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Module – 1
ENERGY SCENARIO
Prof. Prasad J. Parulekar
(TSEC)
Compiled by Prof. Prasad J. Parulekar
Module 1 – Energy Scenario
Learning Objectives
Types of energy sources
Life of energy sources
Energy scenario in India
Energy v/s Economic growth
Energy policies, pricing and reforms
Energy use and Environment
Need for energy conservation
Energy security and strategies for future
Energy
Major I/P to country’s economic development
Need of Energy System Design / Energy Management ---increasing consumption but limited
resources
Developing countries --- ever increasing energy needs
Global energy need --- rises by 2.4% every year
Total primary energy consumption – 85% through fossil fuels
Energy consumption – affects environment;
Human activities – uses energy – cause climate change
Classification of Energy
(A) 1. Coal 2. Crude Oil 3. Natural Gas 4. Uranium
(B) 1. Steam 2. Electricity 3. Petrol 4. CNG
What is the Difference?
Compiled by Prof. Prasad J. Parulekar
Primary Energy Sources Secondary Energy Sources
Extracted / captured directly from natural Converted from primary energy sources
resources
Their energy content – expressed in terms Their energy content – expressed in terms
of TOE (tonnes of oil equivalent) of kJ / kW / kCal / kWh
Can be renewable / non-renewable
1 TOE ?
107 kcal = 11630 kWh = 41868 MJ
Any non-energy use/s of Primary energy sources?
Coal / natural gas – as feedstock in fertilizer plant
(C) 1. Electricity 2. Oil (Petrol, etc.) 3. Natural Gas 4. Lignite
(D) 1. Firewood 2. Cattle dung 3. Agricultural waste
What is the Difference?
Commercial Energy Sources Non-Commercial Energy Sources
Available in market for definite prices Sourced within a community and its
surrounding area
Compiled by Prof. Prasad J. Parulekar
Used for commercial purposes Normally not traded in commercial market
Original source can be anything, fossils, nuclear, Also called as traditional fuels
solar, etc.
Basis of industrial, agricultural, transport and Often ignored while compiling country’s
commercial development in modern world energy statistics
Used not only for industrial purpose but also for Most of the times, available at free of cost
household purpose
(E) 1. Coal 2. Crude Oil 3. Natural Gas 4. Nuclear
(F) 1. Solar 2. Wind 3. Biomass
What is the Difference?
Renewable Energy Sources Non-Renewable Energy Sources
Obtained from natural sources and essentially Also obtained from natural sources but can not be
inexhaustible produced, grown, replenished or used on a scale
which can sustain its consumption rate
Can be harnessed without releasing harmful Consumed at much faster rate than nature can
pollutants create them
Will deplete with time
Compiled by Prof. Prasad J. Parulekar
Global Primary Energy Reserves and Commercial Energy Production:
1. Coal
Most abundant and geographically dispersed fossil fuel
Exist as peat, brown coal (lignite), sub-bituminous, bituminous and anthracite
892 billion tonnes of proven coal reserves worldwide
Available in almost every country of world, however recoverable coal reserves in around 75 countries
Though it has poor environmental credentials, it is crucial contributor to energy supply in many
countries
What is R/P ratio?
If the reserves remaining at the end opf the year are divided by production in that year, the result is
length of time that remaining reserves would last if production were continue at that level
Compiled by Prof. Prasad J. Parulekar
Global Primary Energy Reserves by the End of 2018
2. Oil
1687.9 billion barrels of proven oil reserves worldwide
48% of proven oil reserves are in Middle East countries
If production continues at today’s rate, most of the major oil producers such as US, Russia, China will
have their oil fields depleted within a decade and world has to depend only on middle east, where it
may last for next 78 years
There are some unconventional oil resources also like, oil shale, oil sand, extra heavy oil and natural
bitumen; if these are also taken into account as oil then oil reserves will be 4 times larger than current
conventional oil reserves
Oil shale – any sedimentary rock containing solid bituminous materials (called kerogen) that are
released as petroleum-like liquids when rock is heated during pyrolysis
Oil sands (Tar sands) – combination of clay, sand, water and bitumen, a heavy black viscous oil; can
be mined and processed to extract oil rich-bitumen, which is then refined into oil
Natural Bitumen – portion of petroleum that exists in semi-solid or solid form in natural deposits; in
its natural state, it contains sulphur, metals and other non-hydrocarbons
Extra heavy oils – portion of heavy oil having API gravity less than 100 (i.e. it is heavier than water)
(API – Americal Petroleum Institute)
1 Barrel = ______Liters?
≈160 L
How Oil is Formed?
