Sei sulla pagina 1di 297

National Energy Map for India:

Technology Vision 2030

The Energy and Resources Institute

Office of the Principal Scientific Adviser,


Government of India

ISBN

81-7993-099-8

Published by
TERI Press
The Energy and Resources Institute
Darbari Seth Block
IHC Complex, Lodhi Road
New Delhi 110 003, India
Tel. 2468 2100 or 2468 2111
Fax 2468 2144 or 2468 2145
India +91 Delhi (0)11
E-mail teripress@teri.res.in
Web www.teriin.org

Office of the Principal Scientific Adviser,


Government of India
318, Vigyan Bhavan Annexe
Maulana Azad Road
New Delhi 110 011, India
Tel. 2302 2112
Fax 2302 2113
India +91 Delhi (0)11
Web www.psa.gov.in

Contents

Preface

Acknowledgements

vii

Project team

ix

Tables

xi

Figures

xix

Acronyms and abbreviations

xxiii

Introduction

Methodology

Sectoral demand projections, technological characterization,


and resources availability

29

Energy scenarios

139

Model results and analyses

149

Key observations and recommendations

193

iv

Contents

appendices
A1

Description of energy sector models

207

A2

Sectoral reference energy system (RES)

215

A3

Socio-economic drivers of energy demand

221

A4

Region-wise hydrocarbon reserves at the end of 2005

235

A5

Sankey diagrams

241

A6

Balance sheets

249

Bibliography

253

Preface

India has recorded impressive rates of economic growth in recent years, which provide
the basis for more ambitious achievements
in the future. However, a healthy rate of economic growth equalling or exceeding the
current rate of 8% per annum would require
major provision of infrastructure and enhanced supply of inputs such as energy. High
economic growth would create much larger
demand for energy and this would present
the country with a variety of choices in terms
of supply possibilities. Technology would be
an important element of future energy strategy for the country, because related to a
range of future demand and supply scenario
would be issues of technological choices
both on the supply and demand sides, which
need to be understood at this stage, if they
are to become an important part of Indias
energy solution in the future.
The Indian government aims to achieve
an economic growth rate of over 8% in the
next two decades in order to be able to meet
its development objectives. However, rapid
economic growth would also imply the need
for structural changes in the economy as well
as for induced shifts in the patterns of enduse demands. To meet the needs of the Indian populace in the most effective manner,

it is important to map out the energy demand and supply dynamics in the country.
This study estimates alternative trajectories
of energy requirements and examines the
likely fuel mix for the country under various
resource and technological constraints over
a 30-year time frame.
This study has been commissioned and
supported by the office of the PSA (Principal Scientific Advisor) to the Government of
India. The two-year study has drawn inputs
from several organizations and sectoral
experts across the country to gauge the likelihood of technological progress and availability of energy resources in the future.
The MARKAL model used in this study
is a widely used integrated energy system optimization framework that enables policymakers and researchers to examine the best
technological options for each stage of energy processing, conversion, and use. This
modelling framework was used to represent
a detailed technological database for the Indian energy sector with regard to energy resources (indigenous extraction, imports, and
conversion) as well as energy use across the
five major end-use sectors (agricultural,
commercial, residential, transport, and industrial).

vi

Preface

The report discusses the data, assumptions, and methodological framework used
to estimate useful energy requirements of
the country based on demographic and economic drivers. Technological assessments of
resources and energy conversion processes
have been described in the report. Economic
and technological scenarios have been developed within the integrated modelling framework to assess the best energy mix during the
modelling time frame. Based on the scenario
assessment, the report provides directions to
various stakeholders associated with the Indian energy sector including policy-makers,
technologists, and investors.
The report clearly points towards the
countrys increasing import dependence of
all fossil fuels. It also indicates that coal
would continue to play a key role in meeting

the countrys energy requirements. However, the indigenous availability of coal is


expected to plateau in the next couple of
decades with the current exploitation plans
and technology. The need for energy efficiency in the end-use sectors and radical
policy changes in the transport sector is also
highlighted. The study points towards focussing efforts simultaneously on the demand
and supply sides for the economy to attain
the most efficient utilization of available resources.

(R K Pachauri)
Director-General, T E R I

Acknowledgements

T E R I acknowledges the high-level technical inputs and guidance provided by various


national experts in the development of the
model. T E R I specially thanks the following
experts: R Chidambaram, Kirit Parikh, A K
Kolar, Kamal Kapoor, Brahma Deo, V K
Sharma, R B Grover, Srinivas Shetty, H S
Kamath, V K Agarwal, L M Das, P K Sen,
Adish Jain, Arun Kumar, Surya P Sethi,
Arvinder S Sachdeva, Prodipto Ghosh, Dilip
Chenoy, Sudhinder Thakur, P K Modi, Alok
Saxena, and S Nand.
T E R I also acknowledges the input
provided by the following organizations:
Department of Atomic Energy, Nuclear

Power Corporation of India Ltd, Bharat


Heavy Electricals Ltd, National Thermal
Power Corporation Ltd, National Hydro
Power Corporation, North Indian Textiles
Manufacturers Association, Indian Railways, Oil and Natural Gas Corporation Ltd,
Engineers India Ltd, Indian Aluminum
Manufacturers Association, Steel Authority
of India Ltd, Fertilizer Association of India,
Cement Manufacturers Association, Confederation of Indian Industry, and Indian
Paper Manufacturers Association.
Thanks are due to Mr Rakesh Kumar
Arora for his invaluable secretarial assistance.

Project team

Principal investigator

Leena Srivastava

Core team

Ritu Mathur, Pradeep K Dadhich, Atul Kumar,


Sakshi Marwah, Pooja Goel

Sector experts in TERI

Amit Kumar, Shirish S Garud, Mahesh Vipradas,


V V N Kishore, Pradeep Kumar, Alok Adholeya,
Girish Sethi, N Vasudevan, Shashank Jain, Abhishek Nath,
Upasna Gaur, Ananya Sengupta, Parimita Mohanty,
K Rajeshwari, Ranjan K Bose, Sudip Mitra, R C Pal

Advisors

R K Pachauri, R K Batra, Y P Abbi, S K Chand,


K Ramanathan, Preety M Bhandari

Project review monitoring


committee

S P Sukhatme, S K Sikka, E A S Sarma, Y S R Prasad,


R P Gupta, Chandan Roy, R K Saigal

Editorial and production


team

Ambika Shankar, Archana Singh, Gopalakrishnan,


Jaya Kapur, K P Eashwar, Richa Sharma, R K Joshi,
R Ajith Kumar, Subrat K Sahu, T Radhakrishnan

Tables

Table 1.1

Production of primary energy sources of conventional energy in India

Table 1.2

Estimated energy demand

Table 2.1

Demographic trends in India

15

Table 2.2

Assumptions for population projections

17

Table 2.3

Population projections (in million)

18

Table 2.4

Ruralurban distribution (%) as per the UNPD

18

Table 2.5

Ruralurban distribution (%) as per the Census of India

18

Table 2.6

Projected population and number of households in rural and


urban areas (million)

19

Number of rural households (in million) in various expenditure


categories for 6.7% GDP growth

20

Number of urban households (in million) in various expenditure


categories for 6.7% GDP growth

20

Number of rural households (in million) in various expenditure


categories for 8% GDP growth rate

21

Number of urban households (in million) in various expenditure


categories for 8% GDP growth rate

21

Number of rural households (in million) in various expenditure


categories for 10% GDP growth rate

22

Number of urban households (in million) in various expenditure


categories for 10% GDP growth rate

22

Projections of GDP at factor cost at 1993/94 prices (in crore rupees)


under various GDP growth rate scenarios

23

Table 2.14

Sectoral composition of GDP (%)

25

Table 2.15

Sectoral GDP at factor cost (in crore rupees) under 6.7% GDP
growth rate scenario

26

Table 2.7
Table 2.8
Table 2.9
Table 2.10
Table 2.11
Table 2.12
Table 2.13

xii

Tables

Table 2.16

Sectoral GDP at factor cost (in crore rupees) under 8%


GDP growth rate scenario

26

Sectoral GDP at factor cost (in crore rupees) under 10%


GDP growth rate scenario

26

Table 3.1

Projected cropping intensity and gross cropped area

32

Table 3.2

Demand for land preparation at various GDP (gross domestic


product) growth rates (in million hectares)

33

Table 3.3

GIA GCA under irrigation under various growth scenarios

34

Table 3.4

GIA under groundwater irrigation at various GDP growth rate scenarios

35

Table 3.5

Crop-wise GCA and water consumption

36

Table 3.6

Technology characterization of pump sets

38

Table 3.7

Comparison of transport sector demand estimates by various


agencies for the year 1999

41

Comparison of transport sector demand estimates by various


agencies for the year 2000

41

Table 3.9

Assumptions on occupancy rate and utilization rate for cars

43

Table 3.10

Assumptions on occupancy rate and utilization rate for two-wheelers

46

Table 3.11

Assumptions on occupancy rate and utilization rate for buses

47

Table 3.12

Mode-wise road passenger travel demand (in billion passenger


kilometres) under 6.7% GDP (gross domestic product) growth scenario

47

Mode-wise road passenger travel demand (in billion passenger


kilometres) under 8% GDP (gross domestic product) growth scenario

48

Table 2.17

Table 3.8

Table 3.13
Table 3.14

Mode-wise road passenger travel demand (in billion passenger kilometres)


under 10% GDP (gross domestic product) growth scenario
48

Table 3.15

Mode-wise freight travel demand (in billion tonne kilometres); 6.


7% GDP (gross domestic product) growth scenario

49

Mode-wise freight travel demand (in billion tonne kilometres);


8% GDP (gross domestic product) growth scenario

50

Mode-wise freight travel demand (in billion tonne kilometres);


10% GDP (gross domestic product) growth scenario

50

Rail passenger transport demand (in billion passenger kilometres)


under alternative GDP (gross domestic product) growth scenarios

51

Rail freight transport demand (in billion tonne kilometres)


under alternative GDP (gross domestic product) growth rates

51

Technological characterization of two-stroke two-wheelers

53

Table 3.16
Table 3.17
Table 3.18
Table 3.19
Table 3.20

Tables

xiii

Table 3.21

Technological characterization of four-stroke two-wheelers

53

Table 3.22

Technological characterization of three-wheelers

54

Table 3.23

Percentage of cars sold by various manufacturers

55

Table 3.24

Technological characterization of cars

55

Table 3.25

Technological characterization of buses

56

Table 3.26

Technological characterization of goods vehicles

56

Table 3.27

Technological characterization of locomotives (freight)

56

Table 3.28

Technological characterization of locomotives (passenger)

57

Table 3.29

Estimates of bio-diesel production

57

Table 3.30

Assumptions in various transport scenarios

58

Table 3.31

Demand projection of caustic soda in India

60

Table 3.32

Projected demand of soda ash in India

60

Table 3.33

Demand projections of aluminium

61

Table 3.34

Demand projections for finished steel in India

62

Table 3.35

Cement demand projections

63

Table 3.36

Cotton cloth demand projection

64

Table 3.37

Demand projection for fertilizer

65

Table 3.38

Projected demand for paper and paper board in India

65

Table 3.39

Energy demand projection for other industries

66

Table 3.40

Production of caustic soda through different processes:


1998/99 to 2003/04

67

Table 3.41

Technological characterization of caustic soda industry

67

Table 3.42

Details of Indian soda ash plants

68

Table 3.43

Technological characterization of soda ash industry

68

Table 3.44

Technological characterization of the aluminium industry

70

Table 3.45

Production and technological details of Indian steel industry


during the year 2001/02

71

Table 3.46

Efficiency improvement measures for integrated steel plants

72

Table 3.47

Efficiency improvement measures for EAF-based steel plants

73

Table 3.48

Level of share of BFBOF and Scrap-EAF steel plants

74

Table 3.49

Percentage distribution of cement production in the year 2002/03

74

Table 3.50

Percentage distribution of input material requirement for different


varieties of cement production in India

75

Technological details of process-wise cement production in India

76

Table 3.51

xiv

Tables

Table 3.52

Variety-wise percentage distribution of cement production in


2001 and 2036

76

Table 3.53

Technological characterization of cotton textile industry

79

Table 3.54

Installed capacity according to sources of feedstock (percentage)


used for nitrogenous fertilizer production

80

Table 3.55

Specific energy consumption for urea production in India

80

Table 3.56

Technological characteristics of paper mills

82

Table 3.57

Energy conservation options for Indian paper mills

83

Table 3.58

Income categories based on MPCE in rural and urban areas

88

Table 3.59

Number of lighting points per household in various income


classes in rural and urban areas

88

Table 3.60

Demand for lighting (trillion lux hours)

89

Table 3.61

Useful energy demand for cooking (petajoules)

