1. Equity and Environment:
Two imperatives for Indian Electricity Policy
The role of Renewables and Energy Efficiency
Ashwin Gambhir
Prayas (Energy Group), Pune
Contestations at Koodankulam: legitimacy and constraints
Discussion at Council for Social Development, October 18th 2012, New Delhi
Prayas Energy Group, Pune

2. About Prayas Energy Group
Prayas is a Voluntary Org, based at Pune, India
– PEG works on theoretical, conceptual and policy
issues in the energy and electricity sectors.
– Based on a comprehensive, analysis-based
approach for furthering the ‘public interest’.
– Research & Interventions (regulatory, policy).
– Civil Society training, awareness, and support.
2

3. Outline
• A macro look at the power sector in India
• Three problems of present energy paradigm
– Inequity,
– Resource limitation and
– Environmental damage
• Way towards a solution
– Policy options promoting equity
– Energy efficiency
– Renewables
• Conclusions
3

4. Electricity–HDI linkage: Intl experience
1.00
Cuba
Ecuador
0.90
Sri
Lanka y = 0.094ln(x) + 0.076
0.80 R² = 0.838
0.70
Human Development Index (HDI, 2007)
HDI=0.8; Elec use = 2210 kWh/capita according to the regression fit.
0.60
0.50
India (2007); HDI=0.612; Elec use = 542 kWh/capita
0.40
0.30
0.20
0.10
HDI vs electricity consumption per capita/yr
0.00
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000
Electricity consumption in kWh per capita per year (2007)
(a) India is in the elastic region where steep increase in HDI is seen with increase in
electricity use, (b) Several countries have managed to achieve high HDI with similar
electricity use as that of India  need for direct action for improved HDI.
4

5. Electrification & Economic Development
100
AP Gujarat Maharashtra
90
Percentage of Total Electrified Households
Chattisgarh
80
MP
Rajasthan
70
60 West Bengal
Orissa
50 Jharkhand
UP
40
30
Bihar
20
10
Data for 2009-10
0
- 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000
State per Capita Domestic Product
5

6. Power Sector Status
• Present Installed capacity ~ 207 GW (RE- 25 GW, 12%)
• 2010-11 Generation ~ 950 BU (incl captive) (RE ~ 50 BU, 5%)
• Un electrified population 33% (~40 cr); villages ~ 6% or (35,000)
• Peak Load shortage -13% ; Electricity ~10%; unreliable service.
• Financial health of Utilities worsening (~70,000 cr losses in 2010-11)
• 6-7% growth in electricity use; projected to double in 2020;
largest growth in Industry and commercial/residential.
• Rising energy imports and electricity tariffs
6

7. Power Generation Capacity including captive,
percentage shares of 210 GW (2010-11)
Coal
13%
0% Gas turbines
1%
1% Diesel gen-sets
Large Hydro
7%
Indian Nuclear
47%
2% Wind power
Small Hydro
Biomass + Bagasse Cogen
18%
Solar (PV, Thermal)
Captive
8%
1%
7

8. Share of Generation including captive of a
total of 900 TWh (2009-10)
10.9%
Thermal
5.0%
Large Hydro
2.7%
Indian Nuclear
11.9% Renewables
69.4%
Captive
8

9. 16
Range of Tariffs in Rs/kWh for all sources
14
RE tariffs are as per CERC.
Range for solar tariffs is from competitive bidding.
Other prices are from Prayas estimates and are only indicative
12
10
8
6
4
2
0
Coal Gas Diesel Large Indian Imported Wind Small Biomass Bagasse Solar PV Solar CSP
turbines gen-sets Hydro Nuclear Nuclear power Hydro Cogen
9

10. Three problems of Energy Paradigm
Inequity
Limitation of conventional energy resources
Socio - Environmental issues (local and
global)
Prayas Energy Group, Pune

11. The two faces of India
11

12. First face is far more prevalent
Households by electricity use (kWh/month)
> 100 U
Highly skewed distribution!
No Connection 50 - 100 U Only 10-12% HHs have
monthly electricity
consumption > 100 kWh.
< 50 U
Source: Prayas analysis of State ERC orders
12

13. Energy and infrastructure deficit and inequity
80
% households with access to
70
60
50
40
30
20
10
0
Concrete/brick Toilets Electricity Clean energy for
walls cooking
2001 2011
% of expenditure spent on accessing modern energy
14
12
10
8
6
4
2
0
0 - 10 10-20 20 - 30 30 - 40 40 - 50 50 - 60 60 - 70 70 - 80 80 - 90 90 - 100
Expenditure deciles of population
13

