1.

INTRODUCTION
The earth energy balance represents the balance between incoming energy from the Sun Sand thermal (long wave) and reflected (shortwave) energy from the Earth. The energy released from the Sun in one hour would be adequate to cover the energy needs of the entire world population for one year. However, when the radiation reaches the Earth, most of it is reflected back to space by the atmosphere, some of it is absorbed by the atmosphere and at the Earth's surface etc. Only 0,005% of the 5,6 1024J emitted by the sun per year is converted into mechanical energy by humans.

World Energy Balance 2007 Current energy systems are based on coal, oil, natural gas, and nuclear fission, depending on the circumstances in a given country and its access to todays cheapest, not necessarily on the most viable, primary energy resources. 88 percent (!) of our energy supply in 2007 was from fossil or nuclear origin. The effects on our climate and the environment by emissions and the huge losses within the production / distribution cycle, however, are neither discussed nor questioned. Moreover there is little renewable energy used, most of it is combustibles and wastes, which are simply burned in furnaces. An exception, of course, is hydro power. At the current annual demand of fossil fuels, the proved reserves will be exhausted within the next three
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to five decades. But our generation takes the system for granted, although it is only one and a half centuries old. Electricity plants, for example, are not only by far the worst energy converters worldwide but also by far the biggest producers of greenhouse gases (GHGs) and other environmental unfriendly surpluses. In 2007 the losses in all 50,000+ electricity plants worldwide amount officially to 2,282 million tonnes of oil equivalent (Mtoe) while the total final energy consumption summed up to 8,286 Mtoe. This figure on its own is quite remarkable, but it gets scarier indeed if you compare it with the final consumption, let us say, of ALL industry activities worldwide. The losses occurring in the electricity plants are nearly equal to the energy consumed in the entire industry sector (2,275 Mtoe). That means, if you and I would have the power to shut down the entire industry sector worldwide for a given amount of time, we would save less energy than what is lost by the operation of those power plants.

World Energy Balance, Comparison 1973 to 2007 The total final consumption (TFC) worldwide grew from 4,675 Mtoe in 1973 to 8,286 Mtoe in 2007 with 88 percent derived from the combustion of fossil fuels and nuclear power. This is equivalent to an average power consumption rate of 96,349 terawatt-hours (TWh) in 2007. At first the increase in the OECD countries from 2,809 Mtoe in 1973 to 3,770 Mtoe in 2007 seems to be modest for a 34 years time span. However, the OECD countries, with 18 percent of
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the worlds population, consume 45.5 percent of the energy produced worldwide. Meaning that they use about four times more energy per person than the global average, and thus are also responsible for about half of the global emissions of carbon dioxide (CO2) and other GHGs! But when thinking about the worlds energy consumption, one has also to think about China. This huge country with 1.3 billion (bn) inhabitants is advancing fast. The standard of living of most Chinese has improved markedly since the Chinese economic reform in 1978. Even the financial crisis, which started in 2008, has not affected them too much. Their gross national product (GNP) is still rising with two digit numbers. Unfortunately, China depends on huge coal deposits for its economic growth. In real figures, Chinas final energy consumption in 1973 was 369 Mtoe (8 percent of the energy produced worldwide) compared to 1,259 Mtoe (15 percent of the energy produced worldwide) in 2007. Emissions have risen by 5.7 percent per annum between 1973 and 2007 mainly because of the use of coal, which increased levels of CO2 by 4.8 bn tonnes over the 34-year period. And the consumption is still increasing on a rapid pace. Noteworthy is also the comparison of the energy supply to the energy consumption between 1973 and 2007. Here, the inherent losses of our energy system are hidden, which rose in the given time span from 1,440 Mtoe (23.5 percent) to 3,743 Mtoe (31.1 percent). Data Source: International Energy Agency. Key World Energy Statistics 2009. Paris, France 2009

1.1 PRODUCTION OF HYDROGEN 1.1.1 Hydrogen From Direct Solar Virtual power plants with direct solar hydrogen and Fuel Cells One possibility to produce hydrogen directly - without the use of electricity - is the direct use of solar energy, based on electrochemical photolysis (see image: Direct Hydrogen Production from Solar Energy). This technology has to be downscaled with the aids of nanotechnologies and nanostructures in order to be implemented into the daily life. As a Virtual Power Plant, these applications can be installed in family houses, small enterprises, public facilities, (or even at the bodies) etc. These applications, which do not exist today, will produce hydrogen to be used in fuel cells for heating, cooling and electricity production. (Source: Own research) Direct Solar Hydrogen Production at the Plataforma Solar de Almeria (PSA) In several research and development projects, over the years, various concepts from the laboratory processes to pilot-scale preparation have been created. The direct solar hydrogen production using in thermal processes does not need coal, natural gas or oil as raw materials. Additionally, this process also simply saves the step to converte energy from heat into electricity and the high flaring and transmission losses of the existing electricity system. The German Aerospace Center (DLR) works until today, together with European partners since the 1970s, in exploring the direct production of hydrogen from solar energy. In a thermo chemical cycle processes in which water is split by means of several steps, one or more reactants in the process are recovered and recycled. Several hundred of these procedures are documented and are currently sporadic appearing as "breaking news" messages in the media. There are two groups: one uses inorganic sulfur compounds, such as sulfuric acid, the other method is based on metals or metal oxides, especially iron. The process, based thermo chemical cycle processes, is implementing iron oxide-based reactive material, alternately oxidized and reused again. A coated ceramic structure in a solar receiverreactor is heated with concentrated solar radiation to about 800 C. The hydrogen reacts with the coating, to bound the oxygen and hydrogen is released. In a second reactor, the steam power is
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heated to about 1,200 degrees C. This escapes the reactive oxygen on the coating and the cycle begins again. This procedure has, after initial pilot tests of the Institute of Technical Thermodynamics at the DLR in Germany, its sucessfull dress rehearsal in November 2008 at the Spanish Platform Solar de Almeria. The two solar receiver-reactors are mounted in 28 meters high on the so-called SSPS Tower (Small Solar Power System). The units are installed in modular mode, currently designed for 100 kW. The structure is relatively unspectacular, the two reactors have the size of a normal household refrigerator. The already installed sun heliostats (mirrors), automatically following the sun, have a thermal capacity of max. 2.7 MW. The location in Tabernas, with over 3,000 hours of sunshine per year and a direct solar radiation of 1.900 kW / h per square meter provide Europe's best solar power. 1.1.2 Hydrogen From Renewable Energies Production of Hydrogen without electricity from renewables Although a renewable energy source in conjunction with electrolysis would eliminate the dependence on fossil fuels, it still requires the production of electricity in the first place. The overall efficiencies of these processes are thereby reduced. Alternative methods without the need for electrical power include: Photo electro chemical (PEC) hydrogen PEC systems use sunlight directly to generate sufficient energy to split water into hydrogen and oxygen. The advantage over conventional electrolysis using photovoltaic is the elimination of an electrical current network and the associated current transmission losses. Biological Photolytic Hydrogen Another way to directly tap solar energy for hydrogen production is to take advantage of certain microalgae and photosynthetic bacteria that sometimes use photosynthesis to make hydrogen instead of sugar and oxygen. However, the algal enzymes that trigger hydrogen production are inhibited by oxygen, so bioengineering of enzymes or a whole new organism would be required to make this process even remotely practical.

Conversion of Biomass and Wastes Hydrogen can be produced via pyrolysis (thermochemical conversion) or anaerobic# digestion (fermentation) of biomass resources such as agricultural residues, wastes including plastics and waste grease; or biomass specifically grown for energy uses. Specific research areas include reforming of pyrolysis streams and development and testing of fluidizable catalysts. Scientists are also working on dark fermentation reactions which do not do not require light energy at all. Here, a variety of bacteria ferment sugars and produce hydrogen using multienzyme systems. Sugars are relatively expensive substrates so engineering pretreatment technologies to convert lignocelluloses biomass into sugar-rich feedstock including hemicelluloses and cellulose that can be fermented directly to produce hydrogen, ethanol, and other high-value chemicals will be needed. Solar Thermal Water Splitting Water usually decomposes at temperatures of more than 2,500C into hydrogen and oxygen. Researchers have demonstrated that highly concentrated sunlight can be used to generate these temperatures. However, catalysts based on metals or inorganic sulfur compounds can lower the heat needed to the more moderate range of 800 1,200C. Such high-temperature, high-flux solar driven thermo-chemical processes offer a novel approach for the environmentally benign production of hydrogen. All the above mentioned methods are still in experimental phases and capable of supplying only small amounts of hydrogen. It seems that many technical, economical, and even mental hurdles need to be overcome before widespread commercial scale production of clean hydrogen is possible. Production of Hydrogen with electricity from renewable Electrolysis, which uses direct current electricity to separate hydrogen from water, could be a possible technology used to produce hydrogen entirely renewable and without pollution, but it requires the input of large amounts of electrical energy. To support this production of hydrogen from green electricity, still a grid of substantial length and power is needed. The grid consists of thousands of kilometers (in Germany 1.67 million km) high voltage transmission lines, carrying only alternating current (AC). That means electricity from renewables must be
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converted to high voltage, transformed down again, and then rectified in AC / DC converters before fed into the electrolyzer. Moreover, the electricity from wind power and photovoltaic is fluctuating by nature. But the membranes inside the electrolyzer do not really like to be operated with fluctuating current. They need pretty stable direct current (DC) power only. It is a little easier with electricity made from hydro power, which is far more stable and can be converted in electrolyzers of different sizes into hydrogen. This has been done in Norway and Egypt successfully for many years. The hydrogen is mostly used there for the production of fertilizers. 1.1.3 Hydrogen From Fossil Fuels Residential fuel cells Chemical process to produce hydrogen The idea sounds convincing: replace your standard gas boiler with a micro-CHP (combined heat and power) system based on fuel cell technology and be your own producer of clean heat, hot water and electricity. The majority of micro-CHP systems based on fuel cell technology today use natural gas as a primary energy which is converted into hydrogen by an integrated reformer. In an exothermic reaction, the fuel cell then uses the hydrogen as input fuel to produce (together with oxygen) heat and DC electricity. The micro-CHP unit is fitted with an integrated heat exchanger to recover the heat from the fuel cell stack in order to use it for space heating and hot water. A separate water tank can be connected to the unit as well to store the heat and thus increase the total system efficiency. Almost all micro-CHP systems for domestic use today generate not more than 1kW of electricity per hour while providing up to 1kW (SOFC) and 1.7kW (PEM) of thermal output for space heating and hot water. If the heat demand is higher, a supplementary burner can be fired up to fill the gap. If the electricity demand is higher, it can be obtained from the grid. Despite these necessary occasional inefficiencies, the overall system efficiency is approximately 80 percent. What are the benefits? First and foremost, electricity (and heat) is generated locally which is much more efficient than transmitting it over long distances on the grid. Unused electricity in turn is exported over the low voltage network to the nearest available load, while unused heat is stored in a water tank. But can we really talk about clean in-house residential hydrogen generation as it is often stated in brochures and advertisements? Unfortunately, not! The hydrogen, as obtained from the natural gas grid, is neither clean nor renewable. At the most, it is low carbon, because less carbon
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dioxide is produced when taking natural gas directly from the gas network than would be if it were to be generated from other fossil fuels and transported in compressed or in liquid form from A to B!

