Top Banner

of 193

Better Environment

Apr 08, 2018

Download

Documents

Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
  • 8/6/2019 Better Environment

    1/193

    BETTER ENVIRONMENT

    THROUGH

    ENERGY EFFICIENCY

    PROJECT ASSIGNMENT

    SUBJECT: ENVIRONMENTAL LAW

    POST GRADUATE DIPLOMA IN ENVIRONMENTAL LAW (PGDEL)

    SUBMITTED BY

    R.L. BHUTIANI

    I.D. NO.EL/702/07-08

    C/O ENGINEERS INDIA LIMITED

    BANGALORE 21

  • 8/6/2019 Better Environment

    2/193

    DECLARATION

    BETTER ENVIRONMENT THROUGH ENERGY EFFICIENCY

    Certified that this Project Work is my original work and that I have

    not taken or borrowed any material from others work nor have I

    presented this partly or fully to any other institution / College /

    University. I have complied with all the formalities prescribed inthis regard.

    RAMESH LAL BHUTIANI

    I.D. NO.EL/702/07-08

    Date : 28 April 2008

    Place: Bangalore

  • 8/6/2019 Better Environment

    3/193

    CONTENT

    Chapter 1 Introduction

  • 8/6/2019 Better Environment

    4/193

    Chapter 1

    Introduction

    1.1 ENERGY SCENARIO

    The global primary energy consumption at the end of 2002 was equivalent to 9405

    million tonnes of oil equivalent (Mtoe). The Figure 1.3 shows in what proportions the

    sources mentioned above contributed to this global figure.

    Figure 1.3 Global Primary Energy Consumption

    The primary energy consumption for few of the developed and developing countries is

    shown in Table 1.1. It may be seen that Indias absolute

    primary energy consumption is only 1/29th of the world, 1/7th of USA, 1/1.6th time of Japan

    but 1.1, 2.9, 1.3, 1.5 times of Canada, Australia, France and U.K respectively.

  • 8/6/2019 Better Environment

    5/193

    Table 1.1 Primary Energy Consumption by fuel (2002) in Million

    Tonnes Oil Equivalent (Mtoe)

    Oil NaturalGas Coal Nuclear Hydro Total Share ofTotalUSA 894.3 600.7 553

    .8185.8 58.2 2293.0 24.4%

    Canada 89.7 72.6 30.7

    17.0 78.6 288.7 3.1%

    France 92.8 38.5 12.7

    98.9 15.0 258.0 2.7%

    RussianFederation

    122.9 349.6 98.5

    32.0 37.2 640.2 6.8%

    United

    Kingdom

    77.2 85.1 36.

    5

    19.9 1.7 220.3 2.3%

    China 245.7 27.0 663.4

    5.9 55.8 997.8 10.6%

    India 97.7 25.4 180.8

    4.4 16.9 325.1 3.5%

    Japan 242.6 69.7 105.3

    71.3 20.5 509.4 5.4%

    Malaysia 22.5 24.3 3.3 - 1.7 51.8 0.6%

    Pakistan 17.9 18.8 2.1 0.4 4.6 43.8 0.5%

    Singapore 35.5 1.6 - - - 37.1 0.4%

    TOTAL

    WORLD

    3522.5 2282.0 2397.9 610.6 592.1 9405.0

    Energy Distribution Between Developed And Developing Countries

  • 8/6/2019 Better Environment

    6/193

    Figure 1.4: Energy Distribution Between Developed and Developing

    Countries

    Although 80 percent of the worlds population lies in the developing countries (a fourfold

    population increase in the past 25 years, their energy consumption amounts to only 40

    percent of the world total energy consumption. The high standards of living in the

    developed countries are attributable to high-energy consumption levels. Also, the rapid

    population growth in the developing countries has kept the per capita energy consumption

    low compared with that of highly industrialized developed countries.

    The world average energy consumption per person is equivalent to 2.2 tonnes of coal. In

    industrialized countries, people use four to five times more than the world average, and

    nine times more than the average for the developing countries. An American uses 32

    times more commercial energy than an Indian.

    1.6 Indian Energy Scenario

    Coal dominates the energy mix in India, contributing to 55% of the total primary energy

    production. Over the years, there has been a marked increase in the share of natural gas in

    primary energy production from 10% in 1994 to 13% in 1999. There has been a decline in

    the share of oil in primary energy production from 20% to 17% during the same period.

  • 8/6/2019 Better Environment

    7/193

    Energy Supply

    Coal Supply

    India has huge coal reserves, at least 84,396 Million tonnes of proven recoverable

    reserves (at the end of 2002). This amounts to almost 8.6% of the world reserves and it

    may last for about 235 years at the current Reserve to Production (R/P) ratio. In contrast,

    the worlds proven coal reserves are expected to last only for 204 years at the current R/P

    ratio. India is the fourth largest producer of coal and lignite in the world. Coal production

    is concentrated in these states (Andhra Pradesh, Bihar, Madhya Pradesh, Maharashtra,

    Orissa, Jharkhand, West Bengal).

    Oil Supply

    Oil accounts for about 33 % of India's total energy consumption. While India has invested

    considerable resources in this sector, the crude oil production has stagnated at around 32-

    33 million metric tonnes per year over the past decade. The majority of India's roughly

    5.4 billion barrels in oil reserves are located in the Bombay High, upper Assam, Cambay,

    Krishna-Godavari, and Cauvery basins. India's average oil production level for 2002 was

    793,000 barrels per day. The consumption continues to outstrip production and. about

    70% of the total petroleum product demand is met by imports imposing a heavy burden

    on foreign exchange. India had net oil imports of over 1.2 million barrels per day in 2002.

    Indias annual current oil import bill is around Rs.80,000 crores. In terms of sector wise

    petroleum product consumption, transport accounts for 53% followed by domestic and

    industry with 18% and 17% respectively.

    Natural Gas Supply

    Natural gas accounts for about 8 per cent of energy consumption in the country. The

    current demand for natural gas is about 96 million cubic metres per day (mcmd) as

    against availability of 67 mcmd. By 2007, the demand is expected to be around 200

    mcmd. Natural gas reserves are estimated at 660 billion cubic meters.

    Electrical Energy Supply

    The all India installed capacity of electric power generating stations under utilities was

    1,07,973 MW as on 31st March 2003, consisting of 26,910 MW- hydro, 76,607 MW -

  • 8/6/2019 Better Environment

    8/193

    thermal and 2,720 MW- nuclear and 1,736 MW- wind (Ministry of Power). The gross

    generation of power in the year 2002-2003 stood at 531 billion units (kWh).

    Nuclear Power Supply

    Nuclear Power contributes to about 2.5 per cent of electricity generated in India. India has

    ten nuclear power reactors at five nuclear power stations producing electricity. More

    nuclear reactors have also been approved for construction.

    Hydro Power Supply

    India is endowed with a vast and viable hydro potential for power generation of which

    only 15% has been harnessed so far. The share of hydropower in the countrys total

    generated units has steadily decreased and it presently stands at 25% as on 31 st March

    2003. It is assessed that exploitable potential at 60% load factor is 84,000 MW.

    Final Energy Consumption

    Final energy consumption is the actual energy demand at the user end. This is the

    difference between primary energy consumption and the losses that takes place in

    transport, transmission & distribution and refinement. The actual final energy

    consumption (past and projected) is given in Table 1.2.

    Table 1.2 Demand for Commercial Energy for Final Consumption (BAU

    Scenario)Source Units 1994-95 2001-02 2006-07 2011-12

    Electricity BillionUnits

    289.36 480.08 712.67 1067.88

    Coal MillionTonnes

    76.67 109.01 134.99 173.47

    Lignite Million

    Tonnes

    4.85 11.69 16.02 19.70

    Natural Gas MillionCubicMeters

    9880 15730 18291 20853

    Oil Products MillionTonnes

    63.55 99.89 139.95 196.47

    Source: Planning Commission BAU:_Business As Usual

    Sector wise Energy Consumption in India

    The major commercial energy consuming sectors in the country are classified as shown in

    the Figure 1.5. As seen from the figure, industry remains the biggest consumer of

  • 8/6/2019 Better Environment

    9/193

    commercial energy and its share in the overall consumption is 49%. (Reference year:

    1999/2000)

    Figure 1.5 Sector Wise Energy Consumption (1999-2000)

    Indias Energy Needs

    Economic growth is desirable for developing countries, and energy is essential for

    economic growth. However, the relationship between economic growth and increased

    energy demand is not always a straightforward linear one. For example, under present

    conditions, a 6% increase in India's Gross Domestic Product (GDP) would impose an

    increased demand of 9 % on its energy sector.

    In this context, the ratio of energy demand to GDP is a useful indicator. A high ratio

    reflects energy dependence and a strong influence of energy on GDP growth. It is

    worthwhile to note that developed countries by focusing on energy efficiency and lower

    energy-intensive routes maintain their energy to GDP ratios at values of less than 1.The ratios for developing countries tend to be much higher.

