Article New Energy Architecture India Accenture

New Energy Architecture
India
World Economic Forum In partnership with Accenture
Contents
A note on the creation of this study
Executive Summary
This World Economic Forum report was

developed by the Forums Energy Industry
Partnership in collaboration with Accenture.
A Methodology for Managing Transition Effectiveness
Step 1: Assessing Current Energy Architecture Performance
A series of interviews with stakeholders from

across the energy value chain conducted in
New Delhi during October 2011, and a private
session conducted at the India Economic
Summit in Mumbai in November 2011, form the
basis of the sections on Indias objectives for a
New Energy Architecture and the enabling
environments required to achieve them.
1.2 Indias Current Energy Architecture Performance
13

1.3 Comparing Indias Current Energy Architecture Performance with

the Grow Archetype
The views expressed in this publication do not

necessarily reflect those of the World
Economic Forum or Accenture.

21

3.1 Achieving Indias New Energy Architecture Objectives:

Creating the Right Enabling Environment
22
3.2 Defining Enabling Environments for Indias New Energy Architecture
28
Step 4: Defining Areas of Leadership
29
30
Appendices: The Creation of the Energy Architecture Performance Index
Contributors
World Economic Forum

Roberto Bocca, Senior Director,

Head of Energy Industry
Espen Mehlum, Associate Director,
Head of Knowledge Management and
Integration Energy Industries
Project Adviser: Accenture

Arthur Hanna, Managing Director,

Energy Industry
James Collins, Senior Manager,

Energy Strategy
Mike Moore, Project Manager,

New Energy Architecture,
Accenture Secondee
With further support from Timothy

Hendrikz, Bryan Hori, Piush Kothari and
Samuel Madden
1.1 Introduction to Indias Energy Architecture
16
Step 2: Creating New Energy Architecture Objectives
17
20
Step 3: Defining the Enabling Environment
2.1 Defining Indias Objectives for a New Energy Architecture
4.1 A Multistakeholder Action Plan

31
Appendix A: Computation and Structure of the Energy Architecture
Performance Index

32
Appendix B: Technical Notes and Sources for the Energy Architecture
Performance Index
New Energy Architecture India
Executive Summary
The last decade has been a period of tremendous growth for India. This
growth has driven a large increase in energy demand, with India now
being the fourth largest consumer of energy globally. Between 1990 and
2008, total demand grew by 95%2 and has put Indias energy
architecture under severe strain. India has provisionally set a 9% GDP
growth target as part of the 12th Five Year Plan, which will require energy
supply to grow 6.5% per year.3 This represents a much more significant
growth target for the sector than in previous years. The focus for the
coming years will therefore be on supporting economic growth by
providing a secure supply of energy. Indeed, inability to meet energy
demand could be the single biggest constraining factor to Indias growth
story.4 This will require India to bring new forms of supply online, deliver
it more effectively to consumers (both urban and rural), and do so at a
market-based price (based upon the eventual eradication of subsidies)
that sends appropriate signals to both the demand and supply sides.
India does have a responsibility to achieve its growth trajectory in an
environmentally sustainable manner, and has set a voluntary target to
cut the emissions intensity of GDP by 20-25% by 2020 compared with
2005 levels.5 Therefore, the way forward should be to identify common
ground between climate change policy and economic growth and
pursue measures that achieve both.
Considering that there needs to be a significant expansion in energy
infrastructure, India has an opportunity to pursue development while
managing emissions growth, enhancing its energy security and creating
world-scale clean-technology industries. This would require that India
leapfrog inefficient technologies, assets and practices and deploy ones
that are more efficient and less emission-intensive. India should
therefore not look to copy the Western model of energy infrastructure
development, and instead pursue a development path that is particular
to its local conditions. This would require that India leapfrog inefficient
technologies, assets and practices and deploy ones that are more
efficient and less emission intensive, with a key opportunity being the
expansion of decentralized distribution and generation.
Inability to meet energy

demand could be the single
biggest constraining factor
to Indias growth story.1
Interviewee, New Delhi, October 2011

World Bank, World Development Indicators
An Approach to the 12th Five Year Plan, Indian Planning Commission, 2011
4
Interview participant, New Delhi, October 2011
5
Natural Resources Defense Council, From Copenhagen Accord to Climate Action:
Tracking National Commitments to Curb Global Warming, http://www.nrdc.org/international/
copenhagenaccords/
1
2
3
Making the Transition

The focus for the coming years will be on supporting economic growth
by providing a secure supply of energy. To provide a secure supply of
energy and address further issues of distorted energy pricing, poor air
quality, growing water scarcity and import dependence, the unreliability
of the grid and continuing energy poverty require India to bring new
forms of supply online, deliver it more effectively to consumers (both
urban and rural), and do so at market-based prices (based upon the
gradual phase-out of subsidies). To do so, India should consider
pursuing the following set of objectives:
Objective 1 Augment resources for energy security: India must
look to encourage and expand the presence of international coal
and oil & gas companies to provide the investment and technical
expertise to develop domestic hydrocarbon resources, invest in
continuing development of the renewable industry and look to
increase efficiency in end use consumption.
Objective 2 Provide access to modern forms of energy for all: India
must promote the role of the private sector in developing and
deploying decentralized distribution and generation and modern
cookstove and lighting technologies to rural areas where lack of
awareness and state-level bureaucracy is impeding progress.
Objective 3 Strengthening energy carriers: The financial health of
transmission and distribution companies must be improved to
enable investment in strengthening, expanding and developing the
power grid while gas infrastructure must continue to expand its
small but growing coverage.
Objective 4 Rationalize energy prices: To transition to a more
efficient economy, India needs a well-instituted market mechanism
for energy pricing and must gradually withdraw wide-scale energy
subsidies while ensuring that transparent and effective distribution of
kerosene and LPG to those below the poverty line is implemented.
Executive Summary
The Required Enabling Environment
The New Energy Architecture Project
To enable India to address its objectives, an enabling environment will be

needed. The creation of an enabling environment will require support
from across all four pillars:
New Energy Architecture: India builds on the methodology and findings

of the World Economic Forums wider work, New Energy Architecture:
Enabling an effective transition. This project aims to better understand
how countries can make the transition to a New Energy Architecture that
more effectively underpins economic growth and development,
environmental sustainability and energy access and security.
India has a strong policy framework at the national level but

implementation at the state level is often lacking. The public policy
regime for the promotion of renewable energy at the national level is
viewed as being among the most effective in the world a benchmark
for all emerging markets.6 However, success in implementing national
targets varies significantly on a state by state basis. Poor performing
states should be targeted to promote capacity building and encourage
wider economic development.
Development of the power grid is urgently needed. The transmission
and distribution network is in urgent need of investment and
development and India has the opportunity to leapfrog western
countries through the deployment of more efficient, less intensive and
smarter technology. India has seen rapid development in its renewables
sector, especially in wind energy and this expertise and momentum
must be leveraged and applied to other technologies, particularly solar.
The study provides a basis for discussion and a valuable tool for
policy-makers, industry and other stakeholders to use in identifying the
current energy architecture challenges for India and the enabling
environments that should be created to drive the transition to a New
Energy Architecture. We hope it will provide support for any discussion
on Indias energy architecture aimed at generating concrete insight and
priorities for action.
Costly and inefficient subsidies are damaging the economy. The energy
market must be made more transparent and efficient to attract foreign
and private investment. This will require the removal of subsidies and
increased separation between the government and state-owned
companies. Market structures for the transmission of electricity between
states must be rationalized to foster the development of renewable
generation and better load balancing.
India can become a centre of excellence for renewable energy R&D.
India has a large and growing educated population and this must be
leveraged to provide the technical skills that will be required to make the
transition to a New Energy Architecture. Society must be more aware of
the consequences of energy consumption and the role of decentralized
distribution and generation in providing modern forms of energy and
bringing opportunities for economic development.
The provision of information is essential for the deployment of new
technologies. The effective, transparent and sympathetic dissemination
of information will be central in developing Indias energy architecture,
from communicating the removal of subsidies to the need to consume
energy more efficiently. Honest and upfront communication will also be
essential to gaining the involvement of international and private energy
companies in the development of Indias hydrocarbon resources.
The governments role in creating a strong, stable and transparent policy
framework is essential. This will require strong political leadership to
manage the effective removal of subsidies and enable the benefits from
increased private sector participation to be fully passed onto the public.
Indias population is growing in size and wealth and private companies
must look to exploit this opportunity, this will involve investing in
collaborative partnerships to gain access to technology and skills and
deploying new technologies to market. The true cost of energy use and
waste must be communicated by civil society so that changes in
subsidy levels and energy architecture are accepted. Cultural changes
such as the acceptability of electricity theft must be altered. The role of
modern forms of energy in developing the welfare and economy of rural
areas must be imparted.
Tulsi R. Tanti, Wind matters: Making the case for wind in India, Suzlon, 2011
A Methodology
for Managing
Transition
Effectiveness
7
It has been common for some time to

characterize the concerns surrounding energy
as a triangle of imperatives relating to the
economy, the environment and energy
security.8 To be effective, energy architecture
should be designed with these imperatives in
mind, although it should be noted that delivery
against each of them is limited by a set of
boundary constraints. Energy architecture is
defined as the integrated physical system of
energy sources, carriers and demand sectors
shaped by government, industry and civil
society. Our conceptualization of energy
architecture can be seen in Figure 1. While this
is a greatly simplified view, it provides an
overview of the complex interactions involved,
underlining that a systems-based approach
should be taken to managing change.
Figure 1 Energy Architecture Conceptual Framework

Energy Triangle
Economic Growth & Development
Industry
Physical
Carriers
Energy Triangle
Civil Society
Economic Growth & Development
Government
Energy Sources
Industry
Physical
Carriers
Civil Society
Energy
Access &
Security
Boundary Constraints
Social
Environmental
Sustainability
Boundary Constraints
Definitions
For a more detailed understanding of the New EnergyPhysical elements :

Physical elements :
Includes
Architecture methodology and conceptual framework, refer
to energy sources, Includes energy sources,
their carriers and end
their
carriers
and
end
World Economic Forum, New Energy Architecture: Enabling an
markets.
Effective Transition, 2012.
markets.
8
This concept is commonly referred to by the IEA, among others,
whose mandate has been broadened to incorporate the Three
Es of balanced energy policy-making: energy security, economic
development and environmental protection.
Environmental
Sustainability
Social
Definitions
Government
Markets &
Demand Sectors
Energy
Access &
Security
Markets &
Demand
Sectors
Energy Sources
Social elements :
Social elements :
IncludesIncludes
political
political
institutions, industry and
institutions,
industry and
civil society, which shape
the
physical
elements.
civil society, which
shape
the physical elements.
The Energy Triangle

:
Boundary constraints :
Ultimate objectivesFactors
that limiting
performance against the
the energy architecture
is
energy triangle, both
physical and social.
designed to support.
The Energy Triangle :

Ultimate objectives that
the energy architecture is
designed to support.
Bounda
Factors
performa
energy t
physical
A Methodology for Managing Transition Effectiveness2
Step 1 Assessing Current Energy

Architecture Performance: This process begins
with an assessment of current energy
architecture performance using the Energy
Architecture Performance Index (EAPI); a
composite indicator that considers economic
development, energy access and
environmental sustainability. This is intended to
help countries to monitor the progress of their
transition, and guide policy and investment
decisions with regard to energy accordingly.
Step 2 Creating New Energy Architecture
Objectives: Based on strengths and
weaknesses identified, a set of objectives for a
New Energy Architecture that more effectively
meets the imperatives of the energy triangle is
created. These objectives are tested through
in-country interviews with representatives from
across the energy value chain.
Step 3 Defining the Enabling Environment: An
enabling environment that supports New
Energy Architecture objectives is designed.
Interviews are used to identify the enabling
environments that should be put in place, with
the suggestions further tested through a
multistakeholder workshop.
Step 4 Introducing Areas of Leadership: The
ultimate output is the creation of an action plan
that details the relative roles of government,
industry and civil society in creating an
enabling environment for the transition.
Figure 2 New Energy Architecture Methodology
Key question
1. Assessing current
energy architecture
performance
Activity
This project was initiated to help decisionmakers enable a more effective transition to a
New Energy Architecture. To do so, a
methodology has been created to help them
look to the long term and to provide a stable
policy environment, based on a holistic and
in-depth understanding of the consequences
of decisions across the energy value chain. The
end result will be a New Energy Architecture
that is more responsive to balancing the
imperatives of the energy triangle. This process
comes in four steps (see Figure 2):
2. Creating New Energy

Architecture
objectives
3. Defining the
enabling
environment
4. Defining areas of
leadership
The Energy Architecture

