India is a developing country facing the critical challenge of meeting its rapidly increasing demand for energy. With over a billion people, India ranks sixth in the world in terms of energy demand. Its economy is projected to grow seven to eight per cent over the next two decades, spurring a substantial increase in demand for oil to fuel land, sea, and air transportation.
While India has significant reserves of coal, it is relatively poor in oil and gas resources. Its oil reserves amount to 0.5 per cent of the global reserves. Due to the stagnating domestic production of crude oil, India imports approximately 70 per cent of its oil, much of it from the Middle East. The World Energy Outlook, published by the International Energy Agency (IEA), projects that India’s dependence on oil imports will grow to 91.6 per cent by the year 2020.
Despite efforts to enhance domestic energy production and diversify fuel mix, India still faces energy and peak shortages of around 8 per cent and 12 per cent respectively, while a large section of the rural population continues to lack access to clean and efficient energy fuels to meet their daily requirements. As with many developing economies starting from a low per capita energy consumption point, India’s consumption of 439 kg per capita is far below the world average of 1,688 kg per capita (Planning Commission, 2006). India, with over a billion people, only produces 660 billion KWh of electricity and over 600 million Indians have no access to electricity and have limited access to other clean, modern fuels such as LPG and kerosene.
There has been significant improvement in the growth in actual generation of energy over the last few years. As compared to the annual growth rate of about 3.1 per cent at the end of the IXth Plan and initial years of the Xth Plan, the growth in generation during 2006-07 and 2007-08 was of the order of 7.3 per cent and 6.33 per cent respectively.
Energy Resources in India
Conventional Energy Sources
Coal: India is the world’s third largest producer of coal. Chhattisgarh, Jharkhand, Orissa and West Bengal together account for about 77 per cent of India’s coal reserves. A cumulative total of 253.3 billion tons of geological resources of coal have so far been estimated in the country as on 1.1.2006. Coal is a major energy source catering to India’s growing energy needs, meeting about 51 per cent of the country’s commercial energy needs, and about 70 per cent of the electricity produced. While the adoption of efficient coal based power generation technologies (internal gasification combined cycle and ultra-supercritical) would reduce the environmental impacts from coal combustion, clean coal utilisation needs to be adopted across the entire coal cycle through scientific mining practices followed by land reclamation, beneficiation of coal for ash reduction at source and transforming coal from its current form to cleaner energy forms via coal liquefaction, and coal gasification. Moreover, Coal Bed Methane (CBM) is an important clean energy option for the country and needs to be examined judiciously as a key alternative to the country’s sustainable energy pathway.
The Ministry of Petroleum and Natural Gas (MoPNG) has undertaken several initiatives to tap gaseous fuels other than natural gas. Proven CBM is estimated to double India’s gas reserves. The government has formulated a CBM policy to attract technology and investment for exploration and production of CBM from coal-producing areas. Already, 16 exploration blocks for CBM have been awarded to national oil companies and private companies, and exploration work in all these blocks is in progress. In-situ coal gasification can also release usable gas from in-extractable coal reserves below 600 meters depth and bring it to the surface without the accompanying ash, while providing the potential for injecting back the captured CO2.
Oil and Natural Gas: Within a proved amount in place of 1,652 million tons, the amount of proved recoverable reserves in 2005 was 786 million tons, of which 410 million tons is located offshore. Onshore reserves have risen by 13.3 per cent from the 332 million tons (as on 1 April, 2002) to 376 million tons, whereas offshore reserves have remained virtually unchanged. As on 1 April, 2006, further growth in onshore reserves to 387 million tons and a sharp drop in the offshore reserves down by 10 per cent to 369 million tons has been recorded. In 2005-06, offshore fields provided almost 65 per cent of national oil output. Total production of oil (including gas-plant liquids) has fluctuated in recent years within a range of 36 to 38 million tons per annum. In 2005, India produced (in million tons) 32.5 crude oil, 1.4 natural gasoline and an estimated 2.4 gas-plant LPG, all of which was consumed internally.
Oil accounts for about one third of India’s commercial energy consumption, and its share has been growing gradually in recent years. Although India has significant domestic oil reserves, it is a net importer. The Government of India has initiated such steps, as to intensify domestic exploration and development efforts to explore new fields and increase the reserve base of the country to ensure oil security for the nation. The Hydrocarbon Vision 2025 laid down a phased programme for reappraising 100 per cent of the sedimentary basins of the country by 2025 (Planning Commission, 1999). The Directorate General of Hydrocarbons (DGH) has conducted a number of studies to upgrade information on the unexplored or the less explored regions in the country. Overseas acquisition of equity oil is another major strategy adopted to enhance the oil security of the country. The Government of India aims to produce 20 MT per annum of equity oil and gas abroad by 2010. Although oil shale, in association with coal and also oil, is known to exist in the far north-eastern regions of Assam and Arunachal Pradesh, the extent of the resource and its quality have not yet been determined. Currently oil shale, recovered with coal during the mining process, is discarded as a waste product.
