What Is The Indian Energy Scenario Environmental Sciences Essay

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Economic growth the world over is driven by energy, whether in the form of finite resources such as coal, oil and gas or in renewable forms such as hydroelectric, wind, solar and biomass, or its converted form, electricity. This energy generation and consumption powers the nation’s industries, vehicles, homes and offices.

Energy Resource Base. Energy security depends, to a great extent, on the availability of an adequate resource base. The resource base is the sum of reserves and resources. Reserves are occurrences of all types and forms of hydrocarbon deposits, natural uranium, and thorium that are known and economically recoverable with present technologies. [23] Resources on the other hand are less certain, are not economically recoverable with present technologies, or are both. [24] In the future, with advances in technology and geophysics, many of today’s resources are likely to become reserves. Following paragraphs briefly discusses the resource base, consumption and forecast of consumption of energy for India.

Energy Resources

India has relatively modest endowment of energy resources to increase access of energy services to its growing population and to fuel economic development. Coal and hydro electricity are India’s primary energy resources. Coal accounts for 55% of total energy demand and oil for 34 %. [25] Gas, hydropower and nuclear power make up the remainder.

Petroleum. India’s proven oil reserves as of January 2005 are at about 5 billion barrels, or about 4.5% of the world total. [26] Most of these reserves lie offshore near Mumbai and onshore in Assam state. However, exploration is still happening, and India’s off-shore and on-shore basins may contain as much as 11 billion barrels. India presently ranks as the 25th greatest producer of crude oil, accounting for about 1% of the world’s annual crude oil production. About 30% of India’s energy needs are met by oil, and more than 60% of that oil is imported. [27] A strong growth in oil demand has resulted in India’s annual petroleum consumption increasing by more than 75% from what it was a decade ago. Petroleum consumption is projected to climb to about 3 million barrels per day by 2010. An historical summary of petroleum production and consumption in India is at Appendix ‘A’.

Natural Gas. India’s natural gas reserves as of January 2005 are estimated at about 29-32 trillion cubic feet (tcf), or about 0.5% of the world total. Most of these reserves lie offshore northwest of Mumbai in the Arabian Sea and onshore in Assam state. [28] India does not yet rank in the top 20 of the world’s greatest natural gas consumers, but that will soon change. Natural gas has experienced the fastest rate of increase of any fuel in India’s primary energy supply, demand is growing at about 4.8 % per year and is forecast to rise to 1.2 tcf per year by 2010 and 1.6 (tcf) per year by 2015. An historical summary of natural gas production and consumption in India is shown in Appendix ‘B’.

Coal. India has huge proven coal reserves, estimated (as of January 2005) at more than 90 billion tons, or about 10% of the world’s total coal. [29] Most of this coal are relatively high ash bituminous coal and are located in Bihar, West Bengal, and Madhya Pradesh states. At the current level of production and consumption, India’s coal reserves would last more than two hundred years. India is currently the third-largest coal-producing country in the world (behind China and the United States), and accounts for about 8.5% of the world’s annual coal production. [30] India is also currently the third-largest coal consuming country (behind the China and the United States), and accounts for nearly 9% of the world’s total annual coal consumption. More than half of India’s energy needs are met by coal, and about 70% of India’s electricity generation is now fueled by coal. [31] The annual demand for coal has been steadily increasing over the past decade, and is now nearly 50% greater than it was a decade ago. Even though India is able to satisfy most of its coal demand through domestic production, less than 5% of its reserves is coking coal used by the steel industry. As a result, India’s steel industry imports coking coal, mainly from Australia and New Zealand, to meet about 25% of its annual needs. An historical summary of coal production and consumption in India is shown in Appendix ‘C’.