Performance Index
An archetype approach
The four pillars of an enabling

environment
How is energy
architecture currently
performing?
What are the objectives

for a New Energy
Architecture?
What enabling
environment will achieve
transition objectives?
Who is responsible for

implementing enabling
environments?
a) Understand current
energy architecture
a) Highlight energy
architecture challenges
b) Select KPIs to assess

current and historic
performance
b) Identify New Energy

Architecture objectives
a) Create an enabler
toolkit that highlights
the potential actions
that can be taken to
accelerate the
transition
a) Develop high-level
action plan for steps
to be taken by
government, industry,
the finance
community and civil
society to shape the
transition
b) Map enablers to
transition objectives
Key considerations for

stakeholders
In the following sections,

the methodology is applied
to India. This begins with
an overview of Indias
current energy architecture
and the results of the
Energy Architecture
Performance Index. Indias
objectives for a New
Energy Architecture are
then identified, based on
where its current strengths
and weaknesses lie.
This is followed by an
exploration of the enabling
environments that need
to be created to achieve
objectives. The final
section discusses the roles
of government, industry
and civil society in working
collaboratively to create an
enabling environment.
Step 1:
Assessing Current
Energy Architecture
Performance
The Economic Times, India eyeing 63,000 MW nuclear power capacity by 2032: NPCIL, 11 October 2010
References to Indias energy balance are sourced from the IEA.
Prayas, Energy Group, An Overview of Indian Energy Trends: Low Carbon Growth and Development Challenges, September 2009
12
CEA Annual Report 2009-2010; Ministry of Power, Power Sector at a Glance ALL INDIA
13
ibid
14
Ministry of Coal, Annual Report 2009-2010
15
Ministry of Coal, Provisional Coal Statistics 2009-2010
9
10
11
1.1 Introduction to Indias

Energy Architecture
While the liberalization of the energy sector has increased the

involvement of private players, the energy value chain remains
predominantly state controlled. According to the Ministry of Power,
86.5% of Indias total installed power generation capacity is publicly
owned, either by the states or the central government.12 A smaller share
is covered by independent power producers (IPP) and industrial
auto-producers. State Electricity Boards (SEBs) own around 50% of the
total installed capacity. Public companies owned by the central
government, including the National Thermal Power Corporation (NTPC),
the National Hydroelectric Power Corporation (NHPC) and the Nuclear
Power Corporation of India (NPCI), control around 34% of Indias total
capacity.13 The oil sector remains largely in the hands of national oil
companies (NOCs). The exception is refining where a quarter of capacity
is in private hands. Upstream, progressive liberalization of exploration
and the licensing policy has attracted some private and foreign firms,
such as Essar and Reliance Industries. The coal sector is dominated by
state monopolies that produce over 90% of coal14 and 70% of lignite in
India.15
India is currently the worlds fourth largest consumer of energy and

accounted for around 5.1% of world primary energy demand in 2008.
Indias primary energy mix is predominantly fossil fuel based. India is the
third largest user of coal products in the world (see Figure 3) and coal is
the mainstay of the energy sector accounting for 42% of primary
energy demand and over 80% of electricity generation in 2008. Oil
dominates the transport sector, while natural gas represents a smaller,
but rapidly growing share of the mix. Renewable energy plays an
increasingly large role in power generation, primarily through large
hydro-power. While nuclear currently plays a small role, it is expected to
grow significantly in future years, with the Nuclear Power Corporation
Limited (NPCIL) planning to add 16 reactors by 2032.9 Despite the rapid
economic growth of recent years, the majority of Indias population
continues to use traditional fuels such as dung, agricultural waste and
firewood for cooking and heating.10
Policy setting and implementation is divided between five ministries: the

Ministry of Power, the Ministry of Coal, the Ministry of Petroleum and
Natural Gas, the Ministry of New and Renewable Energies and the
Department of Atomic Energy. Under the Ministry of Power, the Bureau
of Energy Efficiency is a body that coordinates energy conservation
measures; the Central Electricity Authority (CEA) acts as an advisory
body to the central government on matters of national electricity policy,
and specifies technical standards and norms for grid operation and
maintenance among other issues; and the Central Electricity Regulatory
Commission (CERC) regulates central and interstate level power-related
activities, while the State Electricity Regulatory Commissions (SERCs)
work on state level licensing, state level electricity tariffs and competitive
issues. State governments also have considerable responsibilities in the
power sector, as they are responsible for the implementation of national
laws and can set their own laws and regulations to be applied in their
territory.
Just five sectors of industry (iron and steel, cement, chemicals and
petrochemicals, pulp and paper, and aluminium) are responsible for the
majority of industrial energy demand. Economic growth has gradually
decoupled from energy growth, due to the increasing role of the
services sector. The popularity of non-motorized modes of transport
(which are responsible for more than a quarter of all trips in major cities,
and greater than half in small towns and rural areas) and public
transportation (which satisfies more than three quarters of passenger
demand for motorized transport) mean that the consumption of the
transport sector is significantly less than the global average.11 The
residential sector comprises about 39% of final energy consumption in
India, but only 19% of final commercial energy consumption, since
biomass dominates household energy use in rural areas.
Figure 3 Energy Balance (KTOE) in India, 2008
Coal &
Peat
Supply & consumption

Production
Crude Oil
Oil
Products
Gas
Hydro
Solar,
wind etc.
Biomass
& waste
Nuclear
Electricity
Heat
Total
225,090
38,339
0*
26,299
9,829
1,350
163,565
3,834
468,307
Imports
38,275
130,974
18,611
9,302
795
197,958
Exports
-40,070
-1,656
-38,380
-33
International marine bunkers
-141
-141
International aviation bunkers
-4,746
-4,746
-336
-336
261,373
169,313
-24,655
35,601
9,829
1,350
163,565
3,834
762
620,973
Stock changes
TPES (Total primary energy supply)
% Share
42,1%
27,3%
5,7%
1,6%
0,2%
26,3%
0,6%
0,1%
0,0%
-4,0%
Key Players by Sector
Oil & Gas
Renewables
Power Generation and T&D
Bharat Petroleum
Hinustan Petroleum
Indian Oil
ONGC
Cairn Energy (private)
Essar Oil (private)
Reliance (private)
Ministry of Petroleum and Natural Gas
Suzlon (priavte)
Tata BP Solar (private)
Moser Baer (private)
Orient Green Power (private)
Greenko (private)
Ministry of New and Renewable
Energies
NTPC
NHPC
NPCI
Power Grid Corporation of India
Tata Power (private)
Ministry of Power
Ministry of Coal
Department of Atomic Energy
Bureau of Energy Efficiency
Central Electrical Authority
Central Electricity Regulatory Commission
Source: IEA, Accenture Analysis

1.2 Indias Current Energy

Architecture Performance
The Energy Architecture Performance Index (EAPI) assesses nations
past and current performance in balancing the imperatives of the energy
triangle. It is intended to be a transparent and effective insight into current
challenges and to provide a solid basis from which to develop future
objectives based on strengths and weaknesses. The index covers 124
nations, enabling countries to benchmark performance in comparison to
their peers. Furthermore, the collection of historic data from 1990 and
1999 to 2008 also enables countries to see how they have progressed
over time. Countries receive an overall score between 0 and 3 for the
index, with a score between 0 and 1 for each of the sub-indices.
India currently receives a score of 1.02 on the EAPI, up from 0.69 in
1990 and 0.84 in 2000. Figure 4 provides an overview of Indias scores
on the index in 2008, 2000 and 1990, as well as the actual data for each
indicator, and the cumulative change in its score between 1990 and
2008. Figure 5 provides further detail of how Indias performance has
changed over time on each of the indicators from 1990 to 2008. It
should be noted that the EAPI is in the first year of its development. As
with any nascent area of research further work needs to be done to
expand the robustness and coverage of the index. This will be
completed over the coming year.
Strong improvement in performance on the economic growth and

development and environmental sustainability sub-indices can be seen.
Progress in economic growth is predominantly due to large reductions
in energy intensity Indias energy intensity has fallen rapidly and is now
on a par with Japan, long heralded as a world leader. This decline is
attributable to Indias shift towards a service economy (which
contributed 55.3% to GDP in 200916) and the high cost of electricity
triggering efficiency improvements across industry. Progress in
environmental sustainability has been driven by reductions in carbon
intensity and improvements in air quality. Both of these are in part due to
the decline in output triggered by the financial crisis; however, regulation
and investment to renovate and modernize existing coal power plants
has significantly contributed to this reduction.
Despite this progress, there remain multiple opportunities across the
indices to further improve Indias energy sector; the import bill has shot
up in recent years, now accounting for 10.23% of GDP, freshwater
withdrawals are rising and despite improvements in carbon intensity and
air pollution, India remains reliant on coal and is the worlds third largest
greenhouse gas emitter.17 Performance in energy access and security
has worsened in some regards with a strong increase in reliance on
imported energy and limited improvement in the quality of the electricity
supply.
Figure 4 Change in Indias EAPI Scores over Time and Relative Performance*
KPI
Index
2008
Actual
Index
2000
Actual
Index*
1990 Cumulative index change 1990-2008

Actual
0,33
EAPI
1.02
0.84
0.69
Economic Growth and Development
0.42
0.37
0.28
GDP (PPP) per capita (current USD)/capita
0.05
2,064
0.03
1,270
0.01
776
0,04
HDI
0.21
0.51
0.09
0.44
0.00
0.39
0,21
Cost of energy imports as a share of GDP (%)
0.49
10.23%
0.82
3.88%
0.89
2.40%
Energy intensity GDP (PPP) per toe
0.59
0.19
0.29
0.29
0.00
0.42
Share of mineral products in export (%)
0.65
30.92%
0.67
28.61%
0.67
28.61%
Environmental Sustainability
0.19
Carbon intensity of energy use (tCO2/2000 USD)
0.26
0.05
1.38
0.10
0,15
-0,40
0,59
-0,03
0,14
0.05
1.67
0.09
Share of non-carbon energy sources(%)
0.12
2.42%
0.12
2.39%
0.12
2.44%
Outdoor air pollution (PM10 [mg/m3] p.a.)
0.38
59,23
0.00
92.88
0.00
110.55
Water scarcity (withdrawals/internal resources)
0.00
47.84%
0.00
47.84%
0.00
39.18%
Energy Access & Security
0.41
Import dependence/TPES (%)
0.32
24.58%
0.34
20.25%
0.38
8.49%
Quality of electricity supply (0-7)
0.24
3.15
0.29
3.20
0.29
3.20
Access to modern forms of energy(%)
0.23
59.69%
0.03
74.00%
0.03
74.00%
Diversity of supply (0-1)
0.83
0.69
0.83
0.69
0.79
0.67
0.41
0,18
1.69
0,00
0,38
0,00
0,04
0.36
-0,07
-0,01
0,20
0,04
*In a number of instances, historic data was not available. In these cases, data was kept constant from the last available year in which it was available. This applies to the following indicators: Share of mineral
products in export data was only available for 2005-2008. In calculations of the index for the years 1999-2004 and 1980, the data from 2005 was kept constant. Water scarcity data was only available for
2000. This was kept constant across the time periods covered. Quality of electricity supply data was only available for 2005-2008. In calculations of the index for the years 1999-2004 and 1980, the data
from 2005 was kept constant. Access to modern forms of energy data was only available for 2003. This was kept constant across the time periods covered.
16
17
World Bank, 2009

IEA, CO2 Emissions from Fuel Combustion, 2011
Figure 5 Comparison of Indias EAPI Scores in 1990 and 2008
India EAPI Energy Triangle
The sections below provide a further

breakdown of the results with regard to each
imperative of the energy triangle.
Economic
development
India has achieved rapid economic growth over the past two decades.
Its energy architecture has supported this development, resulting in a
steady rise of its score on the index from 0.28 to 0.42.
Energy access &

security
Indias economic growth has been supported by declining levels of

energy intensity, which has decreased from 0.42 to 0.14 toe/thousand
2000 US$ (see appendix B for the definition of energy intensity), an
improvement that has outpaced that of other nations. This has resulted
in a rise in the indexed score from 0.00 to 0.59, which is ahead of a
number of its peers and close to convergence with world leaders such
as Japan (see Figure 6). Structural shifts in the economy towards less
energy-intensive activities, particularly the service sector, and efficiency
improvements in energy-intensive industries spearheaded by the
Bureau of Energy Efficiency (BEE), which launched a series of energy
efficiency programmes, including the National Mission on Enhanced
Energy Efficiency (NMEEE) have driven these reductions. The lifestyle
of the population has also contributed: close to 100 million people live in
slums and households in India have one-third the energy intensity of
American households with the same expenditure adjusted for
purchasing power parity. The high density of urban spaces reduces
commuting and forces even the wealthy to live in small homes and
apartments, which require less energy to build and to cool; 29% of
Indias population lives in homes of less than 540 square feet.18 As
development continues and incomes increase, energy consumption is
expected to rise despite the intrinsic trends of Indian life (e.g.
vegetarianism) that reduce energy consumption. India should therefore
look to pursue opportunities that help decouple economic growth from
energy use.
Environmental
sustainability
1990
2008
India EAPI Economic Growth and

Development Spider
GDP per capita index
Share of mineral
products in
export index
HDI index
Import bill as a
share of GDP
index
Energy intensity
index
1990
2008
India EAPI Environmental Sustainability Spider

Carbon intensity
index
Freshwater
withdrawals
index
Share of RES in
TPES index
Outdoor air
pollution index
1990
2008
India EAPI Energy Access and Security Spider