90

Table 3.62

Usage norms for electrical appliances

91

Table 3.63

Useful energy demand for various end uses at 6.7% GDP growth scenario

92

Table 3.64

Useful energy demand for various end uses (petajoules) at 6.7%


GDP growth rate

92

Useful energy demand for various end uses (petajoules) at 10%


GDP growth rate

92

Percentage distribution of households in various income groups


using sources other than geyser for heating water

93

Useful energy demand for heating water (petajoules) at the three


GDP growth rates

94

Table 3.68

Techno-economic parameters for various lighting devices

95

Table 3.69

Techno-economic parameters for kerosene-based lighting devices

95

Table 3.70

Techno-economic parameters of various cooking devices

96

Table 3.71

Characterization of refrigerators

97

Table 3.72

Technological characterization of fans

97

Table 3.73

Technological characterization of air conditioners

98

Table 3.74

Characterization of washing machines, televisions, VCRs/ VCPs,


and music systems

98

Table 3.65
Table 3.66
Table 3.67

Table 3.75

Technological options for cooking in the commercial sector

100

Table 3.76

Energy demand for cooking in commercial sector (in Mtoe)

101

Table 3.77

Technologies for lighting in the commercial sector

102

Tables

xv

Table 3.78

Electricity demand for lighting in the commercial sector (in GWh)

102

Table 3.79

Technologies for space conditioning in the commercial sector

102

Table 3.80

Electricity demand for space conditioning in the commercial


sector (in GWh)

103

Table 3.81

Electricity demand for refrigeration in the commercial sector (in GWh)

103

Table 3.82

Electricity demand projections for other services (in GWh)

104

Table 3.83

Maximum values of domestic coal availability

105

Table 3.84

Coal-bed methane production potential in India

108

Table 3.85

Company-wise crude oil production (MT)

110

Table 3.86

Company-wise production of natural gas (MCM)

110

Table 3.87

Progress during NELP rounds

112

Table 3.88

Oil refinery capacity in India (2005)

114

Table 3.89

Refining capacity, actual crude throughput, and capacity


utilization during the past five years

119

Table 3.90

New refineries planned in the Eleventh Five Year Plan

119

Table 3.91

Natural gas availability

120

Table 3.92

Prices of different types of coal in three different scenarios

121

Table 3.93

Price of crude and other petroleum products

122

Table 3.94

Prices of natural gas

122

Table 3.95

Power generation steam cycles with different unit ratings

123

Table 3.96

Contemporary gas turbines using natural gas as fuel


performance at ISO conditions

124

Table 3.97

Advance class gas turbinesperformance at ISO conditions

126

Table 3.98

Integrated gasification combined cycle experience in the world

128

Table 3.99

Cost comparison of different IGCC technologies (1989 pricing)

129

Table 3.100

Upper bound on installed capacity of large hydro-based power


generation (in GW)

131

Table 3.101

Installed capacity of nuclear energy based power generation

133

Table 3.102

Renewable energy source potential

134

Table 3.103

Techno-economic parameters of power generating technologies

137

Table 4.1

Installed capacity of nuclear-energy-based power generation

144

Table 4.2

Installed capacity of small hydro-based power generation

144

xvi

Tables

Table 4.3

Installed capacity of wind-based power generation

144

Table 4.4

Installed capacity of SPV- and biomass-based power generation


in aggressive renewable energy scenario

145

Table 4.5

Availability of bio-diesel for transportation

146

Table 4.6

Description of energy-efficient scenarios for the transport sector

147

Table 5.1

Commercial energy requirements in the BAU (Mtoe)

150

Table 5.2

Annual production, import, and import dependency of coal

152

Table 5.3

Production, import, and import dependency of non-coking coal in the


business-as-usual scenario

153

Production, import, and import dependency of coking coal in the


business-as-usual scenario

153

Sector-wise commercial energy consumption in the business-as-usual


scenario (in million tonnes of oil equivalent)

155

Trends in sectoral shares in commercial energy consumption


(in percentage)

155

Supply and consumption of coal (million tonnes) in the


business-as-usual scenario

157

Supply and consumption of petroleum products (million tonnes)


in the business-as-usual scenario

157

Supply and consumption of natural gas (billion cubic metres) in the


business-as-usual scenario

159

Trend in the sectoral electricity consumption in the business-as-usual


scenario (in terrawatt hours)

160

Variations in commercial energy consumption across various scenarios


(in Mtoe)

161

Comparison of technology deployment for centralized and


decentralized power generation in the BAU and EFF scenarios for
2021 and 2031 (in GW)

166

Production, import, and import dependency of petroleum products


across various scenarios in 2011

171

Production, import, and import dependency of petroleum


products across various scenarios in 2031

172

Comparison of commercial energy consumption across various


scenarios (in Mtoe)

176

Table 5.4
Table 5.5
Table 5.6
Table 5.7
Table 5.8
Table 5.9
Table 5.10
Table 5.11
Table 5.12

Table 5.13
Table 5.14
Table 5.15

Tables

Table 5.16

xvii

Technology deployment (including decentralized) during 2021 and


2031 in the business-as-usual and high growth and their respective
hybrid scenarios (in GW)

178

Table 5.17

Coal consumption in various end-use sectors in 2011 (in Mtoe)

179

Table 5.18

Coal consumption in various end-use sectors in 2021 (in Mtoe)

179

Table 5.19

Coal consumption in various end-use sectors in 2031 (in Mtoe)

180

Table 5.20

Domestic production, net import, and import dependency of


petroleum products in 2021

181

Domestic production, net import, and import dependency of


petroleum products in 2031

181

Table 5.22

Energy intensity (kgoe/Rs of GDP) for various scenarios

185

Table 5.23

Total commercial energy consumption in transport sector


(in Mtoe) across various scenarios

187

Projected fuel mix in transport sector (in Mtoe) across scenarios


for 2011

187

Projected fuel mix in transport sector (in Mtoe) for various


scenarios for 2021

188

Projected fuel mix in transport sector (in Mtoe) for various


scenarios for 2031

188

Cumulative carbon dioxide emissions for different scenarios


(from 2001 to 2036)

193

Table 6.1

Suggested technology deployment programme

201

Table 6.2

Suggested technology deployment pathway for power generation

202

Table 6.3

Suggested technology deployment pathway for end-use sectors

203

Table 5.21

Table 5.24
Table 5.25
Table 5.26
Table 5.27

Figures

Figure 2.1

Schematic representation of methodological framework

10

Figure 2.2

Energy sector models

11

Figure 2.3

MARKAL building blocks

13

Figure 2.4

Share of sectoral GDP in aggregate GDP (%)

24

Figure 3.1

Area under cultivation in India (million hectares)

30

Figure 3.2

Food grain production in India (million tonnes)

30

Figure 3.3

Trends in composition of fleet of registered passenger vehicles

39

Figure 3.4

Trends in passengers and freight carried by railways

40

Figure 3.5

Category-wise sales of two-wheelers

52

Figure 3.6

Primary aluminium production

69

Figure 3.7

Time trend of specific energy consumption of SAIL steel plants

71

Figure 3.8

Time trend of process profile of cement industry

74

Figure 3.9

Time trend of percentage distribution of different variety of


cement in India

75

Figure 3.10 Time trend of fuel and electricity consumption in the residential sector

85

Figure 3.11 Percentage distribution of households by source of cooking in rural India

86

Figure 3.12 Percentage distribution of households by source of cooking in urban India 86


Figure 3.13 Number of households per 1000 in highest income class possessing
specified durable goods (rural)

90

Figure 3.14 Number of households per 1000 in highest income class possessing
specified durable goods (urban)

91

Figure 3.15 Trend of electricity consumption in the commercial sector (19802003)

101

Figure 3.16 Trend of electricity consumption in other electricity consuming


sectors (19802003)

104

Figure 3.17 Production and import of crude oil over the years

111

xx

Figures

Figure 3.18 Improvement in heat rates with steam parameters

125

Figure 3.19 Economic impact of Integrated gasification combined cycle


design study improvements

129

Figure 5.1

Commercial energy use in the business-as-usual

150

Figure 5.2

Percentage share of fuel mix (business-as-usual scenario)

151

Figure 5.3

Variation in percentage share of traditional fuels in total primary


energy supply

151

Production, import, and import dependency of non-coking coal in the


business-as-usual scenario

152

Production, import, and import dependency of coking coal in the


business-as-usual scenario

153

Figure 5.4
Figure 5.5
Figure 5.6
Figure 5.7
Figure 5.8
Figure 5.9

Production, import, and import dependency of natural gas


in the business-as-usual scenario

154

Production, import, and import dependency of petroleum in the


business-as-usual scenario

154

Sector-wise commercial energy consumption in the business-as-usual


scenario

155

Trends in sectoral shares in commercial energy consumption

156

Figure 5.10 Sectoral consumption of petroleum products in the business-as-usual


scenario

158

Figure 5.11 Trend in the sectoral electricity consumption in the business-as-usual


scenario

159

Figure 5.12 Trends in percentage distribution of electricity consumption in the


business-as-usual scenario

160

Figure 5.13 Total commercial energy consumption across scenarios

162

Figure 5.14 Average annual fuel cost across various scenarios

162

Figure 5.15 Comparison of electricity consumption across various scenarios

163

Figure 5.16 Comparison of power generation capacity mix (including


decentralized) across various scenarios

164

Figure 5.17 Average annualized investment cost in the centralized power


generation across various scenarios

165

Figure 5.18 Comparison of fuel-wise technology deployment in the


business-as-usual and high-efficiency scenarios in the power sector

167

Figure 5.19

Sector-wise coal consumption across different scenarios for 2011,


2021, and 2031

168

Figures

xxi

Figure 5.20 Comparison of import dependency of coking coal across various


scenarios

169

Figure 5.21 Import dependency of non-coking coal across various scenarios

169

Figure 5.22 Comparison of average annual cost of coal across various scenarios

170

Figure 5.23 Production, import, and import dependency of petroleum products across
various scenarios in 2011
170
Figure 5.24 Production, import, and import dependency of petroleum products across
various scenarios in 2031
171
Figure 5.25 Average annual cost of oil and oil products across various scenarios

172

Figure 5.26 Comparison of petroleum product consumption across various


scenarios in the end-use sectors

173

Figure 5.27 Refinery capacity across various scenarios

174

Figure 5.28 Refinery investment cost across various scenarios

174

Figure 5.29 Import of natural gas across various scenarios

175

Figure 5.30 Average annual cost of natural gas across various scenarios

175

Figure 5.31 Commercial energy supply in 2011, 2021, and 2031

177

Figure 5.32 Generation capacity mix for 2011, 2021, and 2031 (centralized and
decentralized)

177

Figure 5.33 Comparison of fuel-wise technology deployment for power


generation across various scenarios for 2021

178

Figure 5.34 Comparison of fuel-wise technology deployment for power


generation across various scenarios for 2031

179

Figure 5.35 Sectoral electricity consumption for 2011, 2021, and 2031

180

Figure 5.36 Import dependency of coking coal across various scenarios for
2011 and 2031

181

Figure 5.37 Import dependency of non-coking coal across various scenarios in


2011 and 2031

182

Figure 5.38 Domestic production, net import, and import dependency of


petroleum products for 2021

182

Figure 5.39 Domestic production, net import, and import dependency of


petroleum products for 2031

183

Figure 5.40 Import of natural gas across various scenarios for 2011, 2021, and 2031

183

Figure 5.41 Sectoral consumption of petroleum products in 2011, 2021, and 2031

184

Figure 5.42 Trends in energy intensity across various scenarios from 2001 to 2031

185

Figure 5.43 Comparison of energy consumption in transport sector across various


scenarios

186

xxii

Figures

Figure 5.44 Comparison of fuel mix in transport sector across scenarios for
2011, 2021, and 2031

189

Figure 5.45 Comparison of net import and import dependency of petroleum


products across various scenarios for 2011, 2021, and 2031

191

Figure 5.46 Expenditure incurred on import of petroleum products

192

Figure 5.47 Cumulative carbon dioxide emissions across various scenarios (200136) 193

Acronyms and abbreviations

AC
ADB
AHP
AIM
AMAI
ARIMA
ATF

Air conditioner
Asian Development Bank
Analytic Hierarchy Process
AsiaPacific Integrated Model
Alkali Manufacturers Association of India
Auto regressive integrated moving average
Aviation turbine fuel

