Synopsis: The country is facing multitude of problems in power sector.  Despite huge investments since independence and considerable increase in generating capacity, electricity is still out of reach for about 40% of the population. In the backdrop of escalating demand for electricity, the social, economic and environmental implications of large addition of conventional power stations, the very need for huge extension of grid based electricity supply systems need to be carefully reviewed not only from the point of sustainability of the present practices, but also from the perspective of looming crisis of Global Warming.  Inequity and injustice being meted out to the rural poor because of the inherent shortcomings of the centralized system of electricity supply need to be at the centre of our policy concerns.

Preface

The country is facing multitude of problems in power sector.  The electricity scenario in the country since independence has been a sad story of power cuts, both scheduled and unscheduled; low & high voltages; frequent collapse of the grid either locally or at state level or at regional level; unsatisfactory customer service; poor operational & financial performance; electricity injustice between rich and poor, and between urban and rural populations; the escalating demand from the urban population for electricity; poor quality of power even during few hours of nominal supply; ever increasing electricity prices; unsustainable subsidies; mounting losses of the supply companies; fast dwindling coal reserves; increasing uncertainty in the availability of gas and nuclear fuel for power generation; growing concern on the socio-environmental impacts of large power projects including dams and the consequent opposition to new power projects; huge inefficiency of the existing facilities etc. 

 Despite the massive investments in the power sector since independence, the successive governments have been arguing that due to low per capita electricity consumption of about 650 kWH (in 2009)in the country, which is one of the lowest in the world, there is a need for massive addition to the installed capacity in order to provide electricity to all.  However, the socio-environmental impacts of large power projects are posing serious obstacles in the form of strong opposition in the implementation of such additions.  Though there have been massive additions to the installed capacity since independence about 40% of the households in the country is still without access to electricity.  While the per capita consumption of electricity of urban India is escalating the rural communities are struggling even to get electricity for basic needs. Such disparity between the urban and rural communities is seriously affecting the overall development of the country, because the per capita consumption of electricity of a small section of the urban rich is reaching the level of developed economies, and demanding more of installed generation capacity.

 Energy consumption is closely associated with a substantial part of Green House Gas (GHG) emissions leading to Global Warming. Of various forms of energy electricity alone is responsible for about 42% of global CO2 emissions and about 24% of all GHG emissions. Though the official stand of the govt. has been that its per capita electricity consumption will not exceed that of the developed countries, the total GHG emissions of India’s large population, even if the per capita consumption were to reach only 25% of the largest consumer nation, will be huge.  In the backdrop of such Climate Change concerns, even though there is clearly a huge disparity between the countries in energy consumption and CO2 emissions, the question is whether India should continue with the fossil fuel driven economic development pathway. Table 1 gives an indication of per capita emission and electricity consumption.

 Whereas the grid based centralized generation system based on large size fossil fuel based or dam based power stations has failed to meet the basic energy needs of the majority of the country’s rural population, the same is proving to be very costly to the society in the form of economic, social and environmental impacts.  The escalating growth of conventional electricity power plants based on fossil fuels and dams in the country are not only adversely impacting the rural communities around such plants, but also are attracting world attention because the country is seen to be emerging as one of the biggest contributors to the Global Warming.   

 The poverty alleviation, rural electrification, decentralized electricity supply system based on renewable energy sources, human development, mitigation and adoption to Climate Change are all intricately linked, and hence need to be addressed with an integrated approach.  A paradigm shift is needed in the way we look at the future electricity needs of our country. 

  Table 1: Global Electricity Consumption and CO2 Emission

                                                                              (Year 2007)

 Country Per Capita

Consumption

(kWH)

Per Capita CO2

Emission (Tons)

United Arab

Emirates

16,161 29.91
Sweden 15,238 5.05
USA 13,616 19.10
Australia 11,216 18.75
Japan 8,475 9.68
Germany 7,185 9.71
China 2,328 4.57
World Average 2,752 4.38
India 543 1.18
Indonesia 564 1.67

                                        (Source: Key World Energy Statistics, IEA, 2009)

 Indian Electricity Scenario – a bleak picture

The electricity scenario in the country since independence has been such a sad story that the sector has been recognized as one of the main hurdles in adequate development of the society. Even if we leave out the first decade after independence as a point in our learning curve in managing our own affairs, one cannot look back at the performance of the sector during last five decades with any pride, except that there has been massive spending in the power sector resulting in phenomenal increase in the installed generating capacity, transmission & distribution network, and the demand for electricity. 

 The installed generating capacity has gone up from few thousand MW at the time of independence to a level of hundred fifty thousand MW, with thermal power providing about 65% of the capacity, hydro providing 25% and the remaining in the form of new & renewable energy sources with a very small contribution of 2.9% from nuclear power. 

