energy.
7. Poor Distribution System: Frequent tripping and breakdown are result of a poor distribution
system.
8. Major Accidents and Natural Calamities: Major accidents like pipeline burst and natural
calamities like eruption of volcanoes, floods, earthquakes can also cause interruptions to energy
supplies. The huge gap between supply and demand of energy can raise the price of essential items
which can give rise to inflation.
9. Wars and attacks: Wars can hamper supply of energy specially it happens in Middle east
countries iin 1990 Gilf war and oil price reached to peak causing global shortage.
10. Miscellaneous factors: Tax hikes, strikes, military coup, political events, extreme temperature
can cause sudden increase in demand of energy and can choke supply.
10
International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 - 6510(Online),
Volume 5, Issue 11, November (2014), pp. 01-20 IAEME
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Volume 5, Issue 11, November (2014), pp. 01-20 IAEME
accreditation procedures, preparing building codes, maintaining central EC fund and undertaking
promotional activities in coordination with centre and state level agencies.
Some of the strategies that can be used to meet future challenges to Nations energy security are:
Building stockpiles of fuels
Diversification of energy supply sources
Increased capacity of fuel switching
Demand restraint
Development of renewable energy sources
Energy efficiency
Sustainable development
Some of the long-term energy strategies available for the better energy secured nation are as under:
Efficient generation of energy resources
Efficient production of coal, oil and natural gas
Reduction of natural gas flaring
Improving energy infrastructure
Building new refineries
Creation of urban gas transmission and distribution network
Maximizing efficiency of rail transport of coal production.
Building a new coal & gas fired power stations.
Maximizing efficiency of rail transport of coal production.
Building new coal and gas fired power stations.
Enhancing energy efficiency
Improving energy efficiency in accordance with national, socio-economic, and environmental
priorities
Promoting of energy efficiency and emission standards
Labeling programmes for products and adoption of energy efficient technologies in large
industries
Deregulation and privatization of energy sector
Reducing cross subsidies on oil products and electricity tariffs
Decontrolling coal prices and making natural gas prices competitive
Privatization of oil, coal and power sectors for improved efficiency.
Investment legislation to attract foreign investments.
Streamlining approval process for attracting private sector participation in power generation,
transmission and distribution as they do not reflect economic costs at all in many cases.
9. ENERGY MIX
Over the last two decades (1990-2011), Indias primary energy mix has not changed much.
The country continues to depend, for most of its energy needs, on coal (>50%) and oil (~30%).
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International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 - 6510(Online),
Volume 5, Issue 11, November (2014), pp. 01-20 IAEME
Coal
Oil
Renewable*
Gas
Hydro
Nuclear
Total
53%
30%
2%
9%
5%
1%
100%
On the other hand, other renewable segments solar, geothermal, wind energy, etc.) and
nuclear energy consumption have also registered an impressive annual growth as compared to the
last decade.
Indias twelfth five year plans estimates that an additional capacity of 75,785 MW is required
over the plan period, giving a total capacity of approximately 276,000 MW. To decrease the gap
between peak demand and peak deficit and to permit the retirement of older, inefficient energy
plants, the plan target has been fixed at 88,537 MW. To meet this target, the private sector share of
this additional capacity will be increased to 53 per cent, up from 19 per cent in the eleventh plan. Of
this added capacity, the Plan estimates that thermal energy derived from coal and lignite will account
for 79 per cent, up from 76 per cent in the previous plan. Hydro-power
Hydro power is expected to generate
10,897 MW (12 per cent of the estimated additional capacity), and nuclear capacity
capac 5,300 MW
(approximately 6 per cent). Energy imports from Bhutan are expected to total 1,200 MW (1.36 per
cent). It is in the renewable sector, however, that major increases are planned; the planned total
addition to capacity of 30,000 MW comprises 15,000 MW wind energy, 10,000 MW solar energy,
2,100 small-hydro
hydro power and the balance to be derived from biomass.