Actual Worldwide Hydrogen Production from The world hydrogen production is not monitored, but estimated at 45 million tons (500 million cubic metres) per year. Around 96 percent of it is derived from fossil fuels. In the year 2000, crude oil was the dominant fossil fuel to produce hydrogen (55 percent), followed by natural gas and coal. At present, 49 percent of the hydrogen is produced by reforming natural gas, 29 percent by coal. Electrolysis had and still has a minimal impact. As long as the electricity for the electrolysis does not come from renewable energy sources, no hydrogen produced at present is clean and "green" respectively. Furthermore, no hydrogen is actually being used by the end consumer. Quo vadis hydrogen economy? (Source: Chemical Economics Handbook, SRI - July 2001 and Industrial Gases by the Chemical Economics Handbook, SRI October 2007) 1.1.4 Hydrogen From Nuclear Energy Production of Electricity and Hydrogen from Nuclear Today there are more than 400 Nuclear Power Stations in daily use in 31 countries worldwide. They produce electricity rather conventional in steaming water with a very high C02 emission in the progress and unknown use of the nuclear waste after usage.

Generation IV reactors are still under research and are not expected to be available before 2020. A high-temperature reactor heats up helium to a temperature of more than 1000C. The helium will directly drive a turbine which not only produce electricity (via a generator) but also splits water in hydrogen and oxygen using a chemical process enabled by the high-temperature reactor.

1.2 PRODUCTION OF ELECTRICITY The Process of Electricity Generation The process of electricity generation was already discovered in the mid-1800s, but its generation today is basically still the same process: Water is boiled by burning fossil fuels to produce steam which drives a turbine. The rotating turbine axle is attached to an electric generator that converts mechanical energy to electricity which could then be used to power applications. Those power plants have low efficiencies of more or less 40%. In other words, about 60% of the energy input is "lost," mostly in generating hot water and steam. The electricity produced by the generator travels along cables to an on-site transformer, which transfers the low voltage to a higher voltage of max 400kV AC as electricity can be moved more economically using high voltage. Transmission lines are used to carry the electricity to a substation which has transformers to change the high voltage into lower voltage electricity. From here the distribution lines carry the electricity to homes, offices and factories. As an unavoidable consequence at least another 10 percent of the electricity is vanished as flaring and transmission losses. Thus just 36% of the electricity is delivered to the user. Moreover many electric appliances are extremely inefficient, wasting most of the power they consume as heat: Approximately 95% of the energy consumed by an incandescent bulb is emitted as heat, the rest given off as light. When the entire cycle of generating, transporting and using electricity is considered, the electricity is delivered to the user with a overall efficiency of just 2%. (Source: Electric Power Industry, PennWell (1998)) 1.2.1electricity from Hydrogen Production of Electricity with hydrogen from fossil fuels Todays path to produce hydrogen, its distribution, storage and utilization is following the line of more or less conventional and known technologies. Starting from fossil fuels, like coal, natural gas or oil, hydrogen is produced by means of reformers. It will than be transported either liquid, gaseous or stored in metal hybrid tanks and finally used in fuel cells to produce electricity for
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mobile, transport and stationary applications or for the electricity network. Here a transformator has to transfer the voltage to max 400kV. The production of electricity in the fuel cell has an efficiency of 40 - 60 percent. In the energy balance the processes for hydrogen production, transport and storage is not included even though they cause air pollution and losses. (Source: Own Research) 1.2.2 Electricity from renewable energies The Role of Renewable Energy in the U.S., 2005 According to a new report by the Energy Information Administration, the U.S. total consumption of energy stood at 100.942 Quadrillion Btu in 2005. Thereof 40 percent from petroleum, 23 percent per natural gas and per coal, 8 percent from nuclear energy and just 7 percent from renewable energies. The total renewable consumption stood at 6.844 quadrillion Btu. 1.2.3 Electricity from Fossil Fuels Planned Power Plants for fossil fuels in Germany Demand for electricity has steadily risen to almost 570 million t.c.e (tonnes coal equivalents) in 2006 and is expected to continue to grow over the next decades. To avoid a gap in electricity generation capacity, 26 new fossil fuel power plants resulting a total capacity of 25.920 MWe from 2008 till 2015 have been announced already: Thereof 19 hard coal plants, 3 brown coal and 4 natural gas power plants. Plans to build two hard coal power plants (one in Herne and one in Ensdorf) have been cancelled January 2008 due to resistance of the population and lack of return of investment! Production of Electricity from Primary Energies in 2002 In 2002, fossil fuels represent the majority source for the production of electricity from primary energies in the EU-25 countries. Twelve countries were particularly depending on nuclear power, while twelve countries use none at all. (Source: Eurelectric, Brussel) 1.2.4 Electricity From Nuclear Energy

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After the exploration process, uranium ore undergoes:

Uranium Mining The uranium ore is recovered from the earths crust.

Uranium Milling A uranium mill is a chemical plant using strong acids and alkalis that extracts uranium from mind ore.

Conversion Conversion of the concentrated uranium into either uranium dioxide (UO2) for heavy water reactors or gaseous uranium hexafluoride (UF6) for light water reactors

Enrichment Most reactors require uranium fuel to have a U-235 content of 3 - 5%. Enrichment is the process that increases the concentration from 0,7% to 3 - 5%.

Transport During the Nuclear Fuel Cycle the uranium needs to be transported from one facility to another.

Fuel Fabrication Uranium is manufactured into fuel pellets by pressing powdered U02/ UF6 into small cylindrical shapes and baking them at a high temperature (1600 - 1700C).

Power Generation Energy is released in a reactor to boil water, produce steam and

drive a turbine that generates electricity. This process alone has an efficiency of only 35 percent (a coal-burning power plant has 40 percent!).

Short-term storage after nuclear fuel is consumed; it is removed from the reactor and stored in large water-filled pools.

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Medium-term storage after the radioactivity and its associated heat have diminished, the fuel is transferred to underground caverns for medium-term storage.

Long-term storage at present, there are no disposal facilities in operation in which the nuclear waste can be stored permanently.