    Long Term Energy Scenario-India

    Coal

    Coal is the primary energy source for power production in India, generating

    approximately 70% of total domestic electricity. Energy demand in India is expected to

    increase over the next 10-15 years; although new oil and gas plants are planned, coal is

  • 8/6/2019 Better Environment

    10/193

  • 8/6/2019 Better Environment

    11/193

    India's natural gas production is likely to rise from 86.56 million cmpd in 2002-03 to

    103.08 million cmpd in 2006-07. It is mainly based on the strength of a more than

    doubling of production by private operators to 38.25 mm cmpd.

    Electricity

    India currently has a peak demand shortage of around 14% and an energy deficit of 8.4%.

    Keeping this in view and to maintain a GDP (gross domestic product) growth of 8% to

    10%, the Government of India has very prudently set a target of 215,804 MW power

    generation capacity by March 2012 from the level of 100,010 MW as on March 2001,

    that is a capacity addition of 115,794 MW in the next 11 years (Table 1.3).

    In the area of nuclear power the objective is to achieve 20,000 MW of nuclear generation

    capacity by the year 2020.

    Table 1.3 Indias Perspective Plan For Power For Zero Deficit Power By 2011/12(Source Tenth And Eleventh Five-Year Plan Projections)

    Thermal(Coal) (MW)

    Gas / LNG /Diesel (MW)

    Nuclear(MW)

    Hydro (MW) Total(MW)

    Installedcapacity ason March

    2001

    61,157Gas:

    10,153

    Diesel: 864

    2720 25,116 100,010

    Additionalcapacity(2001-2012)

    53,333 20,408 9380 32,673 115,794

    Totalcapacity ason March2012

    114,490(53.0%)

    31,425(14.6%)

    12,100(5.6%)

    57,789(26.8%)

    215,804

    1.12 Energy Security

    The basic aim of energy security for a nation is to reduce its dependency on the imported

    energy sources for its economic growth.

    India will continue to experience an energy supply shortfall throughout the forecast

    period. This gap has been exacerbated since 1985, when the country became a net

    importer of coal. India has been unable to raise its oil production substantially in the

    1990s. Rising oil demand of close to 10 percent per year has led to sizable oil import

    bills. In addition, the government subsidises refined oil product prices, thus compounding

    the overall monetary loss to the government.

  • 8/6/2019 Better Environment

    12/193

    Imports of oil and coal have been increasing at rates of 7% and 16% per annum

    respectively during the period 199199. This dependence on energy imports is projected

    to increase in the future. Estimates indicate that oil imports will meet 75% of total oil

    consumption requirements and coal imports will meet 22% of total coal consumption

    requirements in 2006. At present, India does not import any natural gas, but demand is

    supply constrained and imports of gas and LNG (liquefied natural gas) are likely to arise

    in the coming years. This energy import dependence implies vulnerability to external

    price shocks and supply fluctuations, which threaten the energy security of the country.

    Increasing dependence on oil imports means reliance on imports from the Middle East, a

    region susceptible to disturbances and consequent disruptions of oil supplies. This calls

    for diversification of sources of oil imports. The need to deal with oil price fluctuations

    also necessitates measures to be taken to reduce the oil dependence of the economy,

    possibly through fiscal measures to reduce demand, and by developing alternatives to oil,

    such as natural gas and renewable energy.

    Some of the strategies that can be used to meet future challenges to their energy security

    are

    Building stockpiles

    Diversification of energy supply sources

    Increased capacity of fuel switching

    Demand restraint,

    Development of renewable energy sources.

    Energy efficiency

    Sustainable development

    Although all these options are feasible, their implementation will take time. Also, for

    countries like India, reliance on stockpiles would tend to be slow because of resource

    constraints. Besides, the market is not sophisticated enough or the monitoring agencies

    experienced enough to predict the supply situation in time to take necessary action.

    Insufficient storage capacity is another cause for worry and needs to be augmented, if

    India has to increase its energy stockpile.

  • 8/6/2019 Better Environment

    13/193

    However, out of all these options, the simplest and the most easily attainable is reducing

    demand through persistent energy conservation efforts.

    1.13 Energy Efficiency and its Importance

    Coal and other fossil fuels, which have taken three million years to form and these are

    likely to deplete soon. In the last two hundred years, we have consumed 60% of all

    resources. For sustainable development, we need to adopt energy efficiency measures.

    Today, 85% of primary energy comes from non-renewable, and fossil sources (coal, oil,

    etc.). These reserves are continually diminishing with increasing consumption and will

    not exist for future generations (see Figure 1.15).

    Figure 1.15

    Energy Conservation Vs Energy Efficiency?

    Energy Conservation and Energy Efficiency are separate, but related concepts. Energy

    conservation is achieved when growth of energy consumption is reduced, measured in

    physical terms. Energy Conservation can, therefore, be the result of several processes or

    developments, such as productivity increase or technological progress. On the other hand

    Energy efficiency is achieved when energy intensity in a specific product, process or area

    of production or consumption is reduced without affecting output, consumption or

  • 8/6/2019 Better Environment

    14/193

    comfort levels. Promotion of energy efficiency will contribute to energy conservation and

    is therefore an integral part of energy conservation promotional policies.

    Energy efficiency is often viewed as a resource option like coal, oil or natural gas. It

    provides additional economic value by preserving the resource base and reducing

    pollution. For example, replacing traditional light bulbs with Compact Fluorescent Lamps

    (CFLs) means you will use only 1/4th of the energy to light a room. Pollution levels also

    reduce by the same amount. Nature sets some basic limits on how efficiently energy can

    be used, but in most cases our products and manufacturing processes are still a long way

    from operating at this theoretical limit. Very simply, energy efficiency means using less

    energy to perform the same function.

    Although, energy efficiency has been in practice ever since the first oil crisis in 1973, it

    has today assumed even more importance because of being the most cost-effective and

    reliable means of mitigating the global climatic change. Recognition of that potential has

    led to high expectations for the control of future CO2 emissions through even more energy

    efficiency improvements than have occurred in the past. The industrial sector accounts for

    some 41 per cent of global primary energy demand and approximately the same share of

    CO2 emissions.

    In this paper terms Energy Conservation & Energy Efficiency are used

    interchangeably.

    The benefits of Energy conservation for various players are given below

    Industry - Reduced energy bills, Increased Competitiveness, Increased

    productivity, Improved quality, Increased profits!

    Nation - Reduced energy imports, Avoided costs can be used for poverty

    reduction, Conservation of limited resources, Improved energy security

    Globe - Reduced GHG and other emissions, Maintains a sustainable environment

  • 8/6/2019 Better Environment

    15/193

    1.2 Energy and Environment

    Air Pollution

    The usage of energy resources in industry leads to environmental damages by polluting

    the atmosphere. Few of examples of air pollution are sulphur dioxide (SO2), nitrous oxide

    (NOX) and carbon monoxide (CO) emissions from boilers and furnaces, chloro-fluro

    carbons (CFC) emissions from refrigerants use, etc. In chemical and fertilizers industries,

    toxic gases are released. Cement plants and power plants spew out particulate matter.

    Sources of major pollutants in air and average composition of pollutants are given in

    Table 1.4 and Table 1.5 respectively.

    Table 1.4 Major Pollutants in Air SourcesS.No. Source %

    1 Fuelcombustionintransport

    42

    2 Industry 353 Forest

    fire8

    4 Solildwastedisposal

    5

    5 Miscellaneous

    10

    Table 1.5 Composition of Major Pollutants in AirS. No. Pollutant %

    1 CarbonMonoxide

    47

    2 HydroCarbons

    15

    3 SulphurOxides

    15

    4 NitrogenOxides

    10

    5 Particulat

    es

    13

  • 8/6/2019 Better Environment

    16/193

    9.3 Global Warming

    Over the last 100 years, it was found out that the earth is getting warmer and warmer,

    unlike previous 8000 years when temperatures have been relatively constant. The present

    temperature is 0.3 - 0.6 oC warmer than it was 100 years ago.

    Global Warming and Climate Change

    Climate change, also called global warming, refers to the long-term fluctuations in

    temperature, precipitation, wind and other elements of the earths climate system. The

    energy use has attracted huge attention in present times due to its associated global

    climatic impacts.

    Figure 1.11 The Greenhouse Effect

  • 8/6/2019 Better Environment

    17/193

  • 8/6/2019 Better Environment

    18/193

    which made GHG reductions mandatory for 38 developed nations with average reduction

    of 5.2% below 1990 levels by 2012. The emergence of the Clean Development

    Mechanism (CDM) as a framework for the involvement of industrialized countries in the

    developing world may lead to financing opportunities for energy efficiency projects.

    Table 1.6 Climate has Changed and Will Continue to Change Global mean temperature isincreasing- 0.3 to 0.6 o C Global sea level has risen: 10 to 25cm

    Projected temperature increase of2 o C by year 2100 Projected sea level rise of 50 cm byyear 2100

    Acid Rain

    Acid rain is caused by release of SOX and NOX from combustion of fossil fuels, which

    then mix with water vapour in atmosphere to form sulphuric and nitric acids respectively.

