Executive Summary for the policy Makers
The need for an Integrated Power Policy (Chapter 1).
Integrated Energy Policy, as developed by the Planning Commission in 2006, seems to have based its policy recommendations largely on technical, financial and logistical issues, ignoring the hugely important social and environmental aspects of our society. Urgent course corrections are considered essential in order to ensure the true welfare of all sections of our society. Power sector, being a predominant part of the energy policy, needs an integrated approach in order to meet the needs of all sections of our society on a sustainable basis. On the basis of our own experience, since independence, its impact on social, economic and environmental aspects of our society needs an objective and serious consideration. What our society is looking for is not electrical power itself, but the services such as lighting, heating, cooling, motive power etc. from the electrical power. Hence an integrated approach in determining which source of electricity is most suitable for which condition/application at minimum overall cost to the society can be determined only through an Integrated Power Policy approach. The fact that about 40% of our population has had no access to electricity (Census 2001) should remove any doubts about the need for a paradigm shift in our society’s approach to the demand/supply of electricity.
The imperative for a realistic Electricity demand projection (Chapter 2).
A credible electricity demand projection is critical for the responsible management of power sector. The projection by Integrated Energy Policy (IEP) that the country’s electricity production capacity has to increase by five folds (from about 160,000 MW in 2006 to about 800,000 MW by 2032), seem to have been done without considering the associated social and environmental impacts. There is a need for an objective review whether such a large capacity addition based on conventional power sources is in the overall interest of our communities. In this regard whether the true projection of electricity production capacity should be 1,700 BU @ 1,000 kWH per capita by Year 2070, OR 272,000 MW for 4% CAGR by 2031-32 is not as important, as the much needed holistic approach in effectively managing the grid demand for a sustainable supply scenario. Another projection of electricity demand by 2070 (by a Professor from IIT) on the basis that 2,000 kWH per capita of electricity is very frugal and that it is necessary for the minimum Human Development Index, also cannot be accepted for the above stated reasons. Because, this much per capita electricity in 2070 for the estimated population of 1.5 Billions can mean a huge amount of grid based generating capacity, which can not be in the true interest of our communities and the environment. A critical analysis of what constitutes true electricity demand for our communities may indicate that about 1,000 kWH of per capita electricity should be able to meet all our legitimate electricity demands even in the future years such as 2050 or 2070.
A realistic demand forecast must objectively take into account the social, economic, and environmental issues such as the changing consumption pattern across different sectors of our economy; nature’s limit; Global Warming potential of energy consumption; and our obligations to the future generations. A carefully thought out strategy consisting of responsible demand side management and sustainable energy supply options has become imminent for the long term welfare of our communities. In this context the electricity demand projection from the official agencies generally has been found to be exaggerated, because of which a large number of conventional power projects, without due diligence, are being proposed/implemented all over the country with hugely avoidable costs to the society. Keeping in view the limits of the nature in supporting unlimited energy/electricity demand and its implications on our communities, all possible efforts must be made to contain it within manageable levels. India being a tropical country, and having been used to a frugal life-style of our ancestors, our communities will not need high levels of per capita energy/electricity consumption to achieve acceptable levels of human development. Because of the seriously flawed target of aiming to achieve high per capita energy/electricity consumption index, the country must aim to avoid the wasteful life style of the industrialized countries. Instead of projecting future electricity demand with the GDP maximizing paradigm, the country must aim at determining the least amounts of energy/electricity required to eradicate poverty.
Major concerns in continuing with heavy reliance on conventional sources of electricity (Chapter 3, 4 & 5).
Enormous increase in the installed power capacity in the country since independence (about 180 times) and centralsied power supply system has not been able to meet the electricity needs of rural India. About 400 Million people are reported to be outside the purview of the electricity Grid even in 2011 putting a big question mark on the true relevance of such a policy to our country of villages.
Coal, as a fossil fuel, is fast running out, and is encountering a lot of issues such as the ever tightening environmental regulations, the escalating price and decreasing reliability of supply. The popular oppositions around the world to the coal mining and coal power plants are escalating because of the recognition of social, economic, environmental and health issues associated with the mining, transportation and burning of coal. Coal’s global warming potential is acknowledged as huge, because of which there are persistent calls for early retirement of coal power plants. India, being one of the largest producers and users of coal, has to address the credible concerns of its teeming millions on all the related issues. Even from technical and financial angles it appears difficult to portray a role for coal in our future energy scenario. In the backdrop of very difficult situation as far as domestic coal supply to the existing power plants, and in the context of hardening global markets, it is also difficult to see any optimism on the coal supply front in the near future. One can expect a lot of stranded assets in coal power generation, along with huge burden to the society, if necessary steps are not taken to rationalize our generation planning strategy.