All process are NOT included in the Energy Balance. Moreover, Uranium is radioactive. As a result, every aspect of production, from mining to storage, has damaging effects to the nature. 1.3 ENERGY EFFICIENCY Daily Energy Losses When you consider a normal electrical coal power plant, the counting of the efficiency only starts from the moment when the coal is at the venue of the plant. All efforts and all energy spent into the exploration, mining and transport of the coal, in many cases over continents and/ or oceans, are not calculated. When you use an electrical pump at the end of the chain, together with all further transmission, distribution, motor, drive train, pump, throttle and pipe losses not more than 9,67 pc of the energy input is actually used at the end: More than 90% of energy extracted from the ground is wasted before it becomes useful work at a water pump. The wasted energy is released into the atmosphere as heat. These figures speak for a decentralized energy supply, where the energy is produced where it will be used to eliminate most of these losses. Daily Energy Losses by AC DC Adaptors We all know them; they seem so inconspicuous. There a many of them in every household of the "Western" world. Mostly, except for the imprint "Made in China", they carry nothing more than little green or red LED lamps which shine when network-connection is available. We are talking about AC / DC adapters, used in all entertainment and communication technology equipment (Consumer Electronics). The price for these adapters is included when you buy the equipment. We know them as external chargers for batteries in laptops, cameras, navigation devices, game consoles, MP3 players and electronic weather stations. Monitors, flat screens, and printers do not
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work without them. But nobody talks about them. You do not think about them, because they simply "are there". It is not really of much interest how much AC these devices ultimately need to convert it into the DC. Is this worldwide implementation of power conversion worth its price? For the utilities - certainly. For consumers, the next generation and the environment - rather not. In every office, there are, depending on how you count, between 10 to 20 of such AC / DC adapters. In households with children you can easily count 20-50 pieces. All with only one function: The resulting conversion losses are captured no where and are not discussed; they are simply used as heat off. 1.3.1 Global Energy Consumption Worldwide Energy Consumption by Region, 1970 2030 According to the American Energy Information Administration (EIA) and to the International Energy Agency (IEA), the worldwide energy consumption will continue to increase by approx. 50 quadrillion btu every year. Thus starting from 207 quadrillion btu in the year 1970, it is predicted to skyrocket to a value of 702 quadrillion btu in 2030. Here emerging economies (led by China and India) will be the key contributors to the world energy consumption in the future. Energy consumption in transition and mature market economies also is expected to grow, but in a somewhat smaller rate. As with any set of projections, there are significant uncertainties associated with it: The second graphic shows that the EIA had to adjust their predicted data from the year 2005 upwards as the consumption of emerging economies and mature market economies increased more strongly than predicted. Hence it remains uncertain how much energy we will consume in the future. Too many interactions of economic variables and underlying relationships are involved, but one fact is for sure (unfortunately): no alternative technologies can replace the current usage of fossil fuels at the moment. However, various manufacturing processes to produce real clean electricity have existed for more than thirty years, but they are, protected by law in most countries, suppressed in the hands
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of power companies. These electrical or power utilities, understandably, are defending their monopoly with all means. This is the same procedure all over the world. With such a movement, we will never reach a new energy supply system. First class technical possibilities for a decentralized, individual production and supply of electricity and power for mobility, need to be applied now. The next generations will thank us for doing so. If it is not too late for doing so, already. Worldwide Energy Use by Energy Type The consumption of worldwide energy use from all energy types is expected by the EIA (Energy Information Administration) - other sources come to similar figures - to increase gradually. Oil and coal remain the dominant energy type over the forecasted period. Natural gas is projected to be the fastest-growing type of energy to be consumed, reaching the level of coal by 2020. Modest growth in nuclear power will continue while the scenario for renewable energy is uncertain. Resolute plans by environmental programs could lead to an expansion in capacity of renewable energy. 1.3.2 Digital Technologies and Consumer Electronics Cellular boom in China There is no doubt; the worlds largest mobile market is located in China. According to Chinas Ministry of Industry and Information Technology (MIIT), in December 2008, there were 634 million Chinese mobile subscribers, served by only three carriers: China Mobile, China Unicom and China Telecom. The number of subscribers represents only 47% of the countrys population. Thus a further sharp increase in mobile phone subscribers is expected. For comparison: The European Union has a population of only 495 million.

Nokia Mobile Phones volumes 1984 - 2009 From out of nowhere, the Nokia Corporation, based in Espoo, Finland, has become a pioneer in the telecommunication market. In 2009 alone it has sold more than 432 million mobile phones (on average 1.2 million mobile phones per day) and held an estimated 39 percent share of the
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global device market. They have 15 manufacturing plants in nine countries and they distribute their products in 150 countries. Nokia now has almost 130,000 employees from over 120 nations. One important part of this success is the Nokia multidisciplinary design team of about 250 psychologists, market researchers, anthropologists and technology specialists from 25 nations. Nokia, founded in 1865, originally produced rubber boots. The company started its cellular production in 1984 and reached its first 500,000 produced units in 1990. Since then, with annual growth rates of up to 123 percent per annum (1997 to 1998), Nokia is on its way to worldwide market leadership in mobile phones. 1.3.3 Example. from Aircraft/Mining Industries 35 locomotives could not fly, or: Evolution in the Aircraft Industry 1903-2007 In 1903, 35 locomotives with a weight of 16 tonnes each could in fact not fly. However when you compare the Wrights Flyer with todays Airbus A380 over the past 104 years, big changes took place, both in services, daily usage, technology and infrastructure.

When Orville and Wilbur Wright left their plane after the first powered flight (lasting 57 seconds) in Kitty Hawk, North Carolina, on December 17th, 1903, they, and nobody else, could imagine at that time, that only 100 years later there would be commercial aircrafts carrying more than 800 passengers over a range of more than 8,000 miles at an altitude of 33.000 ft. These technologies have created todays worldwide biggest industry: Tourism with more than 8 Mio. commercial aircraft passengers each day. Starting from zero in 1903 we now have also 4,000 active commercial airports worldwide. Todays status of the hydrogen and fuel cell emerging industry compares with that at the time of the Wright Brothers in 1903. There are more dramatic developments coming in the future of hydrogen and fuel cells than anyone can imagine today, hopefully, in less than 100 years.

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2. ENERGY BALANCES AND CO2 IMPLICATIONS

Life Cycle Analysis, focused on energy, is useful for comparing net energy yields from different methods of electricity generation.

The amount of energy inputs to the nuclear fuel cycle has implications for carbon dioxide emissions, and in any scenario nuclear power has negligible emissions.

The economics of electricity generation are important. If the financial cost of building and operating the plant cannot profitably be recouped by selling the electricity, it is not economically viable. But as energy itself is sometimes seen as a more fundamental unit of accounting than money, it is useful to know which generating systems produce the best return on the energy invested in them. This is part of Life Cycle Analysis (LCA). In the 1970s a lot of attention was given to analysing the energy inputs to different parts of the nuclear fuel cycle, and some of the data available today still depends on that work. In recent years some utilities generating electricity have undertaken Life Cycle Analysis (LCA) studies as part of their social accountability. Also mining companies have been publishing their energy use as part of broader environmental or social responsibility disclosure - part of product stewardship, and this feeds into broader LCA figures. Both kinds of results have been audited and published. As well as energy costs, there are external costs to be considered - those environmental and health consequences of energy production which are quantifiable but do not appear in the financial accounts. Beyond these and less readily quantifiable in the same way are the costs involved with global warming. Here however we now have emissions trading schemes which put a direct cost on carbon dioxide emissions, so that can be added in too. The principal focus of LCA for energy systems today is their contribution to global warming. There is an obvious linkage between energy inputs to any life cycle and carbon dioxide emissions, depending on what fuels those inputs. LCA includes mining, fuel preparation, plant construction, transport, decommissioning and managing wastes. In the last couple of years it has been asserted that uranium supplies are critically limited and that it will become increasingly difficult and expensive to recover due to decreasing ore grades, and will thus require undue amounts of energy to mine, largely negating any low-carbon advantage
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over fossil fuels. This notion is based on a misunderstanding of mineral resources generally, and on academic abstractions rather than published data. 2.1 ENERGY BALANCE FROM LCA Life cycle analysis for Vattenfall's Environmental Product Declaration for its 3090 MWe Forsmark power plant for 2002 has yielded some energy data which is up to date and certified. It shows energy inputs over 40 years to be 1.35% of the output. Related to this is the question of carbon dioxide emissions, which for Forsmark are 3.10 g/kWh. More typical data is tabulated in the Energy Analysis paper referred to above. Here, conservative assumptions have been made, but centrifuge enrichment assumed, and the estimate of lifetime inputs is 1.7% of output. If very low grade ore of 0.01% U is envisaged - as has been said to make mining uneconomic the input figure rises to 2.9% of output. All of these suggest a very favourable energy balance, by any criteria. It is difficult to compare these figures with coal, since so much of the coal energy input (beyond the fuel itself) is often in transport, which varies from very little to a lot, and figures of 3.5% to 14.0% are published. For natural gas the figures again depend on transport to point of use, and published figures range from 3.8% to 20%. Another question which arises in this connection is energy payback time. If 25 PJ is taken as the energy capital cost of setting up (Other published figures for building a 1 GWe nuclear power plant range from 2 to 24 PJ.) (including enrichment of the first fuel load), then at 7 billion kWh/yr or 75 PJ/yr output the initial energy investment is repaid in 4 months at full power. Construction time for nuclear plants is 4-5 years. 2.2 LIFE CYCLE ANALYSIS: EXTERNAL COSTS AND GREENHOUSE GASES The principal concern of life cycle analysis for energy systems today is their likely contribution to global warming. This is a major external cost, though not the only one.
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The ExternE study (1995) attempted to provide an expert assessment of life cycle external costs for Europe including greenhouse gases, other pollution and accident potential. The European Commission launched the project in 1991 in collaboration with the US Dept of Energy (which subsequently dropped out), and it was the first research project of its kind "to put plausible financial figures against damage resulting from different forms of electricity production for the entire EU". A further report, focusing on coal and nuclear, was released in 2001. The external costs are defined as those actually incurred in relation to health and the environment and quantifiable but not built into the cost of the electricity to the consumer, and therefore which are borne by society at large. They include particularly the effects of air pollution on human health, crop yields and buildings, as well as occupational disease and accidents. In ExternE they exclude effects on ecosystems and the impact of global warming, which could not adequately be quantified and evaluated economically. The methodology measures emissions, their dispersion and ultimate impact. With nuclear energy the low risk of accidents is factored in along with high estimates of radiological impacts from mine tailings (since shown to be exaggerated) and carbon-14 emissions from reprocessing (waste management and decommissioning being already within the cost to the consumer). The report shows that in clear cash terms nuclear energy incurs about one tenth of the costs of coal. Also, the external costs for coal-fired power were a very high proportion (50-70%) of the internal costs, while the external costs for nuclear energy were a very small proportion of internal costs, even after factoring in hypothetical nuclear catastrophes. This is because all waste costs in the nuclear fuel cycle are already internalised, which reduces the competitiveness of nuclear power when only internal costs are considered. The external costs of nuclear energy averages 0.4 euro cents/kWh, much the same as hydro, coal is over 4.0 cents (4.1-7.3 cent averages in different countries), gas ranges 1.3-2.3 cents and only wind shows up better than nuclear, at 0.10.2 cents/kWh average. The EU cost of electricity generation without these external costs averages about 4 cents/kWh. If these external costs were in fact included, the EU price of electricity from coal would double and that from gas would increase 30%. These particular estimates are without attempting to include possible impacts of fossil fuels on global warming. See also ExternE web site.
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Turning

to

carbon

dioxide, if all energy inputs are assumed to be from coal-fired

plants, at about one kilogram of carbon

dioxide per kWh, it is possible to derive a greenhouse contribution from the energy input percentage of output. However, as the

