Future Energy Trend - India Kaustabha Das Universiti Teknologi Malaysia, Skudai, Johor Bahru, Malaysia E-mail: Kaustabha1985@gmail.

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Abstract With the economic growth of India set to take off, the energy demand for the coming years will rapidly mount in next 25 to 50 years. In this paper we will go through current energy resources and try to look for the upcoming future trend in the energy mix. India after China, is set to experience the greatest increase in energy and greenhouse gas (GHG) emissions globally, and must take critical steps today, at this important juncture in its development, to avoid lock-in to an obsolete high emissions trajectory. Until the recent momentum of the last couple years, Indias progress in renewable energy remained gradual despite it being the only country in the world with a separate Ministry of New and Renewable Energy (MNRE). In 2007 and early 2008, however, the three Es of energy security, economics and the environment, began to resonate outside the halls of the Ministry and permeate national politics, industry and the media. With climate change and growing energy demand as the sensational headlines of the year, clean energy seemed poised to become an indispensable mantra for Indias future development. Clean energy generally covers renewable energy, energy efficiency and cleans fossil fuel technology. India, along with energy efficiency and conservation in buildings and transport, there is also a significant and profitable role for renewable energy technologies to play. Energy Overview To sustain Indias staggering 8% annual economic growth, and to support the countrys

population as it expands from 1.13 billion people today to the most populous nation by 2030, Indias primary energy demand will necessarily multiply three to four times. In absolute terms, this means an increase in energy demand from 542 million tons of oil equivalent (Mtoe) in 2006, to 842 Mtoe in 2016, to 1836 Mtoe in 2031.An increase that will move India from being the fourth largest energy consumer in the world today to the third largest by 2030, after China and the USA. To finance such a supply build-out will require $1.25 trillion invested in energy infrastructure between 2006 and 2030, with more than three-quarters of this investment in the power sector. Currently India ranks fifth globally in installed power capacity with nearly 145 GW. In India, coal-based generation contributes to 76 GW of electricity, while renewables comprise 48.6 GW. For a country of Indias size, 145 GW is clearly not enough and, as a result, India experiences an electricity deficit of 12%, and a peak shortage of 16.7%. Technical and commercial losses from both theft and poor transmission and distribution average approximately 40%. This signifies a massive build-up in comparison to the 27 GW of electric power constructed during the previous 10th Five Year Plan, approximately 25% of which came from renewables. By 2030, the Government of India (GoI) expects to possess 800 GW, an expansion nearly six times above todays standard. With regard to oil, India relies heavily on imports to meet 75% of its needs, a dependence that would rise to above 90% by 2030, if alternatives were not promoted. On top of the clear potential threat to energy security, the economic costs of this oil dependence are high

with the GoI expecting to pay as much as $57.8 billion in subsidies in 2008 - an amount more than 3% of the country's GDP. Natural gas, meanwhile, an increasingly popular choice for both power and transport represents additional challenges concerning import dependence and rising prices. Indias energy situation is, therefore, precarious and all top-level decisionmakers recognize the important role that alternative energy must play. Current Energy Scenario Coal- Coal is the mainstay of Indian energy system with vast indigenous reserves. Geological estimates place Indias coal estimates in 2005 at 248 billion tons. Of these only about 93 billion tons are proved reserves. The rest are indicative or inferred. According to the Expert Committee report, only 52 billion tons of the proven coal reserves are extractable. The domestic reserves of coal are geographically not evenly spread. Coal needs to be transported over different distances from the pithead to the consumption centres. Cost of coal also depends on the mine characteristics and the mining technology employed. Therefore the coal cost can be considered to be composed of two independent variables, extraction cost and transportation cost. Imported coal is competitive in coastal locations, at large distances away from the pithead. Non-availability of high quality coal also necessitates coal imports by companies on present day. Oil- As of April 2005, India had crude oil reserves of 739 million tons. Crude oil reserves have been on a declining trend after having reached a peak of 806 million tons in 1990- 91, but they have improved from a low of 660 million tons in 1998-99. Gas- India has very limited reserves of domestic natural gas and will have to be increasingly dependent on imported natural gas for meeting energy and non-energy demand requirements. In the power sector, coal based generation is facing competition from natural gas at locations away from the mines. The economically exploitable domestic reserves had peaked at 735 BCM at 1992 and fell steadily till 2000. In recent years

