Transcript PROSPECTS AND POLICIES FOR LOW CARBON ECONOMIC …

Policy Research on Energy Infrastructure
of India
Ramprasad Sengupta
Jawaharlal Nehru University (JNU), New
Delhi
Presentation for IGC-ISI Research Network Meeting
20 – 21 December 2010
•Energy Related Policy Research focuses mainly on Energy Security
and Climate Change related Control of Green House Gas Emissions.
Energy Poverty and energy distribution are issues which are relatively
neglected in discussions at global level.
•The arguments for more time before any commitment to emission
bound and also for more carbon space are generally advanced for India
and other developing countries for the removal of poverty and
development
•What time frame is required for removing poverty and committing
to any upper bound of CO2 and other GHG emissions? Time and
speed are important issues as it is the stock and not the flow of GHG
that causes the global warming and the life of CO2 is about 100 years.
2
Role of three kinds of infrastructure deserve special attention for their importance
in faster removal of income poverty, making growth inclusive and supporting
human development.
Water Resource and Water infrastructure.
Roads, Highway and Transport infrastructure.
Energy Resource and Energy Infrastructure.
Comments on the first two and focus on the energy infrastructure in rest of
the presentation.
What has been India’s achievement in making economic growth Low carbon and
energy conserving?
3
Supplies of Total Primary and Final Commercial
Energy and CO2 Emissions.
400
1600
TPCES
350
300
1400
1200
200
800
FNLEN
150
600
100
400
50
200
0
0
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
mtoe
1000
2
250
CO emissions (mt)
CO2MT
TPCES
FNLEN
CO2MT
Source: Based on IEA Data on Energy balances of Non-OECD countries, different volumes.
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Primary Commercial Energy and CO2 intensity over time
0.120
0.100
0.080
0.060
0.040
0.020
T PESCMINT
CO2KGINT
2005
2003
2001
1999
1997
1995
1993
1991
1989
1987
1985
1983
1981
1979
1977
1975
1973
1971
0.000
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Annual Average Growth Rate in the Pre-reform and
Post-reform Periods (%)
Period
1971-1990
1990-2005
GDP
Primary
Growth Commercial
rate
Energy
4.4
6.39
5.55
4.56
Energy
Intensity
of GDP
1.1
-1.72
CO2
CO2
emission intensity of
overall
energy
5.96
4.36
0.389
-0.191
CO2
intensity
of overall
GDP
1.5
-1.91
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Decomposition Analysis of growth of CO2 emission intensity of GDP by the Refined
Divisia Method for the period 1971 to 1990
1.42
1.5
1
0.5
0.683
0.313
0.269
0.149
0
Energy Int effect
Structural Effect
Fuel mix effect
Residual
Total Change
Residual
-0.188
Total Change
Period 1990 to 2005
0.5
0
-0.5
-1
-1.5
-2
-2.5
0.145
Energy Int effect
-2.27
Structural Effect
Fuel mix effect
-0.06
-2.37
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Models of Future Projection of CO2 Emissions
1.
Macro economic approach : Demand based on income,
energy prices
2.
Sectoral approach: Alternative Demand Behaviour:
(a) Sectoral Income, Real Energy Price and Technology –
Energy Intensity.
(b) Sectoral Income, Share of Electricity in Final Energy, and
Energy Intensity
3.
Alternative Growth Rates: 8%, 6%
4.
Real Energy Prices
(a) no change in prices since 2005
(b) Real Energy prices increasing at 3% compound rate per
annum.
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Projection of CO2 emissions (mt)
8 per cent growth
with no price
change
8 per cent growth
with 3 per cent
p.a. price rise
6 per cent GDP
growth rate and
no price change
2005
1083
1083
1083
2021
2726 - 2910
2036 - 2532
2257 - 2442
2031
4920 - 5553
3027 - 4597
3493 - 4016
GDP
elasticity
0.733 - 0.831
0.52 - 0.72
0.71 - 0.85
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Projection of CO2 intensity of GDP (gms/Rupee)
and Per capita CO2 (tonnes)
8 % growth with no
price change
8% growth with 3 per
cent price rise
6% GDP growth rate
and no price range
2005
41
41
41
2021
30-32
23-28
16 – 24
2031
25.4 - 29
16 – 25.4
27 – 31
32 – 44
17 – 24
22 – 27
% drop 2021
% drop 2031
29 – 38
41 – 61
24 – 34
Per capita CO2
(tonnes) 2031
3.4 – 3.6
2.1 – 3.2
2.4 – 2.8
China per capita CO2 = 3.9; US per capita CO2 = 20.6 (2004)
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CO2 Intensity ProjectionsReference & Sectoral Approach
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
43
42
41
40
39
38
37
36
35
34
33
32
31
30
29
28
27
26
25
CO2 intensity- sectoral (gm/Rs)
CO2 intensity- reference (gm/Rs)
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CO2 Emission
(Dir + Indirect Sectoral Share- %): Sc 1B
2005
Oth Svs
10%
Trans
13%
Res
25%
Res
17%
Ind
49%
Agr
12%
2021
Oth Svs
14%
Trans
14%
Ind
39%
Agr
9%
2031
Res
30%
Oth Svs
15%
Trans
14%
Ind
35%
Agr
8%
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Comparative Projections of Primary Energy Requirements for the 8%
GDP growth: Present Study and Planning Commission
Scenarios Present Study
8% growth
Sectoral ApproachSc1B
8% Gr, No Price change
Primary
Energy mtoe Share
2031-32
Coal %
1879
Share
Oil %
Non
Share
Share commercial
Gas % Others %
%
54.72
26.16
10.99
8.13
N.A.