BALCO
BAU
Bbl
BCM
BCPP
BEE
BFBOF
BHEL
BHH
BIODSL
bkWh
BOF
BPCL
bpkm
BPL
BRPL
BRUS
BT
btkm
Btu
CAGR
CBM
CCGT
CCPP

Bharat Aluminium Company Ltd


Business-as-usual
Barrel
Billion cubic metres
Biomass consumption based power project
Bureau of Energy Efficiency
Blast furnacebasic oxygen furnace
Bharat Heavy Electricals Ltd
BayerHallHeroult
Bio-diesel
Billion kilowatt-hours
Basic oxygen furnace
Bharat Petroleum Corporation Ltd
Billion passenger kilometres
Below poverty line
Bongaigaon Refinery and Petrochemicals Ltd
Brundtland Scenario Model
Billion tonnes
Billion tonne kilometres
British thermal unit
Compounded annual growth rate
Coal bed methane
Combined cycle gas turbine
Combined cycle power plant

xxiv

Acronyms and abbreviations

CDH
CDU
CEA
CFL
CFRI
CGE
CHP
CI
cif
CII
CIMS
CMA
CMIE
CMPDIL
CNG
CPCL
CPPRI
CSE
DC
DGH
DMT
DRIEAF
DTC
EAF
EFF
EFOM-ENV
EIA
ENPEP
FAI
FAO
FBR
FGD
FICCI
fob
FYP
GCA
GDP
GDPA
GEF
GHGs
GIA
GJ

Crude distillation unit


Crude Distillation Unit
Central Electricity Authority
Compact fluorescent lamp
Central Fuel Research Institute
Computable general equilibrium
Combined heat and power
Cropping intensity
Cost, insurance and freight
Confederation of Indian Industry
Canadian Integrated Modelling System
Cement Manufacturers Association
Centre for Monitoring Indian Economy
Central Mine Planning and Design Institute Ltd
Compressed natural gas
Chennai Petroleum Corporation Ltd
Central Pulp and Paper Research Institute
Centre for Science and Environment
Direct current
Directorate-General of Hydrocarbons
Di-methyl terephthalate
Direct reduction ironelectric arc furnace
Delhi Transport Corporation
Electric arc furnace
High efficiency
Energy Flow Optimization Model-ENVironment
Energy Information Administration
Energy and Power Evaluation Program
Fertilizer Association of India
Food and Agricultural Organization
Fast breeder reactor
Flue gas desulphurization
Federation of Indian Chambers of Commerce and Industry
free on board
Five Year Plan
Gross cropped area
Gross domestic product
Gross domestic product from agriculture
Global Environment Facility
Greenhouse gases
Gross irrigated area
Gigajoules

Acronyms and abbreviations

GJ/t
GLS
GoI
GSPCL
GW
GWh
HCV
HEV
HG
HHYB
HINDALCO
HP
HPCL
HSD
HYB
IEA
IGCC
IIASA
IMF
INDAL
IOCL
IPCC
IREP
ISLE
ISO
JV
kcal
kg
kgoe
km
KRL
kWh
LBNL
LCV
LEAP
LG
LNG
LP
LPG
l
m
m3

Gigajoules/tonne
Generalized lighting system
Government of India
Gujarat State Petroleum Corporation Ltd
Gigawatt
Gigawatt hour
Heavy commercial vehicle
Hybrid electric vehicles
High growth
High growth hybrid
Hindustan Aluminium Company Ltd
Horsepower
Hindustan Petroleum Corporation Ltd
High-speed diesel
Hybrid
International Energy Agency
Integrated gasification combined cycle
International Institute for Applied Systems Analysis
International Monetary Fund
Indian Aluminium Company Ltd
Indian Oil Corporation Ltd
Intergovernmental Panel on Climate Change
Integrated Rural Energy Programme
Indian Society of Lighting Engineers
Indian Statistical Organization
Joint venture
Kilocalories
Kilogram
Kilogram of oil equivalent
Kilometres
Kochi Refineries Ltd
Kilowatt hour
Lawrence Berkeley National Laboratory
Light commercial vehicle
Long-range energy alternative planning
Low growth
Liquefied natural gas
Linear programming
Liquefied petroleum gas
Litres
Metres
Cubic metres

xxv

xxvi

Acronyms and abbreviations

MALCO
MARKAL
MESSAGE
Mha
MmBtu
MMSCMD
MMTPA
MNES
MoA
MoC
MoEF
MoF
MoP
MoPNG
MoSPI
MoWR
MPC
MPCE
MRPL
MSEB
MT
Mtoe
MTPA
MW
NALCO
NCA
NCAER
NELP
NIOC
NPCIL
NUC
ODC
OECD
OIDB
OIL
ONGC
OPC
PCRA
PFBG
PFI
PHWR
PJ

Madras Aluminium Company Ltd


MARKel ALlocation model
Model for Energy Supply Systems Analysis and General Equilibrium
Million hectares
Million metric British thermal units
Million metric standard cubic metres per day
Million metric tonnes per annum
Ministry of Non-conventional Energy Sources
Ministry of Agriculture
Ministry of Commerce
Ministry of Environment and Forests
Ministry of Finance
Ministry of Power
Ministry of Petroleum and Natural gas
Ministry of Statistics and Programme Implementation
Ministry of Water Resources
Marginal propensity to consume
Monthly per capita expenditure
Mangalore Refinery and Petrochemicals Ltd
Maharashtra State Electricity Board
Million tonnes
Million tonnes of oil equivalent
Million tonnes per annum
Megawatt
National Aluminium Company Ltd
Net cropped area
National Council for Applied Economic Research
New Exploration Licensing Policy
National Iranian Oil Company
Nuclear Power Corporation of India Ltd
High nuclear capacity
Oxygen depolarized cathodes
Organization for Economic Co-operation and Development
Oil Industry Development Board
Oil India Ltd
Oil and Natural Gas Corporation Ltd
Ordinary Portland Cement
Petroleum Conservation Research Association
Pressurized fluidized bed gasification
Population Foundation of India
Pressurized heavy water reactor
Petajoules

Acronyms and abbreviations

PLF
POLES
PPC
PSA
PSC
PSF
PSU
RBPL
REN
RES
RET
RH
RL
RLM
RM
RPL
RUM
SAIL
SCR
SHP
SIAM
SPV
SRTU
SSP
TEDDY
TERI
TPD
TPES
UBPL
UH
UL
ULM
ULSD
UM
UNPD
USC
USDoE
UUM
VCP
VCR
WBCSD
WEC

Plant load factor


Prospective Outlook on Long-term Energy Systems
Portland Pozzolana Cement
Principal Scientific Adviser
Portland Slag Cement
Polyester staple fibre
Public Sector Undertaking
Rural below poverty line
Aggressive renewable energy
Reference energy system
Renewable energy technology
Rural high
Rural low
Rural lower middle
Rural middle
Reliance Petroleum Ltd
Rural upper middle
Steel Authority of India Ltd
Selective catalytic reduction
Small hydro power
Society of Indian Automobile Manufacturers
Solar photovoltaic
State road transport undertaking
Single super phosphate
The Energy Data Directory Yearbook
The Energy and Resources Institute
Tonnes per day
Total primary energy supply
Urban below poverty line
Urban high
Urban low
Urban lower middle
Ultra-low sulphur diesel
Urban middle
United Nations Population Division
Ultra-supercritical
US Department of Energy
Urban upper middle
Video cassette player
Video cassette recorder
World Business Council for Sustainable Development
World Energy Council

xxvii

Introduction

1.1

Background

The growth of a developing economy is


highly dependent on the growth on its energy consumption. Because of the possibility
of inter-fuel substitution in end-use applications, the optimal long-term energy supply
requirements of a country necessitates examination of all energy resources available
both indigenously and globally.
The Government of India plans to
achieve a GDP (gross domestic product)
growth rate of 10% in the Eleventh Five Year
Plan and maintain an average growth of
about 8% in the next 15 years (Planning
Commission 2002).
Given the plans for rapid economic
growth, it is evident that the countrys requirements for energy and supporting infrastructure would increase rapidly as well. In
view of the rising energy prices and other
geo-political considerations regarding energy imports, it is important to identify and
adopt policies and measures that enhance
energy security and help reduce the final energy requirements of the economy. An integrated assessment of all the technological
options available to the economy is therefore
crucial to examine possible energy pathways
and their impacts in terms of costs, infrastructure requirements, and fuel-mix patterns over time.

1
This chapter provides an overview of
Indias energy sector and the challenges it
faces.

1.2

Overview of the energy sector

Energy has been universally recognized as


one of the most important inputs for economic growth and human development.
There is a strong two-way relationship between economic development and energy
consumption. On one hand, the growth of an
economy, with its global competitiveness,
hinges on the availability of cost-effective
and environmentally benign energy sources,
and on the other hand, the level of economic
development has been observed to be reliant
on energy demand.
The energyGDP elasticity, defined as
the ratio of the growth rate of energy to the
growth rate of GDP, captures both the structure as well as efficiency of the economy. The
energyGDP elasticity during 19532001
has been above unity. However, the elasticity
for primary commercial energy consumption for 19912000 was less than unity
(Planning Commission 2002). This could be
attributed to several factors, some of them
being demographic shifts from rural to
urban areas, structural economic changes
towards lesser energy industry, impressive

2 National Energy Map for India: Technology Vision 2030

growth of services, improvement in efficiency


of energy use, and inter-fuel substitution.
The energy sector in India has been receiving high priority in the planning process.
The total outlay on energy in the Tenth
Five Year Plan was about 4.03 trillion rupees
at 2001/02 prices, which comprised 26.7%
of the total outlay. An increase of 84.2% is
projected over the Ninth Five Year Plan in
terms of the total plan outlay for the energy
sector. The Government of India in the
mid-term review of the Tenth Five Year Plan
recognized the fact that under-performance
of the energy sector can be a major constraint in delivering a growth rate of 8%
GDP during the plan period. It has, therefore, called for acceleration of the reforms
process and adoption of an integrated
energy policy.
In the recent years, the government has
rightly recognized the energy security concerns of the nation and more importance is
being placed on energy independence. On
the eve of the 59th Independence Day (on
14 August 2005), the President of India emphasized that energy independence has to be
the nations first and highest priority, and
India must be determined to achieve this
within the next 25 years.

1.3 Energy demand and supply


scenario
In the recent years, Indias energy consumption has been increasing at one of the fastest
rates in the world due to population growth
and economic development. Primary commercial energy demand grew at the rate of
6% between 1981 and 2001 (Planning Commission 2002). India ranks fifth in the world
in terms of primary energy consumption, accounting for about 3.5% of the world commercial energy demand, as per 2003 data.
Despite the overall increase in energy demand, per capita energy consumption in the
country 323 kilograms of oil equivalent in
2003 is still very low compared to other developing countries (MoPNG 2004a).
India is relatively well endowed with both
exhaustible and renewable energy resources.
Coal, oil, and natural gas are the three primary commercial energy sources. Indias energy policy, till the end of the 1980s, was
mainly based on the availability of indigenous resources. Coal was by far the largest
source of energy. However, Indias primary
energy mix has been changing over a period
of time. Table 1.1 gives the break-up of pri-

Table 1.1 Production of primary energy sources of conventional energy in India


Source

Unit

1970/71

1980/81

1990/91

2001/02

2002/03

2003/04

Coal and lignite

MT

76.34

119.02

228.13

352.60

367.29

389.11

Crude oil

MT

6.82

10.51

33.02

32.03

33.04

33.38

Natural gas

BCM

1.45

2.36

18.00

29.71

31.40

31.95

Nuclear power

bkWh

2.42

3.00

6.14

19.48

19.39

17.78

Hydro power

bkWh

25.25

46.54

71.66

73.70

64.10

75.33

Wind power

bkWh

0.03

1.97

2.10

3.40

MT million tonnes; BCM billion cubic metres; bkWh billion kilowatt-hours


Source MoC (2004); CEA (2005)

Introduction

mary energy production for various fuels


from 1970 onwards.
Despite the increasing dependency on
commercial fuels, a sizeable quantum of
energy requirements (40% of total energy
requirement), especially in the rural household sector, is met by non-commercial
energy sources, which include fuelwood,
crop residue, and animal waste, including
human and draught animal power. However,
other forms of commercial energy of a much
higher quality and efficiency are steadily replacing the traditional energy resources being consumed in the rural sector.
Resource augmentation and growth in
energy supply have not kept pace with increasing demand and, therefore, India continues to face serious energy shortages. This
has led to increased reliance on imports.

1.4

Coal

India now ranks third amongst the coal producing countries in the world. Being the
most abundant fossil fuel in India till date, it
continues to be one of the most important
sources for meeting domestic energy needs.
It accounts for 55% of the countrys total
energy supplies. Power sector alone consumes 75% of the coal produced in the
country (MoC 2005).
Through sustained increase in investment, the production of coal has increased
from about 70 MT (million tonnes) in the
early 1970s to 382 MT in 2004/05 (MoC
2005). Despite this increase in production,
the existing demand exceeds the supply. India currently faces coal shortages of 23.96
MT. This shortage is likely to be met through
imports, mainly by the steel, power, and ce-

ment sectors (MoC 2005). The development


of such core infrastructure sectors is dependent on coal.