14. Equity and its various facets
• Significant population is modern energy poor, constraining
their economic development. Modern Energy a must for all.
• However this argument is cynically used many a time to justify
each and every large power project, even without broad local
acceptance; argued in larger national interest.
• Unfortunate history of resource curse (Coal/Hydro) and
increasingly for most proposed nuclear sites.
• Renewable energy is argued for overcoming shortages and
providing supply for all, however not much attention to the
equity aspect of the incremental costs.
14

15. Energy Imports
India net energy import cost ~ 5% of GDP (~ 2% by USA, EU or China)
Indian import bill likely to increase due to:
– Higher coal imports & high/increasing prices, Re depreciation.
300 160
Production, Import of Coal (MTOE) Production, Import of Oil (MT)
140 $100 Bn (09-10), 75% Import dependence
250
120
200 Production
100 Production
150 Consumption
80
Consumption
100
60
50 40
20
0
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
0
15

16. Production and Consumption of Fossil Fuels (Oil,
Gas and Coal) in Mtoe India from 1981-2010
500
450
400
350
300
250
200
150
Import Dependency - 38%
100
50
Production Consumption
0
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009
16

17. Global and local Environment
• India not responsible for global problem of climate change
– with 15% population has emitted only 2.5% of GHG emissions.
– very low per-capita emissions (~ 2 t/cap/yr; world average of ~4)
• Limited carbon space remaining and India will face major
impacts of climate change; highly vulnerable
– Long coastline; very rainfall dependent
• Local pollution of water, land and air as well as water scarcity is
resulting in popular opposition to power plants in most
locations.
17

18. Local environment
Ambient Air Quality Monitored at Ghuggus (Jan 2007- Aug 2012)
1400 2000
1800
1200
1600
RSPM (microgram/m3)
SPM (microgram/m3)
1000 1400
1200
800
1000
600
800
400 600
400
200
200
0 0
2007 2008 2009 2010 2011 2012
RSPM (µg/m3) Standards RSPM (µg/m3) Actual conc.
SPM (µg/m3) Standards SPM (µg/m3) Actual conc.
 Similarly problems with water resources too – pollution as well as conflicts
 Rising resistance to mining, power plants etc. because of environmental
damage, weak adherence to expected norms, weak government monitoring
18

19. So Business-As-Usual growth is
impractical and undesirable
Way towards Solution
Prayas Energy Group, Pune

20. Go back to Basics for a New Paradigm
Development  Growth  Energy  GHG emissions
Three flexible links
• Improved developmental policies
• Efficiency of energy use
• Non-GHG emitting energy sources; benign on local
environment.
• Policies and structures required to increasingly de-
couple the links.
20

21. RGGVY
• National Electricity Policy, 2005 recognizes electricity as a major
driver of rural development and hence poverty alleviation.
Target to provide access to all HHs and ensure minimum lifeline
consumption of 1 kWh/day/HH as a merit good by 2012.
• RGGVY launched in 2005, addresses two components
– developing distribution infrastructure
– free connections to all Below Poverty Line (BPL HHs)
• Critique and concerns
– Inability to supply adequate power; APL connections; quality
and adequacy of network; timelines and delays; emphasis on
HHs.
21

22. RGGVY – What about electricity?
• Physical infrastructure
– 105,851 villages electrified (90% of target)
– 20 Million HHs electrified (81% of target)
• Hrs. of supply often < 6 hrs./ day
• Structural disincentive (loss of Rs 3.5/kWh of sale to HH)
• Restructuring of RGGVY
– GoI to allocate low cost power to RGGVY consumers
– Need only 14 GW capacity to address structural
disincentive (likely addition in next 5 yrs ~ 100 GW)
– Extremely limited C emissions
Source: Roundtable on Electricity for All : Challenges and Approaches, by PEG and PIC at Pune on 18th Feb 2012) 22

23. Energy Efficiency; reduce energy requirement
• Significant potential; needs to be actualized
• EE should be seen as indispensable as power plants, in avoiding
shortages, facilitating inclusive growth and maintaining
competitiveness while reducing emissions.
• Long term locked in savings.
• Need for National large scale programs.
• Link energy tariffs to consumption norm for commercial blds.
• Discourage setting up of inefficient new Industries.
23