A holistic approach to the direct/indirect costs to the society associated with the coal power and an objective comparison with other sources of electricity has become critical. The additionally planned coal power capacity of about 700, 000 MW, as reported in various sections of the media, needs rationalization from the perspective of the social, environmental & economic issues, and in the context of Global Warming phenomenon to which coal burning is a major contributor.
Hydro power capacity addition to a large extent (from the present level of about 37,000 MW to 150,000 MW by 2031-32), as recommended by IEP, needs an objective review from the perspective of the true costs to the society, sentiments of the people and intergenerational aspects. All the associated costs and benefits to the nation, and the long term welfare of our communities deserve much more serious attention than has been given so far. The critical importance of a free flowing river to the bio-diversity, and to the communities which are dependent on it cannot be continued to be ignored any longer. To enable such holistic considerations a change in the society’s approach is critical: wherein various stake holders are effectively involved in the relevant decision making processes; and the experience of our own people since independence are taken into objective account. The past and present practice of ignoring the costs associated with the all important environment in Techno-economic feasibility studies by CEA should be objectively reviewed.
Nuclear power capacity, which is being proposed to be increased from about 4,800 MW in 2011 to about 63,000 MW in 2032,and to about 250,000 MW by 2050, has also seen increasingly vociferous debate on its true relevance to our society. The impact of a wrong nuclear power policy will be much more severe on our densely populated and ill-prepared communities than that in developed countries. Hence there is an inescapable requirement that various sections of our society should be taken into objective confidence before making any commitment to build additional nuclear power plants. In view of the fact that any unfortunate nuclear accident in our densely populated country can have unimaginable consequences, the Precautionary Principles as enunciated by the World Bio-diversity Convention in our developmental paradigm must be heeded to. An objective analysis of all the related issues on nuclear power, including the experiences from other parts of the world, is critical in arriving at the most appropriate decision for the welfare of the entire society. The true costs to our communities and the benefits from nuclear power plants and all the associated activities such as nuclear material mining, safe levels of radiation even during normal operation of reactors, the catastrophic risks of nuclear accidents (as in the backdrop of Chernobyl and Fukushima events), net energy consumed/produced in the nuclear fuel cycle, the true relevance of nuclear power in the Indian scenario, benign alternatives, and the need to safeguard our communities and the environment from the nuclear wastes etc. must be thoroughly debated at the national level, and a consensus of various sections of our society must be obtained before making any long term investments in the sector.
Importance of Environmental and Social issues (Chapter 6).
Keeping in proper perspective the mandate of our Constitution, various Acts of our Parliament, the International Conventions for which India is a signatory, and most importantly the society’s obligations to its vulnerable sections, it becomes obvious that we need to adopt a paradigm shift so as to make the power sector environmentally friendly, with a high level of responsibility toward the bio-diversity. Global Warming is seen as an existential threat to which the power sector has been a major contributor. Unless urgent course corrections are applied, the power sector’s contribution to the destruction of life on this planet will escalate through Global Warming phenomenon. Many of the high profile programmes such as National Mission on Sustainable Habitat; National Water Mission; National Mission for Sustaining the Himalayan Ecosystem; National Mission for a Green India etc. under NAPCC may not have any realistic chance of yielding the stated results unless the power sector is made environmentally responsible. Our failure to conserve our natural resources and to protect the bio-diversity will threaten the very welfare objective of the GDP centred growth target,
Role of renewables in future (Chapter 7).
Possibly, there can be no doubt that the future of our country entirely depends on how effectively our society will be able to harness the huge renewable energy potential within the country. At the international level there is increasing level of confidence and advocacy for deploying renewable energy sources. An integrated energy resource management approach, with a carefully designed combination of centralized and decentralised renewable energy sources, is absolutely needed to avail energy security. The renewable energy sources in distributed mode alone has the potential to completely eliminate the energy injustice to our rural population; but not the dependence on external resources such as coal, petroleum and gas as recommended by IEP, or by risky nuclear power. Whereas the costs associated with the renewable energy sources are continuously plunging, such costs in the case of conventional energy sources are escalating. If the externalities associated with conventional energy sources (such as health and environmental costs) are objectively considered, the benefits to our society from renewable energy sources can be seen to be many times more than those with the conventional energy sources. There are already many cases of renewable energy sources meeting the electricity needs of un-electrified villages satisfactorily. Effective deployment of distributed type renewable energy sources such as roof top solar PV panels, small size wind turbines, community based bio-mass plant or CSP type solar power or solar PV panels etc. can revolutionise the power sector scenario in the country, and hence will need serious efforts to harness this potential for the accelerated welfare of our rural communities.
