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India: Energy Demand and Supply and

Climate Opportunities

Jayant A. Sathaye
Senior Staff Scientist
Lawrence Berkeley National Laboratory
Berkeley, CA

22 March 2006
Workshop on Asia-Pacific Partnership on Clean Development and
Climate Opportunities in China and India, Washington DC
 Contents
z Energy situation in India: An Overview
z Electric Power Sector
z Industrial Sector
z Buildings and Appliances
z Energy efficiency: Key Institutions
z Conclusions
Energy situation in India:
An Overview
 Primary Energy Supply*
100,000

90,000

80,000

70,000

60,000
US
PJ

50,000 China

40,000 India

30,000

20,000

10,000 Primary Energy Supply* / GDP

0 (Indexed to 1971)
71

75

79

83

87

91

95

99

03
160
19

19

19

19

19

19

20
19

19

140

120

100
US
80 China
India
60

40

20
* Excl. traditional biomass in India
Source: 0
Energy data – IEA

03
97
71

81

87

99

01
73

75

77

79

83

85

89

91

93

95

20

20
19

19

19

19

19

19

19

19

19

19

19
19

19
19

19

Economic data – World Bank

 Coal continues to dominate energy mix,
although natural gas share has increased
India: Primary Supply by Energy Source

16,000

14,000

12,000
Solar/Wind/Other
10,000 Hydro
Nuclear
PJ

8,000
Gas
6,000 Oil
Coal
4,000

2,000

0
1971
1973
1975

1979
1981
1983
1985
1987
1989

1993
1995
1997
1999
2001
2003
1977

1991

Source: Energy data – IEA

 Primary Energy Consumption, India
(Excl. traditional biomass)

12,000

10,000 Agriculture
8,000 Industry
Transport Increased Share of
PJ

6,000
Commercial
4,000 Agriculture and
Residential
2,000
Residential and
0
Commercial Energy
1971

1975
1977
1979
1981
1983
1985
1987
1989
1991
1993

1997
1999
2001
1973

1995

2003
Use:
Sectoral Shares • Electricity subsidized
100% to both sectors
80%
• 25% of state fiscal
Agriculture

60%
Industry deficit in many states
Transport
40% Com m ercial
• Subsidy is about $2
Residential billion annually
20%

0%
1971

1975

1981

1985

1991

1995

2001
1973

1977

1979

1983

1987

1989

1993

1997

1999

2003

Source:
Energy data – IEA
 Decomposing India CO2 Emissions:
Economic and population growth more than offset recent
decline in CO2 emissions intensity

600
GDP/pop
1050 Mt CO2
Co2
500
Pop
CO2 / PE (t CO2 per TJ)
400
PE/GDP
CO2 / GDP (kg CO2 per 2000 US$)
300

200

100

0
77

83

87

91

99

01
71

73

75

79

81

85

89

93

95

97

03
19
19

19

19

19

19

19

19

19

19

19

19

19

19

19

20

20
Source: Energy data – IEA; Economic data – World Bank
Electric Power Sector
 Electricity Generation by Source

700
600 Solar/Wind/Other

500 Biomass
Hydro
400
TWh

Nuclear
300
Natural Gas
200
Oil
100 Coal
0
India Generation %
74

77

89

01
71

86
80

83

92

95

98
19
19

19

19

19

19

19

19

19

19

20
Capacity (MW)
Total 123,668 100
Coal, 68,434 55.5
Shares Natural gas 12,430 10.0
Oil 1,201 0.9
100%
90% Solar/Wind/Other Hydro 32,135 26.0
80%
70%
Biomass Nuclear 3,310 2.7
Hydro
60% Other 6,158 4.9
50% Nuclear
40% Natural Gas
30%
20% Oil
10% Coal
0% Source: IEA Energy Data, and
Economic Survey, GOI, 2006
71

74

86

95

98
77

80

83

89

92

01
19

19

19

19

19

19

19
19

19

19

20
 India Electricity Sector:
Background Summary
• Consumption per capita of 400 kWh in 2004-05, assuming 25% technical T&D
loss; US consumption per capita – 13,000 kWh
• India sectoral consumption shares in 2004-05:
— Industrial – 35.6% -- Average tariff about 7 cents per kWh
— Residential 24.8% -- Subsidized – average tariff about 6 cents/kWh
— Commercial 8.1% -- Maximum tariff, about 9 cents per kWh
— Agricultural – 22.9% -- Heavily subsidized – average tariff < 1 cent/kWh

• Continued deficit supply in 2004-05:

— Peak power deficit 11.6%
— Energy deficit 8 %

• Severe transmission and distribution (T&D) loss

— About 50% in 2004-05 aggregate technical and commercial loss (AT&C)
— Assuming 25% is technical loss -- 100 billion kWh or about $6 billion a year

• Five year plan targets have not been met:

— Against the 9th Plan (1997-’02) target of 40,245 MW new capacity, addition was about 21,000 MW
— Private sector target: 17,589 MW vs. a realized addition of 6,735 MW
— 10th plan (2002-’07) target 41,010 MW, revised down to 36,956 MW, commissioned: 13,.416 MW
— Deficits likely to continue in the near term
 India’s Electricity Intensity
Declined Beginning in 1993
Electricity Cons./GDP
(kWh per 2000 US$, 1971 = 100)
250

200

150

100

US
50
China
India
0

95
71

77

83

89

01
85

97
73

75

79

99

03
81

87

91

93
19

19

19

19

19

20
19

19

19

19

19

19

20
19

19

19

19

Source:
Energy data – IEA
Economic data – World Bank
 Maharashtra State Electricity Board (MSEB)
Capacity Deficit – Annual average (2002-03)
(7836 GWh load shedding over 20 hours a day;
1376 MW average evening peak load shedding )
02-03 dispatch

11000

10000

9000

8000

7000 MSEBsupply
MSEBdemand
6000 MSEBhydro
MSEBthermal
MW

5000
DPC
4000 URAN
TEC
3000 CENTRAL

2000

1000

0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
-1000

Hour Source: Phadke and Sathaye (2005)

 Electricity Efficiency Programs Can
Play a Key Role
• Indian states face several challenges –
• Growing electricity shortage, deteriorating utility finances, and fiscal
deficits

• Improving electricity efficiency through DSM programs

for example can
• Reduce electricity shortage, a national potential of about 10,000 MW
• Improve utility revenue and financial position
• Reduce state government subsidy and increase sales tax revenue
• 20 cents sales tax is lost for each kWh not delivered to businesses
• Potential to eliminate between 15-25% of state fiscal deficit
Industrial Sector Energy efficiency
 Continued improvement in India’s
industrial energy intensity since mid-1980s

Industry Primary Ene rgy Consumption pe r Value Adde d

(US $ 2000, 1971 = 100)
140

120

100

80

60

US
40
China
20 India

01
92

95
83

86
74

77

98
89
80
71

20
19
19

19

19
19

19

19
19
19
19

Source: Energy data – IEA

Economic data – World Bank
 Industrial Production: Aluminum, Cement and Steel
India is a Relatively Small Producer Except in the Case of Cement

Country Aluminum Cement Raw Steel

Thousand tonnes Million tonnes Million tonnes

2004 2005 2005

China 6,670 22% 1,000 45% 333 31%

India 862 3% 130 6% 34 3%

US 2,516 8% 99.1 4% 92.4 8%

Other 19,752 66% 993 45% 631 58%

World
Total 29,800 100% 2,222 100% 1,090 100%

Source: USGS, 2006

 Energy Efficiency
in the Indian Cement Industry
-Wide range in energy intensity in Indian cement industry
- Some of the most efficient plants in the world are in India
- Only 5% are inefficient wet kilns (vs. 18% in the U.S.)
- Energy savings and emission reduction possible through:
-Improved energy efficiency
-Increased blending of cement
-Use of alternative fuels
-Waste heat power generation
Average

Dry Kilns

Alt Fuels (Tires, Solvents)

Alt Fuels (Biomass)

Waste Heat Power Generation

Blended Cement (90% >> 70% )

Energy Efficiency

All Options

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 0 50 100 150 200 250 300
GJ/t cement kgC/t cement
Source: Sathaye et al. (2005)
Cement Energy Intensity Trend, India
Electrical Energy Consumption in Indian Cement Industry
VRMs & 3000 TPD KILNS
140
LOW PR. PREHEATER &
EXPERT SYSTEMS
130
PC KILNS
1200 TPD 4-ST SP KILNS
120
ROLLER PRESS & HIGH
DRY PROCESS KILNS EFFICIENCY SEPERATORS
110

100 HIGH EFFICIENCY FANS, MECHANICAL

CONVEYORS
90
1960 1965 1970 1975 1980 1985 1990 1995 2000

KWH/T CEMENT Thermal Energy Consumption in Indian Cement Industry

1700
1200 TPD 4-ST SP KILNS

1500 PC KILNS
DRY PROCESS KILNS WET TO DRY CONVERSION
1300
5-STAGE PC KILNS

1100
6 STAGE PC KILNS & MULTI-CHANNEL
900 BURNERS
HIGH EFFICIENCY COOLERS
700
1960 1970 1980 1990 2000

KCAL/KG CL.

