ENERGY AND SUSTAINABLE DEVELOPMENT

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ENERGY AND SUSTAINABLE DEVELOPMENT
By A. Anantha GM, REC
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Sustainable Development

• Sustainable Development means Development that
  meets the needs of the present day without
  compromising the ability of future generations to
  meet their needs

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Background

• In the last 50 years
• Global GDP grew around fourfold
• Despite high population growth rates in
  developing countries average per capita increase
  by about 30
• Adult illiteracy and infant mortality in
  developing countries cut by half

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Concerns

• Growing social stresses due to conflicts and
  inequality, poverty etc
• Environmental degradation
• For Next 50 years
• The global economy may grow further more than
  four folds
• Poverty may reduce considerably

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Govt. Attention Needed

• To reduce poverty
• Maintain Growth
• Improve social cohesion
• Protecting Environment

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Energy Consumption worldwide
India is 5th largest energy consumer. Per Capita
energy consumption is very low.
Source BP Stats 2005
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Energy Consumption in India
Consumption by energy type in 2003 Source
BP Stats 2005
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Energy Challenges

• Improve access to energy which is
• Sustainable
• Reliable
• Affordable
• In order to
• Alleviate poverty
• Promote energy savings
• Promote renewable and sustainable technologies

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Energy Challenges for Sustainable Development

• Tackling climate change
• Promoting environmentally sound energy
• Use of efficient technologies
• Meeting growing energy needs
• Capacity building

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Energy Efficiency and DSM

• Energy efficient technologies
• Compulsory energy audit annually
• End use efficiency
• Demand Side Management measures like peak saving,
  time of the day metering etc

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Energy Needs

• For Urban areas- High Demand
• For Rural areas- Varies from life line to medium
  demand

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Sources of Energy

• In rural Areas (villages)
• Fuel wood, biomass, biogas, kerosene etc
• Decentralised electricity generation locally
• Electricity supply through grid

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The status of village electrification in India as
on 31.03.2004

• Total No. of census villages 587556
• Total No. of census villages electrified 474982
  (81)
• Balance villages to be electrified 112401
  (19)
• As per the new definition of village
  electrification (effective from 2004-05) total
  no. Of un-electrified villages is estimated to
  be 1,25,000

The status of household electrification in India

• Total No. of households 13.8 Cr. (2001 census)
• Total No. of household electrified 6.02 Cr.
  (44)
• Balance household to be electrified 7.78 Cr.
  (56)

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Rajiv Gandhi Gramin Vidyutikaran Yojana (2005)

• Create Rural Electricity Backbone
• Wire villages/hamlets
• Power to all BPL families last mile
  connectivity
• Electrify public places
• Develop franchisees

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Policy Targets

• As per Rajiv Gandhi Grameen Vidyutikaran Yojna,
• April 2005.
• in 5 years.
• Electrify all villages and habitants
• Provide access to electricity to all
  households
• Give electricity connection to Below Poverty
  Line (BPL) families free of charge. Through
  creation of
• Rural Electricity Distribution Backbone (REDB)
  with at least one 33/11 kV (or 66/11kV) sub
  station in each block.
• Village Electrification Infrastructure (VEI)
  with at least one distribution transformer in
  each village/habitation.
• Decentralised Distributed Generation (DDG)
  system where Grid supply is not feasible or
  cost effective.

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Work in hand
States 22 Districts 196 Villages 51,284
unelectrified 74,615 electrified Households
72,78,758 As on 31.03.06 Additional 10,000
villages electrified under RGGVY
(05-06)
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Electrification of Villages
(Projected)
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Achievements/ Targets

• 10,000 villages electrified by March 2006
• 40,000 villages targeted to be electrified by
  March 2007
• Additional 25,000 villages targeted for intensive
  electrification
• Funds required Rs. 7500 crores i.e. about Rs. 600
  crores per month

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Challenges

• Timely flow of funds
• Holding price line of equipments
• Creation of viable franchisees
• Availability of reliable power

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ATC Losses-Present status (All India ATC loss )
Source MOP site/Power Finance Corporation /
State Electricity Regulatory Commission
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ATC Losses-Present statusAll India ATC loss
(contd..)
Source MOP site/Power Finance Corporation /
State Electricity Regulatory Commission
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ATC Loss of various states
(based on 04-05 figures)
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Projections for Electricity requirement by MOP
Year Billion kWhr Billion kWhr Installed Capacity (GW) Installed Capacity (GW)
7 8 7 8
2006-07 700 700 140500 140500
2011-12 982 1029 197060 206440
2016-17 1377 1511 276385 303330
2021-22 1931 2221 387645 445690
2026-27 2709 3263 543690 654865
2031-32 3799 4793 762555 962210
Source Draft Integrated Energy Policy document
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Source Draft Integrated Energy Policy document
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Household Energy Consumption in India (July 1999-
June 2000)
Fuel Type Physical Units Physical Units Physical Units MTOE MTOE MTOE
Rural Urban Total Rural Urban Total
Fire Wood chips (Mt.) 158.87 18.08 176.95 71.49 8.13 79.62
Electricity (BkWh) 40.76 57.26 98.02 3.51 4.92 8.43
Dung Cake (Mt.) 132.95 8.03 140.98 27.92 1.69 29.61
Kerosene (Mltrs) 7.38 4.51 11.89 6.25 3.82 10.07
Coal (Mt.) 1.20 1.54 2.74 0.49 0.63 1.12
L.P.G. (Mt.) 1.25 4.43 5.68 1.41 5.00 6.41
Source Derived from NSS 55th Round, (July 1999-
June 2000 data, National Sample Survey
Organisation, Ministry of Statistics and
Programme Implementation, Government of India
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The Current Situation