Compiled by Prof. Prasad J. Parulekar
Compiled by Prof. Prasad J. Parulekar
OPEC: Organization of Petroleum Exporting Countries
Compiled by Prof. Prasad J. Parulekar
India: 0.3%
3. Natural Gas
Gaseous fossil fuel
Consists of primarily methane, but also small quantities of ethane, propane, butane, pentane
Undergoes extensive processing to remove almost all constituents except methane
186 trillion cubic meters of proven reserves worldwide
Compiled by Prof. Prasad J. Parulekar
India: 0.6%
Energy Consumption Pattern:
Global Primary Energy Consumption?
Compiled by Prof. Prasad J. Parulekar
Final Energy Consumption:
Energy that is available to end user following conversion from primary energy
Measured in Million tonnes of Oil Equivalent (Mtoe)
It is sum of energy consumption in by all end use sectors
Energy used for transformation and for own use by energy producing industries is excluded from it
Globally, share of energy consumed by different sectors is as below:
Industry – 50%
Transport – 20%
Residential – 18%
Commercial – 12%
Indian Energy Scenario:
Annual energy consumption : 595 Mtoe --(5% of worldwide consumption)
Consumption by Commercial sector – 74%
Compiled by Prof. Prasad J. Parulekar
Energy consumption in form of different sources is as below:
Problems with India’s Power Sector:
Free electricity to few sectors, partly to curry political favor--- depleted the cash reserves of state-run
electricity-distribution system.
Financially crippled the distribution network, and its ability to pay for power to meet the demand.
Situation has been worsened by government departments of India that do not pay their bills
Shortages of fuel:
• Despite abundant reserves of coal--severe shortage of coal.
• Most of coal--- under protected forests or designated tribal lands. Any mining activity or land
acquisition for infrastructure in these coal-rich areas of India, has been rife with political
demonstrations, social activism and public interest litigations
• The giant new offshore natural gas field-- delivered less fuel than projected --- faces a shortage of
natural gas.
Hydroelectric power projects in India's mountainous north and northeast regions --- slowed down by
ecological, environmental and rehabilitation controversies, coupled with public interest litigations.
Nuclear power generation potential----hold back by political activism since the Fukushima disaster in
Japan.
Average transmission, distribution and consumer-level losses exceeding 30%
Electricity supply-- intermittent and unreliable
India’s energy intensive industrial sectors and establishments :
• Aluminum industries
• Fertilizer industries
• Iron and steel industries
Compiled by Prof. Prasad J. Parulekar
• Cement industries
• Chloro alkali industries
• sugar industries
• Textile industries
• Chemicals
• Railways
• Port Trust
• Transport sector (Industrial and service)
• Petrochemicals
• Gas crackers, Naphtha crackers and petroleum refineries
• Thermal and hydral power stations, electricity transmission and distribution companies
• Commercial buildings and establishments.
India’s energy consumption?
3rd largest in World (After China and USA)
1/18th to that of World
1/3rd to that of USA
1/4th to that of China
Primary Energy Sources – Increase in Consumption / Production over last 1 year…….