24. categories, 2020 (TWh)
Change Nature of Discourse on EE
Saving Potential by categories, 2020 (TWh) 2020 (TWh
Saving Potential by categories,
160
New Additions
140 Retrofit
120
100
al Industrial 80
Others New A
60 Retrof
40
20
0
Agriculture Commercial Residential Industrial Others
70% of infrastructure that will be in place by 2030 – is still to be built !
Prioritize industry & residential/commercial, beginning with new addition.
Numbers are only indicative (to show implications of consideration). 24

25. Radical Change in Efficiency Policy
Super efficient appliances consuming 40-50% less than 5-
star models, are commercially available internationally.
 Assist manufacturers to introduce Super Efficient Appliances (as poor
consumers are very cost sensitive)
If 60% of stock for only 4 appliances in 2020 is super-efficient, we can save 60
BU and avoid peak capacity of 20000 MW over the business as usual scenario.
25

26. Electricity Demand Projection – IEP, PC
5000 5000
Nuclear
1300 BU increase in 5 years =
Hydro 200,000 MW additional capacity
4000 4000
Thermal
3000 3000
B kWh
2000 2000
Addition of ~185
GW of Base Load
Thermal capacity
1000 1000
0 0
2004 2007 2012 2017 2022 2027 2032
Assumes - 63 GW from nuclear power (recently revised to 27 GW by 2025) and 150 GW from
hydro power in 2031-32.
26
*Source Integrated Energy Policy (PC, GoI) 2006, numbers are indicative 26

27. Placing Nuclear in context
• Marginal role in Indian power sector, unlikely to reverse.
• Various targets; 12th (2.8 GW)/13th plan highly optimistic (18 GW).
• 2011 – global nuclear capacity fell by 10 GW, while just the wind and
solar PV increased by 44 GW and 23 GW, 67 GW in total vs (- 10) GW.
• Nuclear (10 yr. gestation) not a panacea for today’s electricity shortages.
• The Climate argument- the window for action is the coming decade.
• A true cost comparison with nuclear plants starting construction today
should be with wind and solar prices in 2020.
• Notwithstanding all fundamental arguments against nuclear, economics
of RE beats nuclear and even solar better considering gestation period.
27

28. Cumulative Capacity of Nuclear and New Renewables
25000
Nuclear
New Renewables
20000
15000
Additionally by 2017, RE will likely reach 55,000 MW while
Nuclear is planned to reach upto 4780 + 2800 = 7580 MW
10000
5000
0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
28

29. Total Electricity Generation (TWh) from Nuclear and
New Renewables
Total Electricity Generation (TWh) from Nuclear and New
Renewables
60
Nuclear
50
New Renewables
40
30
20
10
0
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
Source: CEA Monthly Statistics , Monthly generation report (Renewables sources) 2012-13 29

30. Comparing solar PV and nuclear costs
Source: Blackburn & Cunningham, 2010. Solar and Nuclear Costs – the historic crossover. 30

31. Large grid connected Renewables
• Energy security, price rise in fossil fuels; focus on climate has
made RE an extremely important supply option for the future.
• RE moving from margins to mainstream.
– existing capacity 5 X nuclear and generation ~ 2 X
• $ 9.5 billion (50,000 cr) invested in large RE in India in 2011.
– Fastest growing energy sector, 22% CAGR past decade.
• Significant Policy and regulatory push (State and Central) (RPOs,
RECs, NAPCC (15% by 2020); State specific policies, SIPS, Green
levies; NCEF etc)
– 12th Plan; RE ~ 30/40 GW (10 solar, 15/25 Wind)
31

32. RE capacityREaddition from from 2002-2012
Capacity Addition (MW) 2002-12
30000
Solar CAGR (02-12): 22%
25000
WTE
SHP
20000
Bagasse Cogen
15000 Biomass
Wind
10000
5000
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
32

33. Grid Connected Renewable Capacity; March-12
941, 4%
3395, 14%
Wind
1985, 8% Biomass
Bagasse
1150, 4%
17353, 70% Small Hydro
Energy from Waste
Solar
33

34. Wind Potential Estimates (GW) for India
2500
Revised wind power potential significantly different from earlier
estimates; from 50 GW to 500-1000 GW.
> 2000
2000
1500 ~ 1400
1000
700-1000
500
102
49
0
CWET old CWET revised (2012) Phadle A. et al, 2011 Xi Lu et al, 2010 Hossain J. et al, 2011
34

