C ritical need to improve

1. Critical need to improve Efficiencies in Production, Distribution and Consumption of Electricity Chennai 14 December 2013 Shankar Sharma Power Policy Analyst, E-mail: shankar. sharma2005@gmail.com

2. Why efficiency in Power Sector Is Important ?

3. Energy emergency at the global level • 35% of all GHGs associated with energy sector • 1.3 Billion people without electricity; many others have barely enough • In US Thermoelectric energy (including coal, nuclear and natural gas) are • fastest growing use of freshwater resources i • 53% of fresh water usage in 2005 • Large energy projects have • displaced millions of people, • destroyed ecosystems, • natural resources • fueled climate change • Fossil fuels fast running out; but growing demand for energy • Future of energy supply and demand • Energy conservation, efficiency improvements and decentralized renewable energy • best ways to reduce energy poverty • sustainable and climate resilient way

4. Energy emergency at the global level – as per OECD Projections • By 2050 world economy will be four times larger • will need 80% more energy without new policy action • Global greenhouse gas (GHG) emissions projected to increase by 50%, primarily due to a 70% growth in energy-related CO2 emissions. • Terrestrial biodiversity is projected to decrease by a further 10% by 2050, with significant losses in Asia, Europe and Southern Africa. • Globally, mature forest areas are projected to shrink by 13%. • Air pollution is set to become the world’s top environmental cause of premature mortality • Projection: by 2050, 60-70% of energy usage likely to be as electricity • Electricity is cause of 38% of GHG emission in India (53% of CO2 emissions in India); • [MoEF report of 2010]

5. IPCC Source (Year 2007)

6. Power saga in India • Installed generating capacity increased by about 220 times between 1947 and 2013 • Between 1989 & 2013 • Installed generating capacity increased from 58,012 MW to 2,25,800 MW ( + 389%) • Between 1992 & 2013 • National per capita electricity production increased from 283 kWH to 800 kWH ( +283%) • But about 30% of the households have no access to electricity even in 2011. • Many villages remain unelectrified; huge power cuts throughout the year; poor quality of supply; gross inefficiency; vulgar levels of inequity continues. • Multiple crises continue !!!

7. In this background many serious Questions to the society • Electricity Supply is needed no doubt. But ……. • How much ? – leading to highper capita consumption ? • How ?? – any how & by any means? • At what cost ??? – at any societal cost ??? • Can additional power projects be in the benefit of whole society ?

8. In Indian context the main challenges for power sector: • critical need for electricity / energy for development of weaker sections of society • how to eliminate the power cuts ? • how to ensure quality power to all ? • how to meet the additional demand ? • how not to compromise overall welfare needs of masses? • must our forests, rivers and bio-diversity become expendable in order to meet the uncontrolled demand for electricity? • Is capita consumption a good indicator of development? • Equitable distribution of available electricity should be yardstick !

9. One answer which seem to be obvious: Keep increasing the installed generating capacity And Increase T&D network correspondingly ------------------------------------------------ But the reality is: How much increase is techno-economically feasible? Is there a natural limit? Can we ensure true welfare of our masses?

10. Major issues with conventional technology power sources

11. Present scenario - Problems are getting worse • Chronic power cuts in almost all states; peak demand and annual energy • Dissatisfaction for all categories of consumers including the farmers • Gross inefficiency in the sector; massive inequity in electricity supply • Continued reliance on conventional power sources; planning for huge additions in generation and transmission; ever increasing complexity of grid • Indifference to the natural limits to conventional energy sources; fast depleting natural resources • Absence of long term view; lack of sustainability; lack of obligation to the future generations ; empty rhetoric on Global Warming • Very poor financial conditions; cumulative loss > 150,000 Crores • Continued absence of professionalism; costs and benefits are not determined

12. Efficiency of conventional coal energy conversion technologies Even with the latest technologies losses will be quite high

13. Major Social issues with conventional power plants • Peoples’ displacement will cause additional unemployment & increase in slums • Will affect agricultural production, and health ; fishing affected • Prospect of displacement will create social tensions and stiff opposition • Acid rains: Local buildings of heritage importance will degenerate • Degradation of historical monuments ; temples, sculptures, heritage structures • Leads to many Health issues; radiation issues • skin, lungs, heart, kidney

14. Major Environmental issues with conventional power plants • Pollution of air, land and water; hot water discharge into rivers/sea • Will affect flora and fauna including forests • Potential for acid rain • Very serious issues of Global Warming and Climate Change • Coastal power plants will affect marine creatures • High ash content in Indian coal - 30 to 40 % • Ash disposal is serious; impact of fly ash on flora & fauna • only about 35% ash being used • Traces of nuclear radiation in coal ash • Sacrificing forests for coal mines ? • Location of many coal plants destroying man-grove forests and wetlands