Source: Raina, 2002

 Energy Efficiency in the Steel Industry –
Electric Arc Furnace
8

Oxygen Lancing
Secondary metallurgy
Best Practice
Water-cooled walls
High-Power
6 Computer control India
Foaming Slag
SEC (primary energy, GJ/tls)

Oxy-fuel burner/water-cooled roof

Bottom-taphole
Ladle (low-T tapping) US (450 kWh/tls)
Eccentric Bottom Tapping
Scrap Preheating
DC-arc technology
4 Pneumatic steering
Contiarc (2001)

Practical Minimum (high efficiency, high power furnace with scrap preheating and maximum oxyfuel use)
2

Theoretical Minimum (thermodynamic minimum for steel melting and refining)

0
1960 1965 1970 1975 1980 1985 1990 1995
Source: LBNL Estimate
 Estimated Energy Intensity
Cement and Steel Production

Country Cement Steel

(GJ / tonne cement) (GJ / tonne cast steel)

China 5.7 23 -- 35
India 4.3 28 -- 32
US 5.4 20+ ? (MECS 94: 26)

Source: LBNL Estimate based on analysis of the industries in each country

• Need better benchmarking of industrial energy use which will open opportunities
for voluntary energy efficiency programs
Buildings and Appliances Energy Efficiency
Conversion to modern fuels adds to increase in
India’s household energy use per capita

Residential Primary Ene rgy Consumption per Capita

(1971 = 100)
400

350

300 US
China
250 India

200

150

100

50

-
81

83

85

87

91

93
89
71

73

75

77

79

95

97

99

01

03
19

19

19

19

19
19

19

19

19

19

19

19

19

19

19

20

20
 Summary of Cost-Effective
Unit Efficiency Potential for Four Products in India
Product Base Case Efficiency Case Percentage
(kWh/year) (kWh/year) Improvement
Refrigerator
Direct-cool 381 208 45%
Room air conditioner
Window 1191 1056 11%
Motors
Agricultural – 5 HP 992* 875* 12%
Industrial – 15 HP 4079* 3264* 20%
Industrial – 20 HP 5562* 3387* 39%
Distribution transformer
63 kVA 1834 797 57%
100 kVA 2619 1068 59%
Only Main Classes Shown Source: McNeill et al. (2005)
* Motor Consumption includes losses only.
 Four-product Impact on
Energy Efficiency in India in 2020
Consumption Potential savings
Product
TWh Percent TWh Percent
Refrigerators 45 3.6% 16.4 36.4%
Air Conditioners 56 4.5% 4.8 8.7%
Motors 151 12.1% 3.5 2.3%
Distribution transformers 25 2.0% 6.8 27.2%
All 4 Products 276 22.2% 31.5 11.4%
TOTAL India 1246 100.0% 31.5 2.5%
Refrigerator
Source: McNeill et al. (2005) 3.6%
AC
4.5%
Motors
12.1%
Distribution
transformer
2.0%

Other
77.8%
 Commercial Buildings

• Growing share of electricity use

• Several corporate buildings have been built to US
Business Council’s platinum and gold LEED ratings
• Government has stated goal for reducing its own
consumption in major buildings
• Much of the sector still lags behind
• ESCOs could play a major role in the sector
— Financing and risk sharing remain key issues
Energy efficiency: Key Institutions
 India Energy Efficiency:
Legislation, Institutions, Policies and Programs
• Federal institutions created in the 1970s and 1980s
• Petroleum Conservation and Research Association (PCRA) under the
Ministry of Petroleum and Natural Gas in 1978
• National Productivity Council and the Energy Management Center
• Recent legislative mandates –
— Energy Conservation Act 2001
• Created the Bureau of Energy Efficiency (BEE) under the federal Ministry of
Power to
– Develop policies and strategies for reducing energy intensity
– Delegate authority to state energy development agencies
– Develop standards and labels for refrigerators, air conditioners, motors,
agricultural pumps, and distribution transformers
— Electricity Act 2003
• Sets up central and state-level independent regulatory commissions similar
to those in the US, can mandate and finance DSM programs
• Industry initiatives
— Indian Green Business Center (GBC), Confederation of Indian Industry
(CII)
• Provides technical assistance and training to businesses
 Conclusions
• Almost all approaches for improving energy efficiency are being
tested and tried in India, and the liberalized markets offer more
scope than in the past, still the pace is slow
— Replication of successful practices and demonstrations is needed
• Low hanging fruit, always on the other side of fence,
— Need best practices to find the gate and pathway
• Techno-economic analysis that is applied in a consistent
framework is critical for assessing potential and transferring
learning across countries
• Energy efficiency which is often perceived as a blue collar
occupation needs to become a white-collar one –
— Large scale financing of bundled projects where the risk may be
shared
 Thank you
Please check these websites for
LBNL India publications and activities and links

http://ies.lbl.gov/iespubs/indiapubs.html
http://www.dc.lbl.gov/india/

Publication site will be updated regularly over the next month

Rapid decline in service sector energy intensity
due to fast growth in services value added

Services Primary Energy Consumption per value Added

(1971 = 100)

120

100

80
US
60 China
India
40

20

-
83
85

01
71
73
75
77
79
81

99
87
89
91
93
95
97

03
19
19
19
19

19
19
19
19
19
19
19

20
20
19
19

19
19