Import
dependence index
Efficiency improvements have partly been necessitated by the cost of

energy. India has one of the highest industrial electricity rates in the
world, in absolute terms and much more once adjusted for purchasing
price parity.19 Indias electricity prices are not market-based but decided
through administrative processes. The regulated/administrative prices
charge more than the economic cost of supply to industrial consumers
while subsidizing low-income households and agriculture, in what is
known as a cross-subsidy.
The landmark 2003 Electricity Act aimed to modernize the Indian
electricity industry. It legislated for increased private participation in
generation, transmission and distribution; removal of licensing for
captive generation; unbundling of SEBs; minimum levels of generation
from renewable sources; and increased focus on metering and theft
prevention. However, cross-subsidies from industrial to agricultural
consumers were not addressed and have remained high, requiring utility
companies to overprice supply to commercial consumers. This has
resulted in reduced competitiveness of Indian industry and financial
distress to state-owned utilities.
Quality of
electricity
supply index
Diversity of
supply index
Solid fuel use

index
1990
2008
Prayas, Energy Group, An Overview of Indian Energy Trends: Low Carbon Growth and
Development Challenges, September 2009
18
Reluctance on the part of some state governments to reduce electricity

theft has exacerbated these challenges. Electricity theft has in the past
resulted in annual losses amounting to US$ 4.5 billion, roughly 1.5% of
GDP.20 The situation has not improved. It is estimated that one-third of
generated electricity in 2010 was lost in transmission and distribution at
a total cost of US$ 16 billion, the majority through theft.21 The minor
repercussions, low likelihood of being caught, ease of colluding with
energy company staff and, on a macro scale, the vested political interest
in keeping costs down mean that electricity theft is regarded as routine.
In some cases, theft is encouraged by a lack of alternative supply
options, as opposed to an unwillingness to pay on the part of
consumers. Electricity in slums is regularly supplied by an illegal utility
company a connection to the grid is made by simply slinging a wire
over the transmission cable and the output sold to slum dwellers, often
at above market rates.22
The domestic price of oil-based products remains heavily subsidized.
About 60% of the subsidies are spent on holding down the price of
diesel and about half of the remainder comes from the long-standing
subsidy on kerosene. Gasoline was deregulated in 2010 following the
recommendations of the expert group on a viable and sustainable
system of pricing of petroleum products led by Kirit Parikh.23 However,
this has come with Indian characteristics, since the government
continues to advise oil companies on the price to set.
Oil subsidies have had serious consequences for domestic upstream

and oil marketing companies who have become victims of under
recovery and are now reliant on government oil bonds for liquidity.
Indias oil product subsidies, calculated on the basis of differences
between domestic prices and world prices, surged to around US$
41billion in 2008, or US$ 36 per capita and 3.4% of GDP, as global oil
prices rose.24 Given Indias size, both in terms of population and energy
consumption, the absolute value of Indias energy subsidies were the
highest among net energy importing economies in 2009. This reflects
the growing burden of Indias mineral imports: Indias import bill now
accounts for 10.23% of GDP, up from 2.40% in 1990, resulting in a
decline in index scores from 0.89 to 0.49.
The central government also subsidizes natural gas via a complex
system of differential prices that vary across end users and regions.
About 60% of natural gas is sold in an administered pricing mechanism
under which the government sets the price for gas produced by the
state-owned oil companies. The prices of gas produced from joint
venture fields licensed before the New Exploration Licensing Policy
(NELP) came into effect in 1997 are determined by production sharing
contracts entered into with the government. For gas derived from fields
awarded under the NELP, prices are typically set on the basis of a
formula linking them to the price of crude oil. The price of natural gas
imported as LNG is set on commercial terms.
Figure 6 Energy Intensity
0.45
India Energy intensity

(toe/thousand US$)
0.90
EAPI scores
0.40
0.80
0.35
EAPI Score
0.70
0.30
0.60
0.50
0.25
Japan
0.20
0.40
0.15
0.30
0.20
0.10
0.10
0.05
0.00
toe/thousand 2000US$
1.00
0.00
1990
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Nagayama, Effects of regulatory reforms in the electricity supply industry on electricity prices in developing countries, Energy policy 2007
1.00Reforming the power sector: Controlling electricity theft and improving revenue, September 2004
World Bank,
Power Secretary P. Uma Shankar, Bloomberg Businessweek, Can Indias Power Thieves Be Stopped?, 2011
22
Clean Distributed
0.90 Generation for Slum Electrification: The Case of Mumbai, David Schaengold, Woodrow Wilson School Task Force on Energy for Sustainable Development, 2006
23
Government of India, Report of the expert group on a viable and sustainable system of pricing of petroleum products, 2 February 2010
24
OECD Economic Surveys: India 2011
19
20
140.00
21
core
10
New
Energy Architecture India
0.70
0.60
India PM10 level
120.00
100.00
80.00
m3] p.a.
0.80
Despite continuing reliance on coal, India has improved the

environmental sustainability of its energy architecture. Indias score on
the environmental sustainability index has risen from 0.05 in 1990 to 0.19
in 2008. Key drivers include the growth of renewable energy in power
generation and reductions in air pollution. Indias per capita emissions
(1.25 tons) are also well below the global average.
EAPI Score
Progress should not be overstated. India is the fourth largest emitter of

global greenhouse gas emissions after China, the US and Russia.
Furthermore, recent improvements in carbon intensity can be partially
attributed to the affect of the economic downturn. Between 2007 and
1.00
2009, the
annual growth
rate for
fell from 7.1% to
India
electricity
Energydemand
intensity
0.9%, which
can
be
largely
attributed
to
a
downturn
in industrial output
0.90
(toe/thousand US$)
during the global economic crisis.25 Much more can be done to combat
carbon0.80
emissions: a government report suggests that with a reasonable
package of measures, Indias carbon intensity can be reduced by 23 to
0.70
25% from its 2005 level.26
0.60
Spearheaded by a dedicated Ministry for New and Renewable Energy,
0.50 have become an integral part of the governments energy
renewables
Japan
strategy. Since 2000, capacity additions from renewables (excluding
0.40
large hydro) have comprised nearly one-quarter of total additions in the
27
Indian power
0.30 sector, and almost half with large hydro. However, the
share of non-carbon sources in total primary energy supplies as a whole
0.20 marginal, with gains in the share of renewables in the
has remained
electricity
sector offset by a growing demand for petroleum products in
0.10
the transportation sector. This has meant that Indias score on this
0.00
indicator
has remained stagnant.
1990
1999
2000
2001
2002
Renovation, modernization and life extension programmes have led to

the reduction of air pollution from thermal coal-fired plants. This has
resulted in a decrease in air pollution from 110.55 to 59.20 PM10 (mg/m3
per annum), and a concurrent uptick in index performance from 0 to
0.38. Despite this, the overall pollution level remains relatively high due to
a rapid increase in the vehicle population and continued use of coal for
industrial and energy purposes. According to the Central Pollution
Control Board, in 2007 47% of the ambient air pollution monitoring
stations reported the level of solid particulate matters exceeding the
National Ambient Air Quality Standards by a factor of 1.5.28
Growing water scarcity is being recognized as an important problem
facing India. Freshwater withdrawals have increased from 39.18% to
0.45
47.84%, giving it a score of 0 on this index, indicating that urgent action
is needed. Water use is directly
linked
to energy supply, availability
EAPI
scores
0.40 and
price. Water pumping for agriculture accounts for 25-30% of electrical
energy consumption in India.29 Low power-tariffs and unmetered
0.35supply
of power, especially at unregulated times and frequency, lead to
0.30
wastage of water. The use of water by thermal power plants has
shown
to be eight times higher per kWh in India than in the worlds most
0.25
efficient plants.30
2003
0.20
0.15
0.10
0.05
0.00
2004
2005
2006
2007
2008
Figure 7 Outdoor Air Pollution
140.00
1.00
0.90
India PM10 level
EAPI Score
0.70
100.00
0.60
80.00
China
0.50
60.00
0.40
0.30
40.00
EAPI Scores
0.20
PM10 [mg/m3] p.a.
120.00
0.80
20.00
0.10
0.00
0.00
1990
1999
2000
2001
2002
2003
2004
2005
2006
2007
The Impact of the Financial and Economic Crisis on Global Energy Investment, IEA Background paper for the G8 Energy Ministers Meeting 24-25 May 2009
Planning Commission, Government of India, Low Carbon Strategies for Inclusive Growth: An Interim Report, May 2011
Prayas, Energy Group, An Overview of Indian Energy Trends: Low Carbon Growth and Development Challenges, September 2009
28
Central Pollution Control Board, 2007; Annual Report for 2006-2007, New Delhi
1.00 of Indian Industry, Building a Low-Carbon Economy, 2008
29
Confederation
30
CSE India, Water Use in India, Chandra Bhushan
2008
25
26
27
0.80
0.70
India Share of imports in TPES
25.00
20.00
S (%)
0.90
30.00
11
0.45
0.90
EAPI scores
0.40
0.80
0.35
EAPI Score
0.70
0.30
0.60
0.25
0.50
Japan
0.40
Energy Access and Security
0.30
The Indian economy faces significant challenges in terms of meeting its
energy needs0.20
in the coming decade. Although India has extensive
steam-coal reserves,
its known reserves of oil and gas are limited.
0.10
Increasing energy requirements, coupled with a slower than expected
0.00
increase in domestic
crude oil and natural gas production, have meant
that the share of imports
in the energy
growing rapidly.
1990
1999 mix is2000
2001 Import
2002
dependence has risen from 8.49% to 24.58% of GDP. The import
component of domestic oil consumption is about 76% (after adjusting
for the export of refined petroleum products) and in the case of natural
gas, it is about 19%. This has been tempered by Indias diversity of
supply and the promotion of alternative fuel sources, and an aggressive
policy of exploring its basins for hydrocarbons through its New
Exploration and Licensing Policy (NELP). Since the inception of NELP,
1.00
there have been
more than 100 hydrocarbon discoveries, most of them
being natural0.90
gas, totalling over 30 trillion cubic feet.11
These losses are among the highest in the world, comparable with 0.15
some countries in sub-Saharan Africa. According to the World
Economic Forums Global Competitiveness Index, the quality of 0.10
electricity supply has actually worsened in recent years, declining from a
0.05
score of 3.20 in 2005 to 3.15 in 2008. Peak demand deficit surged in
2007-2008 and, despite falling rapidly in 2008-2009, has started rising
0.00
again. Power shortages are an aspect of everyday life and are having
an
2003
2004
2005on industrial
2006 output
2007
2008 GDP
increasingly
negative effect
and impeding
growth; a 2009 study estimated that the downtime cost just to service
sector companies was US$ 9.4 billion, an increase of almost 100% from
2003.32
With the biggest rural population in the world, India faces a huge
electrification challenge. According to the International Energy Agency
(IEA), 25% of the population (289 million) does not currently have access
140.00
to electricity, while 72% of the population (836 million) relies on the
33
traditional use of biomass for cooking. Low energy availability and
120.00
consumption is reflected in the relatively low Human Development
Index
(HDI) of India.
100.00
EAPI Score
Indias power0.80
generation capacity has struggled to keep pace with rapid
economic and population growth and urbanization.
of
India Despite
PM1050GW
level
0.70
total power generating capacity added over the past five years, peak
demand deficits
0.60are expected to remain worryingly high during
2011-2012, ranging from 5.9% in the north-eastern region to 14.5% in
China
the southern 0.50
region.31 In individual states, such as Goa, Daman and Diu,
these deficits0.40
run at over 40%. Transmission and distribution is also
inadequate. Distribution faces substantial technical losses (because of
0.30
overloading of
transformers and conductors, for instance) and, as
previously mentioned, commercial losses of electricity (because of low
0.20
EAPI
Scores
metering efficiency, poor billing and collection and
large-scale
theft of
power).
0.10
0.20
80.00
60.00
40.00
20.00
0.00
0.00
1990
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Figure 8 Import Dependence
30.00
1.00
0.90
20.00
EAPI Score
0.70
0.60
15.00
0.50
EAPI
China
0.40
10.00
0.30
5.00
0.20
0.00
0.10
-5.00
0.00
1990
31
32
33
1999
2000
2001
2002
2003
Central Electricity Authority, Load Generation Balance Report, 2011-2012

MAIT & Emerson Network Power Study, May 2009
IEA, Energy for all: Financing access for the poor, Special early excerpt of the World Energy Outlook 2011
12
2004
2005
2006
2007
2008
Net imports/TPES (%)
25.00
India Share of imports in TPES
0.80
India Energy intensity