A sizable natural gas industry has been developed on the basis of the offshore Mumbai gas and oil/gas fields. Proved reserves in 2005 have been reported by the Indian WEC Member Committee as 1,101 bcm, an increase of 46.6 per cent on the level reported in the 2004 Survey. The revised figure appears to be consistent with the series of ‘proved and indicated balance recoverable reserves’ published by the MoPNG, which shows 1,075 bcm for such reserves in 2006. Marketed production is principally used as a feedstock for fertiliser and petrochemical manufacture, electricity generation and as industrial fuel. The recorded use in the residential and agricultural sectors is very small.
Nuclear Power: Nuclear power for civil use is well established in India. Its civil nuclear strategy has been directed towards complete independence in the nuclear fuel cycle necessary because it is excluded from the 1970 Nuclear Non-Proliferation Treaty (NPT) due to its acquiring nuclear weapons capability after 1970. As a result, India’s nuclear power programme has proceeded largely without fuel or technological assistance from other countries. Its power reactors till the mid 1990s had some of the world’s lowest capacity factors, reflecting the technical difficulties due to the country’s isolation, but rose impressively from 60 percent in 1995 to 85 percent in 2001-02.
Nuclear power supplied 15.8 billion kwh (2.5 per cent) of India’s electricity in 2007 from 3.7 GWe (out of a total of 110 GWe) capacity and this will increase steadily as imported uranium becomes available and new plants come on line. India’s fuel situation, with shortage of fossil fuels, is driving the investment in nuclear energy. By 2050, nuclear energy is expected to contribute 25 per cent to total energy production i.e. one hundred times the 2002 capacity. Almost as much investment in the grid system as in power plants is necessary. Between 2010 and 2020, further construction is expected to take the total gross capacity to 21,180 MWe. The nuclear capacity target is part of the national energy policy.
India is blessed with an abundance of sunlight, water and biomass. Vigorous efforts during the past two decades are now bearing fruit as people from all walks of life are more aware of the benefits of renewable energy, especially where decentralised energy is required in villages and in urban or semi-urban centres. India has the world’s largest programme for renewable energy.
Hydropower: India’s gross theoretical hydropower potential (2,638 TWh/year) and technically feasible potential (660 TWh/year) are amongst the highest in the world. The public utilities’ total installed hydroelectric capacity exceeded 32,000 MW at the end of 2005, with a corresponding generation of 97.4 TWh, equivalent to 16 per cent of India’s public sector electricity generation. About 13 GW of hydro capacity was under construction at end-2005 and that a further 9 GW is planned. The largest hydropower plants currently under construction are Subansiri Lower (2,000 MW), Parbati II (800 MW) and Omkareshwar (520 MW). Numerous other hydropower projects are under way or at the planning stage. In addition, 55 hydropower schemes have been designated as suitable for renovation and upgrading, which could eventually result in an increment of some 2,500 MW to India’s generating capacity. There are 420 small-scale hydropower plants in operation, with an aggregate installed capacity of about 1,423 MW; a further 521 MW of small scale capacity is under construction.
Bioenergy: For India, biomass has always been an important energy source. Although the energy scenario in India today indicates a growing dependence on the conventional forms of energy, about 32 per cent of the total primary energy use in the country is still derived from biomass and more than 70 per cent of the country’s population depends upon it for its energy needs. India produces a huge quantity of biomass material in its agricultural, agro-industrial and forestry operations. According to some estimates, over 500 million tons of agricultural and agro-industrial residue is generated every year. This quantity, in terms of heat content, is equivalent to about 175 million tons of oil. A portion of these materials is used for fodder and fuel in the rural economy. However, studies have indicated that at least 150-200 million tons of this biomass material does not find much productive use, and can be made available for alternative uses at an economical cost. These materials include a variety of husks and straws. This quantity of biomass is sufficient to generate 15,000 to 25,000 MW of electrical power at a typically prevalent plant. In India, more than 2,000 gasifiers are estimated to have been established with a capacity in excess of 22 MW and a number of villages have been electrified with biomass gasifier based generators.
Solar Energy: India receives a good level of solar radiation, energy equivalent of 5,000 trillion KWh/year. The Solar Energy Programme, implemented by MNRE, one of the largest in the world, plans to utilise India’s estimated solar power potential of 20 MW/km2, and 35 MW/km2 solar thermal. The country has also developed a substantial manufacturing capability, becoming a lead producer in the developing world.