    The effects of acid rain are as follows:

    Acidification of lakes, streams, and soils

    Direct and indirect effects (release of metals, For example: Aluminum which

    washes away plant nutrients)

    Killing of wildlife (trees, crops, aquatic plants, and animals)

    Decay of building materials and paints, statues, and sculptures

    Health problems (respiratory, burning- skin and eyes)

  • 8/6/2019 Better Environment

    19/193

    Figure 1.14

    Global Warming (Climate Change) Implications

    Human activities are releasing greenhouse gases into the atmosphere

    Carbon dioxide is produced when fossil fuels are used to generate energy and when

    forests are cut down and burned. Methane and nitrous oxide are emitted from agricultural

    activities, changes in land use, and other sources. Man-made chemicals called

    halocarbons (CFCs, HFCs, PFCs) and other long-lived gases such as sulphur hexafluoride

    (SF6 ) are released by industrial processes. Ozone, at ground level, is released indirectly

    by automobile exhaust fumes and other sources.

    Rising levels of greenhouse gases are already changing the climate

    Observations show that global temperatures have risen by about 0.6 C over the 20th

    century. There is new and stronger evidence that most of the observed warming over the

    last 50 years is attributable to human activities. Climate models predict that the global

    temperature will rise by about 6 C by the year 2100.

  • 8/6/2019 Better Environment

    20/193

    Climate change is likely to have a significant impact on the global environment.

    In general, the faster the climate changes, the greater will be the risk of damage. The

    mean sea level is expected to rise 9 - 88 cm by the year 2100, causing flooding of low

    lying areas and other damage.

    Human society will face new risks and pressures

    Food security is unlikely to be threatened at the global level, but some regions are likely

    to experience food shortages and hunger. Water resources will be affected as precipitation

    and evaporation patterns change around the world.

    India could be more at risks than many other countries

    Models predict an average increase in temperature in India of 2.3 to 4.8oC for the

    benchmark doubling of Carbon-dioxide scenario. Temperature would rise more in

    Northern India than in Southern India, without protection approximately 7 million people

    would be displaced, 5700 km2 of land and 4200 km. of road would be lost, and wheat

    yields could decrease between 2.8 to 6.8%.

    Many options for limiting emissions are available in the short- and medium-term

    Policymakers can encourage energy efficiency and other climate-friendly trends in both

    the supply and consumption of energy. Key consumers of energy include industries,

    homes, offices, vehicles, and agriculture. Efficiency can be improved in large part by

    providing an appropriate economic and regulatory framework for consumers and

    investors. This framework should promote cost-effective actions, the best current and

    future technologies, and innovative solutions that make economic and environmental

    sense irrespective of climate change. Taxes, regulatory standards, tradable emissions

    permits, information programmes, voluntary programmes, and the phase-out of

    counterproductive subsidies can all play a role. Changes in practices and lifestyles, from

    better urban transport planning to personal habits such as turning out the lights, are also

    important.

    9.4 Climatic Change Problem - United Nations Framework Convention on Climate

    Change (UNFCCC)

    Climate change is considered to be among the most serious threats to the sustainability of

    the world's environment, the health and well-being of its people and the global economy.

    Mainstream scientists agree that the Earth's climate is being affected by the build-up of

    greenhouse gases, such as carbon dioxide, caused by human activities, including

  • 8/6/2019 Better Environment

    21/193

    electricity generation, agriculture and transportation. In spite of some lingering

    uncertainties, a majority of scientists believe preventive and prompt action is necessary.

    The international response to climate change took shape with the development of the

    United Nations Framework Convention on Climate Change (UNFCCC). Agreed to in

    1992, the UNFCCC set out a framework for action to control or cut greenhouse gas

    emissions. The UNFCC was signed by most nations, including a voluntary pledge that the

    developed countries would reduce their emissions to 1990 levels by the year 2000. With

    scientific evidence pointing towards increasing destructive contribution of human

    activity, It became clear that most countries would be unable to uphold their promises. All

    the nations, who initially ratified the UNFCC, reconvened in form ofConference of

    Parties (COP) at Berlin in 1995 with a goal of entering into negotiations on a protocol to

    establish legally binding limitations or reductions in emissions. The event was called

    COP-1 and was the first session of what became an annual meeting to analyse the

    efficacy of climatic change program, review scientific data and monitor the emission

    commitments declared by certain countries.

    Since the UNFCCC entered into force in 1994, five meetings of the Conference of the

    Parties have taken place, as well as numerous workshops and meetings of the UNFCCC's

    subsidiary bodies. A Protocol to the Convention was adopted in 1997 at the Third

    Conference of the Parties, held in Kyoto. Although it has yet to enter into force, the

    UNFCCC's Kyoto Protocol commits industrialized countries to achieve quantified targets

    for decreasing their emissions of greenhouse gases.

    9.5 Global Climate Change Treaty: The Kyoto Protocol

    As scientific consensus grew that human activities are having a discernible impact on

    global climate systems, possibly causing a warming of the Earth that could result in

    significant impacts such as sea level rise, changes in weather patterns and health effects--

    and as it became apparent that major nations such as the United States and Japan would

    not meet the voluntary stabilization target by 2000--Parties to the treaty decided in 1995

    to enter into negotiations on a protocol to establish legally binding limitations or

    reductions in greenhouse gas emissions. It was decided by the Parties that this round of

    negotiations would establish limitations only for the developed countries, including the

    former Communist countries (called annex A countries).

  • 8/6/2019 Better Environment

    22/193

    Negotiations on the Kyoto Protocol to the United Nations Framework Convention on

    Climate Change (UNFCCC) were completed December 11, 1997, committing the

    industrialized nations to specify, legally binding reductions in emissions of six

    greenhouse gases. The 6 major greenhouse gases covered by the protocol are carbon

    dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs),

    perfluorocarbons (PFCs), and sulfur hexafluoride (SF6).

    Following completion of the Protocol in December of 1997, details of a number of the

    more difficult issues remained to be negotiated and resolved in spite of periodic

    conferences.

    Major Provisions of the Kyoto Protocol

    As of February 2000, 84 countries had signed the treaty, including the European Union

    and most of its members, Canada, Japan, China, and a range of developing countries.

    Some 22 countries were reported by the UNFCCC Secretariat to have ratified the treaty.

    Nations are not subject to its commitments unless they have ratified it and it enters into

    force.

    The major commitments in the treaty are as follows:

    Emissions Reductions

    The United States would be obligated under the Protocol to a cumulative reduction in its

    greenhouse gas emissions of 7% below 1990 levels for three greenhouse gases (including

    carbon dioxide), and below 1995 levels for the three man-made gases, averaged over the

    commitment period 2008 to 2012.

    The Protocol states that developed countries are committed, individually or jointly, to

    ensuring that their aggregate anthropogenic carbon dioxide equivalent emissions of

    greenhouse gases do not exceed amounts assigned to each country in Annex A to the

    Protocol, "with a view to reducing their overall emissions of such gases by at least 5%

    below 1990 levels in the commitment period 2008 to 2012.

    39 nations have signed the protocol, including the United States, the European Union plus

    the individual EU nations, Japan, and many of the former Communist nations. The

    amounts for each country are listed as percentages of the base year, 1990 and range from

    92% (a reduction of 8%) for most European countries--to 110% (an increase of 10%) for

    Iceland.

    Developing Country Responsibilities

  • 8/6/2019 Better Environment

    23/193

    Another problematic area is that the treaty is ambiguous regarding the extent to which

    developing nations will participate in the effort to limit global emissions. The original

    1992 climate treaty made it clear that, while the developed nations most responsible for

    the current buildup of greenhouse gases in the atmosphere should take the lead in

    combating climate change, developing nations also have a role to play in protecting the

    global climate. Per Capita CO2 emissions are small in developing countries and developed

    nations have altered the atmosphere the most as shown in the figures 9.2 & 9.3.

    The Kyoto Protocol does call on all Parties--developed and developing--to take a number

    of steps to formulate national and regional programs to improve "local emission factors,"

    activity data, models, and national inventories of greenhouse gas emissions and sinks that

    remove these gases from the atmosphere. All Parties are also committed to formulate,

    publish, and update climate change mitigation and adaptation measures, and to cooperate

    in promotion and transfer of environmentally sound technologies and in scientific and

    technical research on the climate system.

    India has ratified the contentious Kyoto Protocol in August 2002. However, the Kyoto

    Protocol does not set any binding limits on developing nation emissions, nor does it

    establish a mechanism or timetable for these countries to take on such limits voluntarily.

    On the other hand, the Protocol does establish a so-called Clean Development

    Mechanism, which allows developed countries to invest in projects in developing

    countries that reduce greenhouse gas emissions and receive credit for the reductions. The

    intent is to help developing nations minimize their emissions even as they develop their

    energy sectors and expand their economies.