Hydroelectric Power. India’s installed capacity for power generation has tripled over the last 20 years and now exceeds 101,000 MWe. [32] Hydroelectric capacity represent about one-fourth of India’s total installed capacity, and overall, India is currently ranked sixth-largest in the world in that category (accounting for about 3.7% of the world’s generating capacity). There is a large amount of hydroelectric capacity in construction and planning stages, and in particular, hydropower development in the Brahmaputra river basin in eastern India is expected to result in six large power plants, which will add nearly 30,000 megawatts (MWe) of generating capacity. [33] 

Nuclear Power. Being a zero-emission energy system, Nuclear Power is one of the best alternatives to Hydrocarbon based energy systems. As far as India is concerned, the present installed capacity is only 2770 MW from its 14 Reactors. [34] The safety record of the power plants has been good except for minor mishaps. India is going ahead with construction of eight other reactors details of which are given below:-

Location

State

Capacity

Tarapur

Maharashtra

2 x 540 MW

Kaiga

Karnataka

2 x 220 MW

Rawatbhata

Rajasthan

2 x 220 MW

Kudankulam

Tamil Nadu

2 x 1000 MW

The installed capacity is being planned to be raised to 20,000 MW by 2020. [35] The Indian Reactors are based on Uranium-Plutonium and the reserves are currently about 34,000 tons, out of which only 44% are economically exploitable. The cost and safety factors are the issues affecting the increased harnessing of Nuclear Power.

Projected Energy Demand

Having seen the energy resource base, let us briefly examine the futuristic demand of energy in brief. India is presently the world’s sixth largest energy consumer and net energy importer. [36] India’s primary energy demand has grown over 3.6% between 1971 and 2002. In 2002, India’s total commercial primary energy consumption reached 538 mtoe (metric tons of oil equivalent). Yet India’s overall energy use of 317 kgoe (kilogram of oil equivalent) in year 2000 was low even when compared with other developing countries (China 51 kgoe, Brazil 700 kgoe). [37] Despite the low per capita energy consumption and excluding biomass which accounts for about 40 % of total primary consumption, in 2002 India accounted for more than 3% of world’s total demand of energy. [38] 

However, the total demand is expected to increase by another 3.5 times in the next two decades, even under a best-case scenario that envisions intensified efforts to modernise power plants, improve transmission and distribution efficiency, and adopt more efficient generation technologies. [39] Appendix ‘D’ depicts power consumption by various sectors in 1997 compared to a business-as-usual (BAU) and an alternative scenario which is considered as the best-case scenario (BCS) for 2020. [40] 

Energy Sources. The soaring demand for power will necessitate a tripling of the installed generation capacity from 101,000 to 292,000 MW over the next two decades. [41] The projected fuel mix for power generation from various sources is shown in appendix ‘E’. At least two-thirds of this power is likely to come from thermal sources, i.e. coal, oil and gas – even under the BCS. This will mean a spiralling cost for imported fuels, including coal, since even a doubling of domestic coal production would not be sufficient to meet the demand. It will also mean a surge in emission of environmental pollutants. Even under this alternative scenario, the contribution of renewable energy does not exceed 5 per cent of the total production. [42] 

Hydrocarbons. The overall growth in demand for all forms of fuel mirrors the growth in the power sector. Even under the alternative scenario, total coal demand will nearly double, and both oil and gas demand will triple, as shown in Appendix ‘F’. Crude oil demand will be far in excess of domestic supply, driven largely by the transportation sector. There will be a growing dependence on imported crude oil imports. Expanding domestic production capacity will require substantial investments, while increasing dependence on imported forms of energy will increase vulnerability to fluctuations in global energy prices. The surging demand will also place an increased burden on the physical and social environments.

Natural gas supplies have stagnated and new finds are only likely to make up for reduced production from depleting fields. Natural gas demand is already in excess of supply. Domestic gas production is expected to meet around 20 per cent of the total demand, thereby requiring massive import of gas. The growth in demand for natural gas depicted in Appendix ‘G’ shows that the largest increases will be for power and industry, especially fertilizers.

Analysis of Energy Resources

The Growing Demand and Supply Disparity. The Integrated Energy Policy Report brought out by the Planning Commission estimates that under an 8 per cent GDP growth scenario, India’s total energy requirements would be in the range of 1536 million tonnes of oil equivalent (mtoe) to 1887 mtoe by 2031. Electricity consumption is estimated to increase by 8.9 times over the period 2001-31. By 2031, the industry and residential sectors are expected to account for nearly 80 per cent of the total electricity consumption as compared to 63 per cent in 2001. Given the constraints on the availability of indigenous energy resources in the country and the burgeoning commercial energy requirements, it is inevitable that the dependence of the economy on imports for coal, oil, gas, and nuclear fuel would increase significantly in the future. Having seen the present consumption and future requirement of energy, let us now briefly examine the prospects of each of these major contributors to energy.

