Fuel in the engine

The issue of energy or fuel is a vital question in today’s context. Infact, the very sustenance of human civilization is dependent on how we are responding to this question. Among the non-renewable energy resources used, oil is going to deplete its known reserve in another 40-60 years and natural gas in 100 years. More than 80 percent of our fuel need is met by non-renewable energy sources. In this scenario, we are faced with two challenges – finding alternative energy resources and using non-renewable energy resources judiciously. At the same time, the environmental issues can very well be another dimension of the challenges.

Additional Capacity Creation
In the power sector, additional capacity for 3454MW has been created in 2008-09. This additional capacity creation is, however, significantly less than what was additionally created in the previous two years. Petroleum refinery capacity is expanded by 29MT in 2008-09 as compared to 2007-08.

Power Generation
Electricity generation from power utilities grew by merely 2.7 perent in 2008-09 over 2007-08. The growth rate fell much short of the targeted 9.1 per cent. Sharp decline in hydro and nuclear power generation in 2008-09 as compared to 2007-08 is the primary reason behind this shortfall in achieving the target.
Decline in hydro power generation is because of this year’s low rainfall. Generation of power from nuclear power stations suffered due to fuel supply constraints.

Power Supply
Plant load factor (PLF), a measure of efficiency, of thermal power stations declined during 2008-09 mainly due shortage of coal supply. Due to the domestic shortage, import of coal increased from about 10.2 MT in 2007-08 to about 16.0 MT in 2008-09.

On the other hand supply of gas to power stations that use gas as the primary fuel for electricity generation fell short of the desired amount.

As a result, the growth in power availability could not keep up to the pace of growth in power demand, which increased power shortage in the country in 2008-09. However, as compared to 2007-08, peak shortage declined in 2008-09 mainly due to the lower growth in peak demand as compared to growth in peak demand met.

Power Projects
Nine sites were identified Under the coal-based Ultra Mega Power Projects (UMPPs), each with a capacity of 4,000 MW in Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Andhra Pradesh, Gujarat, Karnataka, Maharashtra and Tamil Nadu.
There are 40 hydro projects with an aggregate capacity of 13,085 MW are under construction.

Nuclear Deal
In 2008, India signed the Indo-US nuclear deal which promised supply of nuclear fuel for India’s civilian nuclear purpose and transfer of advanced nuclear technology to India. Many have welcomed this deal and said that the cause of meeting energy requirements will be furthered by the deal.

But, contrary to the general faith, the real solution has not been achieved at all. Contradicting a popular daily’s claim that most of India’s nuclear reactors are running at half capacity to severe nuclear fuel shortage, the chairman and managing director (CMD) of Nuclear Power Corporation of India Ltd (NPCIL) assured that India has enough resources of natural uranium (August, 2007). A recent CAG report has clearly stated that that India’s natural uranium resource has been grossly unexplored, which otherwise is capable of meeting the domestic demand.

Even if nuclear deal ensures supply of nuclear fuel, it will cater to only 5% of India’s energy needs. And the cost of power from imported nuclear plants would be 3-4 times that from coal fired plants, or even Indian nuclear plants.

Thus without an overwhelming up-gradation of India’s nuclear power generating capacity, nuclear energy as an alternative source of energy will not be available for India.

Iran-India Gas Pipeline
IPI Pipeline Project or Peace Project, was conceptualized in 1989 by Rajendra K. Pachauri in partnership with Ali Shams Ardekani, former Deputy Foreign Minister of Iran, to deliver natural gas from Iran to Pakistan and India through a proposed 2,775-kilometre pipeline.

But despite it low-cost attraction, the project has faced many political and security hurdles.

India’s growing proximity with the US and security concerns regarding the pipeline has put the project in the backburner.

Government Expenditure
The central plan outlay for the energy sector has been expanded by more than Rs.16500 crores for year 2009-10. It is to be seen whether this expansion brings any significant positive change. Increase of expenditure is however totally concentrated on the power sector. Expansion on expenditure on non-conventional sources of energy is negligible.

Despite much hype over using nuclear energy as a source of power, there is very little emphasis given on atomic energy industries as well as in the field of atomic energy research.

If we look into the central plan outlay of different ministries separately, we will see government’s misplaced priorities regarding the energy issue.

The department of atomic energy witnessed an increase of less than Rs.200 crore in the central plan outlay for 2009-10.

The ministry of mines actually suffered a reduction in central plan outlay than what was spent last year.

The ministry of new and renewable energy has always been a neglected category. This year as well, the situation hasn’t changed much.

Such actions by the government do not substantiate its claim of its commitment towards the issue of energy and power shortages in our country.

Shocks for 2009-10
Over the last five years price of short-term in the country have tripled from Rs 2.32/kWh (unit) in 2004-05 to Rs 7.31 in 2008-09 across the country, according to a recent Central Electricity Regulatory Commission (CERC) data.

The prices are expected to rise further as the Load Generation Balance Report of the Central Electricity Authority forecasted an estimated energy shortage of 8.8 per cent and the peak shortage at 18.1 per cent for the fiscal 2009-10.

The expected peak shortage in the western region is the highest at 27.4 per cent, while that in the northern region is expected to be 19.4 per cent, and southern region 18.8 per cent.

Towards a Policy-Alternative on Energy
A policy alternative on the pressing issue of energy will demand a rigorous exercise of balance and prudent steps. The issue of energy today cannot be dealt without keeping the environmental constraints. For any such myopic exercise will deliver more bad than good. For a better and ensured supply of power for our future generations, the non-conventional renewable energy sources and processes have to be developed fast. Emphasis has to be given on hydro, solar and wind energies.

At the same time, conventional sources of energy such as coal and petroleum has to be used in moderation; if not for the sake of storing them for future use, but at least to stop the irreparable environmental damage that we have dealt to this planet already. A policy collective has to be developed in this regard, rather than seeing the issue in isolation. For example, the fast growing indiscriminate usage of private vehicles has to be discouraged in a positive fashion. To do so, a comprehensive network of public transport system has to be built up quickly. Clarity of understanding and linking the general policy issues at large to the energy issue can put the discourse in the correct track.