1.5

Power

Access to affordable and reliable electricity


is critical to a countrys growth and prosperity. India has made significant progress towards the augmentation of its power
infrastructure. In absolute terms, the installed power capacity has increased from
only 1713 MW (megawatts) as on 31 December 1950 to 118 419 MW as on March
2005 (CEA 2005). The all-India gross electricity generation, excluding that from the
captive generating plants, was 5107 GWh
(gigawatt-hours) in 1950 and increased to
565 102 GWh in 2003/04 (CEA 2005).
Energy requirement increased from
390 bkWh (billion kilowatt-hours) during
1995/96 to 591 bkWh by 2004/05, and peak
demand increased from 61 GW (gigawatts)
to 88 GW over the same time period. The
country experienced an energy shortage of
7.3% and peak shortage of 11.7% during
2003/04. The growth in electricity consumption over the past decade has, however, been
slower than the GDP growth. This could be
due to the high growth of the service sector
and efficient use of electricity.
Per capita electricity consumption rose
from merely 15.6 kWh (kilowatt-hours) in
1950 to 592 kWh in 2003/04 (CEA 2005).
However, it is a matter of concern that per
capita consumption of electricity is among
the lowest in the world. Moreover, the poor
quality of power supply and frequent power
cuts and shortages impose a heavy burden
on Indias fast-growing trade and industry.

4 National Energy Map for India: Technology Vision 2030

1.6 Oil and natural gas

1.6.2 Natural gas sector

1.6.1 Oil sector

India has recently entered a new era in its


gas industry with large discoveries of indigenous gas and the arrival of the first LNG
(liquefied natural gas) tanker in 2004. The
importance of gas in Indias energy mix is
expected to increase sharply from 7% of
TPES (total primary energy supply) in 2000
to 13% by 2030. In the same year, import
dependency on gas will reach almost 40%.
In order to meet the projected consumption,
investment needs of about 44 billion dollars
between 2001 and 2030 are projected.
India will continue to depend on importing LNG in the short- to medium-term to
bridge the demand gap. The capacity of
Indias only operating LNG terminal is expected to double by 2005 and two more
LNG terminals are expected to become operational in the next two years.
The major challenges that India faces towards becoming a sophisticated gas
economy include lack of sufficient transmission infrastructure and lack of a coherent legal and regulatory framework.
Indias consumption of natural gas has
risen faster than any other fuel in the recent
years. Natural gas demand has been growing
at a growth rate of about 6.5% for the last 10
years. Industries such as power, fertilizer,
and petrochemical are shifting towards natural gas. Although Indias natural gas demand
has traditionally been met entirely through
domestic production for the past few years,
the core sectors of the economy have started
facing a gas shortage. To bridge this gap,
apart from encouraging domestic production, the import of LNG is being considered
as one of the possible solutions. Several
LNG terminals have been planned in the
country and two have already been commis-

India is becoming a major player in the international oil and gas industry and is willing to
take on the political and financial risks inherent in overseas investments.
The country currently imports 70% of its
oil and this share is expected to exceed by
90% by 2030. It began importing gas in
2004 and is projected to reach an import dependency of almost 40% in 2030. It has
adopted a four-pronged approach to energy
security, comprising import source diversification and acquisition of equity oil, strategic
oil stocks, increased domestic exploration
and production, and fuel diversification.
Indian oil and gas companies are encouraged to invest overseas and to build strong
relations with strategically important countries. India aims to produce 20 MT of equity
oil by 2010 and 60 MT by 2025 so that domestic consumption could reach 250 MT.
The latest estimates indicate that India
has about 0.4% of the worlds proven
reserves of crude oil. The production of
crude oil in the country has increased from
6.82 MT in 1970/71 to 33.38 MT in
2003/04 (MoPNG 2004b). The quantity of
crude oil imported increased from 11.66
MT during 1970/71 to 81 MT by 2003/04.
Besides, imports of other petroleum products increased from 1 MT to 7.3 MT during
the same period. The exports of petroleum
products went up from about 0.5 MT during
1970/71 to 14 MT by 2003/04. The refining
capacity, as on 1 April 2004, was 125.97
MTPA (million tonnes per annum). The
production of petroleum products increased
from 5.7 MT during 1970/71 to 110 MT in
2003/04.

Introduction

sioned: (1) a petronet LNG terminal of


5 MTPA at Dahej, and (2) an LNG import
terminal at Hazira. In addition, an in-principle agreement has been reached with Iran
for import of 5 MTPA of LNG.

1.7 Renewable energy sources


Renewable energy sources are clean and indigenously available, and can play an important role in addressing the energy security
concerns of a country. Today, India has one
of the highest potentials for effectively using
renewable energy sources. The country is the
worlds fifth largest producer of wind power
after Germany, USA, Spain, and Denmark.
There is a significant potential in India for
the generation of power from renewable energy sourceswind, small hydro, biomass,
and solar energy. The country has an estimated SHP (small hydro power) potential of
about 15 000 MW. The installed combined
electricity generation capacity of hydro and
wind has increased from 19 194 MW in
1991/92 to 31 995 MW in 2003/04, with a
compound growth rate of 4.35% during this
period (MoF 2005). The penetration of
other renewable energy technologies, including solar photovoltaic, solar thermal,
small hydro, and biomass power is also increasing. Greater reliance on renewable
energy sources offers enormous economic,
social, and environmental benefits.
The potential for power production
from captive power plants and field-based
biomass resources, using technologies for
distributed power generation, is currently
assessed at 19 500 MW, including 3500 MW
of exportable surplus power from bagassebased cogeneration in sugar mills (MNES
2005).

1.8

Future scenario

Increasing pressure of population and increasing use of energy in different sectors of


the economy are concern areas for India.
With a targeted GDP growth rate of 8% during the Tenth Five Year Plan, energy demand
is expected to grow at the rate of 5.2%.
Driven by the rising population, expanding
economy, and a quest for improved quality
of life, the total primary energy consumption
is expected to be about 412 Mtoe (million
tonnes of oil equivalent) and 554 Mtoe in
the terminal years of the Tenth and Eleventh
Five Year Plans, respectively (Planning Commission 1999) (Table 1.2).
The International energy outlook 2005
(EIA 2005) projects Indias gas consumption to grow at an average annual rate of
5.1%, thereby reaching 2.8 trillion cubic feet
by 2025 with electric power accounting for a
share of 71%. Coal consumption is expected
to increase to 315 MT over the forecast period. In India, slightly less than 60% of the
projected growth in coal consumption is attributed to the increased demand of coal in
the electricity sector while the industrial sector accounts for most of the remaining
increase. Coal-fired generation capacity is
expected to increase by 59 000 MW between
2002 and 2025 such that use of coal for
electricity generation would be 2.2% per
annum. Oil demand in India is expected to
increase by 3.5% per annum during the
same period.
It is quite apparent that coal will continue
to be the predominant form of energy in
future. However, imports of petroleum and
gas would continue to increase substantially
in absolute terms, involving a large energy
import bill. There is, therefore, an urgent
need to reduce energy requirements by

6 National Energy Map for India: Technology Vision 2030

Table 1.2 Estimated energy demand


Demand (in original units)

Demand (Mtoe)

Primary fuel

Unit

2006/07

2011/12

2006/07

2011/12

Coal

MT

460.50

620.00

190.00

254.93

Lignite

MT

57.79

81.54

15.51

22.02

Oil

MT

134.50

172.47

144.58

185.40

Natural gas

BCM

47.45

64.00

42.70

57.60

Hydro power

bkWh

148.08

215.66

12.73

18.54

Nuclear power

bkWh

23.15

54.74

6.04

14.16

Wind power

bkWh

4.00

11.62

0.35

1.00

Total commercial energy

411.91

553.68

Non-commercial energy

151.30

170.25

Total energy demand

563.21

723.93

MT million tonnes; BCM billion cubic metres; bkWh billion kilowatt-hours; Mtoe million tonnes of oil equivalent
Source Planning Commission (2002)

demand-side management and by adopting


more efficient technologies in all sectors.

1.9 The road ahead


The energy needs of the country are expected to increase at a rapid rate in the coming decades. Therefore, it is imperative to
take steps to increase the indigenously available energy resources so as to avoid excessive
reliance on external sources. The options
available in terms of nuclear and hydel energy, as well as non-conventional sources of
energy, also need to be seriously looked into.
Non-conventional sources of energy may
come to play an increasing role in meeting
energy needs, particularly of the rural population, which depends mostly on non-commercial sources of energy today. The
mid-term appraisal of the Tenth Five Year
Plan (Planning Commission 2005) also em-

phasizes on regulatory reform to improve


the energy efficiency of the country (Box 1).
However, availability of capital and environmental considerations is appearing as serious constraints to the efforts of generating
more capacity to meet the growing demand.
Prudent management of the indigenous energy resources; judicious approach to energy
imports; and progressive shift in favour of
environmentally benign sources of energy,
including non-renewable sources and demand-side management, are some of the solutions to the problems and can, therefore,
be the guiding principles for long-term energy policy of the country.

1.10 Investments in energy


infrastructure
India faces the challenging task of mobilizing financial resources to invest in energy

Introduction

Box 1 Highlights of the proposals made under the mid-term appraisal of the Tenth Five Year
Plan across the energy sector
Improve regulation by


creating a regulatory academy;

institutionalizing the selection of regulators under the regulatory academy;

mandating training for all regulators;

granting financial autonomy to regulatory institutions;

limiting the quasi-judicial role of regulators to tariff setting and dispute resolution, providing a system to make regulators accountable to the Parliament; and

developing a debt pool that would provide up to 20-year loan funding for energy projects, establishing and enforcing energy efficiency standards (the Bureau of Energy Efficiency and PCRA Petroleum Conservation Research Association must develop standards for energy-intensive industries
and appliances, and develop modalities for a system of incentives/penalties for compliance/noncompliance).

infrastructure. The problem is further aggravated by the different financial risks that
have been introduced by the transition to
competitive markets. Far-reaching reforms
are urgently needed to facilitate higher capital
flows in the energy sector.

1.11 Role of new and energyefficient technologies


New and energy-efficient technologies have
a key role to play in the optimal utilization of
resources. At this juncture, there is an urgent
need to address barriers to the adoption of
clean coal technologies and other new
energy processing technologies. R&D (research and development) and demonstration
of these technologies under governmentsupported programmes are very crucial.

1.12 Energy security


The focus currently is on energy security.
The energy security concerns now encompass access to coal, natural gas, electricity,
and oil, and insulation from abnormal price
fluctuations. Indias oil import dependency
is expected to increase from 70% at present
to 90% by 2030. Apart from this, imports of
coal as well as gas are expected to increase
significantly in the next couple of decades.
Furthermore, access to energy supply needs
to be compatible with policy objectives like
mitigation of environmental consequences.
The Government of India has a policy to
mitigate risks by diversifying geological resources of fuel supply and maximizing indigenous use of renewable energy sources and
non-renewable energy sources.

8 National Energy Map for India: Technology Vision 2030

1.13 Objectives of the study


In order to have an integrated energy approach and to meet the policy goals of
economic efficiency, energy security, energy
access, and environment protection, the
Principal Scientific Advisers Office to the
Government of India awarded the study, A
national energy map for Indiatechnology vision 2030, to T E R I in March 2004. The
time frame of the study is from 2001 to
2031. The objectives of the study are
1 to develop a framework for optimal exploitation of energy resources through appropriate technology deployment;

2 to determine the energy technology policies and strategies that would lead to optimal use of energy resources;
3 to suggest a technology deployment strategy at the national level; and
4 to identify energy demand and supply, and
energy-technology related data gaps that
will strengthen such analyses in the future.
The above-mentioned objectives are to be
addressed by building a national-level, bottom-up, technology-driven, optimizationmodelling framework. The model is to be
run under various scenarios to capture uncertainties and bring out its implications on
the national energy scene.