Oil and Gas. As observed in, the import dependency of gas in the BAU scenario increases from almost negligible levels in 2001 to around 67 per cent by 2031 [43] . Similarly import dependency of oil increases from 68 per cent in 2001 to 90 per cent by 2031, mainly on account of the rapid growth. [44] The magnitude of import dependency is dictated by the constraints imposed on infrastructural capacity (liquefied natural gas, LNG terminals and pipelines), but is likely to be even higher if adequate facilities for its import and distribution are made available. Natural gas is a preferred fuel at current prices as compared with coal for power generation and is also more economical for fertilizer production. The International Oil Market is characterized by its non linearity as far as pricing is concerned. The price of oil had sky rocketed to $ 140 a barrel in 2008, the highest ever recorded since 1983. The price of petrol has increased by 56% in last five years. During the same period crude oil prices have increased by 400%. [45] Government has planned massive imports of gas for power generation on the assumption that it would be competitive with coal. That is no longer the case with prices increasing more than double in last few years. In addition MNC groups are currently investing a total of $20 billion in Qatar in new technology plants to convert gas into oil. This technology is reckoned to be viable at an oil price of $25/ barrel which is phenomenally profitable today. These factors therefore are likely to reduce the supply of gas in the world market drastically making those overly dependent on gas highly vulnerable both in terms of availability as well as price.

Today close to 58% of our import bill consists of POL imports. Because of this India is spending more and more of its hard earned foreign exchange on POL. Apart from strategic issues of securing continuous supply of oil, there are complex issues of refining, transportation and distribution. All this require considerable technical and financial resources as also diplomatic skills and political assets in clinching deals. The fast rising scramble for oil and gas underlines the urgency for India to devise alternative energy strategies that do not depend on oil.

Coal. The key functions of the MoC are mainly exercised through Coal India Ltd (CIL) which is the world’s largest coal company. CIL’s operations are characterized by low productivity levels, distribution problems and increased threat from less expensive overseas coal. Demand and supply imperatives are also increasing as time goes by, forcing India to import coal. The projected demand for coal is likely to be in excess of 1020 MT by 2020 against an estimated production of 800 MT. [46] The total coal import dependency (percentage of imported fuel to total fuel consumption) increases from 3 per cent to 70 per cent from 2001-31. [47] .

The decreasing production and increasing import dependency trend is clearly discernable. The increasing environmental and ecological concerns are also affecting use of coal as an energy source. The mounting deficits will lead to production constraints in sectors that are contingent upon availability of coal. Another important factor is the minimal availability of ‘coking coal’ used by the steel industry, which is less than 5% of the Indian coal reserves. As a result, India’s basic infrastructure industry, i.e., steel is dependent on imported coking coal, mainly from Australia and New Zealand, to meet about 25% of its annual needs. [48] Hence India can hardly afford to base its future energy strategy totally on coal.

Hydroelectric Power. Hydroelectric power constitutes one of the predominant sources of renewable energy in India. As of now, about one-fifth of India’s total electricity is based on hydroelectric power and the potential is estimated to be as much as 1, 50,000 MWe, with another 90,000 MWe possible for pumped storage capacity. [49] India’s 10th five-year plan, which runs runs, cost over runs, environmental wrangles and inefficiency of the power plant operation itself. The installed capacity was only 29,625 MW as on 31 July 04 but the through 2007, calls for 10% of all new capacity to come from renewable energy sources, and almost all of it from hydroelectric. [50] The Indian hydro electric power scene is plagued by time over energy generation was only 74 BU. [51] A balance needs to be also maintained between environmental and energy requirements, which if not done is going to affect mega projects like Narmada Sagar Project in Madhya Pradesh, Tehri Project in Uttaranchal and the 11,000 MW Dihang Upper project in Arunachal Pradesh.