15. ASH POND OR ASH LAKE ?

16. EFFECTS OF ACID RAINwillDAMAGE vegetation (WESTERN and EASTERN GHATS at RISK?)

17. Total Installed Capacity (MOP website as on 30.6.2013)

18. IEP’s 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 • More than 700,000 MW of thermal power in pipeline (Prayas report) • Power Corridors in India • Existing Coal Power Corridors • Singrauli, Rihand, Neyveli, Chandrapur etc. • Proposed Coal Power Corridors • Coastal Andhra Pradesh; about 70 projects in 5 districts; • 70, 000 MW • Vidarbha: about 25 projects totaling about 40, 000 MW • Chattisgarh and Madhya Pradesh; Nuclear power park at Jaitapura • Orissa and Coastal Tamil Nadu; Cheyyur

19. Indian Power Scenario T&D losses (2009 –2010, CEA, 18th EPS Report)

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

21. TN Power Scenario(April – October 2013) (Source: CEA) Peak Demand - 13,380 MW (11,887 MW) > 11.2% Energy - 55,564 MU ( 52,181 MU) > 6.1 % For April 2012 - March 2013 Peak Demand - 12,736 MW (11,053 MW) > 13.2% Energy - 92,302 MU ( 76,161 MU) > 17.5%

22. There is an inescapable need to manage the existing resources well: • Generating Plants • & • Transmission and distribution network • Efficiency improvement, demand side management, and conservation should be the future pathway

23. With this background • Do we need many more large power projects? • Must they be fossil fuel or large dam 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?

24. Energy efficiency improvement • T&D loss reduction; biggest source of DSM • 10-15% savings feasible; 10,000 – 15,000 MW at national level • Improvement in agricultural pumping sets • savings of about 18% in Karnataka • Usage of CFLs/LEDs in place of bulbs ; • BEE’s estimation of savings: 10,000 MW • Efficiency improvement in end use applications • Prayas Energy’s study: 30 % savings in households; corresponds to about 25,000 MW of avoided generating capacity

25. Demand Side Management AND Conservation • Economic necessities; reduces overall cost of installed capacity • leads to efficient usage of overall power system • lead to effective use of natural resources • ensures quality and equity of supply • unlimited demand leads to instability of grid • essential during times of power/energy shortage • reduces need for peaking stations (pumped storage plant)

26. Do we need many more of large generation projects ? • How efficient is the Electricity Industry ? • Are all our existing facilities being used optimally? • Are we ensuring equity between urban and rural India? • Can we reduce electricity demand without compromising the crucial economic and welfare activities? • Is there a limit to reliable renewable energy sources? • Can they be reliable and cost effective?

27. Electricity Industry Efficiency • AT&C losses are about 35% {< 10% internationally, <13% in BESCOM} • IP Sets consume about 38% of electricity; {about 50% of this wasted} • Demand Side Management has huge potential; {about 15 to 20%} • End use efficiency (non-agricultural sector) – 5 to 10% • Domestic and industrial usages – 5 – 10 % • Energy conservation – about 5 to 10% All these put together can provide equivalent of 40 - 50% more virtual capacity OR save about 45% of the demand. Deficit in TN and across country is about 10- 15%

28. Economic Implications • @ Rs. 8 to 10 Crore/MW needed for additional generating capacity – huge burden on the state finances • Other infrastructure areas like poverty alleviation, education and health are suffering due to reduced budget allocation • State is known to be incurring more than Rs. 3,000 crores of loss each year • As per 13th Finance Commission national level financial loss of ESCOMs could be • > Rs. 69,000 Crores in 2010-11 and • > Rs. 150,000 Crores in 2014-15

29. Other concerns on conventional power plants • Serious concerns about massive damage to the fragile ecology and bio-diversity • No objective analysis of the real costs (both direct/indirect) to society and projected benefits • Large quantity of fresh water will be required; stress on fresh water resources ( most states are already water stressed) • Most coal fields are below thick forests

30. 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.

31. Extent of Inefficiency • “India’s 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.

32. Efficiency, DSM and conservation will certainly help to overcome the shortages for next few years. How can the future electricity demand be met ? Can N&RE be an answer?