    Indias Greenhouse Gas Emissions

    India has experienced a dramatic growth in fossil fuel CO2 emissions, and the data

    compiled by various agencies shows an increase of nearly 5.9 % since 1950. At

    present India is rated as the 6th largest contributor of CO2 emissions behind China,

    the 2nd largest contributor. However, our per capita CO2 of 0.93t per annum is well

    below the world average of 3.87t per annum. Fossil fuel emissions in India continue

    to result largely from coal burning. India is highly vulnerable to climate change as

    its economy is heavily reliant on climate sensitive sectors like agriculture and

    forestry. The vast low-lying and densely populated coastline is susceptible to rise in

    sea level.

  • 8/6/2019 Better Environment

    24/193

    The energy sector is the largest contributor of carbon dioxide emissions in India. The

    national inventory of greenhouse gases under ALGAS (Asia-Least Cost Greenhouse Gas

    Abatement Strategy) project (funded by the Asian Development Bank, Global

    Environment Facility and United Nations Development Program) indicates that 55% of

    the total national emissions come from energy sector. These include emissions from road

    transport, burning of traditional bio-mass fuels, coal mining, and fugitive emissions from

    oil and natural gas. Agriculture sector constitutes the next major contributor, accounting

    for nearly 34%. The emissions under this sector include those from enteric fermentation

    in domestic animals, manure management, rice cultivation, and burning of agriculture

    residues. Emissions from Industrial sector mainly came from cement production. India is

    the fourth largest producer of cement after China, Japan and the United States. The

    ALGAS study presents the latest set of projections of greenhouse gas emissions from

    India.

    Indian Response to Climatic Change

    India signed the UNFCCC on 10 June 1992 and ratified it on 1 November 1993. Under

    the UNFCCC, developing countries such as India do not have binding GHG mitigation

    commitments in recognition of their small contribution to the greenhouse problem as well

    as low financial and technical capacities. The Ministry of Environment and Forests is the

    nodal agency for climate change issues in India. It has constituted Working Groups on the

    UNFCCC and Kyoto Protocol. Work is currently in progress on India's initial National

    Communication (NATCOM) to the UNFCCC.

    Current initiatives in India to improve understanding of climate change, and comply with

    the requirements of the UNFCCC.

    9.7 Clean Development Mechanism (CDM)

    The Clean Development Mechanism (CDM), provided for under Article 12 of the Kyoto

    Protocol, enables developing countries to participate in joint greenhouse gas (GHG)

    mitigation projects. Under this Protocol, countries (developed countries and economies in

    transition) are required to reduce GHG emissions to below their 1990 levels.

    The CDM enables these countries to meet their reduction commitments in a flexible and

    cost-effective manner. It allows public or private sector entities to invest in GHG

    mitigation projects in developing countries. In return the investing parties receive credits

  • 8/6/2019 Better Environment

    25/193

    or Certified Emission Reductions (CERs), which they can use to meet their targets under

    the Kyoto Protocol.

    While investors profit from CDM projects by obtaining reductions at costs lower than in

    their own countries, the gains to the developing country host parties are in the form of

    finance, technology, and sustainable development benefits.

    The basic rules for the functioning of the CDM were agreed on at the seventh Conference

    of Parties (COP-7) to the UNFCCC held in Marrakesh, Morocco in October-November

    2001. Projects starting in the year 2000 are eligible to earn CERs if they lead to "real,

    measurable, and long-term" GHG reductions, which are additional to any that would

    occur in the absence of the CDM project. This includes afforestation and reforestation

    projects, which lead to the sequestration of carbon dioxide.

    At COP-7, it was decided that the following types of projects would qualify for fast-track

    approval procedures:

    Renewable energy projects with output capacity up to 15 MW

    Energy efficiency improvement projects which reduce energy consumption on the

    supply and/or demand side by up to 15 GWh annually

    Other project activities that both reduce emissions by sources and directly emit less

    than 15 kilotons CO2 equivalent annually.

    The CDM will be supervised by an executive board, and a share of the proceeds from

    project activities will be used to assist developing countries in meeting the costs of

    adaptation to climate change.

    Indian Initiatives on CDM

    Government of India has been willing to fulfill its responsibility under the CDM. It has

    developed an interim criterion for approval of CDM project activities, which is now

    available to stakeholders. It has undertaken various capacity building activities like

    holding of workshops, initiation of various studies, and briefing meeting with the

    stakeholders. India has been actively participating in the CDM regime and has already

    approved projects for further development.

    Under CDM, projects such as energy efficient hydrocarbon refrigerators, modernization

    of small scale foundry units and renovation, modernization of thermal power stations etc.

    are being taken up.

  • 8/6/2019 Better Environment

    26/193

    Case Example

    In a power plant rehabilitation and modernization programme by replacing plant

    equipment which are prone to wear and tear over a period of time, such as boilers and

    auxiliaries, turbine blades, HP governor valves and station auxiliaries which include

    material handling equipment, water treatment, pulverisers, ash handling plant, ESP etc

    resulted in CO2 emission reduction from 1.20 kg/kWh to 1.11 kg/kWh. The details are

    shown in the Table 9.2:

    Table 9.2 Efficiency Improvement and Emission Reductionin a Power Plant Modernisation Programme.

    Parameters Before theprogramme

    After the programme

    Gross heat rate(kcal/KWh)

    2700 2500

    Net efficiency (%) 28 30

    Specific coalconsumption

    0.77 0.71

    Total CO2 emissions(tones/year)

    1435336 1329015

    CO2 emissions (kg/kWh)

    1.20 1.11

    9.8 Prototype Carbon Fund (PCF)Recognizing that global warming will have the most impact on its borrowing client

    countries, on July 20th, 1999 the Executive Directors of the World Bank approved the

    establishment of the Prototype Carbon Fund (PCF). The PCF is intended to invest in

    projects that will produce high quality greenhouse gas emission reductions that could be

    registered with the United Nations Framework Convention on Climate Change

    (UNFCCC) for the purposes of the Kyoto Protocol. To increase the likelihood that the

    reductions will be recognized by the Parties to the UNFCCC, independent experts will

    follow validation, verification and certification procedures that respond to UNFCCC rules

    as they develop.

    The PCF will pilot production of emission reductions within the framework of Joint

    Implementation (JI) and the Clean Development Mechanism (CDM). The PCF will invest

    contributions made by companies and governments in projects designed to produce

    emission reductions fully consistent with the Kyoto Protocol and the emerging framework

    for JI and the CDM. Contributors, or "Participants" in the PCF, will receive a pro rata

  • 8/6/2019 Better Environment

    27/193

    share of the emission reductions, verified and certified in accordance with agreements

    reached with the respective countries "hosting" the projects.

    Size of Market for Emissions Reductions

    All estimates of market volume are speculative at this early stage in the markets

    development.

    One way of looking at the potential size of the market is to assume that about one

    billion tonnes of carbon emissions must be reduced per year during the

    commitment period of 2008-2012 in order for the industrialized countries to meet

    their obligations of a 5% reduction in their 1990 levels of emissions.

    Under Prototype carbon fund programme of the World Bank. Government of India has

    approved a municipal solid waste energy project 'SWERF' in 2001 for implementation by

    EDL India Limited in Chennai, which proposes to use the state of art technology for

    extracting energy from any solid waste irrespective of the energy content.

    9.9 Sustainable Development

    The World Commission on Environment and Development (the Brundtland Commission)

    defined sustainable development as "development that meets the needs of the present

    without compromising the ability of future generations to meet their own needs." In other

    words, development is essential to satisfy human needs and improve the quality of human

    life. At the same time, development must be based on the efficient and environmentally

    responsible use of all of society's scarce resources - natural, human, and economic.

    Sustainable development has multiple objectives. In planning for development, there must

    be deliberate consideration of how to maintain the quality of the environment, human

    well-being, and economic security. The Brundtland Commission, in Our Common Future,

    and subsequently Agenda 21 set out recommendations for developed and developingnations regarding sustainable development strategies concerning clean air and water,

    water supply, energy, land use, housing, waste treatment, transportation, and health care.

    The same advice applies locally. Just as the economic development of a country is linked

    to its environment and citizens, a community takes into account this interconnectedness in

    planning for the future.

    Mainstreaming Climate Change in Sustainable Development

  • 8/6/2019 Better Environment

    28/193

  • 8/6/2019 Better Environment

    29/193

    Addressing climate change mitigation and adaptation involves many stakeholders, cuts

    across short and long timeframes, and requires that all development projects be assessed

    for their sensitivity to climate concerns. This integration of climate concerns in the

    development process

    has been mainstreamed in India through high-level multi stake holder committees.

    The National Committee to Assess the Impacts of Climate Change is chaired by the

    Principal Scientific Advisor to the Prime Minister, and includes meteorologists, climate

    modelers, hydrologists, energy economists, as well as representatives of key Ministries.

    The Committee is evaluating the impact of climate change on key development activities,

    and assessing options to mitigate climate risks.

    Climate change is integrated into the national development planning process, and

    overseen by the Prime Ministers Council on Climate change, which includes

    representation of key Ministries, as well as experts, and representatives of industry and of

    media. The Council provides overall strategic guidance on mainstreaming climate change

    in development, identifies key intervention priorities, and monitors the implementation of

    these interventions.