Non Conventional Sources of Energy

Solar Energy. Geographic location wise, India can harness solar energy in an effective way. So far, photovoltaic (PV) generation has been limited to small installations, generating a total of about 1748 MWe. [52] Most of these are stand-alone installations, but there are 17 grid-interactive PV installations that supply a total of about 1.4 MW to the electricity grid during daylight hours. PV is suitable for isolated rural areas, where access to electricity via power lines is not available. There are plans for additional PV power plants in India; the largest being the twin 60 MWe PV facilities in Bihar state. The key issue with Solar Power Generation is the cost of the PV cells which is subsidized to a great extent and their energy efficiency, which is only 15-20%. [53] Considerable amount of research and investment is required to tap the potential of solar energy; moreover it can not in itself bridge the burgeoning gap between energy demand and availability.

Wind Power. India is the fourth biggest producer of wind energy, but its contribution to total energy produced is miniscule 1.6%. [54] Wind power installed capacity is now more than 1,700 MW, with almost all of the capacity located in the South India. While the current production is about 9000 MW a year, the ministry of New and Renewable Energy has fixed a target of adding another 10,500 MW by 2012. Wind power farms are made up of numerous small units, each generating an incremental amount of electricity. The lone exception is Suzlon Energy Ltd.’s Vankusawade Wind Park, located in Maharashtra, which uses 350 KW wind generators. This Park is presently the world’s largest wind power facility. The Ministry of Non-Conventional Energy Sources has estimated that the gross wind power potential of India at about 45,000 MW and has identified more than 200 sites, especially in the southern states. It is pertinent that in spite of having big aims, on ground there is only 6000 MW of additional generating capacity till 2012. [55] Wind Power is dependent a lot on seasonal weather and is dependent on geographical location. As seen above, it has limited ability of energy production. Further, it requires considerable capital investment and infrastructure development. This takes lot of time to fructify. Wind Power, from being a pilot technology, needs to have an integrated approach for future development.

Geothermal Power. For power generating purposes, the overall geothermal potential of India is about 10,000 MW. There are seven main geothermal regions in India, which contain a total of about 400 thermal springs. The major geothermal area is the Son-Narmada-Tapi (SONATA) rift zone, which follows the Narmada river valley from Gujarat into Madhya Pradesh, and then continues into eastern India. As far as India is concerned, the technology is at a pilot stage.

Biomass. The Ministry of Non-Conventional Energy Sources estimates India’s biomass energy potential at nearly 20,000 MW, with 16,000 MW from biomass and 3,500 MW from cogeneration (i.e., combined heat and power) plants using bagasse from sugar mills. The emergence of ethanol extracted from molasses and biodiesel (Jatropha plant) as an alternative fuel has created a new category of energy supply, which is renewable and agriculture based but not traditionally ‘non-commercial’ as agricultural residue and biomass are considered today. [56] About 40 cogeneration projects capable of generating 280 MW and 30 biomass projects capable of generating 140 MW have been commissioned in India to date. Nearly 500 MW of additional generating capacity is under construction. [57] In spite of these advantages, bio fuel has a great disadvantage that it is crop dependent. Moreover, ethanol produced in India is made of molasses, a by product of sugar industry. This is less profitable process as compared to Brazil’s, which produces ethanol directly from sugarcane. India has potential for biomass and needs to exploit it fruitfully. This requires a change of mindset at higher political echelons, political will to bring about the change and industrial participation for development of biomass/ bio fuel based energy projects. It also requires infusion of capital. The biggest disadvantage of it is that, India has limited cultivable land and if we shift to production of biomass/ bio fuel based crops we may face food security, which is already looming large over India.

Nuclear. The development of nuclear power generation is the most important strand in India’s quest for energy security. As is clear from above statistics, India has little choice. Known fossil fuel reserves at home are limited. There is a measure of insecurity in relying inordinately on cross-border supplies for a country ocean-locked on three sides and ringed by prickly neighbours on land. Bringing more domestic hydrocarbon and renewable resources on stream will not only take time, but even in the best case scenario will not achieve self sufficiency. In the context of global warming, ‘cleaner’ nuclear power clearly has a major role in the country’s energy mix.

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