35. Increasing economic competitiveness of wind
Overall Cost of generation of conventional fuel based vs Wind Tariffs
Source: Rs/Unit
Cost of Generation - imported Coal 4.1
Cost of Generation- Gas (60%) & R-LNG (40%) 4.4
Cost of Generation - Domestic Coal (50%) and Imported Coal (50%) 3.8
Wind (CERC based @ 23% PLF) Maharashtra 4.7
Wind Tariff - Tamil Nadu 3.4
Wind Tariff - Andhra Pradesh 3.5
Wind Tariff - Gujarat 3.6
Wind Tariff - Karnataka 3.7
Wind Tariff - Rajasthan 4.2
RE (non-solar) is quite cost competitive with new conventional capacity addition.
In the range of ~ 4/kWh. (can reduce with competitive bidding).
Source: ICRA, 2011 35

36. The Solar story
• Practically unlimited potential, subject to land availability.
• Significant efficiency improvement possible, on track
• All industry estimates point to further price drop, parity
expected much faster.
• Exponential Growth worldwide (~27 GW PV in 2011)
36

37. Competitive Bidding for solar in India
20
17.91 17.91
18
15.61 15.39
Bidding Range: 10.95 - 12.76;
16 Avg tariff of 12.16/kWh,
32% < CERC benchmark
15.32 14.50
14
Solar PV Tariff in Rs/kWh
Bidding Range: 7.49 - 9.39;
12.54 Avg tariff of 8.77/kWh,
12 12.16
43% < CERC benchmark
10.59 7.9 - 9.59
10
10.39 7.94 - 8.5
8.77
8 8.13
8.34
7
6
State Solar Bidding
4
2
0
CERC 09 MERC 10 MERC 11 CERC 10-11 RERC 10 KERC 10 GERC 10 Batch I, CERC 12 GERC 2012 Batch II, Orissa Karnataka MP Bidding
JNNSM draft JNNSM Bidding Bidding
37

38. Land and Water use
Land for Total
Consumptive Total Water Use (-
Land for mining (30 Generation (30
Land for Total land ) / Saving (+)
power yr life, 80% Yrs for coal, 25
Source Power Plant. land / per over entire
plant PLF) / for wind and
(3% for MW TWh life (Million
(Acre/MW) Submerge solar) in TWh
wind) (BU) Litres)
nce (BU)
4.6-
Coal 0.9-1.4 0.9-1.4 3.7 0.21 22-24 -1176
5.1
Wind 28 0.84 0 0.84 0.05 15 306
Solar PV 5 5 0 5 0.04 114 245
Large
- 12.5 12.5 12.5 0.11 116 -3984
Hydro
38

39. Distributed Renewables – green access
• An important option for quick access, especially in remote
areas.
• Presently largely limited to lighting service
• Significant emerging option for solar for critical social
infrastructure (PHCs, Schools, drinking water schemes etc)
• Higher Costs due to scale and larger O&M needs
• Innovative policy options to reduce consumer tariffs under
consideration of FOR.
• Move to grid interactive (feed in and isolation) DRE
39

40. Green Access/Green Grid
• NAPCC Grid connected RE target ~15% by 2020 (~ 250 TWh)
• Grid essential for harnessing large scale RE
– Geographically un-equal distribution
– Varying generation, needs balancing mechanism
• Enables large investments, better monitoring, less drain on
government finances
• Grid RE needed (2010-2010)
– 75 GW / 160 TWh (BU)
– Equivalent to powering 100 mil. HH @ 100 units / month
40

41. What needs to be done for RE
• Cost reduction through efficient procurement (Competitive
Bidding).
• Protect poor from high cost (financial, environmental or social);
equitable sharing of incremental costs.
• Promote Indian manufacturing (energy security, jobs & cost
reduction)
• 15% RE by 2020 will need doubling the rate of RE capacity
addition (3,500 MW/year  8,000 MW/year)
41

42. Facilitative role from Govt:
• Effective land policy (solar parks, create level playing field,
social inclusion (land lease limited to footprint, profit sharing
must for sustained growth)
• Mandate EIA/ SIAs for RE projects
• Mandate solar purchase only for rich (proportional to the
industry, commercial & high residential consumption)
• Finance is a major issue. Facilitate low cost finance availability.
• Grid Integration of large scale RE, long term Tx evacuation
planning urgently needed; Power Sector Resistance.
• Focus solar PV initially on critical social infrastructure.
• R&D (basic and applied) key for continued cost reduction
42