    Chapter 2

    Energy Security & Environment

    Enabling Access to Clean Energy

    Poverty reduction and economic growth are the prime objectives of national policy.

    Energy is the sine qua non of development. India, with over a billion people, today only

    produces 660 billion KWh of electricity and over 600 million Indians, a population equal

    to the combined population of USA and EU, have no access to electricity, and limited

    access to other clean, modern fuels such as LPG and kerosene. Per capita consumption of

    Energy in India is less than 500 kgoe, compared to global average of over 1800 kgoe.

    This constrained energy access is reflected, as shown in Figure 1, in the relatively low

    Human Development Index of India. Enhancing energy supply and access is therefore a

    key component of the national development strategy.

  • 8/6/2019 Better Environment

    30/193

    Fig.1: Energy consumption is a prime driver of the Human Development Index

    India faces formidable challenges in meeting its energy needs and providing adequate

    energy of desired quality in various forms to users in a sustainable manner and at

    reasonable costs. India needs to sustain a 8% to 10% economic growth to eradicate

    poverty and meet its economic & human development goals. Such economic growth

    would call for increased demand for energy and ensuring access to clean, convenient and

    reliable energy for all to address human evelopment. To deliver a sustained growth of 8%

    through 2031, India would, in the very least, need to grow its primary energy supply by 3

    to 4 times and electricity supply by 5 to 7 times of today's consumption. Along with

    quantity the quality of energy supply has to also improve. The energy challenge is of

    fundamental importance to India's economic growth imperatives.

    1.14 Energy Strategy for the Future

    The energy strategy for the future could be classified into immediate, medium- and long-

    term strategy. The various components of these strategies are listed below:

    Immediate-term strategy:

    Rationalizing the tariff structure of various energy products.

  • 8/6/2019 Better Environment

    31/193

    Optimum utilization of existing assets

    Efficiency in production systems and reduction in distribution losses, includingthose in traditional energy sources.

    Promoting R&D, transfer and use of technologies and practices for environmentallysound energy systems, including new and renewable energy sources.

    Medium-term strategy:

    Demand management through greater conservation of energy, optimum fuel mix,structural changes in the economy, an appropriate modal mix in the transportsector, i.e. greater dependence on rail than on road for the movement of goods and

    passengers and a shift away from private modes to public modes for passengertransport; changes in design of different products to reduce the material intensity

    of those products, recycling, etc.

    There is need to shift to less energy-intensive modes of transport. This wouldinclude measures to improve the transport infrastructure viz. roads, better designof vehicles, use of compressed natural gas (CNG) and synthetic fuel, etc.Similarly, better urban planning would also reduce the demand for energy use inthe transport sector.

    There is need to move away from non-renewable to renewable energy sources viz.solar, wind, biomass energy, etc.

    Long-term strategy:

    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 new coal and gas fired power stations.

    Enhancing energy efficiency

    Improving energy efficiency in accordance with national, socio-economic, and environmental priorities

  • 8/6/2019 Better Environment

    32/193

    Promoting of energy efficiency and emission standards

    Labeling programmes for products and adoption of energy efficienttechnologies 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 pricescompetitive

    Privatization of oil, coal and power sectors for improvedefficiency.

    Investment legislation to attract foreign investments.

    Streamlining approval process for attracting private sector participation inpower generation, transmission and distribution .

    1.3 APPROACH TO SELECTION OF PROJECTS FOR 11TH PLAN

    Keeping in view the lessons learnt from 10th plan while planning for capacity addition

    during 11th Plan, cautious approach have been adopted while choosing

    projects for commissioning in the 11th plan. It has been the endeavour to include

    only such projects as have high degree of certainty of implementation during 11th

    Plan.

    The approach adopted for selection of Hydro, Thermal and Nuclear projects have

    been as follows:

    1.3.1 Hydro

    India is duly concerned about climate change and efforts are on to promote

    benign sources of energy. Hydro Power is one such source and is to be accorded priority

    also from the consideration of energy security. Irrespective of size and nature of hydro

    projects, whether ROR or Storage projects, these are all renewable technologies.

    However, execution of hydro projects requires thorough Survey and Investigation,

    preparation of DPR, development of infrastructure, EIA and other preparatory works,

    which are time consuming and require two to three years for their preparation. It would

    take about 5 years to execute a hydro project after the work is awarded for construction.Thus in order to achieve completion of a hydro project during 11th plan, the project

  • 8/6/2019 Better Environment

    33/193

    should either be already under construction or execution should start at the beginning of

    the plan. The broad criteria adopted for selection of hydro projects for 11th plan are as

    under:

    Those hydro projects whose concurrence has been issued by CEA and

    order for main civil works is likely to be placed by March 2007.

    Apart from the above, a few hydro projects of smaller capacity which are

    ROR type having surface power houses and where gestation period is

    expected to be less than 5 years have also been included. These projects

    would need to be rigorously followed up for completion during the 11th

    Plan.

    Keeping in view the preparedness of various hydro projects, a capacity addition

    of 15, 585 MW is envisaged for 11th Plan.

    1.3.2 Nuclear

    Nuclear is environmentally benign source of energy and over a period of time, its

    proportion in total capacity should increase. Keeping in view the availability of fuel, a

    moderate capacity addition of 3,160 MW nuclear plants has been programmed during the

    11th Plan by the Nuclear Power Corporation. All projects are presently under

    construction. However, in view of the recent developments in the Nuclear Sector,

    capacity addition in nuclear plants during 12th Plan is expected to be much higher.

    1.3.3 Thermal

    Gas

    Although gas is relatively a clean fuel, at present there is uncertainty about

    the availability, period of availability and price of gas. Only 2,114 MW gas

    based capacity has been planned for 11th Plan where gas supply has already

    been tied up. This does not include NTPCs gas based projects at Kawas and

    Gandhar, totalling to 2,600 MW, for which NTPC says that it has the gas

    supply contract but the matter is sub-judice. However more gas based

    projects could be taken up for construction as and when there is more clarity

    about availability and price of gas.

  • 8/6/2019 Better Environment

    34/193

    Coal & Lignite based Thermal plants

    Coal is expected to be main stay of power generation in the years to come.

    The following criteria have been adopted for identifying the coal and lignite

    based projects for inclusion in the 11th plan.

    Such projects as have already been taken up for execution in the 10th Plan period itself

    and are due for commissioning in the 11th Plan period.

    Those thermal projects whose LOA has already been placed by the State and Central

    Public Sector Corporations, other inputs also being in place.

    Those thermal projects whose LOA has already been placed and the financial closure

    achieved by private developers. Those thermal projects whose LOA is expected to be placed by 30th Sept, 2008 and

    commissioning is expected during the 11th Plan keeping in view the normal gestation

    period, the size of the plant & the type(green field/expansion).

    After discussion with the various State Government and Central Generating

    Companies, thermal projects with total capacity of 46,635 MW of coal based and

    1375 MW lignite based capacity have been identified for capacity addition during

    11th plan.

    1.4 CAPACITY ADDITION DURING 11TH PLAN (2007-12)

    Based on the preparedness of the projects, it was envisaged that a capacity of

    about 68,869 MW is feasible for addition during 11th plan period. The sector wise

    break-up of feasible capacity addition during 11th plan is given in Table below:

    SECTOR HYDRO TOTALTHERMAL THERMAL BREAK UP NUCLEAR TOTALPERCENTAGECOAL LIGNITE GAS/LNG

    CENTRAL 9685 23810 22060 1000 750 3160 36655 (53.2%)

    STATE 2637 20352 19365 375 612 - 22989 (33.4 %)

    PRIVATE 3263 5962 5210 0 752 - 9225 (13.4%)

    ALL-INDIA

    15585 50124 46635 1375 2114 3160 68869 (100%)

    Further, a capacity of 13,500 MW has been planned under renewable as per

    information given by MNRE.

  • 8/6/2019 Better Environment

    35/193

    As can be seen from the above profile of capacity addition plan, central sector

    will play a lead role with capacity addition of more than half of the capacity

    addition target. There has been a good response from states on the need for

    1.5 FUEL REQUIREMENT

    The requirement of various fuels for the thermal plants during the terminal year of

    the 11th Plan (2011-12) at normative generation parameters (PLFs and specific

    fuel consumption is summarised in the table below. This is based on a thermal

    capacity addition of 20,387MW and 50,124MW during the 10th and 11th Plan

    respectively.

    Fuel Requirement (Tentative) during 2011-12

    FUEL F

    * From domestic sources, total coal availability is expected to be 482 MT per

    annum by 2011-12. Accordingly, imported coal of the order of 40MT,

    equivalent to 63 MT of Indian coal, may have to be organised. This quantity

    may reduce provided production of domestic coal is increased.