new discoveries of gas have been reported resulting in new highs in overall natural gas reserves reaching 923 BCM in 2003 and the life of reserves is renewed to 29 years. Hydro-electricity- The Central Electricity Authority (CEA) has worked out the theoretical hydro potential of the Indian rivers as also the economic hydroelectric potential. The assessment of hydroelectric potential is based on water availability corresponding to a 90% dependable year. 90% dependable year is a year in which the annual energy generation has the probability of being equal to or in excess of 90% of the expected period of operation of the scheme. On this basis the total theoretical potential of the river systems in India at 60% load factor was assessed as 3,01,117 MW, and the economic potential as 84,044 MW. The firm potential works out to be 50,426 MW. Nuclear electricity- Nuclear power has an increasingly important role to play both globally and in India for electricity generation and in providing energy security while ensuring sustainable development, given that the resources of fossil fuels are finite. India is one of the few countries in the world and the only one among the developing countries to have achieved self-reliance in all aspects of nuclear power generation, starting from the prospecting and mining of uranium, the fabrication of fuel assemblies and the production of heavy water, to fuel reprocessing as well as plutonium recycling. Renewable energy- Addressing the challenges of a climate-constrained world will be an immense task for a country like India with a growing economy, a large population and the obligation to bring hundreds of millions out of poverty. A critical part of the solution will lie in promoting renewable energy technologies as a way to address concerns about energy security, economic growth in the face of rising energy prices, competitiveness, health costs, and environmental degradation. To date, India has 12.6 GW of renewable energy excluding large hydro representing about 9% of total electricity capacity. For the current 11th Five Year Plan period from 2007 to 2012, the GoI has outlined a target of 14 GW to 20 GW of

additional renewable capacity, a very feasible goal given its previous achievements. In the 10th Five Year period from 2002 to 2007, in comparison, approximately 25% of total new power installations consisted of renewables, i.e. 6.5 GW out of the total 27 GW of new power As a result, India is today ranked fourth globally for installed wind capacity as well as second for biogas generation. Indias recent success in clean energy is just a beginning. Future outlook of the energy supply Energy mix- For a growth rate of GDP at 6.5%, the primary energy in the reference case would increase more than nine-fold from 332 MTOE to 3103 MTOE by 2050. This implies a growth rate of 4.6% per year. Coal continues to have the majority share among all sources. Crude oil and gas also increase in absolute terms nine-times and 17-times the levels of 2000 over the 50-year horizon. Contribution of hydro remains low as also that of nuclear and renewables. Import dependence- Coal supplies are robust, with production reaching 485 MTOE by 2050 from the currently prevailing levels of around 172 MTOE. Still this is not sufficient to meet the entire demand of coal and necessitates imports to the tune of 1,190 MTOE in 2050. Coal imports are steadily increasing from 8 MTOE in 2000. Natural gas production will also improve considering exploitation of the new finds, coal bed methane and underground coal gasification potential. However, large amounts of natural gas will have to be imported in order to meet the increased demand for natural gas. While natural gas production reaches 89 mtoe the imports are of the order of 353 mtoe in 2050. Domestic crude oil production remains flat and beyond 2030 every drop of oil consumed in the country is envisaged to be imported. This is very alarming and rapidly India would be rising in the ranks of largest oil importers in the world. Electricity demand and electricity mixElectricity demand in reference scenario grows from 541 TWh in 2000 to 5385 TWh by 2050 at 4.6% increase. Per capita consumption grows from 531 KWh in 2000 to 3400 KWh by 2050. The projected per capita consumption is far