Source Consumption Production Increased by
Increased by
Coal 0.7% 2.9%
Oil 1.5% 0.7% (9.26 Crore Barrels per Day)
Natural Gas 2.7% 3.7%
India’s Coal sector
Reserves are mainly confined to eastern and south central part of India
Jharkhand, Odisha – 51% of total reserves
Most of the coal – with 30-45% ash content
Calorific value – 3000 to 4500 Kcal/kg
Compiled by Prof. Prasad J. Parulekar
Total Consumption:842 Million Tones (2017) - (Electricity sector – 63%, Industries – 37%)
High ash content of coal creates challenge for power sector for achieving efficiency and
environmental management of fly ash
Current coal production not enough to meet demand by power, steel and cement sector
To meet that demand, coal with high Cal value and low ash, need to be imported from Australia,
Indonesia, South Africa
Govt levies clean energy cess or coal tax from 2010 (tax of Rs. 100 on every tonne) on all coal, mined
within country or imported from other countries, in order to promote R&D for cleaner energy
India’s Oil sector
Total Consumption:246 Million Metric Tones (2017) - (Electricity sector – 63%, Industries – 37%)
Main oil fields located at – Bombay High, Upper Assam, Cambay, Krishna-Godavari Basin
75% of oil needs are satisfied by imports from Gulf nations
New Exploration Licensing Policy (NELP) is introduced to open the oil and gas sector for private and
foreign investments in order to bring new technologies and best industrial practices
India’s recent oil import bills: 14 to 15 lakh crores
India’s Natural gas sector
Total Consumption:55 Billion Cubic Meter (2017) - (Energy sector – 58%, Non-energy – 42%)
Most preferred fuel because of its cost effectiveness, greater efficiency and environmentally benign
nature
Fuel of 21st century
When NG is cooled to -161 oC, transformed to LNG, then easy to store and transport
Liquefaction reduces volume occupied by NG by 600 times, so LNG is transported in specially built
ships with cryogenic tanks
CNG is made by compressing NG to less than 1% of its volume it occupies at std atm pressure; stored
in hard containers of cylindrical or spherical shape; used in traditional petrol IC engine vehicles which
are converted to bi-fuel vehicles
The bulk onshore production comes from, Assam, Gujrat and Andhra Pradesh
Power generation, Fertilizer sector – consumes almost 62% of NG
India’s Electricity sector
Total installed capacity in India – 4,09,161 MW
Central sector – 99,005 MW; State sector – 1,04,918 MW; Private sector – 2,05,238 MW
Source wise installed capacity:
Fossil fuels (coal, gas, oil) – 2,36,019 MW (57.9%)
Hydro – 46850 MW (11.5%)
Compiled by Prof. Prasad J. Parulekar
Wind – 41895 (10.2%)
Solar – 61966 MW (15.1%)
Biomass Power/Cogeneration – 10,206 MW (2.5%)
Waste to energy – 520 MW (0.1%)
Small hydro power – 4925 MW (1.2%)
Nuclear – 6780 MW (1.7%)
India’s Nuclear power sector
Total installed capacity in India – 6,780 MW
Currently 22 nuclear power plants (reactors) at 7 locations
Where are they located??
(Kudankulam, TN; Tarapur, MH; RJ; Kaiga, KA; Kalpakkam, TN; Narora, UP; Kakarpar, GJ)
Reactors – 2 types – BWR (Boiling water reactor), PHWR (Pressurized heavy water reactor)
DAE plan to put up total installed capacity of nuclear power plant – 63,000 MW, by year of 2032.
Poor operating load factor – because of inadequate of Uranium supply
Uranium produced in India – 2 to 3 times costlier than that in abroad – because Indian ores contain
only 0.1% uranium compared to 12 to 13% in ores mined abroad
India’s Hydro power sector
India has vast and viable hydro potential
Economically viable potential – 84000 MW
80% of this capacity is identified in basins of Brahmaputra, Ganges, and Indus
Another 15000 MW of potential in small hydro projects
Hydro power generation – instantaneous starting, stopping and managing of load variations – makes
it more reliable
Low cost power procurements of utilities
Unlike generation from fossil fuels, it is independent of inflation
Small / mini hydro projects have good potential to provide energy in hilly and remote areas where
extension of grid system is uneconomical
Projects up to 25 MW – under Ministry of New and Renewable Energy (MNRE); Beyond 25 MW –
Under Ministry of Power
Pie Chart to Represent Sector wise Consumption of Various Energy Sources in India
(2018):
Compiled by Prof. Prasad J. Parulekar
Coal:
Resellers /
5%
9% 5% Retail
Mining
Chemicals &
16% 54%
petrochemicals
Transport
Industry
Petroleum Products:
Resellers / Retail
7%
4%
5% Mining
5%
Chemicals &
9% petrochemicals
54%
Transport
16% Industry
Domestic
Natural Gas:
Compiled by Prof. Prasad J. Parulekar
Thermal
2%
7% Crude Oil
13%
Hydro, Nuclear &
43%
Others
Natural Gas
35% Lignite
Electricity:
2% Thermal
7%
13% Crude Oil
43%
Hydro,
Nuclear
& Others
35%
Source wise Energy Consumption:
Compiled by Prof. Prasad J. Parulekar
Thermal
2%
7%
Crude Oil
13%
43%
Hydro, Nuclear
& Others
Natural Gas
35%
Lignite
Per Capita Energy Consumption in India (2018):
22351 Mega Joules (Total Annual Consumption/Total Population)
Sectoral Energy Consumption in India:
Commercial energy consuming sectors – Industry and Transport
Energy intensity of specific industrial sectors is high compared to global benchmark; energy efficiency
of processes carried pout there, need to be improved
Compiled by Prof. Prasad J. Parulekar
Transport Sector :
Energy consumption by it is increasing at rate of 16% per annum (just next to China)
Consumes 40% of petroleum products
By end of 2030, total projected energy demand 86% by Road transport, 9% by Aviation, 5% by
Railways, Marine and others
Residential, Commercial, Services and Agricultural Sector
Wide difference in consumption patterns in rural and urban households
Rural – 85% of cooking needs – satisfied by biomass; Urban – 56% of cooking needs – satisfied by
LPG
70% population of India – in rural area; accounts for 42% of demand for oil, gas, electricity
Growing demand for electricity in residential sector
Of total electricity used in domestic sector, 70% is used for lighting purpose and 30% for Acs,
Refrigerators, other electrical gadgets
Rapid and high growth in commercial establishments, hotels, shopping malls, IT parks, hospitality
industry – due to this consumption for commercial and service activities is rapidly increasing
Gradual shift to mechanized farming – leads to rise in agricultural energy consumption, both in terms
of electricity and diesel
Think about India:
The 2nd most populous country in the world
The population growth rate -1.6% per annum
Energy Policies and Regulations in India:
Agencies / Depts. / Ministries of of Indian government - oversee the policies and regulation related to
energy---which? Ministry of------
Petroleum & Natural gas
Coal
Compiled by Prof. Prasad J. Parulekar
Non-conventional energy sources
Environments & Forests
Power
Transport of fuels
Department of Atomic energy
Responsible Departments for power generation, transmission and electricity distribution - ??
Under ministry of power-----
Central Electricity Regulatory Commission
State Electricity Boards
Energy sub sectors Under various regulatory Boards
Concerned with energy needs, supply and production—
Oil & Gas Subsector-----
For exploration & Production of natural gas & crude oil
Refining, Distribution & Marketing of petroleum products and natural gas
Export & Import of crude oil & natural gas
Sub – authorities working under this sub sector---
1. Directorate General of Hydrocarbons (DGH)
2. Oil Coordination Committee (OCC)
These 2 oversee working of GAIL, IOCL, OIL, ONGC
Coal Sub sector ------
For exploration and development of coal and lignite reserves
Sub – authorities working under this sub sector---
1. Coal India Limited (CIL)
2. Nevveli Lignite Corporation Ltd. (NLC)
Electricity Sub sector -----
Regulates the working of all SEBs
Sets retail electric tariffs
Handles issues regarding energy, trade and industry
Energy Needs of Growing Economy:
Economic growth – desirable for developing countries
For economic growth --- energy is key factor
Compiled by Prof. Prasad J. Parulekar
Relationship between economic growth and increased energy demand – not always straightforward or
linear
To achieve GDP growth rate of 8% by 2032 --- massive investment in energy sector is required
Its is required that –
Growth in primary energy supply – 3 to 4 times over current is required
Increase in electricity installed capacity – 6 to 7 times over current is required
Increase in annual coal required – nearly 3 times over current demand is required
To achieve GDP growth rate of 8% by 2032 --- massive investment in energy sector is required
Per capita electricity consumption (kWhr per person per year) --- USA – 13246 kWhr; Japan – 7848
kWhr; UK- 6206 kWhrs; China – 3298 kWhr; India – 917 kWhr – much less than many countries
as well world average
Coal – need to expand over 2 billion tonnes/annum
Oil – imports are expected to reach to 90% from current 75%
Natural gas – its share is expected to grow up to 25% by 2032
Nuclear power plant targets by DAE – 50,000 MW by 2030 and 2,50,000 MW by 2050
Power supply position prevailing in India, is characterized by, persistent power shortages,
unreliability and high prices for industrial consumers
Proper clarity in aspects like, energy security, energy conservation, addressing environmental
concerns, and R&D
Energy Intensity on Purchasing Power Parity (PPP):
Energy Intensity?
