policy research on energy infrastructure of india
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Policy Research on Energy Infrastructure of India. Ramprasad Sengupta Jawaharlal Nehru University (JNU), New Delhi Presentation for IGC-ISI Research Network Meeting 20 – 21 December 2010. - PowerPoint PPT PresentationTRANSCRIPT
Policy Research on Energy Infrastructure
of India
Ramprasad Sengupta
Jawaharlal Nehru University (JNU), New Delhi
Presentation for IGC-ISI Research Network Meeting
20 – 21 December 2010
2
•Energy Related Policy Research focuses mainly on Energy Security and Climate Change related Control of Green House Gas Emissions. Energy Poverty and energy distribution are issues which are relatively neglected in discussions at global level.
•The arguments for more time before any commitment to emission bound and also for more carbon space are generally advanced for India and other developing countries for the removal of poverty and development
•What time frame is required for removing poverty and committing to any upper bound of CO2 and other GHG emissions? Time and speed are important issues as it is the stock and not the flow of GHG that causes the global warming and the life of CO2 is about 100 years.
3
Role of three kinds of infrastructure deserve special attention for their importance in faster removal of income poverty, making growth inclusive and supporting human development.
Water Resource and Water infrastructure.
Roads, Highway and Transport infrastructure.
Energy Resource and Energy Infrastructure.
Comments on the first two and focus on the energy infrastructure in rest of the presentation.
What has been India’s achievement in making economic growth Low carbon and energy conserving?
44
Supplies of Total Primary and Final Commercial Energy and CO2 Emissions.
TPCES
FNLEN
CO2MT
0
50
100
150
200
250
300
350
400
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
mto
e
0
200
400
600
800
1000
1200
1400
1600
CO2 em
issions (mt)
TPCES FNLEN CO2MT
Source: Based on IEA Data on Energy balances of Non-OECD countries, different volumes. 4
55
0.000
0.020
0.040
0.060
0.080
0.100
0.120
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
TPESCMINT CO2KGINT
Primary Commercial Energy and CO2 intensity over time
5
66
Annual Average Growth Rate in the Pre-reform and Post-reform Periods (%)
Period GDP Growth
rate
Primary Commercial
Energy
Energy Intensity
of GDP
CO2 emission
CO2 intensity of
overall energy
CO2 intensity
of overall GDP
1971-1990 4.4 5.55 1.1 5.96 0.389 1.5
1990-2005 6.39 4.56 -1.72 4.36 -0.191 -1.91
77
Decomposition Analysis of growth of CO2 emission intensity of GDP by the Refined Divisia Method for the period 1971 to 1990
0.313
0.683
0.269 0.149
1.42
0
0.5
1
1.5
Energy Int effect Structural Effect Fuel mix effect Residual Total Change
Period 1990 to 2005
-2.27
0.145
-2.37
-0.188-0.06
-2.5
-2
-1.5
-1
-0.5
0
0.5
Energy Int effect Structural Effect Fuel mix effect Residual Total Change
88
Models of Future Projection of CO2 Emissions 1. Macro economic approach : Demand based on income,
energy prices
2. Sectoral approach: Alternative Demand Behaviour: (a) Sectoral Income, Real Energy Price and Technology – Energy Intensity.(b) Sectoral Income, Share of Electricity in Final Energy, and Energy Intensity
3. Alternative Growth Rates: 8%, 6%
4. Real Energy Prices (a) no change in prices since 2005 (b) Real Energy prices increasing at 3% compound rate per annum.
9
Projection of CO2 emissions (mt)
8 per cent growth
with no price change
8 per cent growth with 3 per cent
p.a. price rise
6 per cent GDP growth rate and no price change
2005 1083 1083 1083
2021 2726 - 2910 2036 - 2532 2257 - 2442
2031 4920 - 5553 3027 - 4597 3493 - 4016
GDP elasticity
0.733 - 0.831 0.52 - 0.72 0.71 - 0.85
10
Projection of CO2 intensity of GDP (gms/Rupee) and Per capita CO2 (tonnes)
8 % growth with no
price change8% growth with 3 per
cent price rise 6% GDP growth rate
and no price range
2005 41 41 41
2021 30-32 23-28 16 – 24
2031 25.4 - 29 16 – 25.4 27 – 31
% drop 202122 – 27
32 – 44 17 – 24
% drop 2031 29 – 38 41 – 61 24 – 34
Per capita CO2 (tonnes) -
20313.4 – 3.6 2.1 – 3.2 2.4 – 2.8
China per capita CO2 = 3.9; US per capita CO2 = 20.6 (2004)
1111
CO2 Intensity Projections- Reference & Sectoral Approach
25262728293031323334353637383940414243
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
CO2 intensity- sectoral (gm/Rs) CO2 intensity- reference (gm/Rs)
1212
CO2 Emission (Dir + Indirect Sectoral Share- %): Sc 1B
2005
Ind49%
Res17%Oth Svs
10%
Trans13%
Agr12%
2021
Agr9%
Trans14%
Oth Svs14%
Res25%
Ind39%
2031
Ind35%
Res30%
Oth Svs15%
Trans14%
Agr8%
13
Scenarios Present Study 8% growth
Primary Energy mtoe
2031-32Share
Coal %Share Oil %
Share Gas %
Share Others %
Non commercial
%
Sc1B 1879 54.72 26.16 10.99 8.13 N.A.