(toe/thousand US$)
PM10 [mg/m3] p.a.
1.00
1.3 Comparing Indias

Current Energy Architecture
Performance with the Grow
Archetype
The results of the Energy Architecture
Performance Index (EAPI) must be read
in context, paying particular heed to the
structure of Indias economy. Contextual
differences mean that energy architectures
will look very different in different countries,
affecting performance on the index. For
example, Indias large rural population
makes issues around the distribution of
energy a particular challenge.
To account for such differences, studies on energy transitions often take
a regional perspective. However, there is considerable heterogeneity
among countries within single regions. In recognition of this, the EAPI
has been used to create a series of archetypes, grouping countries that
face similar challenges in their current energy architecture, and who
therefore have a similar objective for the transition to a New Energy
Architecture. This process has resulted in the identification of four
archetypes: Rationalize, Capitalize, Grow and Access.
India falls within the Grow archetype. Countries within this archetype
have energy architectures that are focused on securing continued and
rapid economic growth. Their focus is on alleviating supply bottlenecks,
to reduce supply-demand deficits. Key opportunities for these countries
lie in bringing new forms of supply online and delivering it more
effectively to consumers and doing so at a market-based price. It
consists principally of countries that are going through a rapid growth
phase, such as those in East Asia and Central and Eastern Europe. They
feature growing urban populations, but many also have large rural
hinterlands. Due to the growing strain of economic growth, physical
infrastructure often falls short of national needs, despite increasing
investment. Many of these countries experience peak supply deficits
and regular black-outs. The challenge for these countries is to increase
reliability, ensure that power supplies keep up with economic growth,
and avoid shortfalls that constrain growth.
Figure 9 reports the scores and actual data for India and a select group
of Grow nations. Figure 10 is a heat map that complements the raw
scores, allowing for a reading of Indias performance in the EAPI in
relative terms. It provides a sense of the distance in scores that
separates India from other members of the Grow archetype. Blueshaded cells and grey-shaded cells indicate that India scores or ranks
respectively higher or lower than the comparator, while no shading
means that there is no significant divergence. The darker the shading,
the greater the difference in performance.
The heat map mirrors Indias atypical performance pattern described
above. Relative weak points include human development, water scarcity
and the proportion of the population using solid fuels, underlining that
India faces significant challenges in relation to energy access in
comparison to its peers. Relative strengths include energy intensity and
diversity of supply. The figure shows that India is outperformed by its
peers across the three imperatives of the energy triangle China is
stronger on 10 out of the 17 indicators. This underlines the significant
opportunities for improving Indias energy system.
Figure 9 EAPI Results for India and Selected Comparators from the Grow Archetype
Economic Growth and
Development
GDP per capita
HDI index
Import bill as a
share of GDP
Energy intensity
Share of mineral
products in export
Country
KPI
Raw
KPI
Raw
KPI
Raw
KPI
Raw
KPI
Raw
Chile
0.30
11277
0.71
0.78
0.57
0.09
0.78
0.14
0.74
23.24
Hungary
0.44
16217
0.76
0.80
0.29
0.14
0.77
0.14
0.96
3.81
India
0.05
2036.9
0.21
0.51
0.49
0.10
0.59
0.19
0.65
30.92
Indonesia
0.08
2983
0.36
0.59
0.62
0.08
0.46
0.24
0.62
33.46
Korea, Rep.
0.59
21630
0.39
0.12
0.64
0.18
0.90
9.45
Mexico
0.31
11646
0.65
0.75
0.90
0.02
0.84
0.12
0.79
18.46
China
0.09
3598.6
0.47
0.65
0.78
0.05
0.29
0.29
0.97
2.66
South Africa
0.21
7992.8
0.36
0.59
0.64
0.07
0.32
0.28
0.72
24.83
Thailand
0.17
6309.3
0.46
0.65
0.30
0.14
0.56
0.21
0.91
7.91
Turkey
0.26
9802
0.52
0.67
0.63
0.08
0.89
0.10
0.92
7.44
Vietnam
0.05
1937.2
0.38
0.13
0.36
0.27
0.77
20.72
13
Carbon intensity
Share of non-carbon
energy
Country
KPI
Raw
KPI
Chile
0.78
0.49
Hungary
0.79
0.48
India
0.26
Indonesia
Korea, Rep.
Freshwater
withdrawals
Outdoor air pollution
Raw
KPI
Raw
KPI
Raw
0.34
6.63
0.35
61.55
0.97
1.28
0.77
15.16
0.90
15.60
1.38
0.12
2.42
0.38
59.23
0.00
47.84
0.37
1.19
0.39
7.68
0.22
72.35
0.87
5.61
0.75
0.55
0.89
17.49
0.72
30.76
Mexico
0.78
0.48
0.34
6.73
0.70
32.69
China
0.00
2.14
0.18
3.53
0.30
65.61
South Africa
0.08
1.70
0.13
2.64
0.82
22.13
0.34
27.86
Thailand
0.32
1.28
0.03
0.57
0.42
55.31
Turkey
0.77
0.50
0.23
4.57
0.64
37.06
0.56
18.50
Vietnam
0.16
1.57
0.19
3.76
0.46
52.71
Import dependence
Quality of electricity
supply
Solid fuel use
Diversity of supply
Country
KPI
Raw
KPI
Raw
KPI
Raw
KPI
Raw
Chile
0.12
71.34
0.68
5.33
1.00
5.00
0.70
0.61
Hungary
0.17
60.33
0.68
5.29
1.00
5.00
0.88
0.73
India
0.32
24.58
0.24
3.15
0.23
59.69
0.83
0.69
Indonesia
0.73
-74.65
0.39
3.86
0.25
58.36
0.95
0.77
Korea, Rep.
0.08
80.29
0.85
6.15
1.00
5.00
0.87
0.72
Mexico
0.54
-29.34
0.42
4.03
0.86
15.00
0.66
0.59
China
0.40
5.82
0.56
4.72
0.40
48.00
0.54
0.52
South Africa
0.51
-21.16
0.29
3.36
0.83
17.27
0.46
0.47
Thailand
0.25
40.41
0.71
5.48
0.72
25.00
0.87
0.72
Turkey
0.12
70.58
0.45
4.15
0.88
0.72
Vietnam
0.50
-20.14
0.26
3.22
0.22
61.00
0.86
0.71
Diversity of supply
Solid fuel use
Quality of electricity
supply
Import dependence
Energy access &

security
Freshwater
withdrawals
Outdoor air
pollution
Share of noncarbon energy
Carbon intensity
Environmental
sustainability
Share of mineral
products in export
Energy intensity
Import bill as a
share of GDP
HDI
GDP per capita
Economic growth
& development
Figure 10 Heat Map Indicating Differences between India and Selected Archetype Comparators*
Country
India
0.42
0.05
0.20
0.49
0.59
0.65
0.19
0.26
0.12
0.38
0.00
0.41
0.32
0.24
0.23
0.83
Chile
-0.22
-0.25
-0.50
-0.08
-0.18
-0.09
-0.42
-0.52
-0.21
0.03
-0.97
-0.22
0.20
-0.44
-0.77
0.13
-0.28
0.15
-0.43
-0.77
-0.05
-0.87
-0.17
-0.42
-0.14
-0.02
-0.12
-0.04
Hungary
-0.24
-0.39
-0.55
0.21
-0.18
-0.31
-0.63
-0.52
-0.64
-0.52
Indonesia
-0.01
-0.03
-0.15
-0.13
0.14
0.03
-0.27
-0.11
-0.27
0.16
Korea, Rep.
-0.21
-0.54
0.10
-0.05
-0.25
-0.59
-0.48
-0.76
-0.34
-0.29
0.23
-0.61
-0.77
Mexico
-0.29
-0.26
-0.44
-0.41
-0.25
-0.14
-0.42
-0.52
-0.22
-0.32
-0.22
-0.23
-0.18
-0.63
0.17
China
-0.07
-0.04
-0.26
-0.29
0.31
-0.33
0.03
0.26
-0.06
0.08
-0.07
-0.08
-0.32
-0.16
0.29
South Africa
-0.01
-0.16
-0.16
-0.15
0.28
-0.07
-0.15
0.18
-0.01
-0.44
Thailand
-0.07
-0.12
-0.26
0.19
0.04
-0.27
-0.07
-0.06
0.09
-0.05
Turkey
-0.25
-0.21
-0.31
-0.14
-0.30
-0.27
-0.36
-0.51
-0.11
-0.27
Vietnam
0.04
0.00
0.12
0.24
-0.12
-0.08
0.11
-0.07
-0.08
*This heat map allows for a reading of Indias performance in the EAPI in relative terms. It provides a sense of the distance
in scores that separates India from other members of the Grow archetype. Blue-shaded cells and grey-shaded cells
indicate that India scores or ranks respectively higher or lower than the comparator, while no shading means that there is
no significant divergence. The darker the shading, the greater the difference in performance.
14
Score Difference
-0.34
-0.56
-0.7
-0.11
-0.19
-0.04
-0.59
0.38
-0.23
0.07
-0.47
-0.49
-0.04
-0.08
0.19
-0.20
-0.05
-0.19
-0.01
0.02
-0.4
-0.1
0.1
0.4
-0.05
-0.03
0.7
Summary: Key Challenges

for Indias Current Energy
Architecture

Distorted energy prices: While some progress has been made in

liberalizing Indias energy sector, industrial energy costs are among the
highest in the world, leading to a lack of competitiveness within certain
sectors. Meanwhile, residential and agricultural electricity, diesel,
kerosene and LPG prices are heavily subsidized, placing a burden on
public finances and leading to inefficiencies in use and little motivation
for private companies to invest in the industry.
Air quality: Despite significant improvements, the overall pollution levels

remain high due to rapid and sustained increases in vehicle ownership
and continued inefficient combustion of low-quality coal.
Water scarcity: Freshwater withdrawals have increased from 39.18%

to 47.84% as energy, agricultural and industrial output rises, a trend that
is forecast to continue. Urgent action is required to ensure the continued
availability of fresh water to consumers.
Growing import dependence: Stagnant efficiencies, increasing

energy requirements, and a slower than expected increases in
domestic fuel production have meant that import dependence has risen
from 8.49% to 24.58%.
Unreliable grid: India has some of the highest transmission and

distribution losses in the world. The quality of electricity supply has
worsened over recent years with power shortages being routine,
continued voltage fluctuations and inability to meet peak demand.
Energy poverty: 72% of the population continues to rely on biomassbased fuels for cooking, and 289 million people lack access to
electricity, giving India a sub-par performance with regard to energy
access in comparison to its peers.
15
Step 2:
Creating New
Energy Architecture
Objectives
16
2.1 Defining Indias Objectives

for a New Energy Architecture
A consideration of Indias performance on
the EAPI helps highlight the challenges
that its energy architecture faces. It helps
provide a foundation for identifying a set
of objectives for the creation of a New
Energy Architecture in India that is more
responsive to the imperatives of the energy
triangle.35 These objectives were further
shaped and tested during a series of
interviews with a range of representatives
from across the energy value chain, as well
as through a multistakeholder workshop
conducted during the India Economic
Summit. The objectives below therefore
represent the participants suggestions of
the issues that India should focus on.
India has a responsibility to achieve its growth trajectory in an

environmentally sustainable manner, and has set a voluntary target to
cut the emissions intensity of GDP by 20-25% by 2020 compared with
2005 levels.38 Therefore, the way forward should be to identify common
ground between climate change policy and economic growth and
pursue measures that achieve both. Considering that there needs to be
a significant expansion in energy infrastructure, India has an opportunity
to pursue development while managing emissions growth, enhancing its
energy security and creating world-scale clean technology industries.
India should therefore not look to copy the Western model of energy
infrastructure development, and instead pursue a development path that
is particular to its local conditions. This would require that India leapfrog
inefficient technologies, assets and practices and deploy ones that are
more efficient and less emission intensive, with a key opportunity being
the expansion of decentralized distribution and generation.
The following set of objectives are therefore focused on supporting
improvement with regard to economic growth and development and
energy access and security, but have been tailored to provide cobenefits with regard to environmental sustainability. They are intended to
indicate what Indias focus should be in the near to medium term.
In shaping these objectives, the existing government targets have been

taken into account. India has a core objective of achieving sustainable
and inclusive growth and has provisionally set a 9% GDP growth target
as part of the 12th Five Year Plan (2012-2017), which will require energy
supply to grow at 6.5% per annum.36 This represents a significantly
increased growth target for the sector than in the past. The focus for the
coming years will therefore be on supporting economic growth by
providing a secure supply of energy. Indeed, inability to meet energy
demand could be the single biggest constraining factor to Indias growth
story.37 This will require India to bring new forms of supply online, deliver
it more effectively to consumers (both urban and rural), and do so at a
market-based price (based upon the eventual eradication of subsidies)
that sends appropriate signals to both the demand and supply sides.
Tulsi R. Tanti, Wind matters: Making the case for wind in India, Suzlon, 2011
These transition objectives are intended to indicate the focus that India will have over the course
of the next 15-20 years, and are not intended to be exhaustive.
36
Government of India, Planning Commission, Faster, Sustainable and More Inclusive Growth: An
approach to the 12th Five Year Plan, August 2011
37
Interview participant, New Delhi, October 2011
38
Natural Resources Defense Council, From Copenhagen Accord to Climate Action:
Tracking National Commitments to Curb Global Warming, http://www.nrdc.org/international/
copenhagenaccords/
34
35
17
While [Indias] economic growth has

touched millions, without energy security it
cannot be truly sustainable.
Tulsi R. Tanti
CEO, Suzlon34
18
Objective 1 Augment resources for energy security
Objective 4 Rationalize energy prices
Indias principal challenge relates to its supply-demand deficit. Three

main actions will enable India to reduce this deficit: more efficient
exploitation of indigenous hydrocarbon reserves; the adoption of
alternative sources of supply; and, increased energy efficiency across
the energy value chain.
A major objective of energy policy is to have an efficient and competitive

energy economy that promotes efficient use by consumers, appropriate
choice of fuels among substitutes and a proper choice of technique.
This is best ensured by a competitive energy sector. Indias energy
sector is heavily subsidized. The resultant market perversions lead to a
lack of competitiveness in the industrial sector and inefficiencies in use
by the residential and agricultural sectors.
India has introduced a number of measures to tackle these issues: oil