43. Sources of Electricity, 2020 (IEP and Low-C Gr)
2000
Efficiency
1500
Renewable Two Official forecasts show
TWh
Increasing role of
1000 - Efficiency and RE
Coal
Reduced
500 - Energy Demand Forecast
- Role of Nuclear
Nuclear
Hydro
0
IEP (Scenario-5) LowC 2020
2020
43

44. Long Term Energy Planning- a crying need
• BAU is simply impractical and unsustainable.
– Relook at type of industrialisation - future development paradigm
– Tariff policy to discourage excessive, luxury use of energy.
• Need for a more realistic and rational energy supply and demand
projection studies (comprehensively considering various factors)
• More electricity needed, but
– Earnest action for Energy Efficiency (>> gas, nuclear, hydro put together)
– Immediate attention to needs of poor (RGGVY, reserve low cost coal)
• Link policy to specific objective goals.
– RE for energy security and supply / not for global climate
– Multi-criteria framework for assessing mitigation options.
44

45. Conclusions
• Paradigm change
– from growth to development
– supply to demand side thinking,
– from fossil and nuclear to EE/RE.
– Forward looking planning
• comprehensive and truly integrated
• With emphasis on governance
45

46. A parting message
• “Limits to available energy resources are hurting economies
and curtailing development in poorer countries. India, being
more vulnerable to energy shortages than most other
countries, needs to urgently implement a multi-dimensional
solution to avoid a crisis… To avert economic hardship and
work towards mitigating climate change, we must find
answers to the energy conundrum soon. This is possible
through a three-pronged strategy to ‘replace, improve, and
reduce'.” (replace fossil fuel based energy sources with
renewables, improve end use efficiency and reduce
consumption, especially of the rich).
Source: Girish Sant, Handling the Energy Crisis, the Hindu Business line, 30th January 2012 46

47. THANK YOU
ashwin [at] prayaspune [dot] org
Prayas Energy Group
www.prayaspune.org/peg
47

48. Lifecycle water use of electricity (Gallons/MWh)
Source: Wilson et al, 2012. Burning our Rivers: The water footprint of electricity 48

49. Plan wise (past and future proposed) RE and Conventional power
generation capacity addition (MWs)
160000
RE Capacity addition 35%
140000
Conventional Capacity addition
120000 50000
28%
The percentage values are for RE
100000
capacity addition as a fraction of
30000
total capacity addition.
80000
22%
60000 14657
93000
40000 76000
24%
12% 50804
6802
20000 2467
18377 21151
0
9th (1997-02) 10th (2002-07) 11th (2007-12) 12th (2012-17); 13th (2017-22); needed
Proposed for NAPCC target
49

50. Rooftop Solar: in situ generation for self consumption
Consumer category Energy charges (Rs./kWh) in major cities
Bengaluru Hyderabad Kolkata Mumbai New Delhi Pune
Domestic (High end 5.60 6.75 (301-500 7.75 (> 300 4.40 (Tatapower); 5.30 (BEST); 4.80 (0- 400 kWh); 7.92 (300-500 kWh);
consumption) (> 200 kWh) kWh); 7.25 kWh) 9.16 (Rinfra) (all > 300 kWh) 6.40 (> 400 kWh) 8.78 (500-1000 kWh);
(>500 kWh) 5.30 (Tatapower); 6.80 (BEST); 9.50 (> 1000 kWh)
10.61 (Rinfra) (all > 500 kWh)
Commercial 7.20 7.00 7.80 (> 300 5.05 (Tata power); 9.80 (BEST); 7.25 – 8.50 (subject 8.38 (0-20 kW; >200
(> 50 kWh) (> 100 kWh) kWh) 10.91 (Rinfra) to load demand) kWh); 8.44 (20-50 kW);
(all >50 kW) 10.91 (>50 kW)
Mumbai Summer & Winter Load Curves and PV generation profiles in April and December
100 0.8
90 0.7
PV generaiton profile in kWh/kWp
80 0.6
70
0.5
% of peak load
60
0.4
50
0.3
40
0.2
30
20 0.1
10 0
0 -0.1
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Summer Load Winter Load PV Generation in Dec PV generation in April
50