Concerns with Indian Power Sector Socio-environmental problems due to over reliance on Coal Power Plants Washington September, 2011 Shankar Sharma Power.

Concerns with Indian Power Sector

Socio-environmental problems due to over reliance on Coal Power Plants

WashingtonSeptember, 2011

Shankar SharmaPower Policy Analyst, Thirthahally, Karnataka

[email protected]

PART I

Overview of Indian Power Sector

Indian Power Scenario

Total Installed Capacity (As on 30.6.2011: MoP Website)

Sector MW % age of total Capacity

State Sector 82,597 46.66

Central Sector 55,573 31.39

Private Sector 38,820 21.93

Total 1,76,990

Fuel MW Percentage

Total Thermal 115,650 65.4

Coal 96,744 54.7

Gas 17,706 10.0

Oil 1,200 0.7

Hydro 38,106 21.5

Nuclear 4,780 2.7

Renewable 18,455 10.4

Total 1,76,990

Indian Power Scenario

Total Installed Capacity (fuel-wise) (MOP website as on 30.6.2011)

Indian Power Scenario

Power Supply Scenario (April 2010– March 2011: CEA)

Energy Requirement

(MU)

Energy Availability (MU)

Energy Deficit (%)

Northern Region 259,426 238,782 8.0

Western Region 268,452 232,835 13.3

Southern Region 229,853 217,929 5.2

Eastern Region 94,515 90,458 4.3

N E Region 9,879 9,009 8.8

Total for the Country

862,125 789,013 8.5

Indian Power Scenario

Power Supply Scenario (April 2010– March 2011: CEA)

Peak Demand (MW)

Peak Demand Met (MW)

Peak Deficit (%)

Northern Region 37,431 34,101 8.9

Western Region 40,798 34,819 14.7

Southern Region 33,225 31,129 6.3

Eastern Region 14,528 13,085 9.9

N E Region 1,913 1,560 18.5

Total for the Country 125,077 112,167 10.3

Indian Power Scenario T&D losses (2009 - 10, CEA, 18th APS Report)

Region Losses(%)

Northern Region 27(Range from 20 to 64)

Western Region 26(Range from 13 to 35)

Southern Region 19 (Range from 14 to 20)

Eastern Region 27(Range from 21 to 42)

N E Region 34(Range from 29 to 64)

All India 25

Country T&D Losses (%)

India 25Russia 12UK 8China 7USA 6Japan 4Germany 4

Typical T&D losses (Source: CEA/power Ministry)

Installed Power Generating Capacity in Karnataka(Approximate figures in some years)

Year Installed capacity (MW)

Increase over previous decade

Year 1948 83 -

Year 1950 107 29 %

Year 1960 189 77 %

Year 1970 888 470 %

Year 1980 1310 48 %

Year 1990 2760 210 %

Year 2000 5824 211 %

Year 2011 12,147(Own capacity +

Central sector share)

209 %(146 times of 1948)

(Reference: “Belakaayitu Karnataka’ by Dr. Gajaanana Sharma)

Power supply in Karnataka (Source: Central Electricity Authority)

Peak Demand[In Mega Watts (MW)]

Annual Energy[In Million Units (MU)]

Demand (MW)

Supply (MW)

Deficit (%)

Demand (MU)

Availability (MU)

Deficit (%)

April 2010 to Mar 2011 8,430 7,815 7.3 50,474 46,624 7.6

April 2009 to Mar 2010 7,942 6,897 13.2 42,550 42,041 7.7April 2008 to Mar 2009 6,892 6,548 5.0 43,168 40,578 6.0April 2007 to Mar 2008 6,583 5,567 15.4 40,320 39,230 2.7

Available power capacity in Karnataka as on 30.6.2011 (MW)

State Sector (all types of fuels) 6,615

Private Sector 4,116

Share in Central Sector projects of Southern Region

1,416

Total 12,147

Available Power capacity (MW) in Karnataka as on 30.6.2011 (Source: CEA Website)

Hydro Thermal Nuclear Others Total

KPCL 3,600 2,348 Nil 667 6,615

Private Generating Companies

0 2,167 Nil 1,949 4.116

State Total 3,600 4,515 Nil 2,616 10,731

Central Projects share

Nil 1,161 255 Nil 1,416

Total 3,600 5,676 255 2,616 12,147

Karnataka’s Power Scenario

Gross power availability in 2011 = about 12,147 MW; net power availability >> about 9,500 MW;

but maximum power demand met = 7,815 MW

Why this gap ???