33. N&RE potential in India (Primary Source: MNRE, Govt. of India)

34. Legitimate concerns with Renewable Energy sources • huge potential in N&RE in the country • but the impact on environment have to be carefully managed. • widespread usage in distributed mode is critical • roof top solar, community bio-mass, hybrids etc. • Many other benefits of distributed Res • reduced losses, better voltages, more equity, rural employment etc. • Nature’s limit and material usage must be kept in mind

35. A typical case study • An identified need for 1,500 MW of additional demand • -------------------------------------------------------------- • Option I : 4,000 MW coal based UMPP by NTPC at Bijapur • COSTS: Direct Financial Cost : About 25,000 Crores + Foreign Exchange (Coal Import) • Societal Costs + tax incentives • about 4,000 acres of agricultural land • displacement of people • perpetual loss of agricultural production • 4 TMC of water from Almatty Dam? denial of the same to locals • Huge quantities of coal supply & Mountains of Ash • Air, water and land pollution • Health costs; respiratory and neurological • Social unrest & economic deprivation of poor people • BENEFITS : About 1,500 MW of dirty power • Employment for100 people (?), mostly from outside the state • Dividend to central govt.

36. Option II : Integrated Energy Management Approach • COSTS • T&D loss reduction - 600 MW >> 900 Crores • Utilisation lossreduction / DSM - 600 MW >> 900 Crores • Wind energy - 100 MW >> 500 Crores • Biomass – 50 MW >> 150 Crores • Solar – Water heating – 100 MW >> 400 Crores • Solar –residential lighting – 50 MW >> 1,500 Crores • Total cost (a high level approx. cost) >> 4,350 Crores • BENEFITS • Negligible societal cost; negligible or nil land and displacement • No recurring costs such as coal, water and chemicals • Negligible or nil health or environmental costs • Perpetual benefits • Reduced T& D losses; reduced man power costs • Boost to agricultural and rural employment

37. True benefits of KKNP

38. Benign alternatives available in TN

39. Sections 48 (a) and 51 (a) (g) of our Constitution • “ it is the duty of the STATE and every citizen to make honest efforts to protect and improve our environment by protecting and improving rivers, lakes, forests and living beings” • UN Convention on Biological Diversity (1992). • “ … conservation of various components of biological diversity, the sustainable use of its components, and the fair and equitable sharing of the benefits arising out of the utilisataion of genetic resources..” • The Precautionary Principle (UN Convention on Biological Diversity (1992). • “ .. those activities which are likely to pose significant risk to nature shall be preceded by an exhaustive examination; their proponents shall demonstrate that the expected benefits outweigh potential damage to nature, and where potential adverse effects are not fully understood, the activities should not proceed.”

40. We need to honestly seek answers to: • What importance we, as a society, attach to forests and rivers ? • how much more of forests and how many more of rivers can be compromised? • have we considered the long term impacts of forest destruction at the present rate? • shall we not have the true interests of weaker sections of society at the centre of attention? • do we have any obligations to future generations? • are the various provisions of law just to be consigned to books?

41. Per capita consumption of electricity, water, petrol, paper have been highlighted for decades • Need to increase per capita consumption to that of world average also being advocated • But what about per capita forest land; per capita water availability ? • Per capita forest land in India is 0.10 hectares • world average of one hectare • Canada = 14.2 ha, Australia = 7.6 ha, U.S.A = 7.3 ha • Should this not be a primary concern ???

42. Way forward to protect the nature and vulnerable section of our society from the ravages of large size conventional power projects • Attach appropriate value to all the natural resources in the country; • Declare all forests out of bound for power projects • Recognise the need to protect all forests in the country in order to preserve and develop • Consider electricity as national asset; it’s wastage should be heavily discouraged • Instead of GNP maximizing paradigm to estimate energy demand, we must estimate what is the least amount of energy needed to wipe out poverty, and how best to meet it in a sustainable manner.

43. Adopt Costs and Benefits Analysis (CBA) as a mandatory part of approval process • Aim for achieving international best practices of efficiencies • Move away from large conventional power projects • Encourage widespread usage of distributed renewable energy sources • Effective demand side management, highest possible level of energy efficiencies, optimal levels of energy conservation, and widespread use of distributed renewable energy sources must be our future action plan for power sector !!! • Effective Public Consultations is critical

44. CONCLUSIONS • 30% of our households are still without electricity despite massive investments in 6 decades • Demand for electricity can be unmanageable if adequate care is not taken. • The so called balancing act between development and environment is an empty rhetoric having severely depleted bio-diversity during last 66 years. • Forest cover has come down from about 46% in 1947 to less than 23% and Rivers are being seriously threatened. • An honest commitment to protect the forests and rivers has become critical. • Human kind has lived without electricity for ages! • Can we live without a healthy environment ??? • A healthy environment is critical for our survival.

45. An appeal • Let us • focus on relevant issues from our society’s perspective only; not from an individual or a company’s perspective! • keep the poor and vulnerable sections at the centre of our attention !! • constantly remind the society that without a healthy environment and social equity we are doomed !!! • As Gandhiji has said, every single public expenditure should be put to the yardstick whether it benefits the last person in the society.

46. Best Wishes for a Green Planet And Thanks