Methodology

2.1

Approach

As described in Chapter 1, the key focus of


this study was to examine the role that various technological options could play under
alternative scenarios of economic growth
and development; resource availability; and
technological progress. For this purpose, it
was important to choose an integrated modelling framework that would facilitate the
creation and analysis of various scenarios of
energy demand and supply at the national
level, as well as provide a detailed representation and analysis at the technological level
for each category of resource as well as
sectoral end-use demand.
Energy demand is driven by the GDP
(gross domestic product) and population
growth. Different GDP growth rates were
used to develop various scenarios of economic growth while the population projections of the PFI (Population Foundation of
India) were considered to reflect trends in
population growth. These population and
GDP figures were used to estimate end-use
demand in the five sectors of the economy
(agriculture, commercial, residential, industrial, and transport) over the modelling period.
The MARKAL (MARket ALLocation)
Program model was selected to examine the
pathways for optimal energy supply to meet
the end-use services in the five economic
sectors under each scenario. The model indi-

2
cates the minimized total system cost of the
energy sector under various scenarios. Also,
the main outputs provided by the model include information regarding the level of uptake of total energy resources, their
distribution across the consuming sectors,
choice of the technological options at the resource supply end, conversion and end-use
levels, investment levels during each fiveyear time period, an indication of capacity
addition, retirement of equipment and appliances, emission levels associated with resources, end-use technological options
adopted, and so on. The modelling time
frame is from 2001 to 2031, and the data input to the model is from 2001 to 2036. The
overall methodology is schematically depicted in Figure 2.1.
Given wide scope and vast nature of the
exercise, it was important to draw on the
knowledge base of a large and varied team of
experts so as to provide inputs of adequate
quality to the model. Several rounds of interactions with policy-makers and experts in
each sector were crucial to the development
of the modelling framework and the overall
analysis. The choice of the possible technological options (existing and futuristic) to be
included in the model, the development of
the RES (reference energy system), and the
technology characterization for each option
on the demand side as well as the supply side
evolved on the basis of an extensive litera-

10

National Energy Map for India: Technology Vision 2030

Figure 2.1 Schematic representation


of methodological framework

ture review. In addition, several rounds of


deliberations and focused interactions with
sectoral experts, researchers, industry
associations, research and development institutions, government agencies, and policymakers in each of the individual sectors were
held to finalize the input data to the model.

2.2 Choice of modelling framework


Figure 2.2 illustrates various types of energy
sector models widely used across several
developed and developing countries for carrying out their economic and energy sector
planning. These models also consider differ-

ent overall approaches towards the analysis


of energy and environmental systems. The
evaluation of the model to be finally used for
the analysis was governed primarily by the
ability of the models to undertake a detailed
representation as well as evaluation of the
technological options for both existing and
emerging technologies related to energy extraction/supply, conversion, transportation,
and economy. Some of these models, including the ENPEP (Energy and Power Evaluation Program), the MARKAL, the LEAP
(Long-range Energy Alternatives Planning)
System, the AIM (Asia-Pacific Integrated
Model), the MESSAGE (Model for Energy
Supply Systems Analysis and General Envi-

Methodology

ronment), and the POLES (Prospective


Outlook on Long-term Energy Systems),
were extensively reviewed to evaluate the
best option to be used for this study. Various
energy sector models listed in Figure 2.2 are
described in detail in Appendix 1.
Following extensive survey of the existing
models and frameworks, the MARKAL
model was selected as the preferred framework on account of several reasons, as discussed below.
1 MARKAL provides an integrated framework for examining the flow of resources
from the point of extraction up to the
point of end-use, while accounting for
conversion efficiencies, losses, costs of
transport and transmission, and so on.
2 Using a bottom-up framework provides
an adequate scope for representing each
technological option in detail in terms of
its availability, costs, and so on.
3 As a technology mix optimization model,
MARKAL database typically contains a
fairly comprehensive account of technologies for supply and end-use produc-

Figure 2.2

Energy sector models

11

tion, conversion, transmission, and utilization. Supply technologies are described


in terms of their initial, construction, and
operating costs; fuel requirements; discount rates; useful lives; and efficiencies.
Such assumptions may vary with time.
Definition and description of technologies are limited only by the modellers
preferences. A single energy system may
contain definitions of several hundred
technologies that contribute to supply,
demand, efficiency, production, or any relationship defined by the modeller.
The model is dynamic in the sense that it
optimizes over the entire time period and
considers retirement of equipment and
appliances over their lifetime and investment in new capacities while considering
the entire modelling time period.
MARKAL is accordingly an appropriate
framework for conducting a medium- to
long-term analysis over a 30-year modelling time frame.
The model has the ability to include userdefined constraints to reflect physical restrictions on the availability or processing
of resources, maximum penetration ratios
for a set of technologies, and so on.
MARKAL model provides a generalized
structure that can be adapted well for the
Indian energy sector analysis. It allows for
formulating and analysing policy and
technology scenarios easily, so that the
implications pertaining to economy, energy, and environment of a particular set
of policies can be evaluated.
The MARKAL being an optimization
framework was preferred to a simulation
framework as it helps in providing a relative ranking of various technological options from the viewpoint of cost minimization as well.

12

National Energy Map for India: Technology Vision 2030

8 The MARKAL model was developed by


the IEA (International Energy Agency) to
evaluate optimal mix of energy supply
and demand technologies under different
scenarios and objectives. The MARKAL
framework is, therefore, geared towards
expressing energy technology interactions. As a mathematical tool, it is used
for optimizing technology mixes to meet
specified objectives such as least energy
system costs. The MARKAL family of
models provides a flexible, easy-to-understand, proven, and verifiable methodology that can provide insights to assist with
informed decision-making. Policy analysts in several developed and developing
countries have used this model to frame
energy policy and evaluate options based
on their projected financial and environmental effects.

2.3 Modelling framework of the


MARKAL model
2.3.1 Model structure
The MARKAL model is a dynamic LP (linear programming) model of a generalized
energy system. It uses LP methods to solve
for the technology mix that best meets the
specified objectives. It is demand-driven for
which feasible solutions are obtained only if
all specified end-use energy demands are
satisfied for every time period. The end-use
demands for each sector and for each time
period are exogenously forecasted.
Being an LP model, the main function of
the MARKAL model is to optimize a linear
objective function under a set of linear constraints. The problem is to determine the

optimum activity levels of processes that satisfy the constraints at a minimum cost. Examples of constraints in the model include
availability of primary energy resources, production/use balances, electricity/heat peaking, availability of certain technologies, and
upper bounds on pollution emissions.
The elements of the MARKAL simulate
the flow of energy in various forms (energy
carriers), from the sources of supply (import, export, mining, and stockpiling)
through transformation systems (resource,
process, conversion, and demand technologies) to the devices that satisfy the end-use
demands. The basic structure of the
MARKAL model is shown in Figure 2.2.
The elements of an energy system in
MARKAL can be grouped as follows.
 Energy
carrier The component that
encompasses all the energy forms in the
energy system.
 End-use demands
The component that
comprises the demands for end-use
energy services in the economy.
 Demand
technologies All devices that
consume energy carriers to meet energy
demands.
 Conversion technologies
All load-dependent plants that generate electricity or
district heat or both.
 Process
technologies All load-independent processes that convert one energy
carrier to another.
 Resource
technologies The means by
which energy enters or leaves the energy
system, other than end-use consumption.
 Emissions
The component that encompasses the environmental impacts of the
energy system.
Figure 2.3 depicts the MARKAL building blocks, also called the RES. The RES is a

Methodology

2.3.2

Solutions of the models

The MARKAL creates solutions by minimizing the present value of the total energy
system costs throughout the planning horizon, subject to specified constraints. As
such, it uses perfect foresight whereby all
decisions are made with full knowledge of
the future events. The MARKAL solutions
include the following.
 An optimal resource/fuel/technology mix
 A complete breakdown of the costs associated with each technology

Seasonal activity and capacity


level for each conversion
technology in each time period
 Annual activity and capacity
level for each process and demand technology in each time
period
 The level of additional capacity for each conversion process and demand technology
developed in each time period
 Activity level for each resource technology in each
time period
 A full range of energy prices,
such as electricity price by
season and time of day and energy price
provided by renewable technologies
Emission levels for each technology
and the total energy system in each time
period


Figure 2.3 MARKAL building blocks

convenient tool to map the flow of each energy resource over its entire fuel cycle. It
provides a blueprint for each sector in terms
of the resources that it uses/could use and
the end-use demands that are associated
with it. It provides a flow chart of the basic
building blocks of the overall model that can
then be easily mapped onto the actual model
without missing out on important components or links.

13

2.3.3 Description of the model


framework used in analysis
The MARKAL database has been created
over a 35-year period, from 2001 to 2036, at
five-year intervals, coinciding with the Government of Indias Five Year Plans. The year
2001/02 is chosen as the base year as it coincides with the first year of the Government
of Indias Tenth Five Year Plan (2001/02
2006/07). In the model, the Indian energy
sector is disaggregated into five major energy-consuming sectors, namely, agriculture, commercial, industry, residential, and
transport. Each of these sectors is further
disaggregated to reflect the sectoral end-use
demands. The model would be driven by the
demands on the end-use side.

14

National Energy Map for India: Technology Vision 2030

On the supply side, the model considers


various energy resources that are available
both domestically and from abroad for
meeting various end-use demands. These include both the conventional energy sources
such as coal, oil, natural gas, hydro power,
nuclear power as well as renewable energy
sources such as wind, solar, biomass, and so
on. The availability of each of these fuels is
represented by constraints on the supply
side. The relative energy prices of various
forms and sources of fuels dictate the choice
of fuels, which play an integral role in capturing inter-fuel and inter-factor substitution within the model. Furthermore, various
conversion and process technologies characterized by their respective investment costs,
operating and maintenance costs, technical
efficiency, operational life, and so on, to
meet the sectoral end-use demands are also
incorporated in the model. Although, assumptions related to resource availability
and other input parameters of the model related to technology characterization are presented till 2036, the results from the model
are presented till 2031. The effects of inconsistent behaviour of the MARKAL, an optimization model, are thus avoided with
perfect foresight. A detailed description of
the main resources and technology choices
included within each of the main sectors in
the modelling framework is provided in
Chapter 3. A detailed schematic representation of the RES for these sectors, tracing the
resource from the point of extraction to the
point of use, is given in Appendix 2.

2.3.4 Integrating the workshop


inputs into the exercise
Integrating up-to-date data and information
was the key to this integrated and well-tested

methodological framework. Towards this


end, several sectoral workshops were conducted, which involved discussions and focused deliberations with researchers,
stakeholders, and experts from each of the
individual consuming and supplying sectors.
The experts from various fields provided not
only their knowledge and judgments regarding various technological options to be considered in each of the sectors, but also
information regarding key parameters associated with these technologies. Detailed descriptions of each of the technological
options in terms of its techno-economic status and potential at the national and international levels including details regarding its
costs, efficiencies, availability and diffusion
timelines, and so on came to the fore in the
deliberations and discussions held in the
workshops. This helped in the technology
characterization of each of the sectoral options in the model.

2.4 Socio-economic drivers of


final energy demands
Population and GDP were considered as the
main drivers for estimating and projecting
sectoral end-use demands in terms of physical industrial production or useful energy
services. Based on the optimal fueltechnology mix chosen by the MARKAL model to
meet these demands, final energy required is
obtained from the model run.
Population growth and the dynamics of
the demographic shifts across various income classes have a direct influence on the
future energy demands. Accordingly, estimation of growth and distribution of population are vital for any government to
efficiently allocate its resources and plan towards achieving its economic and social

Methodology

goals. Similarly, a high rate of economic


growth, as measured by the GDP and its allocation across the agriculture, industry, and
services sectors, has an impact on energy
consumption. This is mainly because rise in
the GDP, which manifests itself in the form
of increased agricultural production, accelerated industrial production, and rising demand for commercial services, would
inevitably lead to a rise in the energy requirement of the economy at large.

Although the family planning programme


was initiated in the country in 1951, the
1971 census indicated that due to high
growth rate, the population had increased by
24.8% during 196171 as compared to
21.5% during 195161. In spite of the vast
network of personnel involved in the
programme and sizable expenditure from
the centre, this continuing increase in population growth rate disturbed the policy-makers and programme administrators, which
led to the adoption of draconian measures
during the emergency period of 1975/76. A
revised population policy was adopted in
1977 and the family planning programme
was renamed as family welfare programme.
This programme chose to achieve demographic change through education and motivation. As indicated in Table 2.1, population
growth decelerated marginally during the
1980s, evident from the decadal population
growth rate that reduced by 23.9%. Concerted efforts by the government and the incentives offered during 198691 to young
couples having one or two children led to a
slow but steady acceptance of family planning programme.

2.4.1 Population projection and


distribution across various income
groups in India
2.4.1.1 Population and
demographic trends in India
Indias population stood at nearly 350 million at the time of independence. It increased at an unprecedented annual growth
rate of 2.11% during 19512001 to reach
the one billion mark at the dawn of new millennium.