Overall industry efficiency between 40 -50%

Gross inefficiency leading to plan about 50% more capacity than really needed

Inefficiency in managing the existing capacity is the prime reason for the power cuts each year

Many serious Questions to the society

Electricity Supply is needed no doubt. But …….

• How much? – high per capita consumption ?

• How?? – by any means??

• At what cost??? – at any societal cost ???

Salient features of Indian Power Sector

Power sources /Power plants concentrated in few areas; requires massive transportation and transmission infrastructure

Gross inefficiency in all segments of the sector

Massive reliance on conventional and centralised power generation

No diligent studies of realistic future electricity requirement; Unrealistically higher projection of future demand

Complete absence of holistic approach / long term perspective

Discernible absence of attention to welfare needs of bio-diversity/ masses

Mostly new merchant power plants for profit motive; true costs and benefits to society of power plants never determined

R&R and environmental compliance has been abysmally poor; Insensitivity to civil society’s views

Major Issues with Fossil Fuel Power Plants (coal, gas, diesel)

Economic• Unsustainable pressure on natural resources such as land, water

and minerals; reduced agricultural production;

Social• Peoples’ displacement due to large sizes of power plants; health;

decay of rural India

Environmental• Global Warming; pollution of land, water and air; acid rains; impact

on bio-diversity

Major Issues with Dam based Hydro Power Plants

Economic• Demands large tracts of forests and fertile land; water logging;

affects the economy of the down stream population; deposition of silt in dams; deprivation of the same down streams

Social• Peoples’ displacement and health; community leadership issues

Environmental• Methane emission, submersion and fragmentation of forests; loss

of bio- diversity; downstream areas get deprived of fertile silt

Major Issues with Nuclear Power Plants

Economic• Demands large tracts of forests and fertile land; huge Capital costs; long term waste management costs; serious shortages of

nuclear fuels; impact on plant and animal food

Social• Peoples’ displacement and health; community leadership issues; intergenerational issues

Environmental• Mining related pollution; radiation emission during operations and

from nuclear wastes for centuries

PART II

Dangerous Reliance on Coal Power Plants

Major Issues with Coal Power Plants

Huge pollution impacts: air, water and land About 1 acre per MW of land

Requirement of about 3.92 million cubic metres of water per 100 MW per year Additional requirement projected = 4608 million cubic meters.

This water can irrigate about 920,000 ha of land in a year, provide drinking water to about 84 million people or 7% of India’s population

every day for a year

Demands lot of our resources; displacement of poor; fast running out reserve; no replacement is being considered

System unable to meet the growing coal demand requires about 2000 million tons (2 billion tons) of coal every year

More coal mines lead to destruction of forests against forest & tree cover target of 33% it is << 20%

Low efficiency and ever increasing costs solar power cost projected to become comparable by 2017

Major Issues with Coal Power Plants (contd…)

Serious concerns on health aspects; threat to bio-diversity Report of Physicians for Social Responsibility; Asthma, lung cacer, heart disease

and stroke Sierra Club’s fight – stopping 0ver 150 plants ; Report “Human, Social, and Environmental Damages Avoided through the Retirement of the US Coal Fleet” GreenPeace – “the true cost of coal” >> people and the planet are paying for the

world’s dirtiest fuel

Coal burning – a major contributor to Global warming

US - $345 billion a year in hidden expenses (Harvard University research)

not borne by miners or utilities, including health problems in mining communities and pollution around power plants

Critically Polluted Areas in India have coal power plants Sulphur dioxide, high ash content, Mercury, traces of radio-activity Toxic trace elements such as arsenic (As), lead (Pb), cadmium (Cd) Poor regulatory measures

Huge additions to coal power capacity planned (Prayas Pune Report) 700,000 MW additions (84% of all planned) against existing 115,000 MW; Few clusters with very huge coal power capacity heavy reliance on imported coal; mostly in private sector

Critically Polluted AreaProposed CapacityAddition in MW inthe DistrictAngul, Orissa >> 17,840 MWBharuch, Gujarat >> 15,760Singrauli, M.P. >> 15,240Cuddalore, Tamil Nadu >> 10,140Jharsuguda, Orissa >> 9,075Chandrapur, Maharashtra >> 7,800Korba, Chhatisgadh >> 7,570Visakhapatnam, A.P. >> 4,690

Thermal Power Plants Coming Up in Critically Polluted Areas (Source: Prayas Pune Report “THERMAL POWER PLANTS ON THE ANVIL Implications and Need for Rationalisation )

Dangerous reliance on coal power – huge implications

• Integrated energy policy has also projected a total generating capacity of about 800,000 MW by 2031-32, out of which 400,000 MW may have to be coal based.

