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| Abstract: Energy, particularly electricity, is a key input for accelerating economic growth. The present per capita electricity generation in India is about 600 kWh per year. Since 1990s, India’s gross domestic product (GDP) has been growing quite fast and it is forecast that it will continue to do so in the coming several decades. GDP growth has to be accompanied by growth in consumption of primary energy as well as electricity. India’s population continues to rise and could reach 1.5 billion by the middle of the century. Our estimate indicates that even after recognizing that energy intensity of GDP would continue to decline as in the past, the total electricity generation by the middle of the century would be an order of magnitude higher than the generation in the fiscal year 2002-03. This calls for developing a strategy for growth of electricity gener-ation based on a careful examination of all issues related to sustainability, particularly abundance of available energy resources, diversity of sources of energy supply and technologies, security of supplies, self sufficiency, security of energy infrastructure, effect on local, regional and global environment, health externalities and demand side management. Introduction: India, the largest democracy with an estimated population of about 1.04 billion, is on a road to rapid growth in economy. During the period 1981-2000, it has witnessed an impressive GDP growth rate of around 6%/yr . Policy initiatives of the Government of India during the past decade have resulted in a faster growth of GDP and forecasts by several agencies point towards continued growth of Indian economy. Dominic Wilson and Roopa Purushothaman of Goldman Sachs in their paper write, “India has the potential to show the fastest growth over the next 30 to 50 years. Growth could be higher than over the next 30 years and close to 5% as late as 2050 if development proceeds successfully.” To ensure that the development proceeds successfully, Government of India has been very proactive and several steps have been taken in the recent past. These include policy initiatives as well as planning and launching of projects aimed at improving energy, transport and communication infrastructure in the country. The Electricity Act – 2003, notified in June 2003, is one such important initiative. All these are the steps towards achieving an average annual growth of 8% in GDP during the ongoing 10th five year plan (April 2002 to March 2007). As elsewhere in the world, the energy and electricity growth in India is closely linked to growth in economy. One may notice this by comparing per capita electricity consumption and GDP in PPP US $ (purchasing power parity US $) of various countries in the neighbourhood as well as in other regions of the world. Key World Energy Statistics published by the International Energy Agency gives detailed information about electricity consumption in various countries and GDP in 1995 PPP US $. India’s electricity consumption based on data from utilities is given as 408 kWh per year per capita for the year 2001, while GDP per capita in PPP US $ is given as 2138. Corresponding figures for Indonesia are 423 and 2684, for Thailand 1563 and 5833, for Malaysia 2824 and 7645, and for Singapore 7677 and 20426. For OECD countries these numbers are 7879 and 21785. Here one may note a correlation between per capita GDP and per capita electricity consumption. At the time of independence in the year 1947, total installed electricity generation capacity was 1,363 MWe. It rose to 30,214 MWe in the year 1980-81, to 66,086 MWe in the year 1990-91 and to 138,730 MWe on 31st March 2003 , the corresponding growth rates being 9.54%/yr, 8.14%/yr and 6.26%/yr. The average growth rate over the entire period, thus, has been an impressive 8.6%/yr. In spite of this impressive growth, per capita electricity as well as primary energy consumption are still very low. In addition, the share of non-commercial energy resources continues to be much higher than what it is in developed countries . Domestic production of commercial energy has registered an average growth of about 5.9%/yr during the period 1981-2000. Various constraints, particularly poor hydrocarbon resource base, have forced an increased reliance on energy imports, which have grown at the rate of about 7.1%/yr . The electricity sector also has experienced severe shortages during the above period despite an impressive growth. During the year 2000-01, there was an average electricity shortage of 7.8% and a peak power demand shortage of 13% . It has now increased to 10% and 15% respectively . The
growth rate of electricity has been substantially higher than other
forms of energy, the reason being convenience of use and cleanliness
at the user end. Electricity generation in India during the fiscal
year 2002-03 was about 532 billion kWh from electric utilities and
about 104 billion kWh from captive power plants . On per capita
basis it turns out to be about 610 kWh per year. As already mentioned,
India’s GDP has been growing quite fast and it is forecast
that it will continue to be so in the coming decades. GDP growth
has to be accompanied by growth of primary energy consumption as
well as electricity consumption. A number of organs of the Government
of India (GOI) are engaged in energy production and we felt it desirable
to look at all the fuel resources, the plans of all the organs of
GOI and examine the energy scenario as it might emerge in the decades
to come. Long-term forecast is always full of uncertainties; still
it is necessary to build scenarios for the future so as to identify
available alternatives. In case of energy technologies, electrical
energy in particular, lead times for developing new technologies
are very long and, therefore, scenario building is desirable to
identify problem areas and initiate R&D on relevant topics.
The present study has been carried out with this objective. In this
study, after making brief remarks on the population projection,
we review projections about India’s energy demand growth rates
based on other studies and present our projection about electricity
growth rate and a strategy to meet the projected demand. |
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Statistical Outline of India, page 11, 2001- 2002, Tata Services Limited, Mumbai. Dominic Wilson and Roopa Purushothaman, “Dreaming with BRICs: The Path to 2050”,Global Economics Paper No: 99, Goldmann Sachs, 1st Oct. 2003 (http://www.gs.com/insight/research/reports/99.pdf). Key World Energy Statistics, 2003, International Energy Agency. RKD Shah, “Strategies for Growth of Thermal Power”, Energy for Growth and Sustainability, Indian National Academy of Engineering, 1998. i) Power from Utilities: Thermal, Hydro, Nuclear and Wind: 107,972.8 MWe (http://cea.nic.in/exec_summ/chapters.htm#GENERATION%20INSTALLED%20 CAPACITY(MW)), accessed on 23.4.03 ii) Captive Power: 29,000 MWe PowerLine, November 2001 gives estimates of captive power installed capacity in India and these have been extrapolated based on data given in PowerLine, December 2002. Coal, petroleum, natural gas, nuclear and hydro and other renewable forms of energy constitute commercial energy. Traditional or non-commercial energy resources include biomass such as fuel wood, crop-residue and animal-waste. Data about non-commercial energy usage is not so well documented as that about the commercial energy. In the present study we are mainly concerned with the commercial form of energy and unless otherwise stated the term energy would mean the commercial form of energy. Estimated from data given in ‘Energy’, published by the Centre for Monitoring Indian Economy Pvt. Ltd., Mumbai, page 4, April 2002,. TERI Energy Data Directory & Yearbook, 2000/2001, TERI, New Delhi, India. http://www.teriin.org/features/art195.htm accessed on 23.04.03 Throughout the report, we have preferred to talk about generation and not consumption as it is difficult to separate theft from technical losses. It is expected that by the middle of the century theft will be near zero and with technological inputs technical losses will also come to below 10%. Personal communication, Central Electricity Authority, May 2003. Using the data of captive power plants given in “Energy”, published by Centre for Monitoring Indian Economy, April 2002, a capacity factor of 41% has been estimated. At the same capacity factor and an estimated captive power base of 29,000 MWe the electric power generated is 104 billion kWh. |
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