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Event | February 2011

No silver bullet for our energy challenge

Speakers at the 2nd Power Today conference, recently held in Delhi, provided inputs of India's position on the global energy map and were optimistic that this will be a defining decade in power generation.

As per government estimates, the power sector needs an investment of Rs 18,080 crore in the 12th Plan Period (2012-2017), in order to achieve the ambitious target of 88,000 MW. In view of such developments, the 2nd Power Today conference based on the theme 'Fuel to power the next decade' was held at the Sheraton Hotel in Delhi and it sought to provide inputs regarding India's position in energy terms on the global scene.

At the inaugural session, Dr Harish Ahuja, IAS, Joint Secretary (Power) Government of NCT of Delhi, after mentioning India's target of 63,000 MW by 2032 said, "China now has an installed capacity of 962,000 MW - about five and a half times more than that of India and plans to add 110,000 MW from nuclear and 500,000 MW from renewables by 2020. What India is targeting in the next 25 years, China is targeting in 10 years. Keeping these figures in view, the coming decade is going to witness fierce competition as far as energy resources of both these emerging economies is concerned."

Cautioning of pressure on resources due to this race, he said, "Domestic material consumption pa is about 17 tonne per hectare per year-almost four times the world average, 1.7 times that of China and two times that of Japan. Pressure on the environment is enormous and is not sustainable beyond a point. This will result in devastating pressure on the environment and is also questionable for economic reasons. Prices will surge in future and India needs a new resource revolution. Unlike the Green Revolution, which boosted the outputs of plant-based raw material, the next revolution should reduce the amount of material required, part of which can be reached with efficiency gains through better technologies that consume lesser resources. Despite modest success of generation reforms, we are yet to witness major initiatives in distribution reforms, especially where aggregate technical and commercial losses (AT&C) losses are around 32 per cent (Rs 16,000 crore).

He added, "The silver lining is that India is still transforming from an agrarian to industrial economy but has not fully moved to an industrial society so it can avoid the model adopted by the global industrial economies. India has the potential to break new ground. Our cultural roots and Gandhian philosophy of moderate consumption may show us the path which is different. By following the route of modest consumption, we may create our own model of sustained development."

Pratap Padode, MD of Asapp Media and Editor-in-chief of Power Today, said, "If we need to power our future, we need to fuel our power which can fuel our dreams. We need to tap every source and use every resource efficiently. This can give us the competitive edge in the global arena where cost-competitiveness is essential for leadership. The next decade will be a defining one for India as it scales up its GDP to become one of the most powerful nations. So our theme 'Fuel to power the next decade' is apt for the conference."

Agreeing with Padode, Bharatsinh Solanki, Minister of State for Railways, said that the theme was apt particularly because we seek answers to the big question-'Where will the fuel come from'? He said, "This decade will prove to be transformational for the nation and therefore for the power sector. Independent analyst reports say that if India continues to grow at an average rate of eight per cent for the next 10 years, the country's demand for power is likely to increase to 335 GW by 2017-100 GW higher than most current estimates. To fulfil its power requirement, India will require a generation capacity of 415-440 GW, after adjusting for plant availability and a modest five per cent spinning reserve. To keep pace with the soaring demand, India's power sector requires investments of about Rs 24 lakh crore by 2017 and much of this will need to emerge from our partnership with the private sector under PPP. At the time of Independence, it was hardly 1,400 MW and per capita consumption was hardly 14 units, but today we have reached 170,000 MW and per capita consumption is 750 MW, and by 2012 it will reach 1,000 units per person."

He added, "With new technology and emerging green solutions we are also confronted with price issues. Our new Tariff Policy and the new operationalisation of bidding-based tariffs is another move that will benefit society at large. Since 5 January this year, all state discoms are mandated to migrate to tariff-based competitive bidding, open both to public and private sectors. We expect this to lead to some innovations in pricing encourage more efficient technology and reduce the end-user price."

Dr Arbind Prasad, IAS, Senior Adviser (Power and Energy) Planning Commission, spea­king about the 'Ideal energy mix for power in the next decade' said, "Globally electricity generation will have to increase from 18.77 trillion watts per hour (Twh) in 2007 to 35 Twh in 2035."

