Even as the world’s energy utilisation is growing at 2.6 per cent, India is at 6.8 per cent. G Jayaraman shares his thoughts on how to ensure fuel security in the country.
Energy security in India seems to be seeing rough weather, with the state- owned Coal India (CIL) and Oil and Natural Gas Commission (ONGC) failing to meet their targets year after year. CIL again seems to be aiming at producing 482 million tonnes of coal this year and 650 million tonnes by 2016-17, a substantial shortfall of over 20 per cent from target. ONGC has been witnessing a constant decline in assets output within and outside the country. It has slipped from 9.4 million tonnes in 2010-11 to 7.2 million tonnes in 2012-13. Even ONGC’s overseas arm, ONGC Videsh (OVL), has been experiencing an unexpected fall in production in recent years.
Thus, a growing country like India has to depend on fossil fuels like oil and coal for a few more decades, until renewable energy (RE) becomes economically viable and substantially large enough to meet the growing needs of the country.
This brings us to the important question: what is energy security?
Everyone will agree that the energy that ensures
(i) stable generation and supply;
(ii) dependability and
(iii) cost- effectiveness, is what can be classified as secured energy.
A look at Indian energy reserves and its present utilisation will show startling under- utilisation. The reasons could be many but the net result is a huge energy shortage which is affecting the country’s economic growth.
The present shortfall in energy generation is attributed mainly to the following causes:
- There is no growth in coal generation. As already stated, there is a stagnancy in expanding the existing coal mines as well as in opening up and exploiting new coal reserves. The state- run CIL is stuck due to problems with land acquisition, environmental and forest clearances. The same is the case with the ONGC, too.
- The quality of coal is under severe criticism even by the other state- owned organisations. NTPC has been in a longdrawn drawn battle with CIL on the quality of coal supplied to its thermal plants, to the extent of even withholding clearance of coal bills. The industry does not find any proper redressal mechanism to take up the poor quality of supplies from CIL.
- Imports have been on the increase year after year. Today, it is almost in the region of 150 million tonnes which is further burdening the fast depleting foreign exchange reserves.
- The international prices of coal have also shot up considerably, thanks to the fall in rupee value, making the earlier power purchase agreements becoming unviable. Sluggish infrastructural developments, particularly for rail and road is another problem. Today, 50 per cent of coal traffic is by rail transport. It is saddled with a mismatched traffic pattern, only 16 per cent of the railway network carries 55 per cent of the traffic and 45 per cent of the passenger.
- Road development is very inadequate and transport costs are highly prohibitive. The restriction on loading of commercial vehicles up to their rated capacity under the orders of the Supreme Court of India, resulting in an increase in the cost of transportation by almost 25 per cent, is perhaps, one of the major reasons for the steep inflationary trend seen in the last three years.
- India is the fifth largest energy consumer. We are consuming 4.4 per cent of the world’s energy at around 525 million tonnes oil equivalent (mtoe). Where the world energy utilisation is growing at 2.6 per cent, India is at 6.8 per cent. Oil and gas constitute 45 per cent of the total energy consumption and coal is at 35 per cent. Hydro energy is around 17 per cent and all other renewable energy like nuclear, wind, solar, geo-thermal, waste derived fuels are in decimals.
- The energy situation in future is not too bright as even if we exploit hydro potential to its halfway mark ; even if there is a forty- fold increase in renewable energy supply; even if we manage a twenty-four- fold increase in nuclear energy plants, fossil fuels, mainly coal, will continue to be the most significant source of energy supply even after 2030-35.
The way forward
There has to be a positive approach towards the framing of policies. Today, reform seems to be one- sided: to facilitate foreign investment. This is not reform. Reform is the process by which the consumer finds it easy to get the products and services from the government’s agencies with the least procedural delays, simplified and easy to understand methodology, and is assured of his rights as a consumer. Any other type of arrangement to increase the financial side cannot be considered reforms until the basic requirements are met.
There has to be a standard for energy supplies, a benchmark on the prices and a proper quality redressal mechanism to ensure the right energy services to the industry and the common man.
Some of the issues which are hurdles to energy growth are:
- Environmental clearances Create a one-window approach instead of involving independent ministries, viz; E&F, coal, power.
- Cut delays that arise from ambiguity in rules, interpretation for undue advantage, and lack of will to take decisions.
Social problems
Review the National Rehabilitation & Resettlement (RR) Policy 2007
Make allotment of lands to projects based on:
- Market price.
- One-time compensation to owners.
- Return the land to owners if not in use for five years and more.
- Land- owner’s share in business.
Infrastructure hurdles
Improve system reliability by dedicated freight corridors in the rail and road network.
Entry barriers to be set up between states.Exclusive flyovers/speed tracks to be set up for 24×7 movement of heavy vehicles in cities/big towns.
Full exploitation of renewable energy sources
National policy on linking rivers.
People-friendly strategy on macro and mini hydro projects.
Lands on long- term lease for wind and solar projects.
Develop hydrogen cells from electrolysis with solar / wind / hydro energy.
New exploration and R&D
Involve public/private partnership.
FDI in exploration, infrastructure, energy reduction technology products and processes. Coal washery at pit head and waste coal to be used for Coal India’s power plants.
Prospects
The progress in both thermal energy generation, as well as renewable energy generation, have been very encouraging.
The new technology of super critical thermal stations have a lower greenhouse per 750 gm/kwh as against the national average of 1260 gm/kwh, and show great promise for an environmentaly l friendly thermal generation. There have also been improvements in boiler efficiencies and lower sulphar emissions in operating the thermal plants.
The consumers also have a major role to play. There has to be regulation in using most energy- efficient appliances both at home and industry, and a pro-active action for retrofitting energy- efficient plants and machinery.
Waste recovery systems have already been well established and it makes economic sense to install a proper waste recovery systems in all high temperature applications.
Waste derived fuel is another area which isnot much in use in India primarily, because there are no agencies that can collect, process, store and supply the waste derived fuels. Municipal solid wastes (MSW) at 6 million tonnes/day all over India, if properly collected and converted into fuel could meet more than ten per cent of India’s energy requirement.
The way the MSW is disposed of for natural gasification and incineration is a callous act of disastrous consequences to human health. Capital investment in solar energy has been inactive in the last three years. Within the next five years, investment in solar energy will get quite competitive, with the investment in thermal plants. This is one area which requires continuous government support in terms of the purchase price of electricity from solar plants.
It is disturbing to note that a few state governments are proposing to bring down the purchase price for solar electricity by more than 30-40 per cent, justifying it on the move towards lower capital investment. Unless substantial profits are allowed to be generated from solar plant installations, the growth in solar energy will see a major fall as it happened in wind power investments. This, of course, will not be in India’s interest, particularly when more than 85 per cent of its oil requirement is still dependant on imports.
G Jayaraman, Executive President, Birla Corporation
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