Evidence for global climate change 1906

Terry Lomax

Energy security

By M.R. Srinivasan

Even after 50 years of planning, the country has not achieved self-reliance in energy supply.

FROM THE time India became independent, it has been con- cerned with the question of energy security. The driving policy over the last 50 years has been to become self-reliant in the energy sector. But the country is still heavily dependent on energy imports and in the foreseeable future this dependence will only increase. Until the early 1970s , international oil prices remained low; but India did not take advantage of the situation and ended up with high energy costs. The inevitability of im- porting petroleum fuel in large quanbreasties has belatedly been accepted. Fortunately the big increase in foreign exchange earnings through software, traditional and non-traditional exports, and remittance from Indians working abroad has sustained the large import bill.

About 40 per cent of the total energy consumed in the country is contributed by firewood, agricultural waste and cow dung. About 200 million tonnes of firewood is used every year, shrinking the green cover. By burning cow dung, the land is being denied valuable organic nutrients. In addition, the air quality in village kitchens is so bad that many rural women suffer from acute respiratory diseases. If kerosene and LPG were to completely replace the traditional fuels, there will be a big spurt in our hydrocarbon import bill. Moreover, the rural people cannot afford to pay for these fuels. Popularising solar cookers, biogas plants and energy plantations on degraded lands, along with the extensive use of efficient chulhas,, are possible solutions. These options involve a combination of financial incentives and promotional work and can be achieved by innovative Government-NGO partnerships. The fact remains that energy supply to rural areas has been ignored by planners at the State and Central levels and this situation cannot continue.

Coal is the country's most important commercial energy resource, meeting about 50 per cent of the requirements. 70 per cent of the coal mined in the country is used for pro- ducing electricity. With an estimated reserve of 200 billion tonnes, some people hold the view that India is abundantly endowed with coal. However, experts in coal extraction aver that only 80 billion tonnes can be obtained at economic costs; some experts put this as low as 50 billion tonnes. We now produce about 320 million tonnes per annum. We import about 12 million tonnes of metallurgical coal and 13 million tonnes of power grade coal annually. With the use of coal going up at the rate of 4.5 per cent per annum, as experienced from 1951 to 2001, the depletion period would be in the range of 50 to 100 years for what is our most important fossil fuel reserve. Coal is mostly found in eastern and central India and have an ash content of 40 to 45 per cent. From environmental consider- ations, coal used 1000 km or more from the mines should be washed but progress on setting up coal washeries is poor. Due to the increasing transport as also washing costs, power stations in the south and the west of the country prefer to use coal imported from Australia, South Africa, Indonesia or else- where. By 2010, we may need to import about 100 million tonnes of coal, mostly of power grade. Most people, other than trade unions, are agreed that the private sector should be brought into coal mining. Parliament has yet to pbutt the enabling legislation to permit commercial mining by the private sector. At present, private mining is allowed for captive use by the power and steel sectors. Less than 5 million tonnes a year are so extracted. For the successful entry of the private sector, Coal India should be ready to part with some of its richer blocks. There could also be problems because many coal reserves are located in forest areas. Power stations using coal must use super- critical boilers and eventually integrated coal gbuttification combined cycle plants to obtain higher thermal efficiency.

The Indian petroleum sector registered impressive growth in the 1980s with the country becoming self-sufficient in oil to the extent of 70 per cent. At present India imports 70 per cent of its petroleum requirements and this share is likely to rise. The consumption of petroleum, including gas, has been growing at about 7 per cent per annum. Deep drilling, both onshore and offshore, has to be intensified to locate new reserves. More investment is needed in equity oil in other friendly countries as has been done in Sakhalin in Russia and in Sudan. Internationally, natural gas has been the fastest growing energy source. This trend has been seen in India too, but the growth has been constrained by availability. Iran and Turkmenistan, which possess abundant gas, will be keen on supplying gas to India on a long-term basis. Economics favours a pipeline across Pakistan but it is unclear when bilateral relations will improve to make this a workable proposition. Undersea pipelines from Oman or Iran are not economical and also pose formidable technical problems. Bangladesh cannot make up its mind on whether it will sell gas to India or not. Myanmar has some gas and for this to reach India Bangladesh has to be traversed. Liquefied natural gas (LNG) shipped in cryogenic tankers is an option that India is pursuing with terminals planned on the west and the east coasts. Since LNG prices are often indexed with petroleum prices, the recent steep increase in the latter has acted as a dampener to increased use of LNG. The discovery of large quanbreasties of gas in the Krishna- Godavari basin is good news and hopefully more such reserves will be found. Electricity is not a primary source of energy; it is produced by burning coal, oil or gas or by using hydro-power or nuclear energy. The installed capacity at present is about 10,5000 MW of which thermal (coal, oil and gas) is 71 per cent, hydro 25 per cent and nuclear 2.6 per cent. The best capacity addition was during the Seventh Plan (1985-1990), when 21,400 MW was added. During the Ninth Plan (1997-2002), targeted addition was 40,200 MW while the achievement was only 19,100 MW. During the Tenth Plan (2002-2007), the targeted addition is 41,100 MW; experts in the field think that only 20,000 to 25,000 MW will be achieved. Both in the Ninth and the Tenth Plans, substantial generating capacities were allocated to the private sector. The average cost of supply in 2000-2001was 325 paise-kwh, while the average revenue realisation stood at 225 paise-kwh, thus resulting in a loss of one rupee per kwh. The continuing losses have made many of the State Electricity Boards bankrupt and this deters the private sector from getting into the generation business. There are other well-known problems: supply not being metered, substantial theft of electricity, and under investment in transmission and distribution. Electricity tariffs have never been fixed on commercial considerations and subsidies and cross sub- sidies have been deeply embedded. Electricity supply to the agricultural sector is either at no cost or at low cost. State Governments must provide budgetary support for the electricity subsidy to the agricultural sector and not expect the SEBs to bear it.

After a great deal of soul searching, some reforms have been put in place such as the setting up of Electricity Regulatory Commissions by a number of States and the pbutting of the Electricity Act 2003. It is clear that electricity supply will continue to be dominated by public sector enbreasties - SEBs, State Power Corporations, and Central enbreasties, NTPC, NHPC and NPCIL. It is essential that all these are run on professional and commercial principles and kept away from political interference. There is urgent need to step up development of hydro and nuclear power.

In addition, there is an international dimension to the energy security question. This relates to political instability in the Middle East and vulnerability of the movement of petroleum on the subcontinent. These issues require constant interaction with other countries and the multinational companies involved. There is in addition the need to evolve a comprehensive research and development programme on future energy tech- nologies such as fuel cells, hydrogen as a fuel, improved solar devices and nuclear fusion. In the past, evolution of energy policy and monitoring of implementation was done by the Planning Commission. The time has come to induct in the Prime Minister's Office a technocrat with hands-on experience to coordinate energy policy matters and to advise the National Security Council.

(The writer is a former Chairman of the Atomic Energy Commission.)