lesser as compared to the current level of per capita consumption in leading economies in the world (e.g. for 2001, per capita consumption in Canada was 18,212 KWH and in US it was 13,241 KWh). Transport sector- In the reference case, as GDP growth continues to be 6.5% there is an explosion of vehicles required by year 2050. At present, two-wheeler stock is 36 million. By 2050 its requirement increases to 321 million. Similarly for car, present stock is 5 million, by year 2050 it increases by 18 times to around 93 million. Number of cars per thousand persons is increasing from 5 at present to 14 by 2025 and 59 by year 2050. Overall passenger vehicle stock is increasing from 44 million to 470 million, which is more than 10 times the present stock. This is by no means a small task at hand. Kind of roads and highways required to support this sort of traffic will be enormous. Unless there is de-bottlenecking of existing infrastructure soon, the dream of achieving high growth will not fructify. Overall freight vehicle stock increases from 2 million to more than 6 million. This appears to be less compared to passenger vehicle stock growth. This is because the reference case is service sector-led growth case and freight transport is linked to manufacturing activity. Diesel and petrol demand in transport sector increases to 330 and 180 MT by 2050 from present level of 36 and 7 MT respectively. CO2 emissions- CO2 Emissions from all energy sources increase more than 4 times by 2030 and by more than a factor of 10 by 2050 in the reference scenario. Again, as in the case of energy consumption, this is very large increase but inevitable if there are no major changes in the energy mix. Among the sectors, the share of CO2 emissions from electricity is about 45% at present and increases to nearly 55%. On absolute level, electricity CO2 increases 6 times by 2030 and nearly 15 times by 2050. The level of CO2 emissions from road transport also grow very sharply from 95 Mt-CO2 in 2000 to 1694 MtCO2 by 2050. Industry sector emissions grow nearly 10 times in the 50-year horizon. The emissions from domestic and agriculture sector grow by 2 times and 4 times in 50 years respectively.

Conclusion Energy security chiefly connotes security of supply in context of countries with strong growth prospects and those who are net energy importers. In the context of globalization, the import dependence for any country is not going to vanish altogether and countries do make efforts to mitigate the risks involved with imported energy, especially oil and gas, by creating partnerships not only at the individual company level but also at the higher or diplomatic levels. The share of renewables in the installed mix is likely to sustain, if not grow, particularly given the regulatory incentives in place at both the national and state level. With a projected technical potential of over 65 GW, 56 gridconnected wind will likely continue to dominate renewable energy development in India. The government targets in the current 5-year plan include capacity additions of 30 GW from renewables (including large hydro), or about 40 percent of additions. By 2020, the government expects to add another 30 GW from renewables excluding large hydro. Although historically actual additions tend to fall short of their targets, in the past decade India has overachieved in its targets for renewables additions. The process of reforms in India is nearly 15 years old now. The reforms began in around 1991 with introduction of policies required for broad fiscal correction and inflation control. Restructuring of electricity sector, unbundling of generation and distribution, also started taking shape in one state after another soon after the general reforms started. Oil and gas sector in India also saw several key reforms such as opening up of upstream exploration and downstream retail to private sector investment, rationalization of tariffs and so on. The current dialogue and discussion in the policy circles indicates that the trends of reforms in India are irreversible and further reforms are on the anvil as the nation is setting higher growth targets. The Approach Paper to 11th Five-year Plan has set the target of achieving an average growth rate of 8.5%. Further reforms and more conducive policies in the energy sector are the need of the hour. When they are put in place

their results would be seen a few years down the line and would take India towards a more secure and cleaner energy future. References [1] Asian Development Bank (ADB) (2006), Report of the Energy Efficiency Initiative (Draft), March [2] Future of Energy Options for India in an Interdependent World, Vivek Karandikar and Ashish Rana [3]Energy in Indias Future: Insights, Jacques LESOURNE and William C. RAMSAY [4] Future Energy Trends and GHG Emissions for India, P.R Shukla Amit Garg, Debyani Ghosh [5] Residential and Transport Energy Use in India: Past Trend and Future Outlook, Stephane de la Rue du Can, Virginie Letschert,Michael McNeil, Nan Zhou, and Jayant Sathaye [6] Trends and Patterns of Energy Consumption in India, Sahu, Santosh-Indian Institute of Technology Bombay [7] An overview of Indian Energy Trends: Narasimha Rao, Girish Sant, Sudhir Chella Rajan [8] Planning Commission (2006). Report of the Expert Committee on Integrated Energy Policy. New Delhi: Government of India [9]Observer Statistical handbook (OSH) (2005), India 2005, Rupa & Co. and Observer Research Foundation, New Delhi.