 Table 2: Fuel-wise Installed Capacity (as on 31.8.09)

Fuel MW Percentage
Thermal 97,869.24 64.6
  • Coal
80,283.88 53.3
  • Gas
16,385.61 10.5
  • Oil
1,199.75 0.9
Hydro 36,916.76 24.7
Nuclear 4,120.00 2.9
Renewables 13,242.41 7.7
Total 1,52,148.41  

                                                           [Source: Central Electricity Authority, CEA]

 Though there have been deficits in electricity supply both during peak demand hours and in annual energy requirement, the problem generally has been acute in meeting the peak hour demand. Between 1996 and 2009 the peak power deficit has touched a maximum of 18% and annual energy deficit has gone upto 11.5%.   Power supply position as indicated in the table below for the period 1996-2009 can be viewed as typical for the entire country during last two decades.

 All the five regions and almost all the states have been experiencing power cuts.  Though power deficits were recorded for every year during 1996-2009, the total installed capacity and per capita consumption has been increasing continuously.  The urban areas have recorded nearly 100% electrification, and the per capita consumption of a small section of urban elites seem to have reached the level of that in the developed countries. Between 1996 and 2009 the energy availability in the country went up by nearly 90%; and between 1992 and 2006 the country recorded an increase of 52% in average per capita electricity consumption, but the 40% of the population remained without access to electricity. 

Table 3: Power Supply Position in India (Year 1996 to 2009)

    Annual Energy Demand (MU)  Annual Peak Demand (MW)
1996-97 4,13,490 3,65,900 11.5% 63,853 52,376 18.0%
1997-98 4,24,505 3,90,330 8.1% 65,435 58,042 11.3%
1998-99 4,46,584 4,20,235 5.9% 67,905 58,445 13.9%
1999-00 4,80,430 4,50,594 6.2% 72,669 63,691 12.4%
2000-01 5,07,216 4,67,400 7.8% 78,872 65,628 12.3%
2001-02 5,22,537 4,83,350 7.5% 78,441 69,189 11.8%
2002-03 5,45,983 4,97,890 8.8% 81,492 71,547 12.2%
2003-04 5,59,264 5,19,398 7.1% 84,574 75,066 11.2%
2004-05 5,91,373 5,48,115 7.3% 87,906 77,652 11.7%
2005-06  6,31,554 5,78,819 8.4% 93,255 81,792 12.3%
2006-07 6,90,587 6,24,495 9.6% 100,715 86,818 13.8%
2007-08 7,37,052 6,64,660 9.8% 108,866 90,793 16.6%
2008-09 7,77,039 6,91,038 11.1% 109,809 96,785 11.9%
               

[Source: Union Power Ministry]

 The deficits experienced during the last two decades can be attributed to two main reasons. One reason is the huge growth in demand for electricity, mostly from industries and agriculture. Urban residential load also has seen considerable growth largely because of the penchant for energy guzzling gadgets like air conditioners, refrigerators, water heaters, computers and many types of entertainment tools.  The other reason is the unbelievable level of inefficiencies at all stages between electricity generation and its end use.  India has been known to be exhibiting one of the lowest levels of efficiency in the overall management of a vital resource like electricity.  The average Plant Load Factor (PLF) of the coal power stations is reported to be about 63% as against best figure of more than 90% in the best run plants of NTPC. With a total coal power capacity of about 80,000 MW, improved PLF of 85% national average would have provided additionally about 17,600 MW for usage with the same installed generating capacity. This is in stark comparison of about 18,000 MW peak deficit recorded between 1996 and 2009. There have not been serious efforts to improve the efficiency levels to the international best practice levels, which alone would have eliminated the deficits completely.

 Table 4: Power Sector Efficiency in India

       Power Sector Area

 

Prevailing level of efficiency / loss in India International best practice
Generating capacity utilisation   50 – 60% More than 85%
Aggregate Technical & Commercial losses (AT&C)   35 – 40 % Less than 5%
End use efficiency in agriculture   45 – 50 % More than 80%
End use efficiency in industries and commerce   50 – 60 % More than 80%
End use efficiency in other areas (domestic, street lights and others)   20 – 30 %  More than 80%
Demand Side Management Potential to reduce the effective demand by more than 20%

                                                     (Source: Integrated Energy Policy, Planning Commission and other sources)

 The other blunders of the industry are: the unscientifically targeted subsidies which have become unsustainable; huge losses incurred by the electricity supply companies, which alone is reported to be about Rs. 25,000 crores a year; corrupt political interference in the affairs of these companies; lack of social and environmental responsibility for these companies; and poor work practices in these companies.  Such deficiencies for decades have resulted in serious problems for the society as a whole.