Definition: “Ratio of Energy Demand to GDP (Gross domestic product) for a given calendar year”
Measures energy consumption of an economy and its overall energy efficiency
GDP: measures - “the monetary value of final goods and services—that are bought by the final user—
produced in a country in a given period of time (say a quarter or a year)”
Where,
EI = Energy Intensity, national level, Toe/million US $
FC = Total final energy consumption at national level, Toe
GDP = Gross domestic product, million US $
Significance (of Ratio - high or low)?
High Ratio ----
“energy dependence and strong influence of energy on GDP growth”
Compiled by Prof. Prasad J. Parulekar
Countries dominated by heavy industrial production
Developed Countries --------
“Ratio values low or less than 1”
“Focus on energy efficiency and lower energy intensive routes”
Developing Countries ------
“Ratio values high or more than 1”
“Indicates energy losses, energy deficiency”
India’s energy intensity is 3.7 times to that of Japan, 1.55 times to that of USA, 1.47 and 1.5 times to
that of Asia and World respectively.
Purchasing Power Parity (PPP):
Example to understand what is PPP:
o An egg – costs Rs. 3 in India and same costs 30 Yens in Japan (30 Yens ≈ Rs. 15); so the PPP for an
egg between Japan and India is 30 Yens to Rs. 3 or 10 Yens to a Rupee; i.e. for every rupee spent on
egg in India, 10 yens would have to be spent in Japan to obtain same quality egg.
o Applying actual exchange rate of Yen to Rupee in this process would overestimate GDP of Japan with
high price levels relative to India with low price level
o Use of PPP ensures that GDP of all countries is valued at uniform price level and thus reflects only
differences in actual value of economy
o PPP exchange rate equalizes the purchasing power of different currencies in their home countries for
given quantity of goods
o Used to compare standard of living of 2 or more countries
o Simply, it means the purchasing power of country, after neutralizing the currency to global standards,
thus giving more correct picture of country’s purchasing power
o The amount of goods a currency can purchase in two different nations, varies widely, based on
availability and demand of goods and number of other factors
Energy Pricing in India:
On the basis of PPP, power tariffs in India, for industries and commercial establishments – highest in
the world
Average tariff on PPP basis, in India is 30.8 cents/kWh, which is 7.7 in US, 15.3 in Japan and 20.6 in
China
Consumer prices for electricity in India, are set by SERC
Power tariffs are structured on the basis of industrial and commercial users cross subsidizing
agricultural and domestic power consumption; high tension consumers are charged based on both
demand (kVA) and energy (kWh), while low tension consumers only pay for power actually consumed
Prices per kWh varies across states
Agricultural sector is supplied un-metered power; farmers pay highly subsidized lump sum amount
based on declared HP of their pumps – This leads to zero marginal cost of power which promotes
inefficient use & overexploitation of ground water
Compiled by Prof. Prasad J. Parulekar
Domestic sector also has range of subsidies depending upon level of consumption
With rising cost of supply, burden of all cross subsidies has increased and is disproportionately loaded
on the paying industrial, commercial and large household consumers
Availability based tariffs (ABT) & unscheduled interchange charges for power, introduced in 2003 for
interstate sale of power --- helped in reducing voltage and frequency fluctuations
About ABT:
Performance based tariff system for supply of electricity by generators owned and controlled by
central government
New system of scheduling & dispatch -- requires both generators & beneficiaries to commit to day-
ahead schedules (buying & selling of electricity on the day before actual production & delivery)
Its is system of rewards and penalties – seeking to enforce day-ahead pre-committed schedules, though
variations are permitted if notified one & half our in advance
Order emphasises prompt payment of dues, non-payment of same will be liable for appropriate action
Energy Security:
Its basic aim --- to reduce dependency on imported energy sources
Its definition: “The continuous availability of energy in varied forms in sufficient quantities at
reasonable prices”
It’s a serious concern – because --- India’s energy needs are increasing with growing income level
and population --- increases dependency on imported energy sources
Disruption in energy supplies --- affects economic growth, human survival & well being (e.g.