IEPC Report, Planning Commission
Coal Dominant scenario
1702
54.1
25.7
5.5
4.8
9.8
Maximum use of Hydro,
Nuclear & Gas potential
scenario
1652
45.5
26.4
10.7
7.3
10.1
Simultaneous use of all
strategies for sustainable
Energy Development
1351
41.1
22.8
9.8
14.2
12
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Policy Implications
• Any reduction in the Growth Rate ?
• What should be done about Energy Pricing – What about
Carbon tax in GST/VAT Regime
• About 70-75% of CO2 arises from power and transport sector.
Hence policies of carbon intensity reduction need to focus these
sectors.
• Major problem of the transport sector because of very
limited scope of inter-fuel substitution. Both oil security
and carbon and other pollutant emissions from transport
operation have made the search for alternative fuel and
inter-modal substitution quite important. Findings on rail vs
road.
14
• Oil Reserve to production ratio :21, Reserve to Consumption
ratio 5, Share of import : 78%
• Issue of energy security due to volatility of oil prices around a
path of firm rising trend has led to the India government’s
policy initiative for bio-fuel – bio liquids
• Bio-diesel from Jatropha
• Ethanol Policy – molasses route and also direct from cane juice in a
situation of excess production.
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Share of net imports and domestic production
in the total quantity of crude oil supplied to India
economy, 1970-2007
100%
90%
percentage share
80%
70%
60%
50%
40%
30%
20%
10%
0%
Years
Net Imports
Domestic production
Source: Authors’ calculation based on data from GOI, 2010 and GOI, 2006
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Crude Oil Spot Prices in US Dollars/bbl
(Average Unit Value, FOB)
120
in US Dollars/bbl
100
80
Brent
Dubai
60
40
20
0
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Wholesale Price Indices for Petroleum
Products in India (1993-94=100)
600
500
400
300
200
100
0
Petrol
Kerosene
High Speed Diesel Oil
Light Diesel Oil
Aviation Turbine Fuel
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HUBBERT’S MODEL FOR PEAK OIL ANALYSIS
• Q = K/(1+noe-at),
 no = (K - Qo)/Qo
 Q is Cumulative oil production in period t
 K is ultimate recoverable reserves of crude oil
 t denotes the time period
 Qo denotes the level of cumulative oil production in the arbitrarily
chosen time period To
• Note that the first derivative of the logistic function is a bell shaped curve
which attains its maximum at the time of peak when half of ultimate
recoverable reserves (K) has already been exploited (i.e. Q = K/2) and
thus represents the complete cycle of annual crude oil production as
hypothesized by Hubbert.
• As a result, to model the cycle of crude oil production and determining the
peak, he developed the following model:
dQ/dt = P = aQ – (aQ 2)/K
P/Q = a [1- (Q/K)]
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India's annual crude oil production from 1970 - 2007, in
thousand tonnes and in million barrels
20
Projections for Biodiesel Demand and Land
requirement for biodiesel in India
Authors' Calculations
Year
Diesel
(Million
Tonnes)
30 %
2011
42.59
Planning Commission
Land
Biodiesel requireme
(Million
nt for
Tonnes) Biodiesel
20 %
(Million
hectares)
8.52
3.49
2021
78.43
2031
144.31
Per hectare yield of
biodiesel
Per hectare yield of
jatropha seeds
Quantity of jatropha
seeds required for one
litre of biodiesel
15.69
28.86
Year
Diesel
(Million
Tonnes)
30 %
2011
48.73
Land
Biodiesel requireme
20%
nt for
(Million
Biodiesel
Tonnes) (Million
hectares)
9.75
8.15
6.42
11.82
2021
81.60
2031
142.66
Per hectare yield of
2.441 tonne
biodiesel
10 000 kg
3.28 kg
Per hectare yield of
jatropha seeds
Quantity of jatropha
seeds required for one
litre of biodiesel
16.32
28.53
13.65
23.86
1.196 tonne
4555kg
3.28 kg21
Land use classification and estimates for India
(in million hectares)
1950-51
1990-91
2006-07
Forests
40.48
67.81
69.81
Not available for cultivation
47.52
40.48
42.63
Permanent pastures and
other grazing land
6.68
11.4
10.36
Land under miscellaneous
tree crops and groves
19.83
3.82
3.45
Culturable waste land
22.94
15
13.24
Fallow lands
28.12
23.37
25.72
Net sown area
118.75
143
140.3
304.88
305.51
328.73
328.73
Reporting area for land
284.32
utilisation statistics
Total Geographical Area
328.73
Source: Agricultural Statistics at a Glance
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• Critical Biodiesel Price/High Speed Diesel is the minimum price of
HSD/Biodiesel for which returns to a farmer are just sufficient to cover the
opportunity cost of diverting land from cultivating a principal crop to
jatropha cultivation.