India’s overall potential for solar water heating systems has been estimated to be 140 million m2 of collector area. At present only about 1 million m2 of collector area has been installed, a low level in comparison with the potential, and as compared with other countries, notably China. The Solar Photovoltaic Programme (SPV), promoted by the Ministry for the past two decades, has been aimed particularly at rural and remote areas. Of the approximately 80,000 villages not currently connected to the grid, about 18,000 are too remote to be considered. By 2010, the Ministry plans to provide them access to power from renewable energy sources, with the Xth Plan providing electrification for the 5,000 of them.
Geothermal Energy: It has been estimated by the Geological Survey of India that the geothermal potential is in the region of 10,000 MWe, widely distributed between seven geothermal provinces. The provinces, although found along the West Coast in Gujarat and Rajasthan and along a West-Southwest – East-Northeast line, running from the west coast to the western border of Bangladesh, are most prolific in a 1,500 km stretch of the Himalaya. The resource is little used at the moment but the government has an ambitious plan to more than double the current total installed generating capacity by 2012. This would be achieved by utilising both conventional fossil fuels and the range of renewable energies at India’s disposal (bioenergy, hydro, geothermal, solar and wind). The Tattapani field in the far Northwest of the Himalaya has a potential of 1 MW and if this could be developed it would substantially benefit the isolated villages in the mountainous areas.
Wind Energy: The Indian Wind Power Programme was initiated in 1983-84. Wind resource has been estimated to be about 45,000 MW (assuming 3 per cent land availability for wind farms requiring 12 ha/MW). Adequate wind power density has been identified in ten states: Andhra Pradesh, Gujarat, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Orissa, Rajasthan, Tamil Nadu and West Bengal. In terms of currently installed wind turbine capacity, India ranks fourth in the world after Germany, Spain and the USA. At the end of 2005, the figure stood at 4,434 MW. Tamil Nadu possessed over 57 per cent of the commercial plants.
Tidal Energy: The main potential sites for tidal power generation are the Gulf of Kutch and the Gulf of Khambhat (Cambay), both in the western state of Gujarat, and the Gangetic delta in the Sundarban area of West Bengal, in eastern India. The tidal ranges of the Gulf of Kutch and the Gulf of Khambhat are 5 and 6 meters, the theoretical capacities 900 and 7,000 MW, and the estimated annual output approximately 1.6 and 16.4 TWh, respectively.
Wave Energy: The Indian Wave Energy Programme started in 1983 at the Indian Institute of Technology (lIT) under the sponsorship of the Indian Department of Ocean Development. Initial research identified the OWC as the most suitable for Indian conditions. A 150 KW pilot OWC was built onto the breakwater of the Vizhinjam Fisheries Harbour, near Trivandrum (Kerala), and an improved power module was installed later with a total capacity of 1.1 MW.
Ocean Thermal Energy Conversion: India’s potential for OTEC is extensive. Conceptual studies on OTEC plants for Kavaratti (Lakshadweep Islands), in the Andaman and Nicobar Islands and off the Tamil Nadu coast were initiated in 1980. It has been postulated that most of India’s future fully-commercial OTEC plants will be closed cycle floating plants in the range of 10 to 50 MW.
In recent years, India’s energy consumption has been increasing at one of the fastest rates in the world owing to population growth and economic development. Primary commercial energy demand grew at the rate of 6 per cent between 1981 and 2001 (Planning Commission 2002). India ranks fifth in the world in terms of primary energy consumption, accounting for about 3.5 per cent of the world commercial energy demand in the year 2003. Despite the increasing dependency on commercial fuels, a sizable quantum of energy requirement (40 per cent of total energy requirement), especially in the rural household sector, is met by non-commercial energy sources, which includes fuel wood, crop residue, and animal waste, including human and draught animal power. However, other forms of commercial energy of a much higher quality and efficiency are steadily replacing the traditional energy resources being consumed in the rural sector. Resource augmentation and growth in the energy supply has not kept pace with the increasing demand and, therefore, India continues to face serious energy shortages. This has led to increased reliance on imports to meet the energy demand.
Till 1950s, use of tractors for agriculture was very limited. Tractor manufacturing in India started in 1961 with aggregate capacity to manufacture 11,000 tractors. Given that rains are not always timely and evenly distributed, farmers prefer pump sets as a more reliable and assured source of irrigation; as a result, energisation of pump sets have been increasing rapidly. In 2004, 14.1 million pump sets had been energised. Maharashtra has the maximum number of energised pump sets (2.4 million), followed by Andhra Pradesh (2.3 million). As a result of increased mechanisation in agriculture, crop production and rural agro-processing emerged as one of the major consumers of commercial energy. The share of mechanical and electrical power in agriculture increased from 40 per cent in 1971-72 to 84 per cent in 2003-04. Electricity consumption in agriculture sector has been increasing mainly because of greater irrigation demand for new crop varieties and subsidised electricity to this sector. Moreover, due importance is not given to proper selection, installation, operation, and maintenance of pumping sets, as a result of which they do not operate at the desired level of efficiency, leading to huge wastage of energy. The electricity consumption in agriculture sector was 22 per cent of the total electricity consumption during 2006-07.