disrupted oil supply – limits use of pumps by farmers – affects agricultural output----lowers
employment)
Need to reduce oil dependence of economy – through – demand reduction, finding alternative to oil
like NG, RES
Energy import dependence, threatens energy security of country
Need to develop energy strategies for future to reduce this threat
Energy Strategies for Future:
Reducing energy requirements
Improving efficiency of extraction of fossil fuels
Improving fuel efficiency of new coal-fired power plants by adopting new technology (e.g. supercritical
pulverized fuel fired boilers)
Adopting energy efficiency and demand side management
Promotion of public transport / mass transport (metro rail, mono rail) in urban areas
Developing RES, especially solar and wind
Substituting imported oil / gas with domestic alternatives
Ethanol, biodiesel as substitute for petrol and diesel
Biomass gasification for heat or power as alternative to gas / coal
Compiled by Prof. Prasad J. Parulekar
Coal-to-oil technology as done in South Africa
Diversifying energy supply sources
Mix of fuel comprising of coal, gas, nuclear, hydro and renewables with no dependence on any
particular fuel
Sourcing oil / LNG from different countries
Importing gas through pipelines passing through countries who also benefit
Expanding energy resource and developing alternative energy sources
Recovery of oil and gas from abandoned or marginal fields
Improving Oil Recovery (IOR) and Enhancing Oil Recovery (EOR) for improving exploitation of
reserves
In-situ coal gasification
Capturing Coal Bed Methane (CBM) which escapes from coal seams during mining
Conversion of coal to oil
Gas to liquid (GTL)
Stepping up exploration to find new reserves (only one third of oil bearing area explored so far)
Equity, oil, gas, coal from other countries
Setting up energy intensive units (e.g. fertilizer plants) abroad
New domestic sources (e.g. Nuclear – fast breeder reactors, Thorium reactors, gas hydrates, etc)
Promoting community Bio-gas plants
Energy plantations
Energy Conservation and its Importance
Compiled by Prof. Prasad J. Parulekar
Fossil fuels – have taken 100 of millions of years to form, but will deplete soon
In last 200 years, 60% of resources are consumed
For sustainable development --- need to adopt energy efficiency measures
85% of India’s primary energy comes from non-renewable and fossil sources – will diminish soon and
not exist for future generations
What is Energy Conservation?
Different than Energy Efficiency, but related concept
It is achieved when growth of energy consumption is reduced in physical terms
Energy conservation – result of several processes or developments, such as productivity increase of
technological progress
Energy efficiency– achieved when energy intensity in specific product, process or area of production
or consumption is reduced without affecting output, consumption or comfort level
Promotion of energy efficiency – will contribute to energy conservation –hence energy efficiency is
an integral part of energy conservation promotional policies
Energy efficiency – often viewed as resource option like coal, oil or NG --- preserves resource base
and reduce pollution
Nature sets some basic limits, on how efficiently energy can be used --- however, our manufacturing
process are far away from running at theoretical limit
Energy efficiency, means?
“Using less energy to perform same function”
Energy efficiency– most cost effective and reliable means of mitigating the global climate change;
reduce CO2 emissions
E.g. of Energy efficiency and its benefit
Benefits of Energy Conservation and Energy Efficiency
Compiled by Prof. Prasad J. Parulekar
Energy Conservation Act, 2001:
Magnitude of energy consumption--- indicates the development status
But more energy will positively not accelerate the economic growth as long as economy has high
energy intensity.
Indicates large energy wastage in India.
Countries with high energy intensity-- may become uncompetitive due to high energy input cost
For developing economy of the country-- cost of the energy must be reduced
“One unit of energy saved at consumer end, avoids 3 units of fresh capacity addition”.
Energy Conservation Act, 2001 -- enacted to “achieve high energy saving potentials for bridging the
gap between demand and supply of energy, reducing environmental emissions through energy savings
and effectively overcome the barriers”
Under this act, “Bureau of Energy Efficiency” has been established with effect from 1st March 2002
and it is responsible for implementation of policies, programs and coordination of energy conservation
activities in the country.
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Compiled by Prof. Prasad J. Parulekar