Forsmark data quoted above show, many

energy inputs are not fossil fuel, giving it the very low CO2 emission figure of 3.1 g/kWh. The 2005 Environmental Product Declaration for British Energy's Torness 1250 MWe power station shows 5.05 g/kWh (reference year 2002). In France, despite energy-inefficient enrichment plants which are run by nuclear power, the greenhouse contribution from any nuclear reactor using French-enriched uranium is similar to a reactor elsewhere using centrifuge-enriched uranium -- less than 20 g/kWh overall. Figures published in 2006 for Japan show 13 g/kWh, with prospects of this halving in future. The UK Sustainable Development Commission report in March 2006 gave a figure of 16 g/kWh for nuclear, compared with 891 g/kWh for coal and 356 g/kWh for gas. Older figures published from Japan's Central Research Institute of the Electric Power Industry give life cycle carbon dioxide emission figures for various generation technologies. Vattenfall (1999) published a popular account of life cycle studies based on the previous few years experience and its certified Environmental Product Declarations (EPDs) for Forsmark and Ringhals nuclear power stations in Sweden, and Kivisto in 2000 reports a similar exercise for Finland. They show the following CO2 emissions:
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g/kWh CO2

Japan

Sweden

Finland

coal

975

980

894

gas thermal

608

1170 (peak-load, reserve)

--

gas combined cycle

519

450

472

solar photovoltaic

53

50

95

wind

29

5.5

14

nuclear

22

10 - 26

hydro

11

--

The Japanese gas figures include shipping LNG from overseas, and the nuclear figure is for boiling water reactors, with enrichment 70% in USA, 30% France & Japan, and one third of the fuel to be MOX. The Finnish nuclear figures are for centrifuge and diffusion enrichment respectively, the Swedish one is for 80% centrifuge.

Other published figures are consistent with the above for nuclear power, showing it to have around 1-2% of the carbon dioxide emissions of coal-fired power (ie under 20 g/kWh). If extremely low grade ores are envisaged, the figure would rise by a further 1% in line with the energy inputs, making it about 3% of coal (ie about 30 g/kWh) or perhaps 6% of gas - still a very substantial margin where carbon constraints are increasingly needed.

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3. ENERGY SITUATION IN INDIA

3.1 ECONOMIC SITUATION India is a fast growing developing economy. In the nineties , the GNP has grown by 5 7 % per year and has reached the figure of ~ US $ 250 billion (at 9394 prices ) in the year 2000. Predictions of moderate growth models are that by the year 2100, the economy will have grown by a factor of 88 and will still be growing at about 2 % per year . 3.1.1Population By the year 2000, the population had touched the 1 billion mark and the population growth had slowed down from 2 % (in early nineties) to 1.6 % per year. Model predictions are that the population will stabilize at 1.65 billion well before the end of the century. 3.1.2Energy Consumption and Supply (Present Status) The per capita energy consumption is 1/5th of the global average. Commercial energy consumption in 2000 crossed ~ 200 MtOE (million tons of oil equivalent). In the energy supply mix, coal is the dominant player. The indigenous production in 2000 was ~ 309 Mt and the imported component was 20 Mt and the two together supplied 70 % of the primary energy. Oil is dominated by imports, the figures for year 2000 being ~ 32 Mt indigenous crude production and ~ 57Mt imported component. Natural gas used was ~ 28.5 billion cubic meters and was indigenously produce. The installed capacity for electric power generation in year 2000 was ~ 101 GW(Primary fuels used Coal 60%, Other thermal 11% , Hydro 25%, Nuclear 3 %, Wind 1 % ) and the actual generation was ~ 500 Billion kWh. There is a substantial component of non commercial energy use based on traditional fuels like firewood, dung cake, vegetable wastes, wood chips, animal/ human muscle power etc, especially in the rural domestic sector. Overall estimates vary between 10 50 % of commercial energy use and are controversial and facing rapid changes.

3.2 ENERGY RESERVES AND TECHNOLOGIES In the nineties, the commercial energy consumption increased at the rate of 5.5 % per year. This growth is likely to increase further in the coming years, noting especially the fact that the per
21

capita consumption is at 20% of the world average. The energy resource position and the utilization of energy technologies are as described below. India is the 4th largest producer of coal with estimated reserves of 214 billion tons (proven coal/lignite reserves of 118 billion tons). Major coal fields are concentrated in the east and therefore coal typically needs transportation of greater than 1000 Km. Indian coal has high ash content and needs washing / mixing with imported coal. The power sector alone generates ~ 90 Mt of fly ash as slurry; leaching of heavy metals and soluble salts then leads to groundwater pollution. Use of imported coal is increasing at the rate of 15% per year. Clean coal technologies such as liquefaction / gasification, improved efficiency of burning , better mining technologies, removal of particulate matter, NOx, SOx from exhausts etc are of great interest . Indias exploration in the oil sector is inadequate. Nearly 40 % of the sedimentary basins still await exploration. The recoverable reserves are estimated as only ~ 640 Mt (a mere decades supply!). The biggest consumer is the transport sector and so the technologies of fuel cells, energy storage in hydrogen, electricity run vehicles, replacement of liquid fuels by compressed natural gas are of interest. The natural gas reserves of India (including a recent big find near the east coast ) are ~ 850 billion cubic meters. This is close to 30 years supply, at todays consumption rate, but the consumption (especially in power and industrial sectors) is rising at the rate of ~ 8% per year. More exploration and imports are a must. India seems to have enormous deposits of gas hydrates at depths ~ 1.5 Km , estimated to be of the order of ~ 1900 trillion cubic meters. Economic exploitation of gas hydrates is thus a major technical challenge. In the nuclear energy sector, estimated reserves of fissionable / fertile materials are: Natural Uranium ~ 70 kilotons and Thorium ~ 360 kilotons. If the fertile fuel is used to breed fissile fuel, using fast breeders, fusion / accelerator breeders, this resource is equivalent to a total of ~ 720 billion tons of coal, which has the potential to provide energy to India for ~ few thousand years. The nuclear energy sector is thus very important to India for energy security and selfsufficiency. There is a three stage strategy for exploitation of nuclear power. The first stage is based on the use of PHWR (Pressurised Heavy Water Reactors) exploiting the natural uranium reserves. The second stage is based on the use of Fast breeder reactors using Pu from PHWR and Natural uranium / thorium to double inventory, produce U etc. Stage 3 is based on the

22

utilization of U and natural thorium as fuel in Advanced Heavy Water reactors (AHWR). In the first stage PHWR technologies have been mastered. Thirteen nuclear power stations, with a capacity of ~ 2.7 GW are supplying power to the grid at 85 % capacity utilization. Additional PHWR with capacity of 5 GW are under construction for completion before 2010. The objective for 2020 is ~ 20 GW. For the second stage, a Fast Breeder Test Reactor at 45 MW has been tested for over a decade. A 500 MW Prototype Fast Breeder Test reactor is under construction and will supply power by year 2010. For the third stage, KAMINI, an experimental reactor testing thorium utilization concepts , is operational. Design of AHWR deriving 70 % of its power from thorium fuel has been completed and technology development is in progress. Advanced nuclear technologies which make a lot of sense for India are nuclear fusion and accelerator based spallation neutron sources. Fusion systems may be used to produce electricity and/or as neutron factories to breed fissile fuel and burn actinides. Magnetic fusion bottles of the Tokamak type have been indigenously fabricated and are operating in Gandhinagar. A second generation superconducting Tokamak which will produce ~ 1000 second long shaped plasmas is currently undergoing assembly at the Institute in Gandhinagar. Among renewable energy sources, the potential of large scale hydroelectric power generation is ~ 84 GW. The installed capacity is only ~ 25 GW, the big gap being due to environmental concerns, investments required and the irregular nature of the hydroelectric power supply. The potential for small capacity hydroelectric units ( ~ 25 MW capacity ) in remote hilly regions is ~ 15 GW with only ten percent installed. The gross potential for wind power, especially in coastal areas , has been estimated as ~ 43 GW. The installed capacity of ~ 2 GW is the 5th largest installed capacity in the world. Biomass power generation is an excellent technology for rural development. Aggregate biomass combustion (using fuel wood , crop residues, animal dung) based cogeneration of power in process industries like sugar, rice and paper mills has a potential of ~ 17 GW out of which only ~ 0.5 GW is installed. Another important area of biomass utilization is that based on biomass gasifiers for application to thermal, mechanical and electrical systems. India has become a world leader in this technology exporting equipment to USA, Europe, Latin America and Asian countries. Although the cumulative capacity installed is only ~ 35 MW, its social consequences for the rural domestic sector in India, especially for the health and well being of women and children is enormous. Solar photovoltaic systems with capacity ~ .1 GW have been installed in grid interactive projects. Second generation photovoltaic
23