• Minister of State for Coal: "There are no two opinions about the need to switch over to other modes of power generation ……. Coal-based power production has to be restricted".

• Future need for huge quantity of coal import; 630 million tons annual domestic capacity More than 1000 million tons to be imported.

• Energy security, due to import dependence, will be serious issue

• At present Approximately 80 coal-based thermal power stations operating

• >> 90% power coal supply responsibility is catered to by Coal India Limited (CIL)

• Large clusters of coal power plants planned Vidarbha >> 30,000 MW Konkan >> 40,000 MW AP coast >> 40,000 MW Orissa >> 50,000 MW Singruali/Rihand region; Chattisgarh CPPs even in states like Karnataka, Kerala and HP without coal reserve

• Coastal areas are targeted for ease of import and sea water impact on fresh water bodies and fishing

• More coal fields are being opened

• More of forests are getting destroyed

• More of tribals being displaced

Global warming and Climate Change : What is India’s commitment ?

Dangerous reliance on coal power – huge implications

Coal power Efficiency

Global Warming and Electricity Industry

The Impact of Electricity Industry on Global Warming

About 38% of GHG emission at the national level (53% of CO2 emissions in India); [MoEF report of 2010]

Large dams - tropical deforestation produces 20 per cent of all carbon emissions caused by humans, and destroys long-term carbon sinks

Methane from dams is highly potent GHG

Additionally – power stations consume a lot of natural resources; land, water, fossil fuel etc; displace people; atmospheric and ground water pollution;

Transmission lines need large tracts of lands / forests

Nuclear fuel cycle itself consumes horrendous amount of energy

Global Electricity Usage and CO2 Emission (Year 2007) (Source: Key World Energy Statistics, IEA, 2009)

Country Per Capita Electricity Consumption (kWH)

Per Capita CO2 Emission (Tons)

United Arab Emirates

16,161 29.91

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

Implications on Global warming ?

“Emissions have been, and continue to be driven, by economic growth; yet stabilization of greenhouse-gas concentrations in the atmosphere is feasible and consistent with continued growth.”

“Emissions from deforestation are very significant – they are estimated to represent more than 18% of global emissions”

“Curbing deforestation is a highly cost-effective way of reducing greenhouse gas emissions.”

What our society is doing at present is to supply inefficiently derived energy from limited conventional sources at subsidized rates for highly inefficient and / wasteful end uses, for which the real subsidy cost will be passed on to future generations.

Concerns about dam based hydro power and nuclear power are equally grave but of different

nature

Extent of Inefficiency

“India’s power sector is a leaking bucket; the holes deliberately crafted and the leaks carefully collected as economic rents by various stake holders that control the system. The logical thing to do would be to fix the bucket rather than to persistently emphasise shortages of power and forever make exaggerated estimates of future demand for power. Most initiatives in the power sector (IPPs and mega power projects) are nothing but ways of pouring more water into the bucket so that consistency and quantity of leaks are assured ….”

Deepak S Parekh, Chairman, Infrastructure Development Finance Corporation, September 2004.

As per 13th Finance Commission, national level financial loss of ESCOMs could be

> Rs. 69,000 Crores in 2010-11 and

> Rs. 116,000 Crores in 2014-15

With this background

• Do we need many more large power projects?

• Must they be fossil fuel OR large dam based OR nuclear based?

• Since fossil fuel & dam based power projects contribute heavily to the global warming effect

what suitable alternatives are available to us ?

• Since the policies since independence have largely failed to meet our requirements, is

there a need for a paradigm shift?

PART III Towards an Integrated Energy Policy

IEP’s projection

total power capacity should increase from about 160,000 MW in 2006 to about 800,000 MW in 2031.

coal power from 80,000 MW to 400,000 MW hydro from 36,000 MW to 150,000 MW nuclear from 4,800 MW to 20,000 MW

This scenario throws up huge problems to our society

Unsustainable demand on land, fresh water and natural resources Unacceptable levels of pollution Population displacements High GHG emissions Reduced energy security due to dependence on imports

Integrated Energy Policy

Desirable Vision:

Develop a policy to enable meeting the legitimate demand for energy of all sections of the society at realistic prices on a sustainable basis without compromising the interest of other aspects of the society such as flora, fauna and general environment.