and gas reserves have been opened up for exploration and production
by private and foreign firms under the New Exploration License Policy
(NELP), which soon will be replaced with the Open Acreage Licensing
Policy (OALP); targets and incentives for renewable energy have been
laid out in the Prime Ministers National Action Plan on Climate Change,
which targets a 15% renewable contribution to the electricity generation
mix by 2020; the Jawaharlal Nehru National Solar Mission targets the
deployment of 20GW of solar power by 2022; and, the National Policy
on Biofuels proposes a target of 20% blending of biofuel by 2017.39
Increases in energy efficiency are being targeted by the National Mission
on Enhanced Energy Efficiency. These targets need to be further
bolstered if India is to reduce its supply bottlenecks.
Objective 2 Provide access to modern forms of energy for all
In the oil sector, continuing to phase out energy subsidies would

facilitate private and joint venture investment and reduce the under
recovery of upstream firms and oil marketing companies. A review of
subsidies for petroleum products was completed by an expert group led
by Kirit Parikh in 2010.45 While some of their recommendations have
been pursued, further efforts should be made in this regard.
In electricity markets, the removal of cross-subsidies that reduce the
revenues of the distribution utilities to below cost would remove a major
barrier to private investment. These measures would improve allocative
efficiency in the Indian economy and boost GDP. They would also relieve
considerable fiscal pressure and allow revenues to be better directed
towards achieving Indias development goals.
Energy poverty continues to blight a significant portion of the population,

with fossil fuels currently costing a disproportionate portion of what is for
many very modest incomes. Providing energy access for all is therefore
a key objective if India is to deliver on its target of 9-9.5% GDP growth in
2012-2017 while achieving the Millennium Development Goals a set of
development targets to be reached by 2015, including reducing the
population under the poverty line to below 20%.40 When talking of the
transition from traditional to more modern forms of energy in rural
communities, traditional and modern refer to both the type of fuel
and the technologies used.
Rationalizing prices will accrue co-benefits for environmental

sustainability and energy security, as they have a significant role to play
in promoting energy efficiency and in ensuring expansion of domestic
supply.
Objective 3 Strengthening energy carriers41
A particular challenge for India is balancing the needs to promote a more

competitive industrial sector through rationalized energy prices, and the
need to expand access to modern forms of energy for all. In recognition
of this, challenging decisions with regard to the removal of energy
subsidies must be carefully made. The solution will be ensuring that
energy subsidies reach the appropriate target audience: citizens below
or near the poverty line.
India may be the worlds second fastest growing economy, but its
physical infrastructure continues to fall far short of national needs.
Historically, Indias infrastructure investment has averaged about 4% of
GDP half the countrys more than 8% growth rate and half the GDP
percentage that China devotes to infrastructure.42 Infrastructure is so
poor in some instances that companies are forced to build their own.
Infosys, for example, generates much of its own electricity.43
Balancing the Energy Triangle

The imperatives of the energy triangle may reinforce or act in tension
with one another, and efforts to balance the three require difficult
trade-offs to be made.
The power supply position prevailing in India is a particular challenge,

and is characterized by persistent shortages and unreliability, as utilities
struggle to transmit from load centres to demand centres. Additional
generating capacity will do little to address Indias increasing demand for
power, unless there is significant investment in upgrading transmission
and distribution networks. The supporting infrastructure for the gas
sector has similarly suffered from a lack of investment, and expansion
will be required to enable growth in the sector. Gas pipelines are limited
in length (less than 10,000 km) and confined to the north-west corner,
supplying just 41 cities with city gas.44
USDA, India Biofuels Annual, 2011

UNICEF, Millennium Development Goals Country Report: India 2005
Refers to both electricity transmission and distribution, and oil and gas pipeline infrastructure
42
Accenture, Helping India on the journey to high performance: Three imperatives for policy-makers
and business leaders, 2009
43
The Economist, The Bollygarchs
44
IEA, Natural Gas in India, Anne-Sophie Corbeau, 2010
45
Government of India, New Delhi, Report of the expert group on a viable and sustainable system of
pricing of petroleum products, 2 February 2010
39
40
41
19
Step 3:
Defining the
Enabling
Environment
20
3.1 Achieving Indias

New Energy Architecture
Objectives: Creating the Right
Enabling Environment
Achieving Indias New Energy Architecture objectives is contingent on
the creation of an appropriate enabling environment. The research
conducted as part of the wider New Energy Architecture project has
shown that enabling environments consist of four pillars:
1.
Policy initiatives: Frameworks and incentives should be created to

put in place the rules, price signals and risk-return incentives that
attract investors and facilitate development. Regulations should be
consistent, transparent and evidence-based, and include strict
standards of governance. A strong policy platform will unlock the
potential of business to do what it does best: profitably invest and
innovate.
2.
Technology and infrastructure: Technological innovations should be

deployed to fix specific challenges in a country or stage of the value
chain. Technology pilots should be performed in developing
countries to take advantage of the lack of legacy technology and
infrastructure, strong growth prospects and availability of
resources. Government and industry must look to create and align
standards to reduce production costs and facilitate integration.
3.
Market structures: Market structures should be created to allow

producers to meet consumers needs efficiently. This entails
creating market links between players along the value chain,
financing mechanisms to reduce risk and appropriate scales of
supply and demand.
4.
Human capacity: Human capacity should be developed to both

drive change and develop solutions. To drive change will require
increased citizen access to information (e.g. smart metering). To
develop solutions will require increased focus on education, training
and accreditation by professional bodies to overcome the scarcity
of technical knowledge, ability and experience.
Spanning these four pillars is information. Making changes to energy

architecture requires building support from all stakeholders in civil
society, including the public at large. The establishment of
communication channels between stakeholders is a necessary step
towards promoting better understanding of the risks and benefits
associated with energy architecture change. The provision of
information is therefore central to driving a bottom-up acceptance of,
and even pull for, change.
These four pillars must be deployed in a mutually supportive manner.
For example, the successful deployment of large-scale renewables into
energy architecture requires a portfolio of complementary flexible
generation, strengthening and extending network infrastructure and
interconnections, energy storage technologies, modified institutional
arrangements including regulatory and market mechanisms, newly
trained technicians to manage the system, and public acceptance.
Failure to integrate efforts across the four pillars will lead to an
inadequate enabling environment that hinders the transition. For
example, Indias Five Year Plans have historically placed emphasis on
power generation expansion. However, this results in loading more and
more power on an inadequate transmission and distribution network.
Since transmission and distribution investments have not kept pace with
investments in generation, power cannot be easily moved from surplus
to deficit areas. Industrial and commercial establishments have been
forced to seek captive and standby generation to meet demand or
provide quality supply on a 24x7 basis to support critical processes and
provide peaking support. There therefore needs to be a greater
alignment between policy initiatives and infrastructure build-out.
In the following section, an overview is provided of the options that India
should consider pursuing to create enabling environments that support
its transition to a New Energy Architecture, applying the above
framework. The options highlighted are based on interviews and a
multistakeholder workshop conducted during the India Economic
Summit.
Figure 11 The Four Pillars of an Enabling Environment
21
3.2 Defining Enabling

Environments for Indias New
Energy Architecture
Objective 1 Augment resources for energy security
1.1 Create a policy framework that more effectively supports the
involvement of international partners in upstream projects
The New Exploration Licensing Policy (NELP) was formulated in
1997-1998 to boost hydrocarbon exploration in India, providing a level
playing field where exploration licenses would be granted on a
competitive basis, thereby encouraging the participation of foreign and
private oil companies. NELP was first implemented in January 1999,
with the Ninth Round launched in October 2010.
The international response to NELP has been mixed, and in recent
rounds there has been limited participation by international oil
companies. Unstable fiscal policies, particularly the exemption of natural
gas from tax breaks46, lack of reliable and comprehensive geologic data,
and the opaque structure of the tendering process have driven the poor
response in NELP IX (2011), only eight foreign companies out of a total
of 37 participated in NELP IX and out of these only two foreign
companies were new entrants to the sector.47
The Open Acreage Licensing Policy (OALP) is designed to replace and
overcome some of the issues with NELP but is not expected before
2013. The poor availability and quality of geologic data will be addressed
with the creation of a National Resource Database (NDR) to create a
definitive view of Indias resources, and four major oilfield service
companies have already submitted bids for the work. Companies will
bid for blocks that they delineate based on data from the NDR48 and the
role of Oil and Natural Gas Corporation (ONGC) in the process will be
reduced.
Attracting international partners to the sector is of fundamental
importance if Indias oil companies are to build the capacities to exploit
indigenous assets, particularly as conventional resources are exhausted
and interest turns to more challenging resources (e.g. shale gas).
Although Reliance Industries has been able to pursue such a strategy
through BPs acquisition of a stake in 23 exploration blocks, others have
been unable to mimic this. Policy must continue to be developed to
entice foreign companies to enter India and to govern exploration of
non-conventional resources.
Interview conducted with representative from private oil and gas company in New Delhi, October
2011
47
IHS Global Insight, Indias NELP IX licensing round supported by state oil companies but fails to
attract IOC interest, 29 March 2011
48
Review of E&P Licensing Policy, Petroleum Federation of India, 2005
49
International Energy Agency, World Energy Outlook, 2011
50
Pew Centre, Coal Initiative Reports, A Resource and Technology Assessment of Coal Utilization in
India, A Chikkatur, 2008
51
Forms of Mining in India, Indian Infrastructure, Sanjay Sah, 2010
52
Essar Oil, Developments in India CMM/CBM, Prem Sawhney, March 2010
46
22
1.2 Expand and modernize the coal mining industry to enable foreign
participation and full exploitation of indigenous resources
Over the next 20 years, coal will continue to play an important role in Indias
energy architecture. Under its New Policies Scenario, the International
Energy Agency estimates that India will double its coal use by 2035,
displacing the US as the worlds second-largest coal consumer.49 Given
the continuing role of coal in the energy mix, it is important that India take
steps to ensure that domestic resources are able to meet growing
demand, and do so in an environmentally sustainable way.
Coal production has increased dramatically since nationalization and
has grown at 4% CAGR over the past decade. However, it has been
outstripped by growth in the power industry (which accounts for 80% of
consumption) leaving India increasingly reliant on imported coal.50 Coal
resources are known to be extensive with a potential resource base of
248GT and proven reserves of 93GT. However, systematic exploration
has been based on the coal industrys perceptions of extraction, leaving
extractable proven reserves of only 52GT.50 With increasing numbers of
modern coal-fired power plants being built, it is conceivable that they
may outlast domestic coal reserves. Without a clear picture of it coal
position, India may commit to building power plants now that will affect
its long-term dependence on imported coal. It must embark on renewed
coal exploration to obtain a conclusive estimate of reserves, which can
then be used to inform generation policy and capacity planning.
Shortcomings in exploration can be attributed in some part to the
propensity for open cast mining, which has been favoured due to its low
cost, quick access and high recovery rate. It accounts for over 80% of
production, with 62% of explored areas showing coal at a depth of less
than 300 m.50 The focus on open cast mining has led to chronic
underinvestment in underground mining, which now lacks modern
technology and mechanization.51 This lack of investment means that
India is not capable of exploiting its considerable reserves of
underground coal. As shallow coal becomes scarcer, this lack of
capability may well impede continued growth in coal production.
Some Indian companies have ventured abroad to extract coal reserves
in joint ventures and will acquire knowledge and technology to enable
them to reach underground coal back home. However, Indian coal
production must develop rapidly and significant technology and financial
investments are required. These would most easily be acquired by
opening up the industry to allow for foreign and private participation.
Although some steps have been taken to change the regulation of the
coal mining industry allowing private firms to mine for captive
generation more steps are needed to encourage the involvement of
international mining companies with the knowledge and technology
needed to empower growth in Indian coal production.
Although abundant, Indian coal is mostly of low quality with high ash
content and low calorific value. This has been exacerbated by open cast
mining that increases the quantity of overburden mixed with the coal.
Underground mining would go some way towards mitigating this, but
the use of new technologies must also be encouraged; coal bed
methane (CBM) and underground coal gasification (UCG) should also be
encouraged. Indias coal bed methane (CBM) resource has been
estimated at 50 trillion cubic feet52. Foreign and private participation has
been encouraged. Essar Oil has recently started producing CBM from
fields in West Bengal and has stated its intention to acquire more fields.
The first underground coal gasification (UCG) project was put out to
tender by Coal India earlier this year and has attracted bids from private
Indian companies partnering with international mining firms (to provide
the expertise). UCG is a cost-effective environmental solution for
resource recovery in areas beyond the technical and economic confines
of conventional mining. Both technologies are relatively recent and offer
strong potential in India. Efforts should be continued to expand their
application to Indias deep coal reserves.
1.3 Further growth in the renewables industry will require capacity

building at the state level, and may be further supported by the creation
of a unified energy regulator
Following sustained 31% annual growth in installed renewable capacity
between 2005 and 2009, India is now the fifth largest renewable energy
generator in the world with 5% of global installed capacity. This growth
has been driven by onshore wind energy.53 The public policy regime for
the promotion of renewable energy at the national level is viewed as
being among the most effective in the world a benchmark for all
emerging markets.54 The Ministry of New and Renewable Energy,
among others, has nurtured the sector with a portfolio of policies
Renewable Portfolio Obligations, feed-in tariffs, generation and
tax-based incentives and renewable energy certificates to develop the
market. The government has now set a target of 40GW of renewable
power by 2022, requiring wind and solar capacity to double (see Box 1
for details of the current and prospective status of renewable energy in
India).
While a national policy framework has been put in place to support
these targets, success differs markedly on a state by state basis. States
with large growth rates tend to have burgeoning renewable sectors
e.g. Gujarat and Maharashtra while those with low growth rates,
particularly those in the north-east, do not have an established
renewables sector. State governments are responsible for the
implementation of national laws and can set their own laws and
regulations to be applied in their territory. This results in a patchwork of
policies and targets, as seen in stark differences within Renewable
Portfolio Obligations. Administrative hurdles are also significant in some
states, particularly in relation to land title rights, responsibility for
sanctioning projects and levels of financial support.
Poor performing states with high potential for renewables (e.g.
Jharkhand) should be targeted to promote capacity building and
encourage wider economic development. India must create a
nationwide light touch regulatory environment, provide adequate and
transparent funding for projects, and look to rapidly improve its
evacuation infrastructure and resource database to facilitate industry
participation. India should also consider creating a unified energy
regulator to help align incentives between the states and the central
government.
Box 1 Renewable Energy in India55