• Large parts of rural India not electrified
• Poor service levels 12 to 15 hour power cuts
  common in several large states
• Erratic voltage and rampant breakdowns
• High ATC losses

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Illustrative Cost structure of SEB Supply
(P/kWh)

• Delivered cost to consumer 662 P/kWh
• ATC loss of 48
• Distribution cost of 60 P/kWh
• Transmission cost of 20 P/kWh 7 losses
• Cost of generation for servicing incremental load
  considered
• Imperative that economic and fiscal policies
  should address the core issue along with the
  reduction in other underlying costs

Distribution Cost ATC Loss
Tr. Cost Loss
Generation Fuel Expense
Generation Capital
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Franchisee

• The Energy/ Electricity distribution and
  collection models should be on the basis of
  franchisees for a sustainable development

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Indian Energy Scenario

• Revenue Collection problems
• India- 17 of world population, 4 of primary
  energy
• Present pattern- predominantly fossil based
• 56 of households unelectrified
• Linkage between energy services and quality of
  life

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Power Generation Options
Power Generation
Centralized (Grid Connected)
Decentralized Distributed Generation (Isolated/
Grid interconnected)
Cogeneration ( Export)
Demand Side Management (Solar water heater,
passive solar, Energy Conservation etc.)
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Typical Village Load Profile
Source Prof. Rangan Banerjee, IIT Mumbai
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DDG- Issues

• Execution at mass level
• To contain tariff within affordable limits
• To pursue/encourage private companies and local
  bodies
• Local/ Consumer participation
• Inconsistent SEBs policy
• Mapping of energy resources
• Low load factor
• Standardization of units

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Combination Of Grid And Off Grid Operations

• DDG also to support grid power as a supplement
• Minimum guarantee of supply hours to be given by
  the States/ State utilities at normal rates
• Balance hours supply through DDG at DDGs
  determined tariff
• Average cost of supply through grid and off grid
  to be reasonable and affordable
• To improve the PLF, if required, Power may also
  be exported to the grid or third party by paying
  wheeling charges, wherever applicable

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Regulatory Issues - DDG

• As per the Electricity ACT 2003 no license
  requirement for stand alone generation and
  distribution in notified rural areas
• Interconnection with grid may bring State
  Regulatory Commissions in picture- Matter needs
  to be addressed
• For stand alone system the tariff can be fixed by
  the operator, regulatory commission has no
  jurisdiction in such areas notified as rural
• Private operators of DDG systems must follow
  certain guidelines to be notified by the Govt. of
  India regarding periodicity of increasing the
  tariff and the basis of increase
• Safety regulations to be followed even for DDG as
  per the Electricity Act 2003

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DDG- Policy Interventions

• No Customs or Excise Duty to be charged
• Income tax holiday for 10 years
• No Electricity Duty or other levies

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Talukas as Rural Economic Hubs

• Talukas are manageable
• Talukas can be self sufficient with local
  resources
• Talukas may be converted to Rural Economic Hubs
• DDG can meet the supplementary energy needs of
  the Talukas
• Employment generation in Talukas would reduce
  migration to cities
• Decentralization would work well for
  developmental goals and against economic
  deprivation
• Give equal opportunity to all Talukas
• Rural industries will get a boost
• It will be sustainable

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• REC LTD. SHOULD BE THE APEX AGENCY FOR RURAL
  DEVELOPMENT AND REFINANCING BEING ALREADY SPREAD
  ACROSS THE COUNTRY AND BEING CONSIDERED FOR
  NAVARATNA STATUS

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Way Forward..

• Need to improve Rural Energy Delivery systems
• Encourage DDG as supplementary power option
• Framing of Decentralised Distributed Generation
  Policy at National level
• Develop talukas/ blocks as rural economic hubs
  for sustainability
• Utilise RGGVY infrastructure for feeding power
  through DDG as supplementary power to protect the
  investments made under RGGVY
• Priority to energy efficiency and DSM measures
• Investments to be made in TD sector to cut down
  ATC losses drastically
• Concrete efforts required by all stakeholders for
  sustainable development

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Conclusion

• Growing energy demand and shortage of resources
  call for the urgency to focus attention on energy
  efficiency and demand side management besides
  reducing ATC losses. Energy generation to be
  more decentralised also for meeting local needs
  through grid or off grid. Investments have to be
  made now with a vision for sustainability. All
  energy options to be exploited to the extent
  feasible

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• Thank You