Coal Dominant scenario 1702 54.1 25.7 5.5 4.8 9.8
Maximum use of Hydro, Nuclear & Gas potential scenario
1652 45.5 26.4 10.7 7.3 10.1
Simultaneous use of all strategies for sustainable Energy Development
1351 41.1 22.8 9.8 14.2 12
Comparative Projections of Primary Energy Requirements for the 8% GDP growth: Present Study and Planning Commission
IEPC Report, Planning Commission
Sectoral Approach- 8% Gr, No Price change
1414
Policy Implications• Any reduction in the Growth Rate ?
• What should be done about Energy Pricing – What about Carbon tax in GST/VAT Regime
• About 70-75% of CO2 arises from power and transport sector. Hence policies of carbon intensity reduction need to focus these sectors.
• Major problem of the transport sector because of very limited scope of inter-fuel substitution. Both oil security and carbon and other pollutant emissions from transport operation have made the search for alternative fuel and inter-modal substitution quite important. Findings on rail vs road.
• Oil Reserve to production ratio :21, Reserve to Consumption ratio 5, Share of import : 78%
• Issue of energy security due to volatility of oil prices around a path of firm rising trend has led to the India government’s policy initiative for bio-fuel – bio liquids
• Bio-diesel from Jatropha
• Ethanol Policy – molasses route and also direct from cane juice in a situation of excess production.
15
16Source: Authors’ calculation based on data from GOI, 2010 and GOI, 2006
17
18
19
HUBBERT’S MODEL FOR PEAK OIL ANALYSIS
• Q = K/(1+noe-at),
no = (K - Qo)/Qo
Q is Cumulative oil production in period t K is ultimate recoverable reserves of crude oil t denotes the time period Qo denotes the level of cumulative oil production in the arbitrarily chosen
time period To
• Note that the first derivative of the logistic function is a bell shaped curve which attains its maximum at the time of peak when half of ultimate recoverable reserves (K) has already been exploited (i.e. Q = K/2) and thus represents the complete cycle of annual crude oil production as hypothesized by Hubbert.
• As a result, to model the cycle of crude oil production and determining the peak, he developed the following model:
dQ/dt = P = aQ – (aQ 2)/K
P/Q = a [1- (Q/K)]
20
India's annual crude oil production from 1970 - 2007, in thousand tonnes and in million barrels
21
Projections for Biodiesel Demand and Land requirement for biodiesel in India
Authors' Calculations
Planning Commission
Year
Diesel (Million Tonnes) 30 %
Biodiesel (Million Tonnes) 20 %
Land requirement for Biodiesel (Million hectares)
Year
Diesel (Million Tonnes)30 %
Biodiesel 20% (Million Tonnes)
Land requirement for Biodiesel (Million hectares)
2011 42.59 8.52 3.49 2011 48.73 9.75 8.15
2021 78.43 15.69 6.42 2021 81.60 16.32 13.652031 144.31 28.86 11.82 2031 142.66 28.53 23.86
Per hectare yield of biodiesel
2.441 tonnePer hectare yield of biodiesel
1.196 tonne
Per hectare yield of jatropha seeds
10 000 kgPer hectare yield of jatropha seeds
4555kg
Quantity of jatropha seeds required for one litre of biodiesel
3.28 kgQuantity of jatropha seeds required for one litre of biodiesel
3.28 kg
One kg of biodiesel1.2486 litres of
biodieselOne kg of biodiesel
1.2486 litres of biodiesel
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Land use classification and estimates for India (in million hectares)
1950-51 1990-91 2006-07
Forests 40.48 67.81 69.81
Not available for cultivation 47.52 40.48 42.63
Permanent pastures and other grazing land
6.68 11.4 10.36
Land under miscellaneous tree crops and groves
19.83 3.82 3.45
Culturable waste land 22.94 15 13.24
Fallow lands 28.12 23.37 25.72
Net sown area 118.75 143 140.3
Reporting area for land utilisation statistics
284.32 304.88 305.51
Total Geographical Area 328.73 328.73 328.73Source: Agricultural Statistics at a Glance
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• Critical Biodiesel Price/High Speed Diesel is the minimum price of HSD/Biodiesel for which returns to a farmer are just sufficient to cover the opportunity cost of diverting land from cultivating a principal crop to jatropha cultivation.