    ** 89 MMSCMD of gas requirement at 90% PLF has been projected in 2011-

    12. At present, the availability of gas is of the order of 40 MMSCMD and

    therefore not sufficient to meet the requirement of even existing plants

    1.6 INITIATIVES DURING 11TH PLAN

    1.6.1 High Hydro Development

    50,000 MW Hydro Initiative was launched in 2003 and Preliminary Feasibility

    Report (PFRS) of 162 projects totalling to 48,000 MW were prepared. Out of this

    77 projects with total capacity of about 37000 MW for which first year tariff is

    expected to be less than Rs.2.50/unit were selected for execution. Hydro projects have

    longer gestation period and therefore there is a need to formulate a 10 year plan for hydroprojects. In 11th plan a capacity addition of over 15,500 MW has been targeted keeping

  • 8/6/2019 Better Environment

    36/193

    in view the present preparedness of these projects. Projects totalling to a capacity of

    30,000 MW have been identified for 12th Plan on which necessary preparations have to

    be made from now onwards to ensure their commissioning during 12th Plan. Thus the

    effect of 50,000 MW initiative would be visible in 12th Plan period. Preparation of DPR

    and various clearances and approval etc for these projects are to be obtained during the

    first two years of 11th Plan. It is recommended that CEA should closely monitor the

    progress of preparedness of DPR of these projects and their further execution.

    1.6.2 Initiatives in Thermal Power Development:

    Efforts were made to bring in highly efficient super critical technology in the country for

    thermal power plants and execution of six super critical units of 660 MW capacity each

    was taken up during the 10th Plan period. The first unit of 660 MW based on super

    critical technology is likely to be commissioned during the first year of 11th Plan i.e.

    2007-08. The 11th Plan feasible capacity addition of

    coal based plants includes 12 units based on super critical technology with a

    capacity of 8060 MW which is about 18% of total coal capacity planned for 11th

    Plan. More and more power projects based on super critical technology are

    under planning stage and they would yield benefit during the 12th Plan period.

    It is envisaged that more than 50-60% of capacity addition of thermal plants

    during 12th plan period would be based on super critical units. This would also

    help in reducing the Carbon dioxide emission from new coal fired capacity.

    1.6.3 Ultra Mega Power Projects (UMPP):

    Ministry of Power in the year 2006 has launched an initiative of development of

    coal based ultra mega projects with a capacity of 4,000 MW each on tariff based

    competitive bidding. Ultra Mega Power projects are either pit head based projects having

    captive mine block or coastal projects based on imported coal.

    Sasan UMPP, a pithead plant in Chattisgarh based on domestic fuel and Mundra

    UMPP in Gujrat based on imported coal have already been awarded for execution to the

    respective developers. According to the bids submitted by these developers only one unit

    of 660 MW is expected to be commissioned during the

    11th Plan and the remaining unit during 12th Plan. Other projects where considerable

    progress has been made are coastal projects in Andhra Pradesh and Tamil Nadu and a pit

    head based project in Jharkhand. Further the projects under consideration include pit head

    projects in Orissa and Chatisgarh and coastal projects in Maharashtra and Karnataka.

  • 8/6/2019 Better Environment

    37/193

    1.6.4 Nuclear Power Development:

    11th Plan power programme includes 3160 MW of nuclear power plants all of which are

    under construction. Recently, agreement has been signed with USA in respect of nuclear

    co-operation which is expected to improve the supply of nuclear fuel for nuclear power

    plants. It is also expected that execution of

    nuclear projects will also be opened up to enable participation by other PSUs and

    private sector. The effect of this is likely to be visible in 12th Plan period. Nuclear

    Power Corporation of India has indicated a capacity addition of about 11,000 MW

    during 12th plan. In addition, NTPC have also expressed their intention to enter

    into the nuclear power arena and have proposed an addition of 2,000 MW during

    12th plan period.

    1.6.5 Merchant Power Plants:

    A merchant power plant does not have long term PPA for sale of its power and is

    generally developed on the balance sheet of developers. Government of India has

    reserved coal block with reserves of 3.2 Billion Tons of coal for allotment by Screening

    Committee of Ministry of coal for merchant and captive plants. About

    10,000 MW capacity is expected to be developed through this initiative. This capacity has

    not been taken into account while working out the capacity required in the 9.5% growth

    in generation scenario. Capacity addition through this route would further contribute to

    better economic growth, better reliability of power, more spinning reserve and above all

    would promote creation of competition in the electricity market.

    1.10 NEW AND RENEWABLE ENERGY SOURCES

    The Ministry of New and Renewable Energy Sources (MNRE) have chalked out plan of

    adding 13,500 MW of renewable power in the country during 11th Plan period. This

    would make total installed capacity of these plants at 23,500 MW by the year 2011-12

    which is detailed as below:

    Wind - 17000 MW

    Bio Mass - 3200 MW

    Small Hydro- 3300 MW

    Although installed capacity of the plants is high but on an average plant load factor of

    wind turbine plants is only of the order of 15-20% and as such this capacity can generate

    about 41 billion units at the maximum.

  • 8/6/2019 Better Environment

    38/193

    2.1 INTEGRATED ENERGY POLICY

    There are no projections world-wide that show a lowering of dependence on fossil fuels

    by 2031-32. Oil and gas are forecast to remain in a tight demand-supply balance and the

    likelihood is that most new oil and gas will come from a politically uncertain middle-east.

    Such a global backdrop as resulted in high price volatility for oil & gas. Further, energy

    security concerns are driving key consumers such as the US, China and Japan (that

    together account for some 40% of the world's primary energy consumption) to seek coal -

    the world's most abundant fossil fuel. This has also led to a push world-wide for clean

    coal technologies, carbon sequestration coal to liquids and the zero emission initiative.

    Coal shall remain India's most important energy source till 2031-32 and possibly beyond.

    India will need to take a lead in seeking clean coal technologies and, given its growing

    demand, new coal extraction technologies such as in-situ gasification to tap its vast coal

    reserves that are difficult to extract economically using conventional technologies.

    The broad vision behind the energy policy is to reliably meet the demand for energy

    services of all sectors including the lifeline energy needs of vulnerable households, in all

    parts of the country, with safe and convenient energy at the least cost in a technically

    efficient, economically viable and sustainable manner.

    Meeting this vision would require that India pursues all available fuel options and forms

    of energy, both conventional and non-conventional, as well as new and emerging

    technologies and energy sources.

    Some key recommendations by the Committee on Draft Integrated Energy Policy are

    summarised below:

    (i) Coal Shall Remain India's Primary Energy Source till 2031-32, Current shortages are a

    oncern. Coal accounts for over 50% of India's commercial energy consumption and some

    78% of domestic coal production is dedicated to power generation.

    (ii) Natural Gas needs significant investments in pipelines or, alternatively, in

    liquification, cryogenic shipping & regasification. Should a scenario wherein gas

    becomes 15%-20% of India's energy mix materialise by 2031-32; some 60% to 80% of

  • 8/6/2019 Better Environment

    39/193

    the gas supply would be used for power generation. This would mean that beyond the

    level of gas consumption in the fertiliser, petrochemical, automotive and domestic sectors

    gas must compete with coal, the key alternative for power generation.

    (iii) Power Sector Reforms must focus on control over Aggregate Technical and

    Commercial (AT&C) losses of state power utilities. To control AT&C losses the

    Committee recommends that the existing Accelerated Power Development and Reform

    Programme (APDRP) be restructured to ensure energy flow auditing at the distribution

    transformer level through automated meter reading, geographical information system

    (GIS) mapping of the network and consumers and separation of feeders for agricultural

    pumps. This will fix accountability and provide a baseline which is an essential

    prerequisite to privatisation.

    The Committee feels that it is essential to separate the cost of the pure wires business

    (carriage) from the energy business (content) in both transmission & distribution.

    Electricity Act 2003 recognises such separation for the transmission

    (iv) Reduce Cost of Power: In terms of purchasing power parity, power tariffs in India for

    industry, commerce & large households are among the highest in the world.

    (v) Rationalise Fuel Prices: Relative prices play the most important role in choice of fuel

    and energy form. They are thus the most vital aspect of Integrated Energy Policy that

    promotes efficient fuel choices and facilitates appropriate substitution. In a competitive

    set up, the marginal use value of different fuels, which are substitutes, is equal at a given

    place and time and the prices of different fuels at different places do not differ by more

    than the cost of transporting the fuels. Then the resulting inter-fuel choices would be

    economically efficient.

    (vi) Central and State taxes on commercial energy supplies need to be rationalized to

    yield optimal fuel choices and investment decisions. Relative prices of fuels can be

    distorted if taxes and subsidies are not equivalent across fuels. The equivalence should be

    in term of effective calorie. In other words they should be such that producer and

    consumer choices as to which fuel and which technology to use are not affected by the

    taxes and subsidies.

  • 8/6/2019 Better Environment

    40/193

    Environmental taxes and subsidies, however, are levied to affect choices. Differential

    taxes can be justified here if they appropriately reflect environmental externalities. A

    consistent application of polluter pays principle or consumer pays principle should be

    made to attain environmental objectives at least cost.

    (vii) Energy Efficiency and Demand Side Management: Lowering energy intensity of

    GDP growth through higher energy efficiency is key to meeting India's energy challenge

    & ensuring its energy security.