India has the potential to generate 150GW of power from renewable
energy as can be seen below:
Resource
Estimated
Potential
2010
Capacity
Percentage
Exploited
Average Cost
(US$/kWh)
Biomass
18,000MW
Small Hydro Power
15,000MW
2673MW
14.85%
0.09
2953MW
19.69%
Wind
45,000MW
13,184 W
0.07
29.30%
0.09
Solar
50,000MW
45.5MWp
0.25 0.35
Note: Average cost of coal-fired generation is US$ 0.06/kWh. The

remaining 22GW is from cogeneration and waste to energy
Source: MNRE, 2010
Biomass offers strong potential in an agrarian economy and provides

additional agricultural income as well as increased provision of
electricity; however, its development level is highly state-dependent and
growth has been hindered by an underdeveloped supply chain and lack
of reliable resource assessment. Strongest performers are Uttar
Pradesh and Tamil Nadu, while Rajasthan and Punjab have the greatest
potential.
Small Hydro Power (SHP) offers significant opportunity for expansion
(especially in the north). Development of SHP has been slow due to long
delays caused by an inefficient policy framework for land ownership and
private sector participation. SHP is well supported by established Indian
industry and maximum power production is in summer. Karnataka and
Himachal Pradesh have the highest installed capacity; Himachal
Pradesh and Uttaranchal have the largest potential resource.
Wind energy has benefited from a strong and lengthy subsidization
scheme as well as government-driven capacity building in the form of
the Wind Resource Assessment Program and the Centre for Wind
Energy Technology (a focus point for research and development).
Interest in exploiting offshore wind energy is now growing. Wind energy
is most developed in Andhra Pradesh, Gujarat, Karnataka and Tamil
Nadu. Of investments in wind energy, 99% have come from the private
sector, and many private integrated technology and project
development firms have emerged as investors have sought to reap the
rewards of accelerated depreciation and the feed-in tariff.
Solar power offers strong potential and India has been categorized as a
top-five country for investment in solar power; but, at present, it is
expensive due to the high capital cost of equipment and low plant load
factor, with solar thermal costing marginally less than photovoltaic.
Highest insolation is in the western states of Gujarat and Rajasthan and
the southern state of Tamil Nadu, while large installations have been
completed in Gujarat, Karnataka and Maharashtra. With interest in the
sector rising (JP Morgan and Goldman Sachs have recently invested),
there is a nascent opportunity to leverage the lessons learned from wind
energy and apply it to solar; the development of local production of the
high precision engineered components required could significantly
reduce costs and an accurate resource assessment would drive further
investment in the industry. A recent article in The Economic Times
predicted that the Indian solar industry will need to augment manpower
by 100,000 before 2022.
53
54
55
World Bank, Unleashing the Potential of Renewable Energy in India, 2010

Suzlon
Source: The World Bank, Unleashing the Potential of Renewable Energy in India, 2010
23
1.4 Adopt new technologies to improve the energy efficiency of power

generation
India can save 183.5 billion kWh annually through energy efficiency
initiatives.56 This can begin upstream, targeting improvements in power
generation to increase output, reduce dependence on energy imports
and lower costs of production. The thermal efficiency of coal power
plants in India is about 29-30%, while in developed countries a much
higher level is achieved (e.g. 42% in Japan).57 Most of the new plants to
be added in the near term would also be of the sub-critical type,58 which
would set a long-term trend of environmentally unsound technology.
India should look to move to a quicker switchover to new technologies,
such as super-critical technology. Current super-critical coal-fired power
plants have efficiencies above 45%. Ultra super-critical boilers promise
even higher efficiency and lower emissions.
1.5 Accelerate energy efficiency among consumers (commercial,
residential and agricultural) by introducing clear standards
The National Mission on Enhanced Energy Efficiency was launched in
2008, and measures include labelling of consumer durables for energy
efficiency, imposing targets for reducing energy use in energy intensive
industries and introducing energy efficiency directives in buildings. This
is supported by further initiatives such as the Energy Conservation
Building Code (ECBC).
The ECBC went some way to driving energy efficiency in the construction
of new commercial buildings, but adherence must become mandatory
and extended to cover domestic developments. Likewise, the Bureau of
Energy Efficiencys appliance labelling scheme should be extended to
become mandatory for appliances in addition to refrigerators and air
conditioners, especially those with high power consumption. With sales
of consumer appliances expected to mushroom in the next few years,
there is strong motivation to implement a minimum efficiency standard
and even subsidize the supply of energy efficient products now price is
still seen as the key differentiator in consumer behaviour.
By following Leadership in Energy Efficiency and Design (LEED)
guidelines, consumption of electricity in commercial buildings can be
reduced by 30%.59 A study in 2010 concluded that by 2030, energy
efficiency increases of lighting, refrigeration, air conditioning, fans, water
heating, washing machines and TVs could result in 41% energy
efficiency increase in 2030 over base case scenarios, reducing 2030
consumption by 97TWh.60
Replacing magnetic ballast lighting tubes with electronic ballast tubes in a
government building resulted in savings of US$ 40,000 per annum61 and
LED lighting presents further improvement opportunities. Air conditioning
improvements also offer strong potential for reducing energy
consumption; installing new air conditioning systems in a mid-sized
hospital resulted in energy cost savings of US$ 17,000 per annum for a
cost of US$ 12,000; wider adoption of efficient air conditioning is
expected to result in energy savings of 23Mtoe between 2010 and 2020.62
The introduction of minimum efficiency standards for pump systems will
also help to improve efficiency within agricultural use. New products
such as solar water pumps could further help in this regard. To
encourage the adoption of such technologies, pilot programmes should
be funded to establish proof points.
24
Objective 2 Providing energy access for all

2.1 India has created a strong national policy platform for expanding
access to modern fuels but implementation needs to be improved at
the state level
Government support is essential to the development of a successful
rural electrification plan: without firm implementation policies and goals
that can be enforced through legislation, the electrification process will
fail. Since the launch of the Power for all by 2012 initiatives in 2001,
India has created a solid policy platform. In February 2005, a large-scale
electrification effort, the Rajiv Gandhi Grameen Vidutikaran Yojana
(RGGVY) scheme, was launched by the Ministry of Power to speed up
rural electrification. Since 2005, the Rural Village Electrification (RVE)
Program of the Ministry of New and Renewable Energies has been
supplementing the efforts of the RGGVY with complementary measures
for the provision of basic lighting/electricity facilities through renewable
energy sources.63 These initiatives are further supported by the Rural
Electrification Corporation, which has proven to be an effective means of
furthering electrification efforts independently of political pressures. As
of 30 June 2011, work in 97,940 villages had been completed for
RGGVY, with 166 million free connections to households below the
poverty line.64
In the cookstove market, India previously ran the National Program for
Improved Chulas (NBI) (1985 to 2002), and has recently launched the
National Biomass Cookstoves Initiative (NBCI) to develop and deploy
next generation cleaner biomass cookstoves to households. The
government is piloting the demonstration of 100,000 cookstoves during
2011 and 2012, providing financial assistance for up to 50% of the cost.
Under the NBCI initiative, a series of pilot-scale projects are envisaged
using several existing and commercially available cookstoves and
different grades of process biomass fuel.
While the policy framework has provided a solid platform for reform,
specific challenges have occurred in implementation at the state level,
including delays in finalizing contract awards, delays in land acquisition,
and authenticating lists of households below the poverty line.65
Expanding access requires dealing with the large backlog in the States
of Uttar Pradesh, Bihar, Orissa and Assam and some of the other
north-eastern states.
Anjali Jaiswal, Indias green path to growth: Addressing climate change and building a low-carbon
economy, NRDC
Graus et al. 2007; Chikkatur 2008
58
A Resource and Technology Assessment of Coal Utilization in India, Ananth Chikkatur, 2008
59
NRDC, Taking Energy Efficiency to New Heights, 2011, S. Chary Vedala, R. V. Bilolikar, S. Nalam,
D. Foster
60
Coping with residential Electricity Demand in Indias Future How much Can Efficiency Achieve?
V. Letschert, M. McNeil, Berkeley National Laboratory Environmental Energy Technologies Division,
2007
61
World Resources Institute, Powering UP: The Investment Potential of Energy Services Companies
in India, E. Delio, S. Lall, C. Singh, 2009
62
Options for Energy Efficiency in India and Barriers to Their Adoption, Resources for the Future, S.
Bhattacharya, M. Cooper, 2010
63
This applies to populations of less than 100 inhabitants; the electrification of villages comprising
more than 100 inhabitants will usually be taken on by the RGGVY scheme through its decentralized
distribution and generation. To avoid overlap of efforts, close coordination between the RGGVY and
the MNRE is ensured mainly through the Rural Electrification Corporation.
64
Bharat Nirman Electrification: A Business Plan; http://www.powermin.nic.in/bharatnirman/
bharatnirman.asp
65
Demand for grants 2007-2008, Standing Committee on Energy, 14th Lok Sabha, 20th Report,
Lok Sabha Secretariat, New Delhi
56
57
2.2 Decentralized distribution and generation, and, in particular, the

development of village-scale mini-grids with hybrid generation systems
will accelerate the expansion of access
The focus of the RGGVY scheme has been to provide village
electrification through grid extension. But connectivity by itself is only
part of the problem. In many states, there is also a real shortage of
power, with rural areas the first to face power outs in a shortage
situation. To tackle this problem, greater emphasis could be placed on
the roll-out of decentralized distribution and generation.
In current decentralized generation projects of the RGGVY, the
renewable energy technologies used are diesel-generating sets
powered by biofuels (non-edible vegetable oils), diesel-generating sets
powered by producer gas generated through biomass gasification, solar
PV and small hydropower plants. The development of village-scale
mini-grids with hybrid systems (i.e. a combination of micro-hydro,
gasifiers, direct combustion, large biodigesters and other renewables
backed up by a battery bank and diesel generators) should be a focus
for the future. The roll-out of decentralized generation will enable rural
electrification to be carried out faster due to the lower cost and easier
implementation of decentralized generation compared to grid extension.
An IEA study found that the grid was technically within reach for 90% of
the population but that only 43% are connected due to the connection
cost.66
The RGGVY programme should also be used to catalyse changes in
lighting appliances, in particular to promote a shift from incandescent
lamps to a more efficient model.
2.3 Private entrepreneurs should be encouraged to play a greater role

in the expansion of energy initiatives to poor households
A successful rural electrification programme needs long-term strategic
planning and financial resources for its implementation and for long-term
maintenance and repairs. Under the RGGVY, the Ministry of Power
grants 90% of the cost of rural electrification projects. States are
supposed to cover the remaining 10% of the cost, either from their own
funds or through loans from the Rural Electrification Corporation (REC),
the Power Finance Corporation (PFC) or the Indian Renewable Energy
Development Agency (IREDA). Electricity connections are free for
customers below the poverty line. To facilitate recovery of customer
payments from those above the poverty line, the RGGVY has ordered
the creation and deployment of franchisees. Because these structures
reduce commercial losses through more efficient billing and revenue
collection, they are designed to ensure stable delivery of electricity.
Despite the creation of these support systems, the progress of the
RGGVY initiative has been delayed by a lack of sufficient funds. Indias
rural distribution system is essentially low density with high technical and
commercial losses leading to a high delivery cost. Utilities that supplied
power to rural areas therefore considered such supply as commercially
unviable. For this reason, during the initial stages of the RGGVY, utilities
were generally not inclined to take up rural electrification projects
through funds arranged on a commercial loan basis.67 Some states have
also failed to institutionalize the system of franchises; others have opted
for a basic model of franchisee (revenue-based collection franchisee
responsible for billing and collection on behalf of utility).68
The promotion of decentralized generation and the involvement of
private entrepreneurs would help reduce the burden on state power
utilities. In these efforts, fee-for-service is a useful concept: an investor
installs a micro-grid in a village and asks customers to pay fees for
energy. In effect, the electricity provided is off-grid, the generation is
small-scale, and the providers are individuals or communities. The costs
are high but still lower than under the old regime as the grid does not
need to be extended. A similar model has been proven in Tanzania,
where the Urambo Electric Consumers Cooperative outperforms the
national utility in several respects: lower operation and maintenance
costs, affordable tariffs and improved customer service.69
To support such initiatives, financing mechanisms would need to be put
in place. The National Bank of Agriculture for Rural Development, which
was created in 1982, has proven to be a successful mechanism to
increase credit flows for agriculture. Similar options should be explored
for the expansion of energy access.
IEA, World Energy Outlook, 2002

