Last year (2013), India’s petroleum minister M Veerappan Moily presented a grand vision for the country’s energy security. The peg of the entire plan was to achieve energy independence by 2030.
Now every country and its leaders have a right to present grandiose plans and are well within their rights to articulate their vision and impose their ambitions on the society they lead. However, seldom much thought is given into how will it be achieved.
International Energy Agency’s (IEA’s) executive director Maria van der Hoeven termed this plan as ambitious and idealistic. Keeping Europe’s extremely cultured and nuanced public discourse standards, it actually meant the idea is foolish at best.
On the face of it Maria isn’t off the mark. If you look at the daunting challenges you will feel the same. According to the Planning Commission of India 400 million people have no access to electricity and close to 700 million still use bio-mass and cow dung cakes to cook their food. Those fortunate 800 million who have access to electricity can tell you what quality of supply they put up with. Long hours of power cuts are just one aspect of this low quality access.
“Moily Plan”, as I call it, endeavours to reduce India’s dependence on foreign crude oil imports by 50 percent by 2020, 75 percent by 2025 and to zero by 2030.
What has not been taken into consideration is the fact that right now India is not only importing copious amounts of oil but has become one of the largest importers of coal as well.
Some industry experts have been quick to defend Moily Plan by offering their advice on how to achieve this target. Their recommendations revolve around three pillars. They suggest the pricing of energy should be reassessed and rationalised. Second suggestion is, India should get its energy mix right and for that it should promote large hydro power. The third suggestion is to increase our petroleum production.
All the ideas are great except for one minor problem — they aren’t feasible. Let’s look at the first suggestion — price rationalisation. It is true that electricity is cheap in many parts of India and the state governments’ political agenda of providing free electricity to farmers is a drain on any distribution company, but the fact is even if the price of electricity is increased there will not be enough power to provide for everyone.
Right now India’s electricity demand-supply gap stands at 9 percent during normal times and 12-15 percent during peak hours. While another data suggests on an average India looses 30 percent of electricity in transmission and distribution. Instead of strengthening one of the biggest plans to plug this leakage (Restructured Accelerated Power Development & Reconstruction Programme to digitise distribution and transmission and bring down the loss to just 5 percent which is the international norm), the government is toeing the line of private producers who are interested in just increasing the price of the electricity by raising the bogey of increased input costs of producing power.
Instead of obsessing over price it would be a better idea to rationalise distribution system, stop theft, increase the consumer base by installing more meters and charging the same rates from a larger consumer base. This will improve the health of distribution systems as well as generation companies.
Second issue is of energy mix. Right now the installed capacity in India stands at 228721 MW (as on 31 March 2013). Out of this 68 percent or 155968 MW is in thermal sector which comprises of coal, oil and gas based power plants. However, coal dominates all other with an installed capacity of 134388 MW.
When it comes to generation, thermal power plants dominated by coal accounts for close to 84 percent of the total production. All the energy experts feel this over whelming dependence on coal is unwarranted and dangerous. They say India should pursue large hydro power path which it abandoned after increased public outcry and environmental costs. This suggestion is fraught with danger. All the potential for hydro power is now restricted to the upper reaches of Himalayas. More than 50,000 MW of potential is locked in the remote north eastern Himalayan state of Arunachal Pradesh.
The problem here is of weak geology, water flow that is sensitive to the vagaries of climate change and more importantly it shares borders with China which has never accepted it as part of India. In a strategically important but vulnerable area it is imperative that the government doesn’t pursue any grandiose plans to harness hydro power that will destabilise geo-political interests as well as long term environment interests.
Another fact about hydro power is that the government has abandoned the river valley projects where large reservoirs were created with a purpose to use water for irrigation and generation of electricity. The modern hydro power is run-of-the-river variety. This puts the hydro power at the mercy of river flow and is no longer a stable source of power. So pursuing this source is a drain on exchequer and will only benefit the builders and their companies and no one else. Least of all it will ensure any energy security.
The better idea would be to look at electricity consumption and map the users. There are three groups of users in India as anywhere else in the world. They are domestic, commercial and industrial. The available technology in renewable energy, especially the off grid solar technology, has the ability to be employed in a variety of uses in all the above mentioned sectors.
This off grid renewable source can meet the domestic demands of those who don’t have access to electricity. It can also be used to meet a large part of commercial needs and also industrial demands. In industry the requirement of process heat up to 250 degree centigrade can be met by renewable energy. Efforts should be made to promote the renewable in this space as a complimentary as well as supplementary source which can gradually shoulder the responsibility of meeting a major chunk of power needs.
The last component of expert advice to increase the indigenous petroleum production baffles me. As far as my understanding of Indian Geology goes, there isn’t much oil under the Indian soil. We are poorer in that matter. So we would be dependent on foreign oil for a very long period of time, way beyond 2030.
If we take India’s oil consumption we would find that diesel is being utilised mainly in heavy transport, electricity generators sets, to run bore wells at farms and now a growing segment of SUV drivers.
In 2010 more than 18000 MW of power was generated by the diesel gensets to meet the demands during power outages. If the government can ensure uninterrupted power supply to industrial and commercial sector this usage can be brought down drastically. Also solar bore wells and pumps in rural areas can substantially decrease the use of diesel.
In transportation, the government can improve railway freight service to improve the long distance supply chains thereby decreasing the dependence on diesel guzzling trucks, introduce new diesel saving technologies in truck manufacturing and help manufacturers and buyers with attractive tax discounts and other sops. With these steps in place, the government can then remove subsidies on diesel that would automatically desist people from lapping up the SUVs and other fuel guzzling cars.
These efforts will meet the demand-supply gap in energy by streamlining demand and improving supply for the benefit of everyone. it will manage our dependence within manageable limits. Independence, though, is a different matter.
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