Towards an Integrated Energy Policy

Heavy focus on efficiency improvement, DSM and conservation

Low PLF in the existing thermal power stations; as low as 25% in some states; a major concern

Increase overall PLF from 75% to 90%; can increase availability by more than 10,000 MW

Increase load factors of hydel plants Can provide additionally 3,000 to 5,000 MW

AT&C loss reduction from 30% to 10% Savings of about 15,000 to 20,000 MW

Usage efficiency increase Savings of 20,000 to 25,000 MW

Existing electricity infrastructure can provide > 45,000 MW more

Towards an Integrated Energy Policy

Considerable scope in energy usage efficiency and conservation

DSM potential: 15% as per IEP

Huge scope in distributed type of renewable energy sources

N&RE Potential In India(Source: MNRE)

Potential: (Grid interactive power only)

Remarks

1. Wind energy > 45,000 MW

2. Small hydro 15,000 MW

3. Solar over 5,000 trillion

kWH/year

Potential estimated to be more than the total energy needs of the country

4. Bio-mass >> 25,000 Not known

Energy Security for Future

Can be feasible only through:

– Integrated Energy Resource Management

– Holistic Approach

– Sustainable Practices

– Concern for other Sectors of the Society

The road ahead

• Planning Commission estimates that CO2 generated from energy use can be reduced by 35% through effective deployment of efficiency, DSM measures and renewable energy sources.

• Planning Commission’s main action recommendation for energy security is: “relentlessly pursue energy efficiency and energy conservation as the most important virtual source of domestic energy”.

• Bureau of Energy Efficiency has estimated: at the prevailing cost of additional energy generation, it costs a unit of energy about one fourth the cost to save than to produce it with new capacity.

How to meet the demand in future years ?

Efficiency & DSM measures will meet part of the additional demand

Renewable energy sources is the answer !!!

New & renewable energy sources

• Solar PV cells

• Solar water heaters, Solar cookers & Solar driers • Solar street lights • Solar water pumps • Small size wind mills • Bio-mass plants (eg. Gobar gas plants) • Mini & micro hydel plants

• Hybrid of solar, wind and bio-mass

Major advantages of Renewable energy sources- distributed source mode as against large ones

• people friendly & environmentally friendly• self sufficiency for rural communities and individual houses• reliable supply option; no recurring charges• rural employment opportunities• leads to reduced urban migration; a sustainable option• most suitable to rural communities• accelerated rural electrification• reduced burden on grid supply • reduce GHG emissions• will reduce the need for coal, dam and nuclear power plants

New & renewable energy sources

• European Union has a plan to meet 20% of all its energy needs by 2020 AD through N&RES

• Israel is reported to be targeting 50%

• Greenpeace has come up with plans to meet 100% & 50% of energy needs of New Zealand and India

• Country has a huge potential in harnessing roof top solar PVS; 10% of households @ 2 kW >>> 200,000 MW

• Additionally roof top surface of schools, colleges, industries, commercial, warehouse and office buildings – huge potential

• Bio-mass energy at community levels

• Combination of solar, bio-mass and wind energy

• Germany and Japan >> replacing nukes with RES

Option II : Integrated Energy Management ApproachOne or more of the following options can provide much more power

COSTS T&D loss reduction - 600 MW >> 900 Crores Utilisation loss reduction / DSM - 600 MW >> 900 Crores Usage of CFLs - 400 MW

OR A combination of Wind energy Biomass Solar – Water heating Solar –residential lighting

BENEFITS

Negligible societal cost; negligible or nil land and displacement No loss of forests & bio-diversity Negligible or nil health or environmental costs Perpetual benefits Highly reduced T& D losses; reduced man power costs Boost to agricultural and rural employment

Karnataka Electricity Industry – Integrated Resource Management Model for Demand and supply

PART I: High level calculations of benefits: forecast for peak demand power (MW)

Year 2009 onwards 2009 2011 2013 2015 2017 2018

ALoad forecast @7% growth from 6,200 MW base in 2006 with

0.5% reduction in CAGR every year (peak hour demand) MW 7595 8051 8453 8791 9055 9281