Ministry of Power, 2005-2006
68
Saurabh, RGGVY: A review is in order, The Financial Express, 5 September 2011
69
Felix S. Creutzig and Daniel M. Kammen, The Post-Copenhagen Roadmap Towards Sustainability:
Differentiated Geographic Approaches, Integrated Over Goals, 2009
66
67
25
2.4 Awareness and information dissemination are central to the

adoption of decentralized distribution and generation, and cookstove
schemes
Objective 3 Strengthening energy carriers
Modern forms of renewable energy have to compete with traditional

energies in rural areas, meaning the poor who normally lack regular
income have a natural preference for the fuel that involves no or
minimum monetary transactions.
As the shift to a service industry continues and incomes rise, the peak
load deficit will continue to grow as the use of air conditioning,
refrigeration and electrical appliances increases, necessitating an
increment in the number of peaking power plants. In Maharashtra, the
difference between peaks and the base supply is up to 9,000 MW.73 By
introducing wider demand for profile flattening measures such as
reduced tariffs for non-peak consumption and off-peak timed water
heating in combination with hot water storage, the requirement for
peaking plants could be reduced.
Awareness and information dissemination with regard to the benefits of

using modern forms of technology is therefore key. India has
experienced a number of challenges in this regard. Many villages in
remote areas that are not recipients of grid-distributed power feel
discriminated against when they are provided with what they feel is
second-class electricity. Such complaints have been taken up by
some political parties that have been exerting pressure for grid power to
reach their constituents, as opposed to stand-alone systems.70
Behavioural concerns offer an important explanation for the non-use of
installed improved fuelwood cookstoves in India, where only 6 million out
of a total of 23 million installed improved fuelwood cookstoves were
found to be functional.71
3.1 Reduce peak load deficits through sliding tariffs
Influential members of the rural communities can be used to redress this

misconception within their communities. India has taken steps in this
regard. Acknowledging that most of the burden of doing without
electricity falls on women, the Ministry of Power has arranged for women
to be represented in District Committees, thereby helping in the
coordination and control of electrification extensions within their districts.
India should expand and build on such techniques.
Indias low-income earners are discouraged by high upfront costs even if
the long-term costs are lower than existing technology SELCO (a
provider of solar panels to Indias poor) have found that low-income
earners were discouraged from purchasing solar panels if they were
required to pay back Rs. 300 per month but were incentivized if the
repayment was Rs. 10 per day.72 Through partnering with banks
prepared to offer micro-financing schemes and widespread
communication of the benefits of solar panels, it has now provided over
100,000 systems. Like solar panels, new cookstove technologies come
with high upfront costs (see Figure 12) and private industry should look
to capitalize on this nascent opportunity.
Figure 12 A Cost Comparison of Different Cooking Methods

Technology
Efficiency
(%)
Capital Cost
(USD)
Lifespan
(years)
Fuel Use
p.a
Fuel Price
(USD)
Total Annual
Cost (USD/y)
Traditional Wood Stove
10
0.5
1500 kg
0.02
30.13
High Efficiency Wood Stov
30
500 kg
0.02
11.32
Traditional Kerosene Stove
35
2.5
280 liter
0.17
48.11
High Efficiency Kerosene Stove
50
196 liter
0.17
34.35
LPG Stove
60
40
15
165 liter
0.352
63.34
Biogas
55
200
15
73 m3
26.29
100
100
15
0 n/a
13.15
Solar Cooker
IEA, Comparative Studies on Rural Electrification Policies in Emerging Economies, 2010

Neudoerffer et al. 2001; Pohekar and Ramachandran 2006
72
Harish Hande, CEO SELCO, 25 March 2010
73
Participant comments during a private session on Indias New Energy Architecture held at the
2011 India Economic Summit
70
71
26
3.2 Address the financial health of transmission and distribution

companies to successfully implement grid strengthening programme
Sliding tariffs and improved peak load management would require
improvements in the reliability of the grid. The Ministry of Power has set
out a transformation roadmap for the power sector over the next 15
years that provides a clear direction for future investment and
development for industry stakeholders. The Restructured Accelerated
Power Development and Reforms Program (R-APDRP) incorporates
three phases. Phase one addresses concerns such as transmission and
distribution losses, and lack of transparency and accountability. Phase
two, from years three to five, is expected to address issues on
operational efficiency, customer service excellence and automated
control. Phase three the final phase of the roadmap running from years
five to 15 focuses on the development of a number of initiatives to
support smart grid development, including the formation of a Smart Grid
Task Force and smart grid piloting (including 50-75% funding grants
from R-APDRP, with the balance being met by the respective state
distribution company or technology provider).74
The state-owned transmission and distribution companies are in poor
financial health and have limited capacity to fund the R-APDRP
programme without the aid of the government. A number of interim
solutions have been adopted to meet these challenges with some
success. Delhi has privatized the distribution segment with good results
in terms of reduction in aggregate technical and commercial losses.
Other states have resorted to franchising, in which a private company
takes over the management of the distribution system and collection of
revenues on the basis of a predetermined revenue-sharing model.
Individual companies have taken on these challenges themselves,
integrating up and down the value chain. The Adani group will soon mine
coal in Australia to be delivered to its own port in Gujarat and used partly
to fire its own power stations.75 Suzlon has taken on building and
operating transmission lines to connect new wind capacity to the grid
before transferring control to state electricity boards. Even those outside
of the energy sector have gotten involved to ensure security of supply.
Infosys, for example, generates much of its own electricity.
Despite the success of these interim measures, long-term solutions
must be adopted to fix the financial health of transmission and
distribution companies. As covered under Objective 4, rationalizing
energy prices will go some way to achieve this. Theft must also be
tackled. Metering solutions will be central to this. Prepaid meters for
smaller consumers and for remotely located consumers are options
worth consideration given the strong IT base and the recent
improvements in telecoms facilities in the country.
3.3 Increasing demand for natural gas will require the expansion of
existing infrastructure
Twenty-five cities are currently planning to build city gas networks and
expansion to additional cities is forecast. This will require the
construction of citywide gas distribution networks in addition to intra-city
gas pipelines beyond the north-west corner of the country. Legislation
has recently been amended to break up Gas Authority of Indias
monopoly and with a handful of privately held firms entering the market,
it is expected that large-scale expansion of the network into the north
and east will be forthcoming.
Increasing gas demand will not be met with domestic production and
the need for imports will rise; with the long-planned pipelines linking
India to Iran and Turkmenistan indefinitely suspended due to continuing
tensions between India and Pakistan, this requirement will need to be
met with LNG. LNG capacity is being increased with two additional LNG
terminals in the south and east currently under construction with a
further four proposed.76 A network of pipelines will need to be built to
connect these terminals to the consumer markets.
Objective 4 Rationalize energy prices

4.1 India needs a well-instituted market mechanism in which energy
prices are based on the interaction of demand and supply
Fossil fuel subsidies in India are usually poorly and ineffectually
implemented and have led to a heavy burden on public finances and
reduced profits of state-owned companies. In addition, they lead to
reduced impetus to reduce consumption and to increased greenhouse
gas emissions, and are preventing the development and take-up of new,
more efficient technologies.
Energy subsidies aim to alleviate energy poverty and promote economic
development, but often attract political support once implemented and
are difficult to remove or reform. Despite this, India has been actively
reviewing its subsidies (especially those that benefit wealthier
consumers disproportionately) and has introduced some changes;
gasoline has been deregulated and the price of gas sold under the
Administered Pricing Mechanism has been increased. There is still vast
improvement to be made. Gradual removal of subsidies would increase
real income and reduce greenhouse gas emissions. This is not easy to
achieve, but must be done with a high degree of transparency and
cogent of the impact that removal of the subsidies will have on lowincome households.
Discussions that have fed into this report have focused on the removal of
diesel subsidies. The most widely touted solution has been the
implementation of equilibrium pricing that takes into account
externalities, with a temporary cut to taxes introduced to alleviate the
burden to consumers.
4.2 A transparent and effective cash distribution system for Public
Distribution Scheme (PDS) kerosene and domestic LPG should be
established for those below the poverty line
For now, subsidies should not be completely removed from the
marketplace, since they play an important role in maintaining inclusive
growth. Kerosene, for example, is subsidized on the grounds that it is
an important fuel predominantly used for lighting poor Indian
households, while LPG is subsidized with the intention of improving the
access of lower-income Indian households to modern cooking fuels.
The maintenance of these subsidies does require improved targeting. In
2007-2008, the richest 30% of households consumed 72% of all LPG.24
The 2011 budget proposes that a committee should design a new
system for distributing subsidies for fossil fuels, replacing subsidies for
LPG and kerosene by direct contribution to targeted groups that have a
high probability of having incomes below the poverty line. Depending on
the results of the study group, this reform would be implemented in
2012. While direct contributions will help ensure that subsidies reach
those citizens in need, shielding low-income households from increases
in energy prices, they will be difficult to implement effectively. A
transparent and effective distribution system for PDS kerosene and
domestic LPG can be ensured through a unique identifier/smartcard
framework (a smartcard is a credit card-sized device used to store and
communicate data, in this case related to use; a unique identifier is a
number unique to each smartcard much like a vehicle registration plate).
Distribution Overview, Ministry of Power, Government of India, www.powermin.nic.in/distribution_

overview.htm; Union Power Minister Launches India Smart Grid Forum; Sam Pitroda to Chair Smart
Grid Task Force, Press Information Bureau press release, Government of India, 26 May 2010
75
The Economist, The Bollygarchs
76
BMI, India Oil & Gas Report, Q4 2011
74
27
Step 4:
Defining Areas of
Leadership
28
Step 4: Defining Areas of Leadership
4.1 A Multistakeholder
Action Plan
The creation of an enabling environment that is resilient to risk and
responsive to the imperatives of the energy triangle goes beyond an
individual corporation or governments scope. Three key groups of
stakeholders have a role to play: policy-makers, industry and civil
society. Each stakeholder group should tailor future energy policy to
achieving Indias New Energy Architecture objectives, considering the
following options.
Considerations for policy-makers

Augment resources for energy security by encouraging the
involvement of international companies in the hydrocarbons sector,
and building state capacity to support large-scale renewables
development: Oil, gas and coal exploration must be extended to
quantify the nations hydrocarbon resources and results must be
publicized to encourage foreign investment. Introduce the Open
Acreage Licensing Policy and benchmark the policy framework and
licensing regime against leading international examples (e.g. United
Kingdom) to encourage international oil company investment and
joint ventures. Build on the success of wind energy and expand its
success into solar power initiatives. Look to create streamlined,
effective policy to encourage investment and development of
renewables, especially in states where there is currently low
capacity. Provide legislation and incentives to encourage energy
efficiency across industry and consumers.
Provide access to modern forms of energy for all by expanding the
RGGVY to promote decentralized distribution and generation
projects: Expand RGGVY to promote generation-based projects,
placing greater emphasis on decentralized distribution and
generation, while seeking private industry involvement. Continue to
encourage replacing traditional biomass, with a combination of
more efficient stoves, and fuels. Expand supply and financing of
efficient cook-stoves and ensure that benefits are fully
communicated. Expand use of small-scale solar photovoltaic panels
and solar lighting.
Considerations for industry

Augment resources for energy security by expanding partnerships
with international firms: Expand partnerships with international
companies to provide technical expertise and experience to fully
exploit more technically challenging upstream assets. Increase
efficiencies in generation through adoption of modern technologies.
Develop a strong domestic research and development and
manufacturing base. Continue to invest in non-conventional
sources, e.g. coal bed methane.
Provide access to modern forms of energy for all by adopting
fee-for-service business models to commercialize decentralized
generation projects: Invest in hybrid decentralized generation
technologies. Adopt fee-for-service business models to
commercialize rural decentralized distribution and generation
projects. Look to benefit from government incentives to deploy new
renewable generating capacity.
Strengthen energy carriers by adopting pre-paid metering
technologies: Adopt pre-paid metering technologies to reduce theft.
Invest in modern equipment (e.g. transformers) to increase
transmission efficiency. Continue to expand gas pipelines and
citywide gas distribution networks. Invest in evacuation
infrastructure for renewable generation sites.
Rationalize energy prices by growing scale of renewables sector to
reduce costs: Use Indias abundance of engineering, scientific and
manufacturing expertise to develop and produce technology (e.g.
solar) in-country and at low cost.
Considerations for civil society