    Over the past decade, gains in both poverty reduction and economic growth have been

    significant, and supported by energy growth, which has been significantly lower than the

    economic growth. This reduced energy intensity of the economy, in the period since

    2004, has been marked by an economic growth rate of over 9% per annum, which has

    been achieved with an energy growth of less than 4% per annum.

    These policies have been driven by the imperatives of sustainable development, and have,

    as a co-benefit, led to a decline in the intensity of energy use and carbon dioxideemissions as well.

    Figure 2(a) illustrates the declining trend in energy use and CO2 emissions intensities,

    and Figure 2 (b) highlights that the energy intensity of the Indian economy compares

    favourably with those of other major economies.

  • 8/6/2019 Better Environment

    41/193

    Fig. 2(a): Emissions and Energy Intensity Trends in India

  • 8/6/2019 Better Environment

    42/193

    Fig. 2(b): Total Primary Energy Intensities of the Major Economies

    Thus, clearly there is room to improve and energy intensity can be brought down

    significantly in India with current commercially available technologies. India would need

    to and must succeed in achieving much lower energy intensity compared to its current

    level. Lowering energy intensity through higher efficiency is like creating a virtual source

    of untapped domestic energy. It may be noted that a unit of energy saved by a user is

    greater than a unit produced, as it saves on production losses, as well as transport,

    transmission and distribution losses. Thus a "Megawatt", produced by reducing energy

    need saves more than a Megawatt generated. The Committee feels that upto 25 percent

    reduction in India's energy intensity is possible overn current levels.

    Efficiency can be increased in energy extraction, energy conversion, energy

    transportation, as well as in energy consumption. Further, the same level of service can be

    provided by alternate means requiring less energy. The major areas where efficiency in

    energy use can make a substantial impact are mining, electricity generation, electricity

    transmission, electricity istribution, pumping water, industrial production processes,

    haulage, mass transport, building design, construction, heating ventilation & air

    conditioning, lighting and household appliances.

  • 8/6/2019 Better Environment

    43/193

    Enhancing Sustainable Development and Mitigating Climate Change

    This reduced energy intensity, at the relatively low level of Indias per-capita GDP, has

    been made possible by a range of factors, including Indias historically sustainable

    patterns of consumption, enhanced competitiveness, proactive policies to promote energy

    efficiency, and more recently, the use of the Clean Development Mechanism to accelerate

    the adoption of clean energy technologies.

    (a) Patterns of Consumption

    Food habits and recycling processes have mitigated growth in energy demand and GHG

    emissions. The specific GHG emissions from food production and processing are much

    lower in India than in developed countries, as seen in Figure 3.

    Fig. 3: CO2 Emissions from the Food Sector from field (Production) toTable (processed food), excluding cooking

    The high ratio of recycling in India, compared to that of other major economies in Figure

    4, has also limited the growth in energy use, and GHG emissions, because of the lower

    demand for virgin material such as steel, aluminum and copper.

  • 8/6/2019 Better Environment

    44/193

    Fig. 4: Recycling Ratios in Major Economies

    (b) Increased Industrial Energy Efficiency

    Over the past decade, energy efficiency in Indian industry has increased steadily. In the

    major energy-consuming industrial sectors, such as cement, steel, aluminum, fertilizers,

    etc., average specific energy consumption has been declining because of energy

    conservation in

    existing units, and (much more) due to new capacity addition with state-of-the-art

    technology. For example, as shown in Figures 5(a) and (b), the specific energy

    consumption of Indian cement plants and of Indian iron & steel plants has been declining

    rapidly. In the cement

    sector, the specific energy consumption of the mostefficient plants is now comparable to

    that of the most efficient plants in the world.

  • 8/6/2019 Better Environment

    45/193

    Figure 5(a): Trends in thermal specific energy consumption in the Indiancement sector

    Figure 5(b): Trends in specific energy consumption in the Indian iron &steel sector

    (c) Policies to Promote Energy Efficiency and Renewable Energy

  • 8/6/2019 Better Environment

    46/193

    (i) Electricity from Renewables:

    The Electricity Act, 2003, requires State Electricity Regulatory Commissions to specify a

    percentage of electricity that the electricity

    distribution companies must procure from renewable sources. Several Commissions have

    already operationalized this mandate, and also notified preferential prices for electricity

    from renewables. This has contributed to an acceleration in renewable-electricity capacity

    addition, and over the past three years, about 2,000 MW of renewable-electricity capacity

    has been added in India every year, bringing the total installed

    renewable capacity to over 11,000 MW. Of this, a little over 7,000 MW is based on wind

    power; India now has the fourth largest installed wind capacity in the world. The National

    Hydro Energy Policy has resulted in the accelerated addition of hydropower in India,

    which is now over 35,000 MW.

    (ii) Enhancing Efficiency of Power Plants:

    Coal is the mainstay of Indias energy economy, and coal-based power plants account for

    about two-thirds of the total electric generation installed capacity of about 135,000 MW.

    In addition, the Electricity Regulatory Commissions are also linking tariffs to efficiency

    enhancement, thus providing an incentive for renovation and modernization. New plants

    are being encouraged to adopt more efficient and clean coal technologies, and four new

    plants under construction have adopted the more-efficient supercritical technology for

    power generation.

    (iii) Introduction of Labeling Program for Appliances:

    An energy-labeling program for appliances was launched in 2006, and comparative star-

    based labeling has been introduced for fluorescent

    Tube lights, air conditioners, and distribution transformers. The labels provide

    information about the energy consumption of an appliance, and thus enable consumers to

    make informed decisions. The labeling program now covers about two-thirds of the

    refrigerators and air conditioners and almost all fluorescent tube lights sold in India.

    (iv) Energy Conservation Building Code:

    An Energy Conservation Building Code (ECBC) was launched in May, 2007, which

    addresses the design of new, large commercial buildings to optimize the buildings

  • 8/6/2019 Better Environment

    47/193

    energy demand. Commercial buildings are one of the fastest growing sectors of the Indian

    economy, reflecting the increasing share of the services sector in the economy. Nearly

    one hundred buildings are already following the Code, and compliance with it has also

    been incorporated into the Environmental Impact Assessment requirements for large

    buildings.

    (d) Accelerated Introduction of Clean Energy Technologies through the CDM

    The CDM National Designated Authority has approved over 700 CDM projects, and

    about 300 of these have been registered by the CDM Executive Board. The registered

    projects have already resulted in over 27 million tones of certified CO2 emissions

    reductions, and directed investment in renewable energy and energy projects by reducing

    the perceived risks and uncertainties of these new technologies, thereby accelerating their

    adoption.

    As the Indian economy opens up to international competition, it would become more

    energy efficient. This is well demonstrated by India's steel & cement industry. However,

    following policies are recommended, some of which can be implemented through

    voluntary targets undertaken by industry associations as opposed to external inspection

    and enforcement.

    (a) Increase coal use efficiency in power generation from the current average of 30.5

    percent to 39 percent for all new plants.

    (b) Promote urban mass transport, freight movement by railways, and energy efficient

    vehicles. Enforce minimum fuel efficiency, standards for all vehicles.

    (c) Force the pace of energy efficiency improvement in energy using appliances and

    equipment and fiscal incentive to the firm which commercialises equipment that exceeds

    energy efficiency target. Enforce labelling with major financial repercussions if

    equipment fails to deliver stated efficiencies. In extreme cases resort to black listing of

    errant suppliers at consumer information web sites and for government procurement.

    (d) Promote minimum life cycle cost purchases instead of minimum initial cost

    procurement.

    (e) Require industry with a turnover in excess of say 50 crores to employ at least one

    certified internal energy auditor reporting directly to the board/owner like the current

    internal auditor. For smaller industries achieve the same by clubbing a group of them

    together or requiring each industrial estate to provide such services collectively for a fee.

  • 8/6/2019 Better Environment

    48/193

    Annual audits must include energy audits for all specified energy intensive industries and

    industries with a turnover exceeding say Rs.100 crores.

    (f) Establish benchmarks of energy consumption for all energy intensive sectors.

    (g) Disseminate information, support training and reward best practices with national

    level honours in energy efficiency & energy conservation.

    (h) Institute specialisations in energy efficiency / energy conservation and environment in

    all technical colleges and commence certification of such experts.

    (i) Augmenting Resources: India's energy resources can be augmented till 2031-32 by

    exploration to find more of coal, oil and gas, or by recovering a higher percentage of the

    in-place reserves. Developing the thorium cycle for nuclear power and exploiting non-

    conventional energy, especially solar, offer possibilities for India's energy independence

    beyond 2050.

    At a growth rate of 5% in domestic production, currently extractable coal resources will

    be exhausted in about 40 years. However, only about 45% of the potential coal bearing

    area has currently been covered by regional surveys. Further, it is felt that both regional

    as well as detailed drilling can be made more comprehensive. Covering all coal bearing

    areas with

    comprehensive regional & detailed drilling could make a significant difference to the

    estimated life of India's coal reserves. Finally, India's extractable coal resources can be

    augmented through in-situ coal gasification which permits using coal deposits which are

    at greater depth or not easily extracted by conventional methods. Similarly extracting coal

    bed methane before and during mining can augment the country's energy resources.