technology has still not taken off. In solar thermal systems, work on industrial and domestic use of water heaters is continuing in a small way. However, solar thermal power generation which may have a potential of up to 35MW/ Km , especially in arid areas, is still not of economic interest . 3.3 ENERGY SUPPLY PROJECTED FOR YEAR 2100 The model predictions for the year 2100, are a population of ~ 1.65 billion people, an economy with a GNP of ~ US$ 22000 billion dollars and an electric power generation capacity of ~ 1000 GW. The primary fuels are coal at 50 %, natural gas at 25 % and nuclear and renewable energies sharing the last 25 per cent. The critical energy technologies for India therefore are clean coal technology, exploration and exploitation of natural gas / gas hydrate resources, nuclear technologies (especially those involving utilization of thorium), replacement of petroleum products in the transport sector by fuel cells, hydrogen, electricity etc and the development of improved solar photovoltaic and thermal systems .

24

4. POWER AND ENERGY

Energy is needed for economic growth, for improving the quality of life and for increasing opportunities for development. Some 600 million Indians do not have access to electricity and about 700 million Indians use biomass as their primary energy resource for cooking. Ensuring life line supply of clean energy to all is essential for nurturing inclusive growth, meeting the millennium development goals and raising Indias human development index that compares poorly with several countries that are currently below Indias level of development. The broad vision behind Indias integrated energy policy is to reliably meet the demand for energy services of all sectors including the lifeline energy needs of vulnerable households in all parts of the country with safe, clean and convenient energy at the least-cost. This must be done in a technically efficient, economically viable and environmentally sustainable manner using different fuels and forms of energy, both conventional and non-conventional, as well as new and emerging energy sources to ensure supply at all times with a prescribed confidence level considering that shocks and disruption can be reasonably expected. In other words, the goal of the energy policy is to provide energy security to all. The Power & Energy Division comprises of four units, Power, Coal, Petroleum and Energy Policy. Together these units r eview the energy situation in the country within the context of the global energy balance and rising environmental concerns. The division looks at Indias energy options in an integrated manner and proposes policies that would make the energy sector efficient and would ensure energy security. Energy security is defined in terms of reasonable assurance of access to energy and relevant technologies at all times with an ability to cope with sudden shocks. Energy security does not mean complete energy independence, it only means an ability to meet reasonable requirements with reasonable assurance of stable supply or an ability to pay for import needs. 4.1 ROLES AND FUNCTIONS OF THE POWER & ENERGY DIVISION

Servicing the Energy coordination Committee under the Chairmanship of Prime Minister; Evolving an integrated energy policy covering commercial and non-commercial sources of energy;

Proposing policies and institutions for the management of supply and demand in different sub-sectors of the energy sector, assessing the availability of different forms of energy
25

and suggesting appropriate arrangements to meet the country's energy needs keeping in view the need to tap all available technology options, improve energy efficiency and conserve energy to lower energy intensity and thereby deliver a suitable growth trajectory;

Analysing issues pertaining to the energy security of the country; Suggesting policies to meet lifeline requirements of poorer households and vulnerable households;

Examining Plan proposals and finalisation of scheme- wise outlays in respect of Central Ministries and PSU's covering the Energy sector. These include the ministries of Power, Coal, Petroleum & Natural Gas and New & Renewable Energy Sources, the department of Atomic Energy and PSUs under their respective administrative control;

Examining all proposals related to Policy, Regulation, CoS / GoM / Cabinet Notes and Acts mooted by various ministries covering the energy sector;

Examining / suggesting policy and regulatory frameworks that facilitate competition and private sector participation in the Energy Sector. Restructuring of PSUs in the sector, need for reducing the dominance of the Government through disinvestment;

Examining technical, financial and economic viability of investment projects in the energy sector and their appraisal.

Crafting, evaluating and monitoring key initiatives such as Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGY), Bharat Nirman, Accelerated Power Development and Restructuring Programme (APDRP), Remote Village Electrification and Village Energy Security;

Preparing Annual and Five year plans for the Energy Sector. Monitoring and appraisal of Plan programmes and schemes of respective ministries;

Reviewing annual financial performance of State power utilities; Evaluating strategies and policies for promotion of emerging issues in all energy subsectors such as for Clean Coal Technologies, In-situ Coal Gasification, extraction of Coal Bed Methane, Coal Liquefaction, Carbon Capture & Sequestration, Low Carbon Growth, LNG import, transmission pipelines, New Exploration Licensing Policy (NELP) etc.

Examining and suggesting policies related to pricing of fuels.

26

Promoting growth of industries in the energy in the areas from exploration for natural resources, exploitation, refining and product processing, transportation including pipelines.

Promoting energy efficiency through various programmes including education, demand side management, infusing commercially or near commercial technologies, developing new technologies etc.

Reviewing progress of R&D in the Energy Sector. Managing the National Energy Fund for R& D.

4.2 ENERGY POLICY The importance of Planning Commissions role in energy policy arises from the need for an integrated energy policy because the responsibility for different energy sources is distributed over a number of different Ministries, e.g. Petroleum, Coal, Power, Water Resources (in the case of hydroelectricity), Atomic Energy and New & Renewable Energy. Several other Ministries are also involved in determining policies which affect energy demand (Transport, Urban Development, Industry, Steel, etc.) and the Finance Ministry determines tax rates for different fuels. Policies applicable to different energy sources need to be consistent with each other and the overall framework for energy must be consistent with achieving the objective of inclusive growth. In many areas policies relevant for energy are in the hands of State government e.g. urban transport, city planning, building codes, etc. and these policies also need to be made consistent with the overall energy policy. Guiding principles of an Integrated Energy Policy are as follows: Energy markets should be competitive wherever possible for economic efficiency and for promoting optimal investment in energy. However, competitive markets alone will not ensure efficiency in this area because of negative environmental externalities associated with some fuels, potential supply risks and also the scope for exploitation of temporary shortages. These problems can only be addressed through appropriate fiscal policies to take care of externalities and independent regulation to take care of anti-competitive market behavior. Given the need to expand supplies of energy public sector investment in energy must be supplemented by private investors. The removal of distortions and impediments that discourage
27

investment in expanding domestic energy capacity is vital, as is the maintenance of an investor friendly environment for energy development. In general, both the tax structure and regulatory philosophy applied in each energy sector should be consistent with the overall energy policy should provide a level playing field to all players whether public or private. Taxes should be neutral across energy sources except where differentials in taxation across energy sources are specifically intended to counter differential externalities, such as differences in pollution. Subsidies are relevant but they must be transparent and targeted. Consideration should be given to alternative means of achieving the social objectives sought to be achieved by energy subsidies through different methods, including direct transfers to eligible households. The most efficient method of schemes and the objective should be chosen. Energy-efficiency is extremely important and can be promoted by setting appropriate prices and this is particularly important where energy prices are rising. However, appropriate prices by themselves may not suffice and non-price incentives/disincentives are therefore also required. This includes standards of energy efficiency that are forward looking, i.e. anticipate future price changes or pollution penalties. These standards should be determined on the basis of rational considerations and must be set in an expanding range of applications, with continuous dynamic adjustment of these standards. The standards should also be effectively enforced. There is scope to use both, mandatory and voluntary standards, the latter being reinforced by public opinion combined with appropriate tax incentives. Public Sector Undertakings operating in the energy sector must operate with autonomy and also full accountability to ensure incentives for adequate investment through their own resources and improvements in efficiency in energy production and distribution. 4.3 ELASTICITY OF ENERGY DEMAND Contrary to other developed and developing countries, total primary commercial energy requirement in India has been falling with respect to the growth in GDP largely because higher energy prices have led to its efficient use. The elasticity for per capita primary commercial energy supply with respect to per capita GDP (i.e. percent increase in per capita energy consumption for one percent increase in per capita GDP) estimated from the time series data of India over 1990-91 to 2003-04 comes to 0.82 which is significantly lower than 1.08 estimated for the period since 1980-81. Similarly the elasticity for per capita electricity generation is only 1.06
28