Of the total electricity consumed in 2006-07, industrial sector accounted for the largest share, using about 50 per cent of the total commercial energy available in India. The Indian industrial sector is highly energy intensive and efficiency is well below that of other industrialised countries. Efforts are made on a regular basis to promote energy conservation in these countries as this will help reduce the cost of production. There is considerable scope for improving energy efficiency in industries dealing with iron and steel, chemicals, cement, pulp and paper, fertilisers, textiles, etc. If such industries adopt energy conservation measures, it could lead to a substantial reduction in their cost of production. It has been estimated that the total conservation potential of this sector is around 25 per cent of the entire energy used by it.
Of the total electricity consumed in 2006-07, industrial sector accounted for the largest share, followed by the domestic sector. Electricity consumption in domestic sector has increased at a much faster pace as compared to other sectors during 1970-71 to 2006-07.
Transport sector accounts for the lion’s share (50.4 per cent) of the total consumption of high speed diesel oil in India. In India, transportation energy use increases by an average of 4.4 per cent per year for light-duty vehicles, 2.9 per cent per year for passenger rail, and 3.4 per cent per year for buses.
Initiatives Towards Energy Security
In the recent years, the government has rightly recognised the energy security concerns of the nation and more importance is being placed on energy independence. The government is promoting the use of ethanol made from sugar-cane and bio-diesel extracted from trees that are common in many parts of India, such as Jatropha, Karanja and Mahua. Additionally, India is emerging as a growing market for solar, wind and hydroelectric power. However, Jharkhand, Bihar, Uttar Pradesh, Orissa, Uttrakhand, West Bengal etc. are some of the states where significant number (more than 10 per cent) of villages are yet to be electrified. Integrated Energy Policy constituted by the Planning Commission has in its report (IEPR) estimated the requirement of primary energy supply to increase 3 to 4 times the 2003-04 level for an economy growing at around 8 to 9 per cent per annum over the next 25 years. The country’s electricity generation capacity / supply would need to go up 6 to 7 fold from the current installed capacity of around 1.15 lakh MW during 2003-04. In addition, crude oil requirement would need to increase 4 to 4.5 fold from the 2003-04 consumption level. An ambitious mission of ‘Power for all by 2012’ is now in place and would require that our installed generation capacity should be at least 200,000 MW by 2012 from the present level of 144,564.97 MW. Power requirement will double by 2020 to 400,000MW.
Several state governments in India provide electricity at subsidised rates or even free to some sections. This includes electricity for use in agriculture and for consumption by backward classes. The subsidies are mainly in the form of cross subsidisation, with the other users such as industries and private consumers paying the deficit caused by the subsidised charges collected. Such measures have resulted in many of the state electricity boards becoming financially weak.
CDM Based CFL Scheme: The government has approved a scheme of Rs. 48 crores to promote replacement of incandescent bulbs with compact fluorescent lamps (CFLs) by leveraging the sale of Certified Emission Reductions (CERs) under the CDM of Kyoto Protocol. The Bureau of Energy Efficiency (BEE) is coordinating voluntary efforts to provide high-quality CFLs to domestic consumers. This will reduce C02 emission and help avoid the consumption of 6,000to 10,000MW. Also, the Energy Conservation Building Code (ECBC) has been launched to reduce energy consumption in new commercial buildings. The Standards and Labeling Programme and Strengthening of SDAs has been approved for capacity building at the state level (with an approved cost of Rs 49.47 crores) and a Standards Labeling Programme to promote energy efficient equipments and appliances with an allocation of Rs.47.71 crores.
Recognising the merits of biofuels, the government has identified ethanol and biodiesel as the key focus areas, both at the early stages of commercialisation. An autonomous National Biodiesel Board is being created to promote, finance, and support organisations that are engaged in the field of oilseed cultivation and oil processing leading to biodiesel production. The National Urban Transport Policy (NUTP) of the Ministry of Urban Development seeks to encourage integrated land use and transport planning in cities, and focuses on greater use of public transport and non-motorised modes by offering central financial assistance. The policy incorporates urban transportation as an important parameter at the urban planning stage. The National Auto Fuel Policy of 2003 provides a roadmap for achieving various vehicular emission norms over a period of time and the corresponding requirements for upgrading fuel quality. While it does not recommend any particular fuel or technology for achieving the desired emission norms, it suggests that liquid fuels should remain the main auto fuels throughout the country and that the use of CNG/LPG be encouraged in cities affected by higher pollution levels so as to enable vehicle owners to have the choice of the fuel and technology combination.
Inputs from State of Environment Report: India 2009, published by Ministry of Environment & Forests, Govt. of India.