Indias
s projected energy mix
mix in 2030 is as under wherein the renewable has to play prominent
role.. The solar and wind has to contribute their major part in the energy mix 2030. The energy from
coal will become increasingly import dependent despite increased production of both renewable
renewa
and
nuclear energy. Estimated Energy Mix 2030 for India and components of renewable source energy
generation is graphically indicated as under:
Source
Coal
Renewable*
Gas
Hydro
Nuclear
Total
13
2030
62%
14%
6%
10%
8%
100%
International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 - 6510(Online),
Volume 5, Issue 11, November (2014), pp. 01-20 IAEME
Renewable
Sources
Solar
Wind
Biomass
Others
2030
52%
39%
7%
2%
Silent points regarding energy mix for 2030 are appended below:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 - 6510(Online),
Volume 5, Issue 11, November (2014), pp. 01-20 IAEME
be able to meet its development objectives. However, rapid economic growth would also imply the
need for structural changes in the economy as well as for induced shifts in the patterns of end-use
demands. To meet the needs of the Indian populace in the most effective manner, it is important to
map out the energy demand and supply dynamics in the country.
India is likely to surpass China as the largest source of energy demand growth in the world by
2035, according to the latest BP Energy Outlook 2035. The growth in demand for energy in India
will outpace each of the other so-called BRIC (Brazil, Russia, China, and India) countries,
recognized as the upcoming engines of economic growth in the world, the report said. Indias energy
demand is expected to grow by 132%, while China and Brazils energy demand will grow by 71%
and Russias by 20%. Growth in Indias energy demand will be around double the aggregate of nonOECD countries. OECD countries refer to the 20 nations that are signatories to the Convention on
the Organisation for Economic Co-operation and Development, and mostly comprise mature
economies. India consumed around 536 million tonnes (mt) of coal, 42mt of lignite, 211.42mt of
crude, 46.5 billion cubic meters of natural gas, and 755,847 giga-watt-hours of electricity in fiscal
2012, according to a report titled Energy Statistics 2013, of the ministry of statistics and programme
implementation. The report, an annual feature published by British energy firm BP Plc, says India
and China will together account for half of the energy demand growth in the world till 2035, which is
pegged at 41%. Over the next two decades, Indias energy consumption is also expected to grow at a
significant rate of 11%, albeit at a lower clip than energy demand growth. This will compel India to
be dependent on imports of fossil fuels such as coal well into in the future, the report states. Across
fuel categories like liquids (crude oil, natural gas liquids) and coal, India is likely to outpace China in
terms of demand growth. In coal, for instance, Chinas demand is declining, driven by the
rebalancing of Chinas economy towards services and domestic consumption, and supported by
efficiency improvements and more stringent environmental policy, the report observes. India, on the
other hand, is continuing with its industrialization drive. Among fossil fuels, the biggest spurt of
183% in demand will be seen by natural gas, a commodity whose scarcity has already caused a few
concerns in the Indian economy. The country was supposed to have significant production of
domestic natural gas supply, especially from the high-potential Krishna-Godavari basin where
operators like Reliance Industries Ltd and Oil and Natural Gas Corp. Ltd are active. But geological
challenges have prevented this from materializing so far and heavy volumes of expensive gas are
being imported at present. Indias energy import bill may reach $300 billion by 2030, said Rahool
Panandiker, principal at Boston Consulting Group. This has serious implications for policymakers
who need to come up with ways to ensure that domestic energy production is boosted as much as
possible, else factors like the current account deficit and geopolitical tension in oil and gas producing
regions of the world may pose a threat for India, he said.
The continual increase in demand of fossil fuels for energy generation may meet the energy
crises of the country but on the other hand it will have negative impact on environment as a whole.
Thereby the drive to boost up the usage of renewable is required to be enhanced at the fast track so
that there will neither be deficiency of energy nor fear of degradation of nature.