for the period from 1990-91 to 2003-04 compared to 1.30 for the period since 1980-81. However, the energy elasticity of GDP growth in India may not fall as much in the future as rising income levels will foster life style changes that are more energy intense. Comparing Indias energy elasticity with other countries, using cross-country regression based on data of 2003, the elasticity for total primary energy supply (TPES) comes to 0.83 for all countries and to 0.79 for countries with a purchasing power parity (PPP) GDP between $2000 and $8000 (Indias GDP in PPP terms based on 2000 dollars was $2732 in 2003 and by 2031-32 might reach the upper end of the range). Indias energy elasticity for commercial energy is comparable to the elasticity estimates for TPES using cross country data. The elasticity for electricity consumption comes to 1.24 for all countries and to 1.25 for PPP adjusted GDP per capita range of $2000 to $8000. Indias elasticity for electricity generation is comparable to that of countries with per capita GDP exceeding $8000 in PPP terms. Importantly, the trend of falling elasticity with rising income levels is demonstrated even by cross country data. India s primary energy use is projected to expand massively to deliver a sustained GDP growth rate of 9% through 2031-32 even after allowing for substantial reduction in energy intensity. In order to fuel this on sustained basis, the growth of around 5.8% per year in primary energy supply including gathered noncommercial such as wood and dung of would be required. Commercial energy supply would need to grow at about 6.8% per annum as it will replace non-commercial energy, but this too involves a reduction of around 20% in energy use per unit of GDP over a period of ten years. Requirement of Indias dominant fuel Coal including Lignite will expand from around 500 million tonne in 2006-07 to over 2.5 billion tones per annum based on the quality of available domestic coal over a period of 25 years. The primary energy use by 2031-32 will increase by 4 to 5 times and Power generation capacity would increase six-folds from the 2006-07 level of around 1,60,000 MW inclusive of all captive plants. Putting Indias likely energy demand in 2031-32 in a global perspective, one sees that Chinas current energy consumption is 1100 -1200 Mtoe and USAs current consumption is 2400-2500 Mtoe. In comparison, India consumed about 421 Mtoe of commercial energy in 2007-08. With a projected population of just under 1.47 billion in 2031-32, Indias per capita energy consumption will be marginally above Chinas current per capita consumption or be about one seventh of the current US per capita consumption. What this means is that India on per capita basis, currently consumes under 6% of what the US consumes and under 41% of what China consumes and will, by 2031-32, consume just under 15% of current US consumption levels and equal Chinas current per capita
29

consumption. More importantly, Indias per capita energy consumption that is less than 27% of 2003-04 level of global average energy consumption shall in 2031-32 also remain just about 74% of the current global average. 4.4 SUPPLY SCENARIO AND ENERGY MIX India s energy basket has a mix of all the resources available including renewables. The choice before the country in reference to pursuing for different sources of energy is not choosing among the available ones but to develop them all and to seek what else? The dominance of coal in the energy mix is likely to continue in foreseeable future. Primary Energy Consumption Mix in 2007-08 Energy Type Units in Original Units in Mtoe % share in % share in Total Primary Energy Consumption

Primary Commercial Energy

Coal Lignite Oil Natural Gas LNG Nuclear Power Hydro Power Wind Power Primary Energy Non-Commercial Energy

Mt Mt Mt BCM Mt MkWh MkWh MkWh

501.52 34.65 139.73 32.27 8.24 16777 128702 11410 -

215.48 9.71 139.73 29.07 10.21 4.38 11.07 0.98 420.62

53.54

39.50

33.22 9.34

24.51 6.89

1.04 2.63 0.23 100.00

0.77 1.94 0.17 73.78

Commercial Mtoe

Mtoe

149.50

26.22

Total Primary Energy Mtoe consumption

570.12

100.00

30

Energy Equivalence The energy labeled as final energy such as electricity, petrol, gas, coal, firewood, etc. is obtained from the sources available in nature, labeled as primary energy, and includes hydrocarbons (coals, oil, and natural gas), fissile or fertile elements primarily uranium, the kinetic energy of natural elements (wind, water, etc.), and the electromagnetic rays of the sun and the natural heat of the Earth (geothermal energy). As per convention, final energy consumption is generally expressed as weights of fuels burnt, or from kWh consumed if it is electricity. Each fuel, while burning, produces certain amount of energy in the form of heat that can be measured in standard units such as kilocalories or Joules. Fuels are compared using their calorie content with that of oil in tonnes or million tonnes of oil equivalent (Mtoe). One tonne of oil is worth 42 billion Joules or 10 billion calories whereas one tonne of Indian thermal coal has 4.1 billion calories. Thus 1 Mt of Indian thermal coal is 0.41 Mtoe. Electrical energy measured in kWh is also converted in to the thermal energy kcal or kJ using the definition and finally expressed as Mtoe (1 billion kWh = 0.86 billion calorie or 0.086 Mtoe). Taking the thermal efficiency of the power plant and other losses in the system, the equivalence between electricity and fossil fuels would be 1billion kWh = 0.28 Mtoe (in case of coal-fired boilers) and 0.261 Mtoe (in case of nuclear electricity). 1 billion kWh generated from hydroelectricity or wind power, however, are considered as equivalent to 0.086 Mtoe since there is no intermediate stage of heat production while using these primary energies. It is possible to argue that the efficiency of thermal power plant should be used to convert hydroelectricity and wind power also. In this case, 1 billion kWh of hydroelectricity would be equivalent to 0.28 Mtoe. This has an important bearing when one considers how much of energy is renewable. Thus in 2007- 08, renewable energy was 2.86% or 8.76% of Indias total primary commercial energy depending on the conversion factor used. 4.5 POWER SECTOR PERFORMANCE Rapid growth of the economy places a heavy demand on electric power. Reforms in the power sector, for making it efficient and more competitive, have been under way for several years and while there has been some progress, shortage of power and lack of access continues to be a major constraint on economic growth. Average peak shortages excluding scheduled load shedding was estimated at 12% and average energy shortages at 11 % in 2008-09. The persistent shortages of
31

electricity both for peak power and energy indicate the need for improving performance of the power sector in the country. Power shortages are an indication of insufficient generating capacity and inadequate transmission and distribution networks. To a great extent this is the outcome of poor financial health of the State Electricity Utilities having high levels of Aggregate Technical and Commercial (AT&C) losses. AT&C losses of most of the State Power Utilities (SPUs) are currently high at above 35 %. This has made them financially sick and unable to invest adequately in additional generating capacity. For the same reason, these utilities have had only limited success in attracting private investors to set up power plants. Accelerated Power Development & Restructuring Programme (APDRP) was promoted in the year 2003 with the mission of bringing down Accumulated Technical & Commercial (AT&C) losses up to 15% in over five years period but the actual performance in last seven years has not come anywhere close to the targeted level. The scope for further tariff increase is limited since tariffs for paying customers are already among the highest in the world and it may make sense for them to opt out for captive generation. It may be noted that the reported AT&C loss is an underestimate as SEBs accounts conceal more than they reveal. There are several incidences of unaccounted ghost billing, manipulated consumer mix and recording of sales accrual and expenditure on cash basis etc. Viability of State Utilities Not Improving 200102 200203 200304 200405 200506 200607 2007-08 2008-09 (Actual) (Actual) (Actual) (Actual) (Actual) (Actual) (Actual) (Prov.) Energy sold 66.02 / available, 67.46 67.47 68.75 69.58 71.35 72.42 74.55

(in %) Revenue from sale of electricity Cost electricity sold

32

68135

76640

85942

91738

101366

117267

123423

154398

of 98541

102247

110553

118975

129110

153036

173886

204800

Loss on sale 30407 of electricity Average cost supply (paise/kWh) Average tariff (paise/kWh) Gap between the cost supply of and 115.58 258.99 of 374.57

25607

24611

27237

27743

35768

41462

50402

351.72

353.80

357.35

367.62

392.17

404.66

436.09 (16.42%)

(-6.10%) (-5.54%) (-4.60%) (-2.03%) (4.07%) (8.03%)

263.63 (1.79%) 88.09

275.04 (6.20%) 78.76

275.55 (6.39%) 81.80

288.63

300.51

308.17

328.77

(11.44%) (16.03%) (18.99%) (26.94%) 79.00 91.66 96.49 107.32

tariff (paise) Notes: Financial Performance of 20 major states excluding Delhi and Orissaas reported. Figure in brackets are growth rates over 200102. Approved tariffs hikes exceed average tariff increases estimated above. Generating Capacity addition during the Tenth Plan (2002-2007) & Anticipated generating capacity by the end of the Eleventh Plan (2007-2012) (in MW) Hydro Thermal Nuclear Wind and Total

Renewables Installed capacity as on 31 26269 March 2002 Addition during Tenth Plan 7886 Installed capacity as on 31 34654 March 2007 Proposed Addition during 15627 59693 3380 14000 92700
33

74429

2720

1628

105046

12114 86015

1080 3900

6132 7760

27212 132329

Eleventh Plan Total capacity anticipated 50281 as on 31 March 2012 Indias Emission Efficiency Fossil fuels are made up of hydrogen and carbon. When fossil fuels are burned, the carbon combines with oxygen to yield carbon dioxide. The amount of carbon dioxide produced depends on the carbon content of the fuel; for example, for each unit of energy used, natural gas emits about half and petroleum fuels about three-quarters of the carbon dioxide by coal. The carbon emission factor of a fuel simply tells us how much carbon will be released per unit energy used. India is a large, fast growing economy with a very low consumption of energy but with a significant share of coal in its primary energy mix. CO 2 emissions from consumption of fossil fuels constitute more than half (~54% in 2000) of total GHG emissions in India. Indias CO 2 emissions from fossil fuel combustion in the year 2004 were estimated at about 1.1 billion tonne. The CO 2 emissions will continue to grow for some time, because there is a need to increase the currently low per capita levels of energy use to support growth, reach the Millennium Development Goals and eventually provide modern living standards to all her citizens. Most of the available projections undertaken by reputed independent international organizations indicate that Indias CO2 intensity per unit of GDP is likely to continue to decline through 2030 2050. India is a relatively low carbon economy by global comparison by two measures, CO2 emissions per capita and CO2 emissions per unit of GDP in PPP terms. Energy Units, Calorific Values of various Fuels and Terminologies: Energy Units Unit Joule Electron Volt 1.0622 x10 -19 Equivalence in Joules Other equivalence 145708 7280 21760 225029