Provide access to modern forms of energy for all by building
awareness of the benefits of new forms of energy access: Increase
education and communication of benefits to redress negative
perceptions of decentralized distribution and generation systems to
grow adoption rates.
Rationalize energy prices by informing the public of the true costs of
energy use: Create public awareness of the true cost of energy use
and the benefits of efficient consumption.
Strengthen energy carriers by addressing the health of transmission

and distribution companies: Remove the cross-subsidy in the
electricity sector to improve the financial health of state-owned
utilities. Increase state adherence to the 2003 Electricity Act to
enforce unbundling of utilities and development of the transmission
and distribution network. Create serious and solid disincentives to
electricity theft.
Rationalize energy prices by phasing out subsidies: Adopt the
recommendations of the expert group on a viable and sustainable
system of pricing of petroleum products and create a roadmap to
their eventual removal. Create a viable roadmap to move away from
cross-subsidies in the electricity industry.
29
Appendices:
The Creation of the
Energy Architecture
Performance Index
30
Appendix A: Computation
and Structure of the Energy
Index
This appendix presents the structure of the Energy Architecture
Performance Index (EAPI). The index is designed to understand how
countries are performing in relation to each of the imperatives of the
energy triangle: economic growth and development; environmental
sustainability; and energy access and security. A sub-index was created
for each of these imperatives. For each sub-index a set of key
performance indicators (KPIs) were chosen based on an understanding
of the objectives of the imperative:
Economic growth and development: This sub-index aims to
measure the extent to which energy architecture supports, rather
than detracts from, economic growth and development. The
following KPIs were chosen:
Energy intensity
Cost of energy imports as a share of GDP
Share of mineral products in export
GDP per capita
HDI
Environmental sustainability: This sub-index aims to measure the
extent to which energy architecture has been constructed in a
manner that reduces negative environmental externalities. The
following KPIs were chosen:
To create comparative data that could be aggregated into an

overarching index, the data has been normalized. An individual index
was created for each KPI. Performance for each KPI is expressed as a
value between 0 and 1, calculated as per the below expression:
0,
BASE
,
Score =
TOP BASE
1,
> BASE
TOP > > BASE

< TOP
Instead of using the maximum and minimum values of each data set,
anomalies were first removed by establishing TOP and BASE levels.
TOP is the point of the raw data that is mapped to 1 and is calculated
based from the mean +/- two standard deviations (dependent on
whether a high or low value for the original metric is good or bad).
BASE is the point of the raw data that is mapped to 0 and is calculated
from the mean +/- two standard deviations (dependent on whether a
high or low value for the original metrics is good or bad). All other
values then follow a linear distribution from the BASE to the TOP.
In the case of diversity of supply, the raw data was first converted into a
Simpsons Diversity Index to measure the distribution of energy supply
across seven supply sources: coal and peat; crude oil and oil products;
gas; nuclear; hydro; other renewables such as geothermal and solar;
and combustible renewable and waste. The Simpsons Diversity Index is
expressed using the below function, where n is the relative abundance
of each energy source:
Carbon intensity of energy use

Share of non-carbon energy sources
Water scarcity
Energy access and security: This sub-index aims to measure the
extent to which energy architecture is at risk to an energy security
impact, and whether adequate access to energy is provided to all
parts of the population. The following KPIs were chosen:
Import dependence
Diversity of supply
Quality of electricity supply
Access to modern forms of energy
To create the sub-indices for environmental sustainability, as well as

energy access and security, the individual indices for each KPI were
aggregated by expressing each as a share of 1, with all KPIs evenly
weighted (i.e. each indicator could contribute up to 0.25 to the subindex). In the case of economic growth and development, energy
intensity was given a higher weighting. This was in response to feedback
received from the project steering board, which emphasized the
importance of demand side management measures. Energy intensity
therefore accounts for 30% of the index, with the remaining four
indicators accounting for 70% of the index. The scores for GDP per
capita and HDI were combined to provide a base level indication for
economic growth and development, and together account for 17.5% of
the index.
To create the overall score for each country the scores on each
sub-index were added together, with the maximum score on the EAPI
therefore being 3.
31
Historic data
To understand how countries have progressed over time, historic data
was collected for the years 1999 to 2008, and also for 1990. To
complete the normalization process for historic data the TOP and BASE
values used were those from todays index. The historic indicators thus
show how countries are performing in comparison to today.
In a number of instances historic data was not available. In these
instances, data was kept constant from the last available year in which it
was available. This applies to the following indicators:
Economic growth and development
Share of mineral products in export: Data was only available for
2005-2008. In calculations of the index for the years 1999-2004
and 1980, the data from 2005 was kept constant.
Environmental sustainability
- Water scarcity: Data was only available for 2000. This was
kept constant across the time periods covered.
Energy access and security
Quality of electricity supply: Data was only available for
2005-2008. In calculations of the index for the years 1999-2004
and 1980, the data from 2005 was kept constant.
Access to modern forms of energy: Data was only available for
2003. This was kept constant across the time periods covered.
Appendix B: Technical Notes

and Sources for the Energy
Index
This appendix presents the technical descriptions and sources for the
13 KPIs of the Energy Architecture Performance Index. The most
complete data set available for the indicators was from 2008. Data from
this year was therefore used, unless otherwise unavailable.

Energy intensity
GDP per unit of energy use (PPP $ per kg of oil equivalent) | 2008
Provides an indication of the efficiency of energy use, and whether there
is an opportunity to improve energy availability by reducing energy
intensity. Total primary energy supply is calculated as indigenous
production plus imports, removing exports, international marine
bunkers, international aviation bunkers, and then adding or taking away
stock changes. (Source: The World Bank)
Creating archetypes
Cost of energy imports as a share of GDP
Archetypes were created by grouping those nations that displayed

common features during the KPI analysis, and are defined as follows:
Value of import of fuels/GDP | 2008
Rationalize: Those nations that scored in the top quartile for

economic growth and development
Capitalize: Those nations that scored outside the top quartile for
economic growth and development, and in the top quartile for
energy access and security
Grow: Those nations that scored below the top quartile for
economic growth and development, and energy access and
security, but above the bottom quartile for energy access and
security
Access: Those nations that scored in the bottom quartile for energy
access and security
A review of countries that fell towards the boundaries of the above
criteria was completed. This was in recognition of the fact that many
countries display features of more than one archetype. In these
instances, countries have been allocated to the archetype that
represents their most pressing need.
32
Provides an indication of the extent to which the energy sector has a

negative impact on growth. Import bill is calculated based on the import
of fuels (mineral fuels, lubricants and related materials) as classified
under the Standard International Trade Classification, Revision 3,
Eurostat. (Source: WTO Statistical Database)
Share of mineral products in export
Mineral products in export/national exports | 2008
Provides an indication of the efficiency of energy use, and whether there
is an opportunity to improve energy availability by reducing energy
intensity. The share of mineral products includes minerals fuels as
classified under the Harmonized System Codes of Chapter 27, which
covers mineral fuels, mineral oils and products of their distillation;
bituminous substances and mineral waxes. (Source: ITC)
GDP per capita
GDP (PPP) (current $) per capita | 2008
GDP per capita is gross domestic product divided by mid-year
population. GDP is the sum of gross value added by all resident
producers in the economy plus any product taxes and minus any
subsidies not included in the value of the products, using purchasing
power parity rates. (Source: The World Bank)
HDI
Human Development Index | 2008
Import dependence
The Human Development Index is used to assess comparative levels of

development in countries and includes PPP adjusted income, literacy
and life expectancy as its three main matrices. The HDI is only one of
many possible measures of the well-being of a society, but it can serve
as a proxy indicator of development. HDI has been shown to correlate
well with per capita energy use. A certain minimum amount of energy is
required to guarantee an acceptable standard of living (e.g. 42 GJ per
capita), after which raising energy consumption yields only marginal
improvements in the quality of life. (Source: The World Bank)
Net imports/TPES | 2008
Carbon intensity of energy use
Carbon intensity (total carbon dioxide emissions from the consumption
of energy per dollar of GDP using market exchange rates (metric tons of
carbon dioxide per thousand year 2005 US dollars) | 2008
Estimate carbon dioxide emissions from the consumption and flaring of
fossil fuels, per thousand dollars of GDP, using market exchange rates.
When there are several fuels, as in this case, carbon intensity is based
on their combined emissions coefficients weighted by their energy
consumption levels. (Source: EIA)
Share of non-carbon energy sources
Alternative and nuclear energy/TPES | 2008
Clean energy is non-carbon energy that does not produce carbon
dioxide when generated. It includes hydropower, nuclear, geothermal
and solar power among others. This is taken as a share of total primary
energy use. (Source: The World Bank)
PM10 [mg/m3] per annum | 2008
Particulate matter concentrations refer to fine suspended particulates
less than 10 microns in diameter (PM10) that are capable of penetrating
deep into the respiratory tract and causing significant health damage.
Data for countries and aggregates for regions and income groups are
urban-population weighted PM10 levels in residential areas of cities with
more than 100,000 residents. The estimates represent the average
annual exposure level of the average urban resident to outdoor
particulate matter. (Source: The World Bank)
Water scarcity
Freshwater withdrawals as a share of internal resources | 2000
Annual freshwater withdrawals refer to total water withdrawals, not
counting evaporation losses from storage basins, and are a proxy
measure for water scarcity. Withdrawals also include water from
desalination plants in countries where they are a significant source.
Withdrawals can exceed 100% of total renewable resources where
extraction from non-renewable aquifers or desalination plants is
considerable or where there is significant water reuse. Withdrawals for
agriculture and industry include withdrawals for irrigation and livestock
production and for direct industrial use (including withdrawals for cooling
thermoelectric plants). Withdrawals for domestic uses include drinking
water, municipal use or supply, and use for public services, commercial
establishments, and homes. Data are for the most recent year available
for 1987-2002. (Source: AQUASTAT)
Provides an indication of the extent to which a nation is dependent on

sourcing imports to meet energy demand. Net imports are calculated
across all energy sources, as well as carriers including electricity and
heat. This is taken as a share of total primary energy supply.
Dependence on energy imports exposes affected economies to
potential price risk fluctuations. (Source: World Bank)
Diversity of supply
Simpsons Diversity Index | 2008
Greater diversity in sources of supply will reduce dependence on any
one fuel, and therefore increase energy security. Given the
interdependence of economic growth and energy consumption, access
to a stable energy supply is a major political concern and a technical
and economic challenge. All else being equal, the more reliant an
energy system is on a single energy source, the more susceptible the
energy system is to serious disruptions. Examples include disruptions to
oil supply, unexpectedly large and widespread periods of low wind or
solar insulation (e.g. due to weather), or the emergence of unintended
consequences of any supply source. (Source: IEA; Authors
calculations)
Quality of electricity supply
Rating from 0 to 7 | 2008
Assesses the quality of the electricity supply within a country based on
lack of interruptions and lack of voltage fluctuations. This has been used
in favour of measures of the percentage of the population supplied with
electricity, as we believe that it is a nuanced measure more suited to the
purposes of a global comparison. This is taken from the World
Economic Forums Executive Opinion Survey, in which respondents
were asked: How would you assess the quality of the electricity supply
(lack of interruptions and lack of voltage fluctuations) of your country? [1
= insufficient and suffers frequent interruptions; 7 = sufficient and
reliable]. (Source: World Economic Forum, Global Competitiveness
Index)
Access to modern forms of energy
Percentage of the population using solid fuels | 2008
Provides an indication of whether the population has access to modern
sources of energy. Solid fuels include biomass, such as wood, charcoal,
crops or other agricultural waste, as well as dung, shrubs and straw,
and coal.
Although solid fuels are used for heating purposes, the World Health
Statistics database is a compilation of information on the main fuel used
for cooking purposes only. (Source: World Health Organization)
33
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New Energy Architecture

World Economic Forum In partnership with Accenture

This World Economic Forum report was

A Methodology for Managing Transition Effectiveness

Step 1: Assessing Current Energy Architecture Performance

A series of interviews with stakeholders from

1.2 Indias Current Energy Architecture Performance

1.3 Comparing Indias Current Energy Architecture Performance with

The views expressed in this publication do not

3.1 Achieving Indias New Energy Architecture Objectives:

3.2 Defining Enabling Environments for Indias New Energy Architecture

Step 4: Defining Areas of Leadership

Appendices: The Creation of the Energy Architecture Performance Index

Roberto Bocca, Senior Director,

Project Adviser: Accenture

Arthur Hanna, Managing Director,

James Collins, Senior Manager,

Mike Moore, Project Manager,

With further support from Timothy

1.1 Introduction to Indias Energy Architecture

Step 2: Creating New Energy Architecture Objectives

Step 3: Defining the Enabling Environment

2.1 Defining Indias Objectives for a New Energy Architecture

4.1 A Multistakeholder Action Plan

New Energy Architecture India

Inability to meet energy

Interviewee, New Delhi, October 2011

New Energy Architecture India

Making the Transition

The Required Enabling Environment

The New Energy Architecture Project

To enable India to address its objectives, an enabling environment will be

New Energy Architecture: India builds on the methodology and findings

India has a strong policy framework at the national level but

It has been common for some time to

Figure 1 Energy Architecture Conceptual Framework

Economic Growth & Development

Economic Growth & Development

For a more detailed understanding of the New EnergyPhysical elements :

The Energy Triangle

The Energy Triangle :

A Methodology for Managing Transition Effectiveness2

Step 1 Assessing Current Energy

Figure 2 New Energy Architecture Methodology

2. Creating New Energy

The Energy Architecture

The four pillars of an enabling

What are the objectives

Who is responsible for

b) Select KPIs to assess

b) Identify New Energy

Key considerations for

In the following sections,

New Energy Architecture India

New Energy Architecture India

Step 1: Assessing Current Energy Architecture Performance

1.1 Introduction to Indias

While the liberalization of the energy sector has increased the

India is currently the worlds fourth largest consumer of energy and

Policy setting and implementation is divided between five ministries: the

Supply & consumption

International marine bunkers

International aviation bunkers

Oil & Gas