In the session on power efficiency, Subodh Garg, Director General, National Power Training Institute (NPTI), said, "Present installed capacity in our country is about 170,000 MW but maximum capacity connected to the grid is 110,000, so it means that about 60,000 MW of capacity is not available for utilisation. One of the reasons is low plant load factor (PLF) of power projects. The average PLF of thermal projects is 78 per cent, PLF of central sector power projects is about 85 per cent and that of state sector units is about 70 per cent. So there is a gap of about 15 per cent in PLF of state sector units and if it can be brought to 80-85 per cent, it can result in better efficiency of generating units. This can be achieved by adopting better management practices, regulating plant maintenance and renovation and modernisation (R&M) of power projects. Another factor which is essential for improving power efficiency in generation is proper training of people to man the control rooms. Improving efficiency in transmission can also be achieved through open access and HVDC systems. Higher voltages transmitted over large distances with low losses improve the efficiency of the system. Large-scale application of SCADA and smart grids result in optimum utilisation of the system."

He also suggested the use of helicopters to reduce construction time and for faster erection and stringing of transmission lines.

To improve efficiency in distribution, he said, "AT&C losses are about 30 per cent and ideally they should be around 15 per cent. In 2009-10, AT&C losses in the country were Rs 40,000 crore. So equipment with proper specifications should be bought and transformers should not be overloaded. One of the major reasons for high AT&C losses is power theft and if it can be controlled, then the present installed capacity in the country may be sufficient to meet the present demand. Current average deficit of power is about 10 per cent and the peak load deficit is around 13 per cent so if the overall AT&C losses are contained, the present capacity is sufficient to meet the demand. Another part of AT&C losses is low collection efficiency. Whatever amount is billed is not collected for various reasons. Online billing and paying of bills through credit cards and doorstep collection by discoms too may improve collection."

Arvind Gujral, BSES Rajdhani Power (BRPL), speaking about 'Benefits of privatisation in distribution sector-Delhi case study' said, "Distribution is the last mile in terms of supply to consumers but top of the cycle in terms of revenues which starts from consumers to discoms and flows to the transcos and gencos. So if revenues are not assured for transcos and gencos, it is a problem since these companies need security of their dues. In 2010-11, losses were about Rs 68,000 crore and the projected loss in 2014-15 is Rs 116,000 crore-the main reason being the inability of state utilities to enhance operational deficiencies and reduce T&D losses."

Speaking about 'Wind energy in India and cost-effectiveness', Dr JM Phatak, CMD, Rural Electrification Corporation (REC), clarifying the role of the organisation said, "REC apart from rural electrification (as its name suggests) also uses funds to finance not only grid-operated power but also grid-disconnected power, ie, wind and other new sources of power."

In the session on 'Coal availability and gas allocation policy', Session Chairperson Dr MP Narayanan, former Chairman Coal India, commenting on the present scenario of power projects getting entangled in 'No go' zone clearances said that there should be accountability and if there is a 'No go' zone, then an alternative should be suggested.

Dr RK Sachdev, President Coal Preparation Society of India (CPSI), and former Advisor to the coal ministry speaking of the burgeoning demand for coal said, "Today the generating capacity is 167,000 MW in utilities and 30,000 MW in captives. But the dependence on coal is very high. In the last financial year, coal supply in the country produced was 532 million tonne, of which 600 million tonne was consumed."

In the last session on 'Hydel power and renewable energy', AK Singhal, Director, Ministry of New and Renewable Energy (MNRE), in view of the peak load deficit in the country (from 10-20 per cent) said, "Generating of power may have gone up about 60 times since Independence but today about 20 per cent of the installed capacity deficit is being met through diesel gensets."

Speaking about 'Can hydel power bridge the gap?' Ritu Mathur, Associate Director, Modelling and Economic Analysis division, The Energy and Resources Institute (TERI), said, "The two major concerns are energy security, ie, how to meet this energy requirement, and climate change." While speaking of the role of hydro in the system she said, "There is no single silver bullet for India's energy challenge."

Commenting on the three points of energy security in solar energy, Dr RK Bhogra, Consultant (Solar Energy), BHEL, mentioned them as availability (abundantly available), sustainability (inexhaustible source of energy) and affordability. He said, "The third factor of affordability becomes an issue due to conversion of the technology at an affordable price." He added, "Grid parity can be achieved by larger volumes of production, use of lesser material, ie, thinner wafers in solar cells and the use of indigenous material to make it cost-effective."

Speaking about the only source of energy that can be set up in one year and how India can gain from it, Ravi Raina, President (India operations), Astonfield Renewables, on the topic of 'Determining the best sources of investment to drive solar energy projects', said, "In terms of a generation base of 2,000 MW, only 25 per cent of this is in China, 15 per cent in Japan, so 60 per cent are still looking for a place to put up their plants for the next 100 GW, and that place can be in India. That is where the challenge lies for the government because if they put up this base quickly, people will set up their plants here."

The deliberations by the various speakers identified critical issues in each sector which set guidelines for policy decisions and implementation for the government and private companies.
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