Table 2.1 Demographic trends in India


Rate/measure for the 10-year period before the census
Enumerated

Percentage

Crude

Crude

Total

Expectation of

population

change in

birth

death

fertility

life at birth

Census year

(in million)

population

rate

rate

rate

Male

Female

1951

361.1

13.3

4044

2832

5.36.0

3234

3234

1961

439.2

21.6

4648

2628

6.36.6

3739

3739

1971

548.2

24.8

4344

2122

6.46.6

4345

4244

1981

683.3

24.6

37

15

5.1

50

49

1991

846.6

23.9

35

13

4.3

54

53

2001

1027.0

21.3

29

10

3.7

59

60

Source Bhat (2001)

15

16

National Energy Map for India: Technology Vision 2030

2.4.1.2 Population projection for


India
A number of national and international
agencies have attempted to project Indias
population over various time periods. Internationally, the Population Division of the
Department of Economic and Social Affairs
of the United Nations Secretariat (UNPD or
United Nations Population Division) is
entrusted with the responsibility of demographic estimation and projections for all
countries and areas of the world, including
urban and rural areas and major cities, and
these projections serve as the standard and
provide consistent set of population figures
for use throughout the United Nations system. Within the country, prominent research
organizations like the PFI and renowned demographers like P N Mari Bhat have also
made population projections for India. Their
projections are based on the Component
method,1 although different assumptions for
various influencing factors, such as fertility
rate, mortality rate, and migration, are used.
Table 2.2 provides a comparative assessment
of the assumptions used by the above-mentioned agencies.
Table 2.3 provides the population projections for India as estimated by various
sources. A close look at the estimates reveals
that the UNPD (medium variant) estimates
are not very different from the PFI estimates. For the period 200136, the UNPD
projects population to increase at an annual
growth rate of 1% while the PFI estimates
the growth rate to be 1.14%. Both the agencies estimate that the annual population
1

growth rate would decline over the decades


during the forecast period. As per the
UNPD figures in the medium-variant scenario, annual growth rate of population declines from 1.41% to 1.08% to 0.73%
during 200111, 201121, and 202131, respectively. As per the PFIs projections, the
growth rate is 1.37%, 1.34%, and 0.92%
during the same time periods.
For this study, the PFI estimates are preferred to the UNPD estimates, since the PFI
relies more on the country-specific details.
The UNPD estimates are based on the assumptions that are derived on the basis of
experience of all the countries in the world,
which might not reflect the specific characteristics inherent in Indian demography. The
PFI estimates, on the other hand, have been
derived on the assumptions specific to various Indian states. The PFI population projections are used by the Office of Registrar
General of India that conducts the population census in the country every 10 years.
Moreover, the Planning Commission also
adopts the set of population projections provided by the PFI for formulation of various
national plans and policies.

2.4.1.2.1 Ruralurban population


As energy-use patterns, choice of fuels, and
so on vary considerably among rural and urban areas, examining the trend of urbanization in the future assumes high significance
for a country like India.
Indias population has grown 2.84 times
from 1951 to 2001, that is, from 361 million
in 1951 to 1027 million in 2001. Its rural

The component method for population projections separately studies the drivers of the future size of the population,
such as fertility rate, mortality rate, and migration.

17

Methodology

Table 2.2 Assumptions for population projections


Factors

UNPD

PFI

Mari Bhat

Total fertility

Assumed to decline based on

Extrapolation by fitting lin-

Assumed to fall to

rate

the past trend of fertility rate

ear trend (197196) for

2.8

during 19502000 (a lower limit

each of the larger states in

reach very close to

of 1.85 children per woman)

India. The figure 1.6 is

the

taken as the floor value

level only by 2025

Medium path of mortality de-

Three values of life ex-

The life expectancy

cline is used to project future

pectancy for the periods

at birth has been as-

mortality levels

199195,

and

sumed to reach 67

extrapo-

for males and 71 for

Mortality rate

202126

201116,
were

lated, using linear fit, at


five-year

intervals

in

2010

and

replacement

females by 2025

from

2001 to 2051, for each of


the 15 larger states. The
figures for India are obtained as weighted average of the figures of the
major states
Migration

The future path of international

No large-scale inter-state

Net migration to In-

migration is set on the basis of

migration in the country

dia assumed to be

past international migration es-

zero

timates and on assessment of


the policy stance of countries
with regard to future international migration flows
UNDP United Nations Population Division; PFI Population Foundation of India

urban distribution has also undergone structural changes over the same period. Its
population in rural areas has more than
doubled (~2.5 times) from 298 million during 1951 to 740 million in 2001, whereas
population in urban areas has increased
more than four times (~4.6 times) from 62
million to 287 million during the same time

period. The UNPD estimates the urban


population to increase by about 33% by
2016 and 42% by 2031, while corresponding
figures given by the Census of India are 34%
and 40% for the same time period.
As indicated in Tables 2.4 and 2.5, the
percentage shares of the population residing
in urban areas projected by both the UNPD

18

National Energy Map for India: Technology Vision 2030

Table 2.3 Population projections (in million)


Source

Scenario

2001

2006

2011

2016

2021

2026

2031

2036

UNPD

Low variant

1031

1099

1156

1203

1242

1269

1282

1283

Medium variant

1033

1112

1188

1259

1323

1378

1424

1461

High variant

1034

1125

1220

1315

1405

1490

1573

1653

Optimistic

1026

1109

1191

1271

1345

Realistic

1025

1103

1173

1244

1320

1027

1092

1177

1264

1344

1413

1473

1526

Mari Bhat

PFI

PFI Population Foundation of India; UNPD United Nations Population Division


Note UNPD projections were available from 2000 to 2050 on a five-year interval. Figures presented in this table are
interpolated for the years mentioned.

Table 2.4 Ruralurban distribution (%) as per the UNPD


Region

2001

2006

2011

2016

2021

2026

2031

2036

Urban

28

29

31

33

35

37

42

45

Rural

72

71

69

67

65

62

58

56

UNDP United Nations Population Division; PFI Population Foundation of India


Source UNPD (2003)
Note Projection distribution was available from 2000 to 2016 on a five-year interval. Figures presented in this table
are interpolated for 2001, 2006, 2011, etc. and, based on the past trend of 200116, these have been extrapolated
for the period 201636.

Table 2.5 Ruralurban distribution (%) as per the Census of India


Region

2001

2006

2011

2016

2021

2026

2031

2036

Urban

28

30

32

34

36

38

40

42

Rural

72

70

68

66

64

62

60

58

Source Census of India (1991)


Note Figures were available till 2016 and, based on the past trend of 200116, these have been extrapolated for
the period 201636.

and the PFI are more or less similar. The


data given by the PFI is considered in this
analysis to ensure consistency with the set of
population projection provided by the PFI
and adopted by the Office of Registrar General of India, Government of India.

2.4.1.2.1.1 Number of households


The household size for rural and urban areas
has been estimated based on the rate of
decrease in average number of households
in rural and urban areas during the period

Methodology

19

cate the number of urban and


rural households under six exhouseholds in rural and urban areas (million)
penditure classes, namely, BPL
(below poverty line), L (low),
Population
Number of households
LM
(lower
middle),
M
Year
Rural
Urban
Rural
Urban
(middle), UM (upper middle),
2001
739.44
287.56
137.34
56.26
and H (high) for the three sce2006
764.40
327.60
144.53
65.36
narios based on three different
2011
800.36
376.64
154.06
76.62
projected GDP growth rates,
2016
834.24
429.76
163.48
89.14
namely, 6.7%, 8%, and 10%,
2021
860.16
483.84
171.60
102.34
considered in this study. It may
be noted that in the tables, these
2026
876.06
536.94
177.92
115.80
six expenditure classes in rural
2031
883.80
589.20
182.73
129.57
areas are denoted by RBPL, RL,
2036
885.08
640.92
186.30
143.71
RLM, RM, RUM, and RH
Source Census of India (1991)
whereas
the
corresponding
Note The figures were available till 2016 and, based on the past
classes in urban areas are detrends, have been extrapolated for the period 201636.
noted by UBPL, UL, ULM,
UM, UUM, and UH, respectively, with the prefixes R and U
19812001. Following the rate of decrease
denoting rural and urban households, reduring this period, household size has been
spectively.
projected to decline by 4.75% and 4.46% for
It is clear from the projections presented
rural and urban, respectively, by 2036. Table
in Tables 2.72.12 that as the economy
2.6 presents the projected population and
achieves high GDP growth rate by 2031, the
number of households in rural and urban areas.
number of urban and rural households in the
BPL and L expenditure classes diminishes.
Subsequently, there is a rise in the number
2.4.1.2.1.1.1 Income-wise houseof households in the higher expenditure
classes in the rural and urban areas by 2031.
hold distribution
Table 2.6 Projected population and number of

To estimate the distribution of population in


various income groups, a lognormal curve is
fitted on the data sets for the MPCE
(monthly per capita expenditure) for rural
and urban areas, and frequency of population in various income groups has been calculated using statistical software package
SYSTAT11. A detailed methodology for estimating and projecting the number of
households in various expenditure classes is
given in Appendix 3. Tables 2.72.12 indi-

2.5 Gross domestic product as a


measure of economic growth
The significance of economic growth for a
polity cannot be undermined in the context
of overall development. Economic growth
results from an increased production of
goods and services leading to high income
generation. This ultimately translates into
improvement in the quality of life of the

20

National Energy Map for India: Technology Vision 2030

Table 2.7 Number of rural households (in million) in various expenditure categories for
6.7% GDP growth
Rural

1999

2001

2006

2011

2016

2021

2026

2031

RBPL (<615)

88.5

84.5

68.2

49.0

27.3

10.0

2.1

0.2

RL (615775)

20.0

21.8

26.7

29.1

25.3

15.4

5.3

0.9

RLM (775950)

12.4

14.0

19.9

25.7

28.1

22.5

11.0

2.7

RM (9501200)

8.2

9.9

15.8

23.7

32.0

34.0

23.8

9.3

RUM (12002800)

5.8

7.0

13.7

26.0

49.2

84.3

117.3

118.0

RH (>2800)

0.1

0.1

0.1

0.5

1.5

5.5

18.3

51.5

RBPL rural below poverty line; RL rural low; RLM rural lower middle; RM rural middle; RUM rural upper middle;
RH rural high; GDP gross domestic product
Note Figures in brackets represent monthly per capita consumption expenditure in rupees.

Table 2.8 Number of urban households (in million) in various expenditure categories for 6.7%
GDP growth
Urban

1999

2001

2006

2011

2016

2021

2026

2031

UBPL (<665)

15.6

18.1

13.3

8.0

3.2

0.6

0.0

0.0

UL (6651120)

14.5

19.2

22.5

23.1

18.1

8.9

2.1

0.1

ULM (11201500)

6.4

8.9

12.7

17.1

19.6

16.2

7.4

1.4

UM (15001925)

3.5

5.0

8.0

12.6

18.1

20.8

15.3

5.2

UUM (19254000)

3.4

4.8

8.3

14.9

27.8

49.2

71.3

70.7

UH (>4000)

0.2

0.3

0.5

1.0

2.3

6.7

19.7

52.1

UBPL urban below poverty line; UL urban low; ULM urban lower middle; UM urban middle; UUM urban upper
middle; UH urban high; GDP gross domestic product
Note Figures in brackets represent monthly per capita consumption expenditure in rupees.

people in terms of various economic and


social indicators such as enhanced purchasing power and improved access to quality
education and health care services. GDP is
considered as the most commonly used measure of economic growth. It tracks the
domestic economic activity in terms of
the value added and income generated
(in monetary terms) during a specified time
period.

2.5.1 Literature review on gross


domestic product growth projections
There are several agencies engaged in making short-term forecasts of the growth rate of
real GDP for the Indian economy based on
the regular monitoring of key parameters
that influence it. These agencies include
many bilateral and multilateral organiza-

Methodology

21

Table 2.9 Number of rural households (in million) in various expenditure categories for 8%
GDP growth rate
Rural

1999

2001

2006

2011

2016

2021

2026

2031

RBPL (<615)

88.50

84.46

60.56

32.66

11.77

2.40

0.18

0.00

RL (615775)

20.00

21.84

27.17

25.57

15.86

5.49

0.89

0.00

RLM (775950)

12.43

14.01

21.39

26.34

22.07

10.98

2.85

0.18

RM (9501200)

8.24

9.89

17.92

28.19

31.88

22.82

8.54

1.64

RUM (12002800)

5.81

7.00

17.20

40.06

76.67

110.68

110.67

68.52

RH (>2800)

0.14

0.14

0.29

1.23

5.23

19.22

54.80

112.38

RBPL rural below poverty line; RL rural low; RLM rural lower middle; RM rural middle; RUM rural upper middle;
RH rural high; GDP gross domestic product
Note Figures in brackets represent monthly per capita consumption expenditure in rupees.