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Erg (erg) Calorie (cal) British Thermal Unit (BTU) Kilo calorie (K cal) Mega Joule (MJ) Kilo Watt Hour (kWh) Therm Giga Joule (GJ) Million BTU (MMBTU) Terajoule (TJ) Exajoule (EJ) Quad (Quadrillion BTU) Terawatt-year (TWyr)

10 -7 4.187 1.055 x 10 3 4.1868 x 10 3 10 6 3.6 x 10 6 1.055 x 10 8 10 9 1.055 x 10 9 10 15 10 18 1.055 x 10 18 3.1536 x 10 19 ~172 million barrels of Oil equivalent 8760 Billion Units 238.85 k cal 3.6 MJ or 1 Unit or 860 k cal 10 5 BTU 278 kWh

35

Calorific Value of Various Fuels Fuel Unit Calorific Value in Million tonnes of Oil equivalent (Mtoe) LNG LPG Motor Spirit (MS) Kerosene Oil (crude) Diesel (HSD) Furnace Oil Natural gas Charcoal Soft coke Biogas Firewood Indian Thermal Coal Coal gas Indian Lignite Nuclear Electricity Cow-dung Cakes Electricity Hydro Electricity Wind Electricity Mt Mt Mt Mt Mt Mt Mt Bm 3 Mt Mt Bm 3 Mt Mt Bm 3 Mt BkWh Mt BkWh BkWh BkWh 1.23 1.13 1.10 1.064 1.00 0.95 0.904 0.90 0.693 0.6292 0.4713 0.45 0.41 0.4004 0.2865 0.261 0.21 0.086 0.086 0.086

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5. INDIAN SCENARIO FOR ENERGY BALANCE

In India, the interest in biofuels has grown substantially during the last few years. The primary reason for this is that energy security, better environmental performance, greening of wastelands and creation of new employment opportunities are seen as some of the advantages of biofuels. Biofuels may be considered and accordingly developed as a multi-dimensional beneficial energy alternative for our nation. The two types of biofuel that are currently in focus of attention in India are (i) Bioethanol and (ii) Biodiesel.

Biofuels have attracted a lot of debate in the recent past over its status as a Green Fuel. The environmental, economic and community benefits associated with biofuels depend largely on how biofuels are developed and manufactured. Just as different crops have different yields in terms of biofuel per hectare, wide variations also occur in terms of energy balance and Greenhouse Gas emission (Carbon dioxide) reductions across feedstocks, locations and technologies. The contribution of a biofuel to energy supply depends both on the energy content of the biofuel and on the energy going into its production i.e. biofuels are heavily dependent on various set of input and throughput parameters which are inherently either energy positive or energy negative in nature and contribute to the energy balance of the respective processes. The latter includes the energy required to cultivate and harvest the feedstock, to process the feedstock into biofuel and to transport the feedstock and the resulting biofuel at various phases of its production and distribution. As regards the impact on GHG emissions from the production of biofuels, it depends on the GHG emissions avoided by biofuels (compared to fossil fuel) and the GHG emissions during the production of biofuels. Therefore, a positive balance on the net energy supplied and net GHG emissions avoided, is one of the key parameters to decide on promotion of biofuels as a sustainable alternative to the fossil fuels.

Globally, significant number of studies have been undertaken to assess the energy balance and carbon balance of biofuels. Energy balance is defined as the net quantity of energy supplied by the biofuel and associated co-products at the end use minus the energy required during various developmental and manufacturing stages of biofuel. Carbon balance is defined as the net quantity
37

of GHG (CO ) emitted or avoided to the atmosphere during the various stages of activities like
2

manufacture, distribution and end use of fuel. The coverage of these studies includes assessment of energy and GHG balance for more traditional feedstocks like soybean, corn, rapeseed, sugarcane, etc. using various technologies for production of biofuels. Some of the studies also focus on the feedstocks like Jatropha, Sweet Sorghum, and Cellulosic Biomass as well. Most of the studies focus on the technological and climatic conditions, relevant to specific geographies like USA and Europe, however, hardly any study relevant to Indian conditions is available, which focus on the relevant feedstocks and the suitable technological pathways available in India. Recognising the need to assess the energy and environmental sustainability of the biofuels, National Committee on Biofuels of Confederation of Indian Industry (CII), under the guidance & support of Department of Biotechnology, had proposed to carry out the study with real time data from the industries and other stakeholders domain, to estimate net energy and carbon balance of various biofuels, in India. A constituted core committee, under this initiative has conducted the comprehensive estimation of energy and carbon balance of selected biofuels, across their value chains, i.e., feedstock development, manufacturing process, blending and end use, pertaining to Indian conditions. The study has considered the following categories of biofuels to estimate the energy and carbon balance in Indian context:

1. Bioethanol from Molasses Molasses a by-product of sugar manufacture is currently the most widely used feedstock for ethanol production in India. The sugar present in molasses is fermentable sugar and can be used to produce bioethanol. 2. Bioethanol from Sweet Sorghum Of late, bioethanol production from Sweet Sorghum has demonstrated significant potential. Sweet Sorghum is a crop with wider adaptation and grows rapidly and results in higher production of biomass as well. It has a four-month crop cycle which results in two crops per year as compared to only one in case of sugar cane. 3. Bioethanol from Cellulosic Biomass

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Hydrolysis is the technology which is majorly used for production of bioethanol from cellulosic biomass. The technology is still in its infancy and seems promising in the Indian scenario because of the excess availability of cellulosic biomass feedstock in the country. The report estimates the energy and carbon balance for bioethanol from two most widely available biomass residues in the country, i.e., Bagasse and Rice straw. The steps involved in manufacturing bioethanol from both these feedstocks are similar but the difference in yield of bioethanol and the co-products result in some difference in the final results obtained. 4. Straight Vegetable Oil (SVO) from Jatropha Jatropha has been discussed as one of the key source of biofuels in the Indian context for a while. With a large number of Jatropha plantations being initiated across the country, Jatropha may play a major role in the future of the Indian biofuel sector. SVO from Jatropha can be used directly as a fossil diesel substitute in simpler engines. It is also one of the economical fuels, for decentralized usage, especially in the Indian rural areas. 5. Biodiesel from Jatropha To overcome the shortcomings of SVO, it is further treated and processed for production of biodiesel. The most widely used technology for conversion of oil to biodiesel is transesterification. This fuel can be used in diesel engines as it is and can also be blended with petro-diesel for end use.

The study has successfully come out with a suitable framework for estimation of energy and carbon balance of various categories of biofuels (Bioethanol & Biodiesel) in India context. The framework and boundary for the study has been set in consultation with stakeholders. The study has analyzed the inputs and data received from various industries, R&D labs, academic institutions involved in production and research of biofuels. It has also referred various published data available in the National and International domain. Data collected from various sources have been normalized to the possible extent based on the detailed stated set of assumptions in the main report. The above study has evolved with a generic framework to estimate the energy and carbon balance in Indian context, which, may be suitably used by various stakeholders to examine the energy balance and carbon neutrality in their specific cases.

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The rport captures the net energy balance of biofuels, estimating the energy supplied by the respective biofuel and its co-products at the end use and the energy required at different stages of production. The total energy consumed during manufacturing process has been deducted from the total energy supplied by the biofuel and its co-products, to arrive at the net energy balance for the biofuel. Net energy ratio for the biofuel, i.e. the ratio of the net energy output and the net energy input has also been estimated in the report.

The report also captures the carbon balance for biofuel and its co-products. The carbon avoided or emitted during each lifecycle stage has been estimated and a net carbon balance for biofuel has been arrived over the lifecycle within the study boundary. The carbon emitted during the production process has been accounted based on direct energy and material usage. The biofuels and co-products have been considered to displace fossil fuel (diesel or petrol); displacement has been based on energy equivalence. The percentage carbon emission reduction has been arrived at by calculating the total carbon input per Kilo Litre of biofuel produced and comparing it with the emission factor of fossil fuel displaced.

For the purpose of this study the parameters studied are defined as follows:

Net Energy Balance: The energy supplied by the biofuel and associated co-products at the end use minus the energy required during various manufacturing stages of biofuel

Net Carbon Balance: The net quantity of Greenhouse Gas emitted / avoided to the atmosphere during the various stages of manufacture, distribution and end use of fuel.

Net Energy Ratio: The ratio of energy output obtained from the end use of the biofuel and energy input used for the production of the biofuel.

% Carbon Emission Reduction: The net quantity of Greenhouse Gas emissions avoided compared to the use of the petro fuel substituted by the biofuel.