Other Issues of concern to society in Power sector (Chapter 8).
The continued dependence on imported fuels cannot assure us energy security. Energy Plantations, as recommended by IEP to increase bio-energy, unless carefully managed has the potential to impact the food security. The society cannot continue to ignore the need to identify a definitive year to reach peak use of fossil fuels. IEP recommendation for creating coastal infrastructure for import and use of coal should be carefully reviewed for its overall impacts on the society. Focus should not be only on centralized energy infrastructure, but needs be shifted to distributed power supply systems where the electricity produced is consumed locally.
The continued failure of the constitutionally mandated institutional mechanisms to protect the legitimate interests of various sections of our society should be a major concern. It appears that the unbearable pressure (from the private business houses) associated with the perceived need for large additional power capacities on such administrative ministries, regulatory bodies and agencies has resulted in less than diligent application of the spirit of law to effectively take care of social and environmental issues. There is an urgent need to strengthen the institutional mechanism in order to address the social and environmental issues effectively.
Costs & Benefits Analysis as an effective decision making tool (Chapter 9).
In order to ensure a holistic view of the overall welfare of the society, the need to make Costs & Benefits Analysis (CBA) as an essential & objective part of the project approval process cannot be ignored any longer. Such a CBA can assist in capturing all the direct and indirect costs and benefits, so as to enable a wider section of the society to get convinced about the real need for a given project. An important aspect of such a CBA is that it should involve consideration of all feasible alternatives in the pursuit of a given objective; and that it should involve transparent public consultations. Such a mechanism, if used effectively, can clearly differentiate between a high cost project and a high benefit project from society’s perspective. For example: in the case of providing electricity to an un-electrified village such a mechanism can clearly establish as to which option (extending the nearby grid supply OR installing roof top solar PV systems OR a community based bio-energy unit etc.) amongst those suitable to that village is most beneficial to the community/society.
The Way Forward (Chapter 10).
Only through an integrated energy resource management approach it is feasible to meet the legitimated demand for electricity of all sections of our society on a sustainable basis. The combined loss to the nation because of the prevailing inefficiency in the power sector, as per 13th Finance Commission, is expected to reach about Rs. 125,000 Crores a year by 2015. Large additions to power production capacity alone will not solve the problems, as has been experienced during the last 6 decades. Highest possible efficiency, minimum wastages, responsible usage, and wide spread usage of renewable energy sources should be the basis of integrated energy resource management approach. In view of the fact that as much as 35 to 40% of the demand existing on the interconnected power network can be reduced by efficiency improvement measures alone, the STATE has to consider such measures as the first option to bridge the gap between demand and supply. These measures are like low hanging fruits with many perpetual benefits: very low costs, small gestation periods, low or negligible impact on the environment etc. They should be priority number 1.
A massive campaign on rain water harvesting, ground water recharging and powering agricultural pump sets through solar panels should be priority number 2. The effective cost to the society of these measures will be negligible when compared to the overall and perpetual benefits from them.
The need to keep at the centre of our focus the overall costs and benefits to the society of any power supply option need no special emphasis. Effective public consultation will enable adoption of the most suitable power supply alternative. The overall objective should be to eradicate poverty as a fundamental goal while minimizing the impacts of the environment.
Power sector scenario by 2032 & beyond (Chapter 11).
The huge scope available in efficiency improvement in the power sector clearly indicates that in reality there has been no need for power cuts. An objective analysis of the true demand and the huge potential available with renewable energy sources will also indicate that the reliance on conventional energy sources can be drastically reduced by 2032, and can even be completely eliminated by 2050. What is needed is the required level of commitment, a holistic approach, and detailed analysis of the electricity demand and potential for renewables in each of the small geographic areas such as revenue districts/talukas. Highest possible efficiency in all segments of the sector; effective demand side management; optimum level of energy conservation; suitable tariff structure; effective usage of renewable energy sources; societal level responsibility in power sector management etc. is needed to make the power sector sustainable, and to meet the expectations of the people.