BPeak demand reduction feasible through existing system improvements

B1. Generation improvement through R, M & U MW 16 16 16 16 16 16

B2. Transmission & Distribution loss reduction MW 110 110 110 110 110 110

B3. Non-agricultural uses MW 110 110 110 110 110 110

B4. Agricultural use (100 MW reduction during peak hours assumed) MW 10 10 10 10 10 10

Aggregate peak demand reduction feasible through efficiency measures MW 246 738 1230 1722 2214 2460

C Peak demand reduction feasible through solar technologyC1. AEH Installations (50% reduction during evening hrs assumed) MW 105 105 105 105 105 105

C2. Residential installations MW 30 30 30 30 30 30

C3. IP sets (100 MW savings during evening hrs assumed) MW 10 10 10 10 10 10

C4. Public & commercial lighting MW 4 4 4 4 4 4

Aggregate peak demand reduction feasible through solar technology MW 149 149 149 149 149 149

D Demand reduction feasible through wind energy MW 60 60 60 60 60 60

E Demand reduction feasible through biomass MW 48 48 48 48 48 48

F Aggregate peak demand reduction feasible through NCE sources MW 257 771 1285 1799 2313 2570

G Net peak demand forecast on the grid (= A-(B+F)) MW 7092 6542 5938 5270 4528 4251

PART II: High level calculations of benefits: forecast for annual energy requirement (MU)

Load forecast @7% growth from 34,300 MU base in 2006 with 0.5% reduction in CAGR every year (annual energy demand ) MU 42019 44540 46767 48638 50097 51349

Energy reduction feasible through existing system improvements

I1. Generation improvement through R, M & U MU 80 80 80 80 80 80

I2. Transmission & Distribution loss reduction MU 700 700 700 700 700 700

I3. Non-agricultural use MU 430 430 430 430 430 430

I4. Agricultural use MU 250 250 250 250 250 250

Aggregate annual energy reduction feasible from efficiency measures MU 1460 4380 7300 10220 13140 14600

Energy reduction feasible through solar technology

G1. AEH Installations MU 110 110 110 110 110 110

G2. Residential installations MU 60 60 60 60 60 60

G3. IP sets MU 320 320 320 320 320 320

G4. Public & commercial lighting MU 64 64 64 64 64 64Aggregate annual energy reduction feasible through solar

technology MU 554 554 554 554 554 554

Energy reduction feasible through wind energy MU 210 210 210 210 210 210

Energy reduction feasible through biomass MU 200 200 200 200 200 200

Aggregate annual energy reduction feasible through NCE sources MU 964 2892 4820 6748 8676 9640

Net annual energy demand forecast on the grid (= H-(I+M)) MU 39595 37268 34647 31670 28281 27109

Break up of Projected Installed Capacity by 2031-32(As an alternative to IEP)

Capacity (MW)

Share in total capacity by

2031-32

Comments

Coal 110,000 28 % Increase from present capacity of 80,000 MW; IEP has projected 470,000 MW; gradual reduction; early peaking

Hydro 40,000 10 % Only < 25 MW capacity R-0-R plants only after 2032;Against IEP projection of 150,000 MW

Nuclear 10,000 3 % Only known sources of domestic nuclear fuel to be used; targeted to be replaced fully by 2050

Natural Gas 25,000 6 % Targeted to be replaced fully by 2050

Solar (Grid interactive large size units only)

60,000 15 % National solar mission target of 20,000 MW by 2020 should be ramped up adequately

Solar (Roof-top isolated and Grid interactive small size units )

60,000 15 % Huge potential to be harnessed early by policy interventions; a must for accelerated rural electrification and for T&D loss reduction

Wind 30,000 8 % Same as projected by IEP; expected to increase share after 2032 through off-shore wind farms

Bio-mass 50,000 13 % Same as projected by IEP; mostly community based plants

Other renewables (Ocean energy and Geo-thermal)

7,000 2 % Nascent technologies but huge potential; likely to get better focus after 2032

Total Capacity 390,000

WAY FORWARD

There are credible ways of meeting our electricity needs without a large number of conventional power plants !

The society must move resolutely in this direction !! Half measures will not suffice !!!

A holistic, responsible and highly accountable approach

People centric policies are essential and feasible. Effective public consultations

Sustainability should be the criteria Obligations to future generations

Thanks !!!