Shankar Sharma Power Policy Analyst, Thirthahally, Karnataka Shankar.sharma2005@gmail

Concerns with Indian Power Sector

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

WashingtonSeptember, 2011

Shankar SharmaPower Policy Analyst, Thirthahally, [email protected]

PART I

Overview of Indian Power Sector

Indian Power Scenario

Total Installed Capacity (As on 30.6.2011: MoP Website)

SectorMW% age of total CapacityState Sector82,59746.66Central Sector55,57331.39Private Sector38,82021.93Total 1,76,990

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

FuelMWPercentageTotal Thermal 115,650 65.4Coal 96,74454.7Gas 17,70610.0Oil 1,2000.7Hydro38,10621.5Nuclear4,7802.7Renewable18,45510.4Total1,76,990

Indian Power Scenario

Power Supply Scenario (April 2010 March 2011: CEA)

Energy Requirement (MU)Energy Availability (MU)Energy Deficit (%)Northern Region259,426238,7828.0Western Region268,452232,83513.3Southern Region229,853 217,9295.2Eastern Region94,515 90,4584.3N E Region9,8799,0098.8Total for the Country862,125 789,0138.5

Indian Power Scenario

Power Supply Scenario (April 2010 March 2011: CEA)

Peak Demand (MW)Peak Demand Met (MW)Peak Deficit (%)Northern Region37,431 34,1018.9Western Region40,798 34,81914.7Southern Region33,225 31,1296.3Eastern Region14,528 13,0859.9N E Region1,9131,56018.5Total for the Country125,077 112,16710.3

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

RegionLosses(%)Northern Region27(Range from 20 to 64)Western Region26(Range from 13 to 35)Southern Region19 (Range from 14 to 20)Eastern Region27(Range from 21 to 42)N E Region34(Range from 29 to 64)All India25

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

CountryT&D Losses (%)India25Russia12UK8China 7USA6Japan4Germany4

Installed Power Generating Capacity in Karnataka(Approximate figures in some years) (Reference: Belakaayitu Karnataka by Dr. Gajaanana Sharma)

YearInstalled capacity (MW)Increase over previous decadeYear 194883-Year 195010729 %Year 196018977 %Year 1970888470 %Year 1980131048 %Year 19902760210 %Year 20005824211 %Year 201112,147(Own capacity + Central sector share)209 %(146 times of 1948)

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 20118,4307,8157.350,47446,6247.6April 2009 to Mar 20107,9426,89713.242,55042,0417.7April 2008 to Mar 20096,8926,5485.043,16840,5786.0April 2007 to Mar 20086,5835,56715.440,32039,2302.7

Available power capacity in Karnataka as on 30.6.2011 (MW)

State Sector (all types of fuels)6,615 Private Sector4,116 Share in Central Sector projects of Southern Region1,416 Total12,147

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

HydroThermalNuclearOthersTotalKPCL3,6002,348Nil 667 6,615Private Generating Companies02,167Nil1,949 4.116State Total3,6004,515Nil2,61610,731Central Projects shareNil1,161255 Nil 1,416Total3,6005,6762552,61612,147

Karnatakas 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 societys 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 Indias populationevery 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

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 Clubs 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 worlds 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. >> 4,690Thermal 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 Indias 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)

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

Indias 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

IEPs 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 PolicyHeavy focus on efficiency improvement, DSM and conservation

Low PLF in the existing thermal power stations; as low as 25% in some states; a major concernIncrease 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 increaseSavings 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)Remarks1. Wind energy > 45,000 MW2. 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 FutureCan 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 Commissions 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 supplyPART I: High level calculations of benefits: forecast for peak demand power (MW)Year 2009 onwards200920112013201520172018ALoad forecast @7% growth from 6,200 MW base in 2006 with 0.5% reduction in CAGR every year (peak hour demand)MW759580518453879190559281BPeak demand reduction feasible through existing system improvementsB1. Generation improvement through R, M & UMW161616161616B2. Transmission & Distribution loss reductionMW110110110110110110B3. Non-agricultural usesMW110110110110110110B4. Agricultural use (100 MW reduction during peak hours assumed)MW101010101010 Aggregate peak demand reduction feasible through efficiency measuresMW2467381230172222142460CPeak demand reduction feasible through solar technologyC1. AEH Installations (50% reduction during evening hrs assumed)MW105105105105105105C2. Residential installationsMW303030303030C3. IP sets (100 MW savings during evening hrs assumed)MW101010101010C4. Public & commercial lightingMW444444Aggregate peak demand reduction feasible through solar technologyMW149149149149149149DDemand reduction feasible through wind energyMW606060606060EDemand reduction feasible through biomassMW484848484848FAggregate peak demand reduction feasible through NCE sourcesMW2577711285179923132570GNet peak demand forecast on the grid (= A-(B+F))MW709265425938527045284251

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 )MU420194454046767486385009751349Energy reduction feasible through existing system improvementsI1. Generation improvement through R, M & UMU808080808080I2. Transmission & Distribution loss reductionMU700700700700700700I3. Non-agricultural useMU430430430430430430I4. Agricultural useMU250250250250250250Aggregate annual energy reduction feasible from efficiency measuresMU146043807300102201314014600Energy reduction feasible through solar technologyG1. AEH InstallationsMU110110110110110110G2. Residential installationsMU606060606060G3. IP setsMU320320320320320320G4. Public & commercial lightingMU646464646464Aggregate annual energy reduction feasible through solar technologyMU554554554554554554Energy reduction feasible through wind energyMU210210210210210210Energy reduction feasible through biomassMU200200200200200200Aggregate annual energy reduction feasible through NCE sourcesMU96428924820674886769640Net annual energy demand forecast on the grid (= H-(I+M))MU395953726834647316702828127109

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

Capacity (MW)Share in total capacity by 2031-32CommentsCoal110,00028 %Increase from present capacity of 80,000 MW; IEP has projected 470,000 MW; gradual reduction; early peakingHydro40,00010 %Only < 25 MW capacity R-0-R plants only after 2032;Against IEP projection of 150,000 MWNuclear10,0003 %Only known sources of domestic nuclear fuel to be used; targeted to be replaced fully by 2050Natural Gas 25,0006 %Targeted to be replaced fully by 2050Solar (Grid interactive large size units only)60,00015 %National solar mission target of 20,000 MW by 2020 should be ramped up adequatelySolar (Roof-top isolated and Grid interactive small size units )60,00015 %Huge potential to be harnessed early by policy interventions; a must for accelerated rural electrification and for T&D loss reductionWind30,0008 %Same as projected by IEP; expected to increase share after 2032 through off-shore wind farmsBio-mass50,00013 %Same as projected by IEP; mostly community based plantsOther renewables (Ocean energy and Geo-thermal)7,0002 %Nascent technologies but huge potential; likely to get better focus after 2032Total Capacity390,000

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 !!!