Table 2.10 Number of urban households (in million) in various expenditure categories for 8%
GDP growth rate
Urban

1999

2001

2006

2011

2016

2021

2026

2031

UBPL (<665)

15.64

18.06

11.44

4.90

1.25

0.10

0.00

0.00

UL (6651120)

14.46

19.19

21.31

18.01

9.81

2.87

0.35

0.00

ULM (11201500)

6.36

8.89

13.07

16.32

14.62

7.68

1.85

0.13

UM (15001925)

3.53

5.01

8.76

13.87

17.03

13.41

5.44

0.91

UUM (19254000)

3.35

4.84

10.07

21.30

39.67

58.23

57.90

32.78

UH (>4000)

0.22

0.28

0.72

2.22

6.78

20.06

50.26

95.75

UBPL urban below poverty line; UL urban low; ULM urban lower middle; UM urban middle; UUM urban upper
middle; UH urban high; GDP gross domestic product
Note Figures in brackets represent monthly per capita consumption expenditure in rupees.

tions like the World Bank and the IMF


(International Monetary Fund); leading
financial consulting firms like McKinsey,
Goldman Sachs, Morgan Stanley, and so on;
and prominent Indian business associations
like the CII (Confederation of Indian Indus2

try) and the FICCI (Federation of Indian


Chambers of Commerce and Industry).
These organizations forecast GDP growth
rate using econometric techniques such as
ARIMA (Autoregressive Integrated Moving
Average) and Exponential Smoothing. 2

The ARIMA model is a univariate method in which the values of the variable under consideration are forecasted based
on the lagged/past values of the variable itself. Exponential Smoothing technique simplifies the time-series data of the
variable under consideration by reducing or cancelling the effect due to random variations in the data. This technique
can be used for forecasting by assigning weights to the past observations of the variable under consideration.

22

National Energy Map for India: Technology Vision 2030

Table 2.11 Number of rural households (in million) in various expenditure categories for 10%
GDP growth rate
Rural

1999

2001

2006

2011

2016

2021

2026

2031

RBPL (<615)

88.50

84.46

54.92

21.26

4.09

0.34

0.00

0.00

RL (615775)

20.00

21.84

27.03

20.95

7.68

1.03

0.00

0.00

RLM (775950)

12.43

14.01

22.40

24.50

13.73

3.09

0.18

0.00

RM (9501200)

8.24

9.89

19.51

30.04

24.85

8.92

1.07

0.00

RUM (12002800)

5.81

7.00

20.38

54.69

98.74

104.85

55.87

11.88

RH (>2800)

0.14

0.14

0.29

2.62

14.39

53.37

120.81

170.85

RBPL rural below poverty line; RL rural low; RLM rural lower middle; RM rural middle; RUM rural upper middle;
RH rural high; GDP gross domestic product
Note Figures in brackets represent monthly per capita consumption expenditure in rupees.

Table 2.12 Number of urban households (in million) in various expenditure categories for
10% GDP growth rate
Urban

1999

2001

2006

2011

2016

2021

2026

2031

UBPL (<665)

15.64

18.06

10.00

2.83

0.36

0.00

0.00

0.00

UL (6651120)

14.46

19.19

20.39

13.56

4.37

0.51

0.00

0.00

ULM (11201500)

6.36

8.89

13.33

14.86

8.91

2.15

0.12

0.00

UM (15001925)

3.53

5.01

9.35

14.40

13.28

5.42

0.69

0.00

UUM (19254000)

3.35

4.84

11.37

27.12

47.34

49.73

24.32

4.15

UH (>4000)

0.22

0.28

0.92

3.83

14.89

44.52

90.67

125.42

UBPL urban below poverty line; UL urban low; ULM urban lower middle; UM urban middle; UUM urban upper
middle; UH urban high; GDP gross domestic product
Note Figures in brackets represent monthly per capita consumption expenditure in rupees.

However, these forecasts provide a shortterm view of the Indian economy, ranging
from one quarter to one year.
The Institute of Economic Growth, New
Delhi, has projected the GDP growth rate
for the Tenth Five Year Plan period (2002
07) using a macro-econometric model that
generates forecasts of the GDP growth trajectory at the aggregate as well as the
sectoral levels. The Institute has developed

three alternative long-term growth scenarios


based on different assumptions regarding
the investment rate. In the BAU (businessas-usual) scenario, which assumes normal
rainfall and an investment rate of 27.6% of
the GDP, the GDP is projected to grow at a
rate of 6.1% over the modelling time frame.
In the optimistic scenario, assuming normal
rainfall and an investment rate of 31% of the
GDP, the growth rate forecast for the period

Methodology

200207 is 6.8%. Similarly, with an investment rate of 32.9%, the growth rate forecast
is 7.4%. The pessimistic scenario, which assumes low rainfall and an investment rate of
28% of the GDP, forecasts a GDP growth of
about 5.4% for the economy.
The NCAER (National Council for Applied Economic Research) has also projected
the GDP growth rate based on a macroeconometric model consisting of simultaneous system of equations at an aggregate as
well as at a sectoral level. The NCAER has
forecast three alternative growth scenarios
using this model. In the realistic scenario, referred to as the most likely scenario,
the GDP growth rate is projected to increase
from 6.54% in 2004/05 to 7.82% in
2008/09. In the pessimistic and optimistic
scenarios, the GDP growth rate is forecast at
7.18% and 8%, respectively, for 2008/09.

2.5.2 Gross domestic product


growth projections
TERI worked out the most likely GDP
growth scenario for the long term. It was estimated that the GDP would be no more
than 6.7% over the 30-year modelling
period. The methodology for the same is

23

provided in detail in Appendix 3. This particular study, however, was conducted with a
projected GDP growth rate of 8% considered in the BAU scenario that reflected government plans. The rationale for choosing a
GDP growth rate of 8% throughout the period 200436 is also explained in detail in
Appendix 3. Given that the Indian economy
is already in the last year of the Tenth Five
Year Plan, the Planning Commission is in
the process of readying the Eleventh Five
Year Plan (200712). The Government of
India is expected to target a growth rate of
10% for the Eleventh Five Year Plan period.
Hence, additionally, a 10% GDP scenario
has been considered to reflect an even higher
growth rate of the economy, as suggested by
the Office of the PSA (Principal Scientific
Advisor), to examine the impact of a twodigit (a higher rate of GDP growth relative
to the BAU) GDP growth on the future trajectories of energy consumption. Accordingly, three GDP growth rates have been
considered in this study: 8% (reflecting the
BAU scenario), 6.7% (representing a lowgrowth scenario), and 10% (representing a
high-growth scenario).
Table 2.13 presents the figures for
aggregate GDP under the three growth
scenarios.

Table 2.13 Projections of GDP at factor cost at 1993/94 prices (in crore rupees) under various GDP growth rate scenarios
GDP growth (%) 2001

2006

2011

2016

2021

2026

2031

6.7

1 267 945

1 676 029

2 240 639

3 061 793

4 258 687

6 004 800

8 551 719

1 267 945

1 802 078

2 647 845

3 890 552

5 716 498

8 399 411

12 341 490

10

1 267 945

1 904 059

3 066 507

4 938 640

7 953 729

12 809 559

20 629 924

GDP gross domestic product

24

National Energy Map for India: Technology Vision 2030

2.5.3 Trends in sectoral composition of gross domestic product

2.5.4 Projections of sectoral composition of gross domestic product

The sectoral composition of the GDP has


undergone significant transformation, starting from the First Five Year Plan (195055).
Figure 2.4 depicts the historical trend of
the contribution of sectoral GDP in aggregate GDP through the period 19802003.
The trend clearly suggests that the share of
agriculture sector in the aggregate GDP declined from 60% in 1950/51 to about 40% in
1979/80 and to 24% in 2003/04. The share
of industry in the GDP has increased from
13% in 1950/51 to about 22% in 1979/80
and 24.5% in 2003/04, whereas the share of
services in GDP has exhibited a rise from
27% in 1950/51 to about 37% in 1979/80
and 51% in 2003/04.

The India Vision 2020 document (Planning


Commission 2002) highlights that knowledge resources (technology, organization,
information, education, and skills) have replaced capital as the most important determinants of development. This is the prime
reason for a rapidly increasing share of services sector in GDP as the sector is essentially knowledge-based. The document lays
down the reference levels for sectoral composition in GDP (%) that India should strive
to attain by 2020. The reference levels for
2020 as presented in the document and by
T E R I estimates for 2020 for sectoral
composition of GDP (%) are presented in
Table 2.14.
The reference 2020 levels mentioned in
Table 2.14 are highly optimistic. As per these
levels, share of agriculture in aggregate GDP
is projected to decline to 6% with a corresponding rise in the
share of industry
and services to 34%
and 60%, respectively, in 2020. Such
levels in 2020 could
be possible only with
the economy achieving and sustaining a
high aggregate GDP
growth rate of 10%
per annum, beginning from 2004/05
till 2036/37.
The
historical
time trend of the
GDP of the agriculture sector suggests

Figure 2.4 Share of sectoral GDP


in aggregate GDP (%)

Source MoF (2005)

Methodology

Table 2.14 Sectoral composition of GDP (%)


Sectoral composition of GDP (%)

Sector
Agriculture

Reference

T E R I estimates

2020

2020

17

Industry

34

28

Services

60

55

GDP gross domestic product


Source Reference 2020 data is from the World Bank
(2001)

that although the contribution of agriculture


in the GDP has declined, the proportion of
population dependent on agriculture has not
declined in a similar fashion. According to
the Census of India (2001), 65% of the total
population is still dependent on agriculture
for its livelihood. In this context, it is essential to highlight that 6% share of agriculture,
34% of industry, and 60% of services sector
in total GDP implies that income generated
by the agriculture sector would be quite low
and hence would necessitate shifting of
large chunks of population engaged in the
agriculture activities to industry and services
sectors that employ skilled labour. Furthermore, given the thrust on accelerating the
rate of agricultural growth in the Tenth Five
Year Plan, various policies focusing on agriculture growth are being formulated and
implemented. Moreover, achieving food security3 has been a major goal of development
in India after independence. Despite the fact
that food production in the country has increased from 51 MT (million tonnes) in

25

1950/51 to 210.8 MT in 2003/04, complete


food security at the household level has still
not been achieved, with 21% of the population still suffering from under-nourishment
(FAO 2004). Thus, the decline in the share
of agriculture sector in the scenarios using
6.7% and 8% projected GDP growth rate is
not expected to be as rapid as mentioned in
the report of the Planning Commission
(Vision 2020).
For the 6.7% and 8% GDP scenarios, we
assume that the services sector continues to
grow at the current rate (0.51% during
2003/04) till 2036/37, achieving a share of
60% in the GDP by 2036/37. The share of
industrial sector in the aggregate GDP has
increased at an average annual growth rate
of 0.31%. It is estimated that it will achieve a
share of 30% in the GDP by 2036/37. The
rest of the share (10%) is accounted for by
the agriculture sector in our analysis.
The sectoral GDPs at factor cost under
each of the three GDP scenarios are presented in Tables 2.152.17.

2.6 Approach for sectoral enduse demand estimation


Econometric techniques, such as regression
techniques, process models, and end-use
methods, are deployed to estimate and
project the end-use sectoral demand. The
population and GDP projections were used
as the main driving force for estimating
the end-use demands in each of the energy
consuming sectors.

According to the World Food Summit (1996), Food security exists when all people, at all times, have physical and
economic access to sufficient, safe, and nutritious food to meet their dietary needs and food preferences for an
active and healthy life (FAO 1996).

26

National Energy Map for India: Technology Vision 2030

Table 2.15 Sectoral GDP at factor cost (in crore rupees) under 6.7% GDP growth rate scenario
Sector
Agriculture

Industry

Services

Total

2001

2006

2011

2016

2021

2026

2031

333 274

367 050

450 368

560 308

698 425

864 691

1 068 965

(26%)

(22%)

(20%)

(18%)

(16%)

(14%)

(13%)

309 557

457 556

620 657

860 364

1 213 726

1 741 392

2 514 205

(24%)

(27%)

(28%)

(28%)

(28%)

(29%)

(29%)

625 114

851 423

1 169 614

1 641 121

2 346 537

3 398 717

4 968 549

(49%)

(51%)

(51%)

(54%)

(55%)

(57%)

(58%)

1 267 945

1 676 029

2 240 639

3 061 793

4 258 688

6 004 800

8 551 719

GDP gross domestic product

Table 2.16 Sectoral GDP at factor cost (in crore rupees) under 8% GDP growth rate scenario
Sector

2001

2006

2011

2016

2021

2026

2031

Agriculture

333 274

395 320

533 024

711 190

936 593

1 213 019

1 536 733

(26%)

(22%)

(20%)

(18%)

(16%)

(14%)

(13%)

309 557

491 106

732 865

1 093 635

1 632 004

2 435 397

3 634 279

(24%)

(27%)

(28%)

(28%)

(28%)

(29%)

(29%)

625 114

915 652

1 381 955

2 085 727

3 147 901

4 750 995

7 170 477

(49%)

(51%)

(51%)

(54%)

(55%)

(57%)

(58%)

1 267 945

1 802 078

2 647 845

3 890 552

5 716 498

8 399 411

12 341 490

Industry

Services

Total

GDP gross domestic product

Table 2.17 Sectoral GDP at factor cost (in crore rupees) under 10% GDP growth rate scenario
Sector

2001

2006

2011

2016

2021

2026

2031

Agriculture

333 274

358 212

383 575

410 734

477 224

768 574

1 237 795

(26%)

(19%)

(13%)

(8%)

(6%)

(6%)

(6%)

309 557

539 630

987 235

1 670 286

2 704 268

4 355 250

7 014 174

(24%)

(26%)

(29%)

(31%)

(34%)

(34%)

(34%)

625 114

1 006 218

1 695 697

2 857 620

4 772 237

7 685 736

12 377 954

(49%)

(53%)

(58%)

(58%)

(60%)

(60%)

(60%)

1 267 945

1 802 078

2 647 845

3 890 552

5 716 498

8 399 411

12 341 490

Industry

Services

Total

GDP gross domestic product

Methodology

The industrial sector is disaggregated


into eight energy-consuming industries,
namely, chlor-alkali, aluminium, iron and
steel, cement, textile, fertilizer, and pulp and
paper, along with other manufacturing units
grouped as other industries. The physical
outputs from the above-mentioned industries are considered as the demands of industrial outputs. The future demand of
industrial output for each of the aforementioned industrial sub-sectors is based on income generated by various sectors of the
economy. This is measured by the GDP and
the value added by the industrial sector
(GDP of industry), per capita income, and
so on. Similarly, the transportation demand
(disaggregated further into mode-wise
passenger demand and freight transport
demand) is projected using various socio-

27

economic indicators such as per-capita income (indicator of purchasing power), percentage share of population residing in
urban areas, population, and so on. In the
agriculture sector, demand is estimated for
land preparation and irrigation pumping. In
the residential sector, the demand is projected for lighting, space conditioning, cooking, and refrigeration separately for urban
and rural households to account for the differences in lifestyles and choice of fuel and
technology options. In the commercial sector, the demand is projected for cooking,
lighting, and space conditioning, using the
value added by the services sector as an
explanatory variable. The detailed methodology and estimates of energy demands
for each of the end-uses are presented in
Chapter 3.