As per the Integrated Energy Policy of the Planning Commission “by 2031-32 the power generation capacity must increase to nearly 800,000 MW from the current capacity of about 160,000 MW inclusive of all captive power plants.”   Such a large scale addition of conventional power capacity in a short period will have profound impact on social, environmental and economic aspects of our society.  It is pertinent to note here that the Integrated Energy Policy has also contended that despite the increase of the electricity generation capacity /supply by 5 to 6 times by 2031-32 the energy security cannot be assured at least until 2050. This indicates the inadequacy / failure of the grid based centralized electricity supply system to meet the energy demand of a huge population of a diverse country.

 Table 5: Major issues for the society with conventional technology power sources

  Fossil Fuels (coal, gas, diesel)  Dam Based Hydro         Nuclear Power
Economic            Issues Unsustainable pressure on natural   resources such as land, water and    minerals; reduced agricultural      production Demands large tracts of forests

and fertile land;  water logging;             affects the economy of the down             stream population; deposition  of silt

Demands large tracts of forests and

fertile land; huge Capital costs; long

term waste management costs; serious shortages of nuclear fuels

Social  Issues Peoples’ displacement and  health Peoples’ displacement and

Health

Peoples’ displacement and health
Environmental   Issues Global Warming; pollution of

Land and water and air; acid rains

Methane emission,  submersion

 and fragmentation of forests;  loss               of bio-diversity; downstream areas             get  deprived of fertile silt

Mining related pollution; radiation

emission during operations and from       nuclear wastes for centuries

   Future Supply Scenario – towards a sustainable supply option

Inherent with a grid based centralized generation system are the need for long lengths of transmission lines, complex network of distribution systems, and the associated equipment such as transformers. Each of these add to the complexity, reduced reliability and increased capital & operational costs. Such centralized generation systems also need huge organizational structure with large manpower leading to human resource issues, including the human induced errors.  These centralized generation systems also are found to be economical only with large size power plants and concentrated loads. But Indian villages are wide spread and cannot provide any substantial loads individually as in the case of towns and cities. Because of these reasons the rural India, with more than 70% population, is getting poor electricity supply; villages are the last to get supply but the first to be disconnected in case of shortages.   

 The total installed generating capacity in the country has gone up from 58,012 MW in 1989 to 1,52,148  MW in 2009, a whopping 162% increase.

Total monthly generation from conventional sources has increased from 43,596 MU in March 2000 to 65,057 MU in March 2008, an increase of about 50%.

National per capita electricity consumption has gone up from 283 kWH in 1992-93 to 429 in 2005-06, an increase of 52%.

But 40% of the households, mostly in rural areas, have no access to electricity even in 2009.

                                          {Source: as per Central Statistical Organisation (CSO) &  Press Information Bureau, Govt. of India.}          

Urgent measures such as improving the generating plant performance;  reducing the T&D losses; minimizing the wastage in end usage; optimize the demand side management (DSM); and maximising energy conservation will be able not only to eliminate the existing deficits, but also will be able to meet a good portion of the future electricity demand.

The deficiencies, complexities and societal costs inherent in the grid based centralized generation system in India cannot provide any assurance that the rural-urban divide will be eliminated soon and that the electricity supply at the national level will be satisfactory in the near future. There is clearly an urgent need for a paradigm shift in our energy policy: instead of blindly adding millions of MW of additional capacity based on conventional power sources and centralized power supply system, we need to adopt an ‘integrated energy resource management’ approach which will have renewable energy sources and decentralized supply systems at its core.

 

There is growing conviction that in view of the huge societal costs associated with economic, social and environmental aspects of grid based centralized generation system of conventional power sources, the decentralized electric supply systems based on renewable energy sources are hugely economical in the long run.  They are found to be the best option for the accelerated electrification of smaller loads and rural house holds.  Many recent initiatives in the private sector to provide electricity to un-electrified villages through stand alone community based renewable energy power plants fed by bio-mass OR wind OR solar OR micro-hydel power have established that they are the appropriate solution to the energy requirements of most sections of the country. The major advantages which are associated with these alternatives are the shorter gestation periods, low societal impacts, and their immense suitability to rural needs.  India has huge potential in renewable energy sources, and a combination of two or more such sources (Hybrid systems) have huge potential to be used in urban areas also, and are already being used in various combinations.

A recent survey by Greenpeace India has indicated a clear divide between rural and urban supply scenario across the country. While the substantial part of the annual power sector investment is going towards increasing the per capita consumption of the urban areas the rural population continues to get denied of even the basic electricity supply. A number of pilot projects across the country have indicated that decentralized supply systems based on renewable energy sources such as solar, wind, bio mass etc. are the best supply options to most of the rural areas of our country. Many of these renewable energy sources such as solar water heaters have already become established as good sources of renewable energy in urban areas like Bangalore, while solar photovoltaic panels are getting widely used  in rural areas.  Adequate support by the state and central government in the form of well targeted subsidies and/or suitable tariff policies to encourage feed-in-tariff mechanism has the potential not only to drastically reduce the pressure on the existing grid but also to reduce the future load on the grid.  The decentralized supply systems based on renewable energy sources appear to be the only way of achieving 100% electrification in the near future.

Table 6 indicates the huge potential of renewable energy sources in the country.

                                                                         Table 6: N&RE potential in India 

                       Potential

          (Grid interactive power only)

  1. Wind energy      45,000 MW
  2. Small hydro       15,000 MW
  3. Solar   Over 5,000 trillion kWH/year Potential

   (estimated to be more than the total energy                 needs of the country)

  4. Bio-mass         17,000 MW
  5. Ocean Wave     With about 7,000 Km of coastal line it

 should be huge, but no estimates available

                                                         (Source: MNRE, Govt. of India)

 Huge emphasis is needed on decentralized energy options in the future energy policy. Major options which have been considered as techno-economically viable are: 

  1. Roof top solar Photo Voltaic systems, which can meet most of the domestic and smaller loads, such as lighting, TV,   computers etc.  These are being increasingly used in countries like Germany and USA not only to meet the domestic necessities, but for even exporting the excess power to the grid through a mechanism known as Feed-in- tariff.
  2. Solar water heaters have established themselves as very effective tools to provide hot water for houses, nursing homes, hotels etc. at very economical prices.  They are found to be very popular in Towns and cities, but can find good use in rural areas also.
  3. Community based bio-mass systems are highly suited for rural areas, which generally have very good supply of bio-mass.  
  4. At places where there is good average wind speed throughout the year, wind mills can provide very cheap power either at the community level or at the individual house holds level.

Such decentralised power systems have the potential to meet most of the rural loads when they are used in hybrid mode of one or more individual systems, and can provide many other sustainable benefits:   

  • Will greatly reduce the burden on the grid based power supply system; drastically reduce the T&D losses; and vastly improve the power supply to those consumers essentially needing the grid supply;
  • Will drastically reduce the need for fossil fuel based, dam based power stations and the associated transmission & distribution network;
  • Will assist in drastically reducing the GHG emissions;
  • Provide a sustainable, environmental and people friendly energy supply model;
  • Will accelerate the rural electrification due to shorter gestation period of individual projects;
  • Will lead to increase in rural employment opportunities, and hence in minimizing urban migration.

What can individuals /communities do to overcome the crises?

The public including the industries, commerce, residences and institutions can undertake the following measures:

  •  efficiency improvement measures to optimise the electricity consumption;
  • energy auditing in industries to conserve energy ; widespread usage of energy efficient CFLamps;
  • meet lighting, water heating and small pumping energy needs from solar energy;
  • minimum life cycle cost purchase of electrical equipment like motors, transformers, capacitors, lighting fixtures, refrigerators etc;
  • maximize the benefits from time-of-day (TOD) tariffs; night time water heating, night time use of large ovens etc.
  • co-operative society concept to meet the energy needs of a group of industries, as in an Industrial Estate;
  • consider setting up a captive gas fired power generator to cater to a group of industries to eliminate the uncertainties associated with grid supply;
  • widespread use of renewable energy sources wherever feasible;
  • opt for decentralized electricity supply system by a combination of solar, wind and bio mass for individual small scale industries OR communities;
  • lobbying for policy changes for adequate investment in T&D sector, efficiency improvement, demand side management, subsidy on NCEs, rationalization of tariff for agricultural sector, energy conservation in homes, offices, schools, street lights, decorative purposes, etc.
  • industries can explore Carbon Trading by adopting innovative electricity saving measures;
  • educational campaign on the need for high efficiency and energy conservation;
  • participate effectively in important decision making; understand the rationale behind major policy decisions;
  • encourage public debate on all major energy related issues;
  • lobby for legislation on effective public consultation on all major policy issues.

 Conclusions – ensuring energy security   

Since the country has not reached a mature stage in the development of electricity infrastructure unlike the case of developed countries, there is a very good opportunity to learn from others’ mistakes and adopt a suitable model for the country. The multitude of crises facing the electricity industry in India must be converted into an opportunity to herald a new era where social and environmental responsibilities will occupy the highest priority; where long term sustainability of the development path is well considered; and where the equity and energy justice is ensured for all sections of our society. 

 Whereas the grid based centralized generation system has failed to meet the basic energy needs of the majority of the country’s rural population, the same is proving to be very costly to the society in the form of economic, social and environmental impacts. 

 A paradigm shift is needed in the way we look at energy options; not just as some business models only but as sustainable developmental tools.  There can be no doubt that the country will come under increasing international pressure to contain its GHG emissions. 

 Taking all the relevant issues into objective account the best option for the country towards a sustainable future electricity supply is to take an ‘integrated energy resource management approach’ where the world best practices are deployed in the existing system, and decentralized supply options based on renewable energy sources are widely adopted to cater to most of the future loads.

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