Renewable energy sources are clean and indigenously available, and can play an important
role in addressing the energy security concerns of a country. Today, India has one of the highest
potentials for effectively using renewable energy sources. The country is the worlds fifth largest
producer of wind power after Germany, USA, Spain, and Denmark. There is a significant potential in
India for the generation of power from renewable energy sourceswind, small hydro, biomass, and
solar energy. The penetration of other renewable energy technologies, including solar photovoltaic,
solar thermal, small hydro, and biomass power is also increasing. Greater reliance on renewable
energy sources offers enormous economic, social, and environmental benefits. Increasing pressure of
population and increasing use of energy in different sectors of the economy are concern areas for
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India. There is an urgent need to reduce energy requirements by demand-side management and by
adopting more efficient technologies in all sectors.
11. ENERGY INDEPENDENCE SCENARIO
In this Energy Independence scenario the total primary energy demand in 2030 is lower at
1387mtoe (versus 1508mtoe in BAU). The fuel mix shifts towards renewable, although fossil fuels
remain dominant at 68 per cent of the mix. Underpinning the Energy Independence scenario is a
strong supply response and a focus on demand management. This is higher than current plans, but
not beyond reach given enabling market conditions. The biggest shift in the Energy Independence
scenario, however, is in the import dependence, which reduces to 1520 per cent. Coal imports
reduce to 9 per cent, liquids imports reduce to 62 per cent, and gas imports reduce to existing LNG
contracts. While liquid imports remain high in this scenario, there is considerably higher flexibility
and tolerance across the fossil fuel basket, to optimize between coal, liquid and gas import volumes.
Next to this section, describes each of the initiatives for energy independence, and the actions
required to make them a reality.
1. Achieve 1200mtpa domestic coal production
Coal will remain the bedrock of Indias energy requirements for the foreseeable future.
Achieving 1200mtpa of coal production by 2030 will require incremental annual production of
950mtpa, to make up for existing mines that will decline over the next 15 years. This will require
India to:
1.
Accelerate development of Coal projects which are at various stages of approval and
development
2. Fast-track captive coal blocks which have already been allocated, with a production potential
of 850mtpa. Some of these blocks are awaiting approvals or land acquisition, and another
have seen no development.
3. Allow private players to explore, develop and market coal. India has 7 per cent of the worlds
coal reserves and only 0.5 per cent of its exploration expenditure. Exploration and
development at scale will require market-based pricing and a robust coal market.
Import dependence on energy would reduce to 1520 per cent
2. Unlock unconventional gas production
Several recent progressive steps have resolved many pending bottlenecks in upstream oil and
gas. To enable rapid development of 100mmscmd of unconventional gas, India must:
1. Expand the scope of its shale gas policy to include private and public sector players alike
Ensure sufficient fiscal and infrastructural incentives to attract investment in unconventional
supply chains and services
2. Allow full exploration and exploitation of all resources in NELP blocks
3. Allow market determined pricing for unconventional gas and the freedom to market gas.
3. Support conventional oil and gas production
To achieve 150mtoe of conventional oil and gas production in 2030, India will need to ensure
the viability of redeveloping its existing mature basins, e.g., western offshore, attract sufficient
investment into new licensing rounds, and remove the remaining bottlenecks to resource
development. In particular, it will require to:
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Volume 5, Issue 11, November (2014), pp. 01-20 IAEME
1. Allow market pricing of crude oil from nomination blocks, to make the necessary high cost
investments in EOR4and the related technology development-viable.
2. Ensure market pricing for gas and the freedom to market gas produced under NELP or the
proposed open acreage policy.
3. Streamline contract administration by enforcing time bound deemed approvals with
management committee accountability, codifying standard practices around grey zones in
product sharing contracts, defining policies for license extension, exploration in producing
blocks and extension of block areas, strengthening and empowering DGH5 and making it a
statutory body focused on approving and monitoring work programs, budgets and field
development plans.
4. Light up 50,000 villages through off grid solar
Traditional models are increasingly proving unviable to electrify and supply villages. Yet, the
demand surge and economic benefits in newly electrified villages are plain to see. Off grid solar (and
in places wind, bio mass and micro hydel) are better suited, scalable solutions to electrify remote
villages and supplement supply in partially electrified ones. To scale up off grid solar, India will
need to:
1. Fine-tune, scale up and roll out models that have been successfully piloted, while introducing
new elements like competitive bidding and viability gap funding to ensure competition and
transparency
2. Introduce village level O&M capabilities and governance to manage distributed solar assets
Devise interventions/ incentives for rural micro-enterprises and other anchor loads (e.g.,
telecom towers) to shift to renewable solutions vs using diesel power
3. Channelize and attract funds from central and state budgetary allocations, corporate social
responsibility budgets, as well as private risk capital.