• These are estimated based on the Techno economic data on bio-refinery prepared by IRADe for Technology Information Forecasting and Assessment Council (TIFAC) and those on jatropha cultivation prepared by the Tamil Nadu Agricultural University.
• The biorefinery cost of producing biodiesel from jatropha seed oil (excluding the cost of feedstock) is assumed to be Rs 9.50 per kg of biodiesel. The biodiesel yield is assumed to be 1 kilogram from 3.28 kg of jatropha seeds.
• The critical biodiesel and HSD prices have been calculated considering that 1 kg of biodiesel is equal to 1.2486 litres of biodiesel and 1 litre of biodiesel is equal to 0.93117 litre of High Speed Diesel.
24
Critical High Speed Diesel Price (HSD), US $ per barrel 2004-05
Andhra Pradesh
Haryana Maharashtra Tamil Nadu Uttar
Pradesh Uttaranchal Karnataka
Sugarcane 81 102 97 83 83 87 106
Wheat 60 54 51
Bajra 49 49 50
Paddy 64 65 52 53 53 55
Rapeseed & Mustard
59 57
Cotton 62 65 51 50 56
Ragi 51 46
Groundnut 55 47 57 51
Urad 57 48 53 52
Jowar 51 49 48 51
Sesamum 54 56
Barley 52
Masur 53
Gram 61 52 59
Tur 58 57 61 53
Maize 52 50 47 54
Moong 54 48
Soyabean 52
Sunflower 52 53 51
Safflower 53
VFC Tobacco 56
Notes: The exchange rate for 2004-05 is assumed to be Rs 42.25 per US Dollar.
Source: Authors’ estimates based on GOI, 2008
25
Critical price of gasoline (in US$ per barrel) for 2005-06
Andhra Pradesh
Haryana Maharashtra Tamil Nadu Uttar Pradesh Uttaranchal
Jowar 129.53 90.50 69.30
Maize 136.26 76.26 54.49 44.00
Gram 141.72 100.60 73.33
Cotton 134.34 136.89 95.50 72.61
Moong 139.18 93.11
Sunflower 131.31 97.62
Urad 157.66 94.38 75.95 57.99
Paddy 142.93 156.00 94.92 73.03 60.79 52.17
VFC Tobacco 143.16
Groundnut 127.61 94.09 74.28
Tur 137.71 66.44
Wheat 145.61 60.79 45.08
Bajra 126.22 92.74 54.88
Rapeseed & Mustard 147.29 66.81
Soyabean 96.28
Safflower 96.10
Ragi 84.91 71.11
Sesamum 76.10
Masur 67.01
Barley 57.80
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Implications:
•There is thus a possibility of conflict between energy security and food security. The issue of land use and sustainable livelihood issue would come up which would have deeper welfare significance. How to regulate land use. Search for alternative technology – fuel cell hydrogen driven electric vehicle car or bus.
•Residential Sector has also a problem of energy poverty – biomass used in unclean unconverted form. Damaging health externality. Here the desired substitution is to be away from bio mass fuel and in favour of fossil fuel – use of LPG, Kerosene and electricity. Income poverty removal would not ensure energy poverty removal. Additional carbon space required to remove energy poverty of Indian household sector.
27
Rural Sector Current TargetIncome Poverty (%) 28.3 4% HHs with access to Electricity for lighting 44 84% HHs with access to Biomass for Cooking 80-84 44-48
Cooking Poverty Ratio (%) 82 46
Urban Sector Current TargetIncome Poverty (%) 25.7 3% HHs with access to Electricity for lighting 88 96
% HHs with access to other fuels, incl. biomass, soft coke,etc. for cooking (Cooking Poverty Ratio) 38 14
Energy Poverty & Emission Control
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Alternatively, technology for biomass based clean modern fuel development
may be important for energy poverty removal as well as low carbon development..
For example bio-char and its economics. It can capture carbon as well.
Such decentralised energy production and distribution would have also benefit
of income and employment generation
Power Sector:
Development of nuclear power is of great importance particularly in view of
India’s thorium reserves.
Finally : Why not carbon capture? We need to pay some attention to the option ofcarbon capture than solely emphasising carbon mitigation. Economics of this technology and its economic viability in Indian context needs to be carefully examined.
Real challenge is finding the resource use and technology of waste disposal which combines the objectives of low carbon growth with energy security for all - both transport and household sector in particular
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• Fast removal of Poverty• Energy Conservation and Supply side efficiency• Vulnerability of Transport sector• Bio-diesel and Ethanol solution for India• Energy poverty – More of hydrocarbon use or new
technology for bio-mass use (bio-char)• Nuclear power – thorium – uranium cycle.• Carbon Capture• Real challenge is finding the resource use and technology of
waste disposal which combines the objectives of low carbon growth with energy security for all - both transport and household sector in particular
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The End