    Again, enhanced oil recovery and incremental oil recovery technologies can improve the

    proportion of in-place reserves that can be economically recovered from

    abandoned/depleted fields. Finally, isolated deposits of all hydro carbons including coal

    may be tapped economically through sub leases to the private sector.

    (j) Role of Hydro and Nuclear: It is seen that even if India succeeds in exploiting its full

    hydro potential of 150,000 MW, the contribution of hydro to the energy mix would be

    around 5-6%. Similarly, even if a 20-fold increase takes place in India's nuclear power

    capacity by 2031-32, the contribution of nuclear energy to India's energy mix is also, at

    best, expected to be 5-6%.

    Though its contribution to energy requirement is small, hydro electricity's flexibility and

    suitability as a peaking power make it valuable. Moreover, hydro development especially

    storage schemes are critical for India as India's per capita water storage is the lowest

  • 8/6/2019 Better Environment

    49/193

    among all its comparators. Creating such storages is critical to India's water security,

    flood control and drought control.

    Nuclear, on the other hand, theoretically offers India the most potent means to long-term

    energy security. India has to succeed in realising the three-stage development process

    described in the main report and thereby tap its vast thorium resource to become truly

    energy independent beyond 2050. Continuing support to the three-stage development of

    India's nuclear potential is considered essential.

    (k) Role of Renewables: Renewables are unlikely to make a major impact on India's

    energy mix till 2031-32. Even with a 20-fold increase in capacity, renewables cannot

    account for more than 5-7% of India's energy mix. However, from a longer-term

    perspective and the need to maximally develop domestic supply options as well as the

    need to diversify energy sources, renewables remain important to India's energy sector. It

    would not be out of place to mention that

    solar power could be an important player in India attaining energy independence beyond

    2050.

    Subsidy for renewables may be justified on several grounds. A renewable energy source

    may be environmentally benign. It may be locally available making it possible to supply

    energy earlier than a centralized system. Grid connected renewables could provide system

    benefits by generating energy at the lagging ends of the grid. Further, renewables may

    provide employment and livelihood to the poor. However, the subsidies should be given

    for a well-defined period or upto a well-defined limit and should be linked to outcomes

    (energy generated), and not just outlays (capacity installed).

    Power Regulators must create alternative incentive structures such as mandated feed-in-

    laws or differential tariffs to encourage utilities to integrate wind, small hydro,

    cogeneration etc. into their systems. A subsidy could also be given in the form of a

    Tradable Tax Rebate Certificates (TTRC) based on energy generated. The rebate claim

    becomes payable depending upon the amount of electricity/energy actually certified as

    having been supplied.

    An annual renewable energy report should be published providing details of actual

    performance of different renewable technologies at the state and national level. This

    would include actual energy supplied from different renewable options, availability,

    actual costs, operating and maintenance problems etc. It should also report on social

    benefits, employment created, women participation and empowerment.

    Policies for promoting many specific alternatives are suggested in the main text. These

  • 8/6/2019 Better Environment

    50/193

    include fuel wood plantations, bio-gas plants, wood gasifier based power plants, solar

    thermal, solar water heaters, solar photovoltaics, bio-diesel and ethanol.

    2.2 DEMAND SIDE MANAGEMENT AND ENERGY EFFICIENCY

    4.0 INTRODUCTION

    In rapidly growing economy of India, the energy requirements have been increasing

    at a very fast pace. Indian economy has been gradually reforming itself with the

    developments taking place in the dynamic global energy scenario as well as with the

    advancements in technologies worldwide. The Government of India at the highest

    level is giving top priority to the attainment of nations long-term energy security.

    India ranks 5th in the world in terms of primary energy consumption, accounting for

    about 3.5% of the world commercial energy demand in the year 2003. The total

    commercial energy consumption of various sectors stood at 218 million toe (2003-

    04). If it perseveres with sustained economic growth, achieving 8-10% of GDP growth

    per annum through 2030, its primary energy supply, at a conservative estimate, will need

    to grow 3 to 4 times and electricity supply by 5 to 7 times of present consumption. Its

    power generation would increase to 780,000 MW from a current level of about

    120,000 MW and annual coal demand would be in excess of 2000 million tons from a

    current level of 350 million tons. This extraordinary growth in energy demand will

    place great stress on the financial, managerial and physical resources of the country.

    For meeting desired growth rate of the economy, the country faces formidable

    challenges in meeting its energy needs and in providing adequate energy in various

    forms to users in a sustainable manner and at reasonable costs. While it is essential

    to add new power generation capacity as well as ensure availability of substantial

    commercial fuels to meet the nations growing energy requirements, it is equally

    important to look out for options that help in reducing energy demand by various end use

    sectors. The need for enhancing energy conservation efforts has become very

    important.

    4.1 THE ENERGY CONSERVATION ACT

    The planning process so far has been leaning heavily towards the supply side

    strategies. Efforts made to implement DSM, energy conservation and energy

    efficiency measures were symbolic, lacked continuity due to absence of a well knit

    institutional mechanism at the national and state levels. The 10thplan period (2002-

    07) is marked by enactment of the Energy Conservation Act, 2001 and setting up of

  • 8/6/2019 Better Environment

    51/193

    the Bureau of Energy Efficiency (BEE) at the national level. The Act has given

    mandate to BEE to implement the provisions of the Act, and spearhead the

    improvement in energy efficiency of the economy through various regulatory and

    promotional measures. Some key activities that BEE is pursuing include the

    development of energy efficiency labels for refrigerators and other mass produced

    equipment, certification of energy managers and auditors, assisting industry in the

    benchmarking of their energy use, and energy audits of prominent government

    buildings. A beginning has been made by the State Governments in designating

    agencies to oversee implementation of the Energy Conservation Act and deliver

    energy efficiency services including through public-private partnership.

    Integrated Energy Policy (IEP) laid out a vision of providing energy security to all

    citizens. IEP emphasizes energy efficiency & demand side management as essential

    components of the natural energy strategy.

    4.3 ENERGY CONSERVATION STRATEGY IN THE 11TH FIVE-YEAR PLAN

    The basic aim of the energy conservation strategy in the 11th Five Year Plan will be to

    prioritize and implement the provisions under the EC Act 2001 by decentralizing the

    energy conservation programmes at the State level. The strategy will strengthen the

    existing institutional linkages, and pursue the task of consolidating the energy

    conservation information, trends and achievements and create a market for energy

    conservation and for energy efficient goods and services.

    Keeping in view the provisions of the Act, an appropriate institutional mechanism and

    energy database will be developed in the 11th Plan by BEE. As a part of the mechanism,

    a fully dedicated Energy Conservation Information Centre (ECIC) with Information

    Technology facilities will be set up within BEE and Central Energy Conservation Fund as

    mandated under EC Act will be established by the Government of India. Collection of

    such information is a mammoth task and requires systematic handling and coordination of

    efforts of various agencies.

    4.3.3 Institutional Network

    BEE will strengthen its existing institutional linkages with SDAs, and formalize its

    association with various other national level institutions such as PCRA, NPC, TERI,

  • 8/6/2019 Better Environment

    52/193

    CEA, energy centres in academic institutes/universities, etc. with a view to utilize their

    expertise and knowledge in the field of energy conservation. In its institutional network,

    BEE will also include a number of sector specific associations and research institutions,

    and private organizations in various states, and will delegate specific tasks to facilitate the

    implementation of energy conservation programmes.

    4.3.4 Energy Conservation Programmes in the Targeted Sectors

    In the 11th Five Year Plan, BEE will focus energy conservation programmes in the

    following targeted sectors:

    (a) Industrial Sector (Energy Intensive Industries).

    Industry sector offers maximum potential for energy conservation. The Government

    of India has recognized this when a number of energy intensive industries have been

    included as designated consumers in the EC Act. To bridge the efficiency gaps in the

    various units within the same industrial sub sector, BEE in association with SDAs,

    industry associations and research institutions, will develop 15 industry specific

    energy efficiency manuals/guides for the following sectors: Aluminum, Fertilizers, Iron

    &Steel, Cement, Pulp & Paper, Chlor Alkali, sugar, textile, chemicals, Railways, Port

    trust, Transport Sector ( industries and services), Petrochemical &Petroleum

    Refineries, Thermal Power Stations &hydel power stations , electricity transmission

    companies & distribution companies. The manuals will cover Specific energy

    consumption norms as required to be established under the EC Act, energy efficient

    process and technologies, best practices, case studies etc. Follow up activities will be

    undertaken in the States by SDAs. and manuals will be disseminated to all the concerned

    units in the industries.

    (b) Small and Medium Enterprises (SMEs)

    Many of the energy intensive SMEs clusters located in various states of the country are

    said to have large potential for energy savings. In quantitative terms, there is very little

    authentic information and data is available with re