5. Add 100+ GW of grid connected solar and wind
India has demonstrated exceptional progress on the renewables front, more than doubling
installed capacity in the last 5 years, from 14.5 GW in 2008 to approximately 30 GW by December
2013. This translates to more than 3 GW of installed capacity per year. Though outstanding, India
would need to, on average, double this rate over the next 15 years to achieve the 100 GW aspirations.
This would need India to:
1. Enforce Renewable Purchase Obligations (RPOs) unilaterally. Targets have been set for each
state. Renewable Energy Certificates (RECs) remain unsold, forcing REC prices to floor
levels, significantly eroding developer returns. Mandating states to meet RPO targets, and
enforcing penalties for noncompliance would be required.
2. Invest in low wind speed technology with focus on building domestic R&D and
manufacturing capabilities to add 40+ GW by 2030.
3. Devise interventions and incentives for rural micro-enterprises and other anchor loads (e.g.,
telecom towers) to shift to renewables vs using diesel.
4. Introduce a peaking power policy to allow developers to invest in storage to make solar
viable for evening peaks.
6. Reduce industry and building power demand by 30 per cent
Indias overall energy intensity at 0.56koe/USD is high compared to even other developing
countries like Brazil at 0.25koe/USD or Malaysia at 0.4koe/USD, indicating significant improvement
potential. India has started positively on this journey, achieving energy intensity reductions of 1 per
cent per year. A substantial amount of demand reduction is already assumed in the BAU case
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International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 - 6510(Online),
Volume 5, Issue 11, November (2014), pp. 01-20 IAEME
12. CONCLUSION
India is the worlds fourth largest economy as well as the fourth largest energy consumer.
India imports a substantial portion of its energy from coal, oil & gas. As the Indian economy
continues to grow, so will its energy consumption, especially as the growth of its manufacturing
sector catches up with services and agriculture. With domestic resource production facing various
challenges, the general expectation has been that Indian energy imports will continue to grow, and
energy security concerns will intensify. The outlook and options for Indian energy independence
therefore becomes an important topic. In view of above facts, it is essential that a 2030 outlook is
particularly relevant, since it is difficult to significantly change energy policy & thinking in 5/10
years, but almost any boundary conditions can be changed over a 15-year period. Moreover, there
have been few if any, in-depth perspectives on this topic for 2030.
Indias energy demand, which was nearly 700mtoe (million tonnes of oil equivalent) in 2010,
is expected to cross 1500mtoe by 2030. Its dependence on imports is expected to increase from 30
per cent to over 50 per cent, suggesting the need for a new way forward. Indias primary energy
demand by fuel type in 2010 and business as usual (BAU) projections for 2030. Primary demand in
2010 stood at 691mtoe. Of this, about 41 per cent was coal, 24 per cent was liquids, 23 per cent was
non-commercial fuel, 8 per cent was gas, and the remainder was a mix of hydro, renewables and
nuclear power. Despite recent strides in renewable and nuclear power, this is a predominantly fossil
fuel based mix, with 73per cent of primary energy coming from coal, oil and gas.
