EMPOWERING GROWTH

Perspectives on Indias Energy Future

Going On..

Presented By:Abhinav Gupta Roll No. 002, Section: A MBA Power Management Xth Batch (2011-13)
DATE: 18/03/2013

Energy Threat to Indias Growth

Indias demand for energy will continue to expand rapidly. But domestic supply will be constrained by price distortions and other hindrances. This will increase demand for fossil-fuel imports. By 2020, domestic production will fulfil only half of Indias fossil-fuel consumption, down from 60% today. This will add billions to its fuel import bill and deepen its energy security worries.

Today India.. Imports 75% of its Crude Oil requirement. Imports 25% of its Natural Gas requirement. Imports 20% of its Coal requirement.

Increasing Electricity: Need of More Fuel

Disparity speaks .. Worlds avg. per capita per annum electricity consumption: 2900 kWh India is still far from its NEP target of per capita per annum electricity consumption of 1000 kWh More than 30% energy gets wasted till final delivery point.

Spectacular performance by private sector (approx. 42%), but Increasing running cost is hurting the operational and financial performance. Decreasing PLF Year on Year. 6,000 MW of stranded gas based power generation capacity.

Indias Gross Domestic Energy Consumption

Key findings .. Decreasing share of electricity as a source of secondary energy. Increasing share of natural gas. Increasing share of renewable energy as a source of primary energy.

Coal: Most disputed fuel during 11th FYP

Underperforming statistics of 2011-12 .. Total coal demand: 696 MT Total supply: 539 MT Gross coal shortage: 157 MT Total import: 100 MT Net coal shortage: 57 MT Increasing Gap between Demand and Supply .. Projected coal demand by 2016-17: 980 MT Expected import of coal by 2016-17: 185 MT Inadequate Parity in for coal .. Average price of imported coal: $ 95 Per Ton i.e. INR 5,200 Per Ton Domestic coal price: INR 3,500 -5,000 Per Ton Calorific value of imported coal: 6,000 Kcal/Kg Calorific value of domestic coal: 3,700 Kcal/Kg

Natural Gas: Scarce and Important

US governments Energy Information Administration in 2011 found that India had just 63 trn cu ft of technically recoverable shale-gas resources (compared with Chinas 1,275 trn cu ft, for instance) However, large offshore finds have helped to boost Indias reserves from 0.8 trn cu metres (28.25 trn cu ft) in 2004 to 1.2 trn cu metres (42.37 trn cu ft) in 2011, according to the BP Statistical Review of World Energy June 2012. Consumption to increase at 9% by 2020 Gas demand is more than 150 mmcmd against availability of 110 mmcmd. TAPI project .. Is an initiative but neither certain nor sufficient. Expected total capacity of 90 mmscmd of which Indias share is approx. 38 mmscmd. Expected landed cost is $ 13 per mmbtu. Persisting Retarding factors .. High dependence on foreign expertise for advanced exploring techniques. Generally problematic environment for foreign investors in India. APM for Gas e.g. Reliances KG D6 pricing. No firm policy for availability of gas. Govt. warns developers to stay away from gas based new addition by 2016

OIL: Less Than Slick

Oil is the most important element, after coal, in Indias energy mix. Unreliable electricity supplies drive industry to become the largest source of demand for petroleum products. Imports grew by 47% year on year in fiscal 2011/12 (April-March) Demand from the industrial sector will expand along with industrial activity. Even so, as vehicle take-up increases, by 2020 transport will rival industry as a source of demand for oil. Overall, consumption will grow by almost one-half between 2011 and 2020, to 263.2 mtoe. Domestic oil supplies, from proven reserves that are just 0.3% of the worlds total, will not keep pace. Production is expected to rise gradually over this decade, from an estimated 865,000 barrels/day in 2011 to 975,000 b/d by 2020. More privatization in oil sector can lead to be a stimulus package for this sector.

Non Fossil Fuels: Rapid Evolution

Nuclear ..

Government officials have suggested that 600-700 GW of nuclear capacity could be built by mid-century. Yet even a target of 20 GW by 2020, compared with less than 5 GW today, appears optimistic. Opposition to nuclear power in India in the wake of the Fukushima nuclear accident. Poised for impressive growth starting from a very small base. India has rich renewable resources. Installed wind-power generating capacity will almost double between 2011 and 2020 India is already the worlds fifth-biggest market. Solar-power generating capacity to surge from approx. 1.2 GW now to 15.7 GW in 2020 Thanks to favourable government policies and solar powers off-grid applicability. Will account for nearly 60 GW of capacity by 2020, up from 39 GW in 2012. Falls short of government aspirations, R&R policy.

Renewable Energy Source ..

Hydro Power ..

India is .. Worlds seventh-largest energy producer. Fifth-largest energy consumer. Accounting for more than 4% of total global annual energy consumption. To become energy self sufficient India will need to increase .. Its primary energy supply by four to five times. Electricity generation capacity/supply by six to seven times, as compared to 2003/04 levels. By 2031/32 power-generation capacity should increase to nearly 800 GW from the current capacity of about 207 GW. Indias energy security has been declining ..

Indias energy trilemma: An International Perspective

In 2011, India ranked 84 of 92 countries on this measure. Down from 58 in 2010

Three major needs for Indias economic development to continue .. Adequate financing for building and upgrading energy infrastructure. Development of skilled man power. Diversification and modernization of energy mix.

Need of Formulating Holistic Policies

Weakness of Indias Energy system .. This two-tier political structure. Five different energy ministries in the central government Ministry of Petroleum & Natural Gas Ministry of Power Ministry of Coal Ministry of New and Renewable Energy Department for Nuclear Energy Hence policy coordination can be tricky High investment in generation while low focus on distribution segment Way forward .. Standardized and proportional investment Generation: 40 Transmission: 20 Distribution: 40 Diversifying energy mix Increasing coordination among different ministries

Uncertainty in Energy Security in Near Future

As per US governments Energy Information Administration (EIA) By 2025 the BRICs, led by China, will account for nearly 38% of global primary energy demand, up from 27% in 2005 The critical question is: will the BRIC club in the pursuit of economic growth be able to meet its increasing energy demand? Relatively energy-secure nations: Brazil and Russia Energy insecure nations: China and India Coal will remain prime source for electricity in India and China. India will rely more on gas to meet peak load while China will rely more on hydro to meet its peak demand. Indias domestic coal production has grown at an annual average of just 2.6% between 2001 and 2011, compared with an annual average growth of 8% in electricity demand during the same period. A shortfall in domestic coal output has forced India to rely on expensive imports of coal, exacerbating its electricity-supply woes. The investment will not happen until India raises electricity prices to reflect the actual cost of generation.

Industrial Demand and Energy Supply Management: A delicate balance

Industrial Demand and Energy Supply Management: A delicate balance

Industrial Demand and Energy Supply Management: A delicate balance

Industrial Demand and Energy Supply Management: A delicate balance

Industrial Demand and Energy Supply Management: A delicate balance

Uncertainty in Energy Security in Near Future

As per US governments Energy Information Administration (EIA) By 2025 the BRICs, led by China, will account for nearly 38% of global primary energy demand, up from 27% in 2005 The critical question is: will the BRIC club in the pursuit of economic growth be able to meet its increasing energy demand? Relatively energy-secure nations: Brazil and Russia Energy insecure nations: China and India Coal will remain prime source for electricity in India and China. India will rely more on gas to meet peak load while China will rely more on hydro to meet its peak demand. Indias domestic coal production has grown at an annual average of just 2.6% between 2001 and 2011, compared with an annual average growth of 8% in electricity demand during the same period. A shortfall in domestic coal output has forced India to rely on expensive imports of coal, exacerbating its electricity-supply woes. the investment will not happen until India raises electricity prices to reflect the actual cost of generation.

The distribution and infrastructure challenge: Improving Indias grid network and rural connectivity

Indias massive grid failure in July 2012 was symptomatic of deep-seated problems with the countrys electricity connectivity.
The malfunction flows down the entire supply chain, from generation to transmission and distribution. Rural connectivity is especially poor, despite official claims that 90% of villages are electrified. The solutions are easy to identify: better grid management practices, higher electricity tariffs, improved billing/collection and greater private participation in the supply chain. Finding the political will to implement these steps is the difficult part, but the countrys continued economic development depends on it.

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