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The biofuels under study demonstrated a favourable energy balance, with the net energy ratio being >1, (i.e., the total energy output is greater than total energy input). The study has also estimated negative carbon emissions, i.e., the biofuels help reduce net carbon emissions to the atmosphere. The results of the net energy balance and carbon balance for the above selected categories of Biofuels are summarized in the table below:

Based on the analyses, biodiesel from Jatropha oil appears to be having favourable characteristics in terms of energy and carbon balance as compared to other biofuels. On the other hand, Sweet Sorghum based bioethanol appears to have the best conversion efficiency in terms of converting input energy to output energy. The study also presents a comparative analysis amongst all the lifecycle stages of the biofuel production, which shows that the feedstock development stage has the highest contribution to the energy input and carbon emissions, for all the biofuels studied in the report, except for bioethanol production from cellulosic biomass. In the feedstock development, the major contributors to the energy consumption are irrigation and usage of fertilizer. The outcome of the study highlights fertilizer use as one of the major contributors to the energy and carbon input during feedstock development. The report has also considered the energy and carbon input required for production of fertilizer along with any N O
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emissions during the fertilizer application for the analyses. It is observed that sugarcane cultivation requires maximum fertilizer input, amongst the chosen feedstocks, followed by Sweet Sorghum and Jatropha.

The analyses highlight the significance of energy contribution from the co-products obtained during the biofuel production as these contribute to a major share of the total energy generated during the end use stage. The study does not consider any material input offsets by the coproducts (viz. seed cake as fertilizer) but it has considered the usage of the same for meeting the energy requirement of the inherent steps in the production processes.

The study also shows that the net energy and carbon balance per year is highest for Jatropha based biodiesel. This is due to significant energy contribution from the co-products obtained during biodiesel production, namely seed husk, seed cake and glycerol, which contribute almost 48% of the total energy generated during the end use stage. Similar reasons explain the high energy and carbon balance of Jatropha SVO as well, where the co-products include seed husk and seed cake. The report further captures a sensitivity analysis of the results obtained, performed against the variation in energy and carbon contribution of irrigation and usage of fertilizer. The results presented in this study are based on number of assumptions and input parameters, which can significantly impact the results of this study. The assumptions and input data have been considered to suit the Indian context, and have been mentioned in each section. Hence the results of this study should be interpreted in conjunction with the various assumptions considered in the study.

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6. INDIA BALANCES DEVELOPMENT AGAINST EMISSIONS

Powering the country's blistering economic expansion while reining in CO2 emissions sets a thorny challenge for policymakers. One of the key challenges facing fast developing economies such as India is how to fuel and sustain economic growth while simultaneously reducing emissions. Like China, India is strongly opposed to setting emission reduction targets, arguing that any constraints would adversely impact economic growth, with this resistance unlikely to weaken before the current first commitment period of the Kyoto Protocol ends in December 2012. But this emission constraint resistance should not be confused with sustainable market development. Since 2004, India has averaged quarterly GDP growth of 8.4 percent, reaching a historical high of 10.1 percent in September of 2006 and a record low of 5.5 percent in December 2004. In the fourth quarter of 2010, GDP grew 8.2 percent over the corresponding quarter in 2009, with the IMF forecasting GDP for 2011 at 8.2 percent. In its summary for policymakers, the Energy and Resources Institute's National Energy Map for India: Technology Vision 2030 said that, given the government's plans for rapid economic growth, the country's requirements for energy and supporting infrastructure will also increase rapidly over the next two decades. Analysts estimate that to maintain this pace of growth will require India to increase its energy consumption by about 4 percent annually, with the IEA estimating that India will need to spend approximately US$800 billion on its energy sector by 2030. Last year the Indian government published a study based on 2007 data which showed a sharp increase in industrial activity since the last assessment in 1994, making India the world's fifth biggest CO2 emitter after China, the US, Europe and Russia. Since 1994, emissions from electricity, cement and waste have more than doubled. India generates 90 percent of its electricity from coal, which in turn accounts for more than a third of its emissions. Yet India's emissions are some 75 percent less than those from China and the US.

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Like China, India believes the appropriate measure of sustainable economic development is carbon intensity. Its emissions relative to economic output fell by 30 percent between 1994 and 2007 and the government has set a carbon intensity reduction target of 24 percent by 2020. To meet this target India will have to become more energy efficient, will have to reduce its energy intensity and, most importantly, will have to rapidly invest in its renewable energy infrastructure. And it is making good progress. India is among the top five countries in terms of renewable energy capacity with an installed base of over 19 GW of grid interactive renewable power, accounting for 11 percent of total installed capacity, and about 2.5 GW of renewable generation being added annually. To support this policy India recently launched the ambitious National Solar Mission with a target capacity of 20 GW by 2020 and the aim of solar energy achieving grid parity with the cheapest coal-fired capacity by 2030. With over 400 million of its population lacking access to modern forms of energy, it also has one of the largest off-grid renewable energy programmes, with more than 1.5 million decentralized solar applications, over 4 million biogas plants, and in excess of 5 million m² of solar thermal applications installed. According to the Energy and Resources Institute, 'renewable energy resources play a crucial role in providing decentralised power to remote areas. Apart from continuing to provide support to renewable energy schemes, efforts should also be directed towards large-scale deployment of related technologies in order to further bring down their costs.' Aside from solar power, India's government has committed to significantly increasing its hydro capacity. But it is wind power that presents India's major growth opportunity. According to the Indian Wind Energy Outlook 2011, 'wind power must play a key role in fuelling India's growing economy, by delivering substantial amounts of clean and indigenous electricity'. The report forecast that 65.2 GW of wind power could be installed by 2020, up from 13.1 GW at the end of 2010, with a potential of 160.7 GW installed by 2030. Citing last April's Gulf of Mexico oil spill, ongoing unrest in the oil-producing Middle East and North Africa region, and

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the Fukushima nuclear disaster arising from the Japanese earthquake and subsequent tsunami, GWEC secretary-general Steve Sawyer warned: 'A return to old-fashioned power generation cannot be the answer, not only for environmental, but also for economic reasons. 'Betting on the obsolete polluting technologies of the past is not a viable solution, and only renewable energy can fill the gap that will be left by nuclear power in a sustainable fashion.' Scaling up wind power, said the report, would provide both environmental and economic benefits, arguing that wind is now competitive with conventional new-built power generation technologies such as natural gas. But, it cautions, to realise the full potential of India's rich renewable resources the government needs to address several challenges and barriers, including a clear renewable energy framework at national level, incentives for repowering, and rapid up-scaling of grid infrastructure to transport increasing amounts of wind power to the demand centres. According to the World Bank, achieving India's government's renewable energy goals for the next decade will cost between $10 billion and $64 billion in subsidies, depending on whether the government adopts a low-diversity, low-cost renewable energy resources scenario or a highdiversity, high-cost scenario. The higher cost scenario, which would include solar, will only be viable if fossil fuel prices continue to rise and are free of distorting subsidies. Yet although the government committed to removing fossil fuel subsidies at last year's G20 summit, the country's deep poverty problems make this a politically sensitive policy. For all its support for renewable energy development, and its desire to become a world renewable energy leader, the fact remains that India will continue to be heavily reliant on fossil fuels over the next two decades.

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CONCLUSION
In India, the interest in biofuels has grown substantially during the last few years. The primary reason for this is that energy security, better environmental performance, greening of wastelands and creation of new employment opportunities are seen as some of the advantages of biofuels. The report further captures a sensitivity analysis of the results obtained, performed against the variation in energy and carbon contribution of irrigation and usage of fertilizer. The results presented in this study are based on number of assumptions and input parameters, which can significantly impact the results of this study. The assumptions and input data have been considered to suit the Indian context, and have been mentioned in each section. Hence the results of this study should be interpreted in conjunction with the various assumptions considered in the study. The critical energy technologies for India therefore are clean coal technology, exploration and exploitation of natural gas / gas hydrate resources, nuclear technologies (especially those involving utilization of thorium), replacement of petroleum products in the transport sector by fuel cells, hydrogen, electricity etc and the development of improved solar photovoltaic and thermal systems . The broad vision behind Indias integrated energy policy is to reliably meet the demand for energy services of all sectors including the lifeline energy needs of vulnerable households in all parts of the country with safe, clean and convenient energy at the least-cost. This must be done in a technically efficient, economically viable and environmentally sustainable manner using different fuels and forms of energy, both conventional and non-conventional, as well as new and emerging energy sources to ensure supply at all times with a prescribed confidence level considering that shocks and disruption can be reasonably expected. In other words, the goal of the energy policy is to provide energy security to all. The Power & Energy Division comprises of four units, Power, Coal, Petroleum and Energy Policy. Together these units review the energy situation in the country within the context of the global energy balance and rising environmental concerns. The division looks at Indias energy options in an integrated manner and proposes policies that would make the energy sector efficient and would ensure energy security.

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BIBLIOGRAPHY
Berner, E.K., and Berner, R.A. 1996. Global Environment: Water, Air and Geochemical Cycles. Prentice Hall: Upper Saddle River, New Jersey. (Chapter 1Introduction to the Global Environment: The Water Cycle and Atmospheric and Oceanic Circulation ties the energy balance to the nature of the water cycle.) Dickinson, R.E. Land surface processes and climate surface albedos and energy balance. In Advances in GeophysicsV. 25. Academic Press, pp. 305-353. (Detailed.) Kump, L., Kasting, J.F., and Crane, R.G. 1999. The Earth System. Prentice Hall: Upper Saddle River, New Jersey. (Chapter 3Global Energy Balance contains an excellent description of the energy balance and includes a number of additional experimental or illustrative designs and models.) http://www.iupap.org/wg/energy/annexb.pdf http://planningcommission.nic.in/sectors/index.php?sectors=energy http://115.113.225.49/webcms/Upload/Energy_Balance.pdf http://www.renewableenergyworld.com/rea/news/article/2011/05/india-balancesdevelopment-against-emissions

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