Possible import dependence above 50 per cent of 1500mtoe and growing is a clear indication
that a different set of energy outcomes versus BAU will be required if India is to keep its growing
economy supplied with sufficient reliable and cost effective energy. Domestic resources will need to
be explored and exploited to target levels that have not been traditionally considered in current longterm plans. This will require stable, viable market mechanisms that attract sufficient investment
across the value chains. All possible energy sources will need attention, including coal, conventional
and unconventional oil and gas, renewables, nuclear power and energy efficiency. Following are the
factors that give India the opportunity to address its energy security concerns:
1. India has ample opportunity to increase coal production, provided transparent resource
access and development regulations are put in place
2. India has substantial unconventional hydrocarbon potential, even though reserve
estimates vary widely at this early stage
3. Conventional oil and gas still holds great potential in India, especially via the
redevelopment
and intensive exploitation of existing mature basins, provided viable pricing and taxation
mechanisms are in place
4. India has had remarkable momentum in increasing renewable power capacity (both wind
and solar), and doing so while setting global cost benchmarks
5. With a vast proportion of Indias infrastructure yet to be built, India can leapfrog the
developed world in energy efficient buildings, long distance rail transportation, and an
optimal road-rail modal mix etc.
6. India has a unique opportunity to create stronger and more secure supply partnerships
with oil and gas supplying countries in the Middle East and Africa, who will be seeking
large and stable markets to absorb imports displaced by the US.
We believe that it is possible for India to achieve substantially higher domestic energy
supply, lower demand and more secure imports than in the BAU case by utilizing the ample
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resources of renewables at an affordable cost and for longer period without disturbing the fixed
available resources of fossil fuels keeping them safe forthcoming generations.
REFERENCES
[1] www.ideasforindia.in (The Unsustainability of fossil fuel use in India by R. Sengupta) http://www.ideasforindia.in/article.aspx?article_id=126#sthash.HVMbtHxj.dpuf.
[2] http://www.groundtruthtrekking.org/Issues/AlaskaCoal/CoalTerminology.html#ixzz3I4WPVQ
sd.
[3] http://www.futuredirections.org.au/publications/indian-ocean/1118-meeting-india-s-energyrequirements-in-2030-1.html#sthash.OmolPeTf.dpuf.
[4] http://www.livemint.com/Industry/DkEx9mPwpSso24SWhBMxrL/Indias-energy-demand-tosurpass-Chinas-by-2035-BP.html?utm_source=copy.
[5] http://www.currentscience.ac.in/Volumes/105/07/0914.pdf.
[6] en.wikipedia.org/wiki/Integrated_gasification_combined_cycle Extract from paper: national
energy map for India technology vision 2030.
[7] Dr.S.M.Ali and Prof. K.K.Rout, Application of Renewable Energy Sources for Effective
Energy Management, International Journal of Electrical Engineering & Technology (IJEET),
Volume 1, Issue 1, 2010, pp. 18 - 31, ISSN Print : 0976-6545, ISSN Online: 0976-6553.
[8] Archana S. Talhar (Belge) and Sanjay B. Bodkhe, Modernization of Traditional Grid into
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[9] M.R. Kolhe and Dr. P.G. Khot, Coal An Energy Source for Present and Future,
International Journal of Management (IJM), Volume 5, Issue 10, 2014, pp. 71 - 90, ISSN Print:
0976-6502, ISSN Online: 0976-6510.
ABBREVIATIONS
CCS-Carbon Capture & Storage, IEA-International Energy Agency, IGCC-Integrated gasification
combined cycle NELP-New Exploration Licensing Policy, CHCP-Combine Heating & Cooling
Plant, OECD-Organization for Economic Cooperation and development, Mtoe- Million tonne oil
equivalent, BAU-Business As Usual, MTPA-Million Tonne Per Annum, O&M-Operate &
Maintenance, RPO-Renewal Purchase Obligation, BEE- Bureau of Energy Efficiency, AT&C LossAggregate Technical and Commercial Loss, R&D-Research & Development, ECBC-Energy
Conservation and Building Code, CAGR- Compound Annual Growth Rate.
AUTHORS PROFILE
M.R. Kolhe, received the Bachelor of Engineering degree in Electrical Engineering from
Visvesvaraya Regional College of Engineering Nagpur (now: Visvesvaraya National Institute of
Technology, Nagpur) and M.B.A. degree from GS College of Commerce, Nagpur in 1974 and 1990,
respectively. During 1975-2013, he worked in Western Coalfields Limited (Government of India
Undertaking) and retired in 2013 as General Manager (Electrical & Mechanical).
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