• These are estimated based on the Techno economic data on bio-refinery
prepared by IRADe for Technology Information Forecasting and
Assessment Council (TIFAC) and those on jatropha cultivation prepared
by the Tamil Nadu Agricultural University.
• The biorefinery cost of producing biodiesel from jatropha seed oil
(excluding the cost of feedstock) is assumed to be Rs 9.50 per kg of
biodiesel. The biodiesel yield is assumed to be 1 kilogram from 3.28 kg of
jatropha seeds.
•
The critical biodiesel and HSD prices have been calculated considering
that 1 kg of biodiesel is equal to 1.2486 litres of biodiesel and 1 litre of
biodiesel is equal to 0.93117 litre of High Speed Diesel.
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Critical High Speed Diesel Price (HSD), US $ per barrel 2004-05
Andhra
Pradesh
Sugarcane
Wheat
Bajra
Paddy
81
64
Rapeseed &
Mustard
Haryana
102
60
49
65
Maharashtra Tamil Nadu
97
83
49
52
59
Cotton
Ragi
Groundnut
Urad
Jowar
Sesamum
Barley
Masur
Gram
Tur
Maize
Moong
Soyabean
Sunflower
Safflower
62
VFC Tobacco
56
55
57
51
61
58
52
54
52
65
Uttar
Pradesh
83
54
50
53
Uttaranchal Karnataka
87
51
106
53
55
57
51
47
48
49
52
57
48
52
53
53
50
51
57
53
48
54
56
46
51
52
51
56
52
53
59
61
50
47
53
54
51
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Critical price of gasoline (in US$ per barrel) for 2005-06
Andhra
Pradesh
Jowar
Maize
Gram
Cotton
Moong
Sunflower
Urad
Paddy
129.53
136.26
141.72
134.34
139.18
131.31
157.66
142.93
VFC Tobacco
Groundnut
Tur
Wheat
Bajra
143.16
127.61
137.71
Rapeseed &
Mustard
Soyabean
Safflower
Ragi
Sesamum
Masur
Barley
Haryana
136.89
156.00
Maharashtra
Tamil Nadu
90.50
69.30
76.26
100.60
95.50
93.11
97.62
94.38
94.92
94.09
145.61
126.22
Uttar Pradesh
Uttaranchal
54.49
73.33
44.00
72.61
75.95
73.03
57.99
60.79
52.17
74.28
66.44
60.79
54.88
92.74
147.29
45.08
66.81
96.28
96.10
84.91
71.11
76.10
67.01
57.80
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Implications:
•There is thus a possibility of conflict between energy
security and food security. The issue of land use and
sustainable livelihood issue would come up which would
have deeper welfare significance. How to regulate land use.
Search for alternative technology – fuel cell hydrogen driven
electric vehicle car or bus.
•Residential Sector has also a problem of energy poverty –
biomass used in unclean unconverted form. Damaging
health externality. Here the desired substitution is to be
away from bio mass fuel and in favour of fossil fuel – use of
LPG, Kerosene and electricity. Income poverty removal
would not ensure energy poverty removal. Additional carbon
space required to remove energy poverty of Indian
household sector.
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Energy Poverty & Emission Control
Rural Sector
Income Poverty (%)
% HHs with access to Electricity for
lighting
% HHs with access to Biomass for
Cooking
Cooking Poverty Ratio (%)
Urban Sector
Income Poverty (%)
% HHs with access to Electricity for
lighting
% HHs with access to other fuels,
incl. biomass, soft coke,etc. for
cooking (Cooking Poverty Ratio)
Current
28.3
Target
4
44
84
80-84
44-48
82
46
Current
25.7
Target
3
88
96
38
14
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Alternatively, technology for biomass based clean modern fuel development
may be important for energy poverty removal as well as low carbon development..
For example bio-char and its economics. It can capture carbon as well.
Such decentralised energy production and distribution would have also benefit
of income and employment generation
Power Sector:
Development of nuclear power is of great importance particularly in view of
India’s thorium reserves.
Finally : Why not carbon capture? We need to pay some attention to the option of
carbon capture than solely emphasising carbon mitigation.
Economics of this technology and its economic viability in Indian context needs
to be carefully examined.
Real challenge is finding the resource use and technology of waste disposal which
combines the objectives of low carbon growth with energy security for all - both transport
and household sector in particular
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•
•
•
•
•
Fast removal of Poverty
Energy Conservation and Supply side efficiency
Vulnerability of Transport sector
Bio-diesel and Ethanol solution for India
Energy poverty – More of hydrocarbon use or new
technology for bio-mass use (bio-char)
• Nuclear power – thorium – uranium cycle.
• Carbon Capture
• Real challenge is finding the resource use and technology of
waste disposal which combines the objectives of low carbon
growth with energy security for all - both transport and
household sector in particular
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The End
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