Sectoral demand projections,


technological characterization,
and resource availability
This chapter presents the input parameters
to the MARKAL (MARket ALLocation)
model. As discussed in Chapter 2, demands
for five end-use sectors (agriculture, industry, transport, residential, and commercial)
have been considered in this analysis. The
estimates of these demands across different
GDP (gross domestic product) growth rates
are presented in this chapter. Further, the
technology characteristics of various options
in each supply- and demand-side sector are
described. The characterization includes details of the efficiency, cost, life, availability,
and penetration over the modelling time
frame (200131).

3.1
3.1.1

Demand sectors
Agriculture sector

Traditionally, India has been an agricultural


economy. Since Independence, the share of
agriculture in the countrys GDP has been
declining in comparison to the growth of the
industrial and services sectors. The percentage share of GDP from agriculture at factor
cost at current prices has come down from
28.4 in 1993/94 to 20.3 in 2002/03 (MoA
2004). However, agriculture is still a major
source of income for about 53.2% of the
population (MoA 2004). It provides raw

material to several major industries, such as


sugar, textiles, jute, paper, food processing,
and milk and milk processing. Agriculture is
crucial for maintaining the food security of
the country. This sector has forward and
backward linkages with other economic sectors. Therefore, changes in the agricultural
sector have a multiplier effect on the entire
economy. High growth rate of agriculture
ensures good performance of agro-based industries, supports creation and improvement of the rural infrastructure, and
facilitates reduction in poverty.
Agriculture accounts for 43% of the total
geographical area. In terms of cultivated
area, the leading crop is rice the staple food
of a large section of the Indian population
(Figure 3.1) followed by wheat.
There has been a continuous fragmentation of land holdings, partly because of the
growing population pressure and partly because of the peculiar slow shift of the labour
force from agriculture to non-agricultural
economic activities. Per capita availability of
cultivable land (excluding forests) has decreased from 0.48 ha (hectares) in 1951 to
0.15 ha in 2000.
Development of improved production
technologies, efficient input use and improved delivery system, rural infrastructure
development, pricing policies, and marketing arrangements have led to a remarkable

30

National Energy Map for India: Technology Vision 2030

Figure 3.1 Area under cultivation


in India (million hectares)

Source FAI (2004)

increase in food grain production from just


51 MT (million tonnes) in 1950/51 to
174.19 MT in 2002/03 and further to
212.02 MT in 2003/04 (Figure 3.2).
Figure 3.2 Food grain production
in India (million tonnes)

Source FAI (2004)

There has been a spectacular increase in agricultural


productivity since 1950/51,
whereby yield of food grains
went up from 522 kg/ha (kilograms per hectare) during
1950/51 to 1707 kg/ha in
2003/04. Yield of rice and
wheat increased from 668
kg/ha and 663 kg/ha to 2051
kg/ha and 2707 kg/ha, respectively, during the same period. Yield of coarse cereals
went up from 408 kg/ha in
1950/51 to 1228 kg/ha in
2003/04. Yield of nine oilseeds and pulses increased
from 481 kg/ha and 441 kg/ha
to 1072 kg/ha and 623 kg/ha, respectively,
during the same period.
Horticultural production was 156.1 MT
in 2003/04. This sector contributed 30% of
the share of agriculture to the GDP. India
was the largest producer of vegetables and
the second largest producer of fruits in
the world with 90 MT and
47.5 MT of production,
respectively, and accounted
for about 10% of the global
production of fruits. India is
ranked first in the production
of mango, banana, sapota, acid
lime, and cauliflower; second
in onion; and third in cabbage
(MoF 2005).
India is the largest producer
and consumer of tea in the
world, accounting for 27% of
the world production, with
850.5 thousand tonnes of
production in 2003/04. India
is also among the leading

Sectoral demand projections, technological characterization, and resource availability

producers of sugar cane, cotton, and jute in


the world, with production of 236.2 MT,
13.8 MT, and 11.2 MT, respectively, in
2003/04. Cashews, coffee, and spices are
also important cash crops (MoF 2005).

3.1.1.1 End-use demand estimation for the agriculture sector


The country had a stagnant agriculture at
the time of Independence. The traditional
tools and implements used in agriculture relied mostly on human and animal power.
The sector used a negligible amount of commercial energy. However, during the past
five-and-a-half decades, Indian agriculture
has witnessed numerous changes. The
Green Revolution is one of the most striking success stories of the post-Independence
era. The impact of the Green Revolution
was, however, so dramatic that India became
a role model for many developing countries.
This innovation coupled with investments
in irrigation infrastructure and expansion of
credit, marketing, and processing facilities
led to a significant increase in the use of
modern inputs. As a consequence, the requirement of commercial energy of the farm
sector increased by several times.
The availability of farm power per unit
area (kW/ha [kilowatt per hectare]) has been
considered as one of the parameters for expressing the level of mechanization. Power
availability for carrying out various agricultural operations has increased from 0.3 kW/ha
in 1971/72 to 1.4 kW/ha in 2003/04 (MoF
2005).
The contribution of different power
sources to the total power has also changed
over time. The share of mechanical and electrical power in agriculture increased from

31

40% in 1971/72 to 84% in 2003/04 (MoF


2005). However, the extent of use of mechanical power in agriculture is much below
the ideal value. In 1996, the net cultivated
area in the country stood at 142 Mha (million hectares), of which 53.5 Mha was irrigated. Even if it is assumed that tractors are
used only in irrigated areas, there were 38
tractors per 1000 ha. This translates into
1.14 hp (horsepower) per hectare of mechanized power as compared to 25 hp per hectare in developed countries (Venugopal 2004).
Various agricultural operations like
threshing, harvesting, land preparation, and
irrigation, account for energy demand in the
agricultural sector. But, energy demand in
the agricultural sector in India is mainly attributed to two major agricultural operations.
1 Land preparation
2 Irrigation

3.1.1.1.1 Demand for land


preparation
3.1.1.1.1.1 Gross cropped area
Energy demand for land preparation depends on the extent of area under cultivation. The total land area being constant,
NCA (net cropped area) has also remained
constant at about 141 Mha since 1970s. This
implies that increase in GCA (gross cropped
area) has been made possible by increase in
CI (cropping intensity) over the years. NCA
has been assumed to remain constant in the
next 30 years also.
Facilitated by improvement in the irrigation sector, CI is initially expected to increase. However, with further development
of the sector, CI will move towards its saturation level because production time of

32

National Energy Map for India: Technology Vision 2030

crops cannot be reduced beyond a certain


level. Therefore, CI has been assumed to follow a logistic growth pathincreasing at an
increasing rate in the initial years of development, followed by an increase at diminishing
rate, and finally attaining the asymptotic
limit.
Logistic curve equation

Y = Y0

exp (a + bt )
1 + exp (a + bt )

(3.1)

where,
Y is the CI;
Y0 is the asymptotic limit of CI;
a and b are the parameters to be estimated from the time series data of CI;
and
t denotes the time period.
The parameters are estimated by a linear
regression of the loglog form of Equation
3.2.
z = + t

(3.2)

Coefficient is calculated. Theils Inequality


Coefficient always lies between zero and
one, where the smaller the Theils value, the
better the forecasting technique, relative to
the nave method. Zero value indicates a perfect fit. In this study, the calculated Theils
Inequality Coefficient is 0.0026, which is
near to zero. This indicates that the logistic
equation for estimating CI is a perfect fit for
estimating the GCA.
During 197199, GCA increased at an
annual growth rate of 0.496% and is expected to increase at the rate of 0.430% during 200136 (Table 3.1).

3.1.1.1.1.2 Number of tractors


At the time of Independence, and even in
the 1950s, the use of tractors for agricultural
purpose was very limited. Tractor manufacturing in India started in 1961 with a
capacity to manufacture 11 000 tractors
per year. The level of mechanization has
been increasing steadily over the years as a
result of joint efforts made by the govern-

where,
z = ln

( Y / Y0 )
1 (Y / Y0 )

Table 3.1 Projected cropping intensity


and gross cropped area

a and b in Equation 3.1 are estimated values of and . The asymptotic limit of CI is
taken to be 3 in a year, and Z = 0.4478 +
0.0084t
GCA = NCA CI

(3.3)

where,
GCA is gross cropped area; and
NCA is net cropped area.
To validate the predictive accuracy of
the logistic equation, Theils Inequality

Cropping

Gross cropped area

Year

intensity

(million hectares)

2001

1.360

192.054

2006

1.391

196.472

2011

1.423

200.904

2016

1.454

205.345

2021

1.485

209.792

2026

1.517

214.240

2031

1.548

218.687

2036

1.580

223.127

Sectoral demand projections, technological characterization, and resource availability

ment and the private sector. The number of


tractors manufactured from all units during
1997 was over 255 000 (Venugopal and
Pingali 2004). Annual average rate of growth
for tractors manufactured was 9.73% during
19712001.
In the following equation, the number of
tractors has been determined by the GDP in
the agriculture sector and GIA (gross irrigated area).
Tractors =1628872 + 6.388 (GDPA) +
(11.863)

(2.7644)

20617.42 (GIA)
(2.009)

(3.4)

(R2 = 0.97)
where, GDPA represents the gross domestic
product from agriculture.
The above regression equation for the
sample period 197198 shows a high R2
(0.97), indicating that the regressor used explains 99.7% of the variation in the number
of tractors. The t-statistics denotes that coefficients are significant.
The negative intercept indicates that the
number of tractors starts increasing only after a certain level of GDP is attained. In
other words, it implies that mechanization of
agriculture picked up only after a certain
level of growth was achieved by the agriculture sector.

reduce the size of average landholdings, and


the average command area per tractor is expected to remain more or less the same. The
area under tractors is derived by multiplying
the number of tractors with the average
command area per tractor.
At a GDP growth rate of 6.7%, the number of tractors increases and, therefore, area
under tractors increases at the annual average growth rate of 4.1% during 200136. At
the end of forecast period, that is, 2036, 71%
of the total GCA is expected to be under
tractors. At 8% and 10% GDP growth rate
scenarios, the GCA under tractors increases
at the rate of 5.2%, and by 2036, the entire
GCA would be under tractors. The GCA under tractors is lower in the 10% GDP growth
rate scenario as compared to that in 8%
growth scenario during 200631, because at
10% GDP growth rate, agricultural contribution to GDP is relatively lower, implying a
relatively low GDP from agriculture. It may
be noted here that in 2036, maximum limit
of GCA under tractors is equal to the total
GCA in the country. The projected demand
for land preparation is presented in Table 3.2.

Table 3.2 Demand for land preparation


at various GDP (gross domestic product)
growth rates (in million hectares)
Year

3.1.1.1.1.3

Area under tractors

The average command area per tractor was


1516 ha in 1995 (Singh and Singh 1995). It
was 18 ha per tractor in 2001, and has been
assumed to remain constant since. This is
because, over time, the efficiency of tractor
in terms of command area may increase but
the fragmentation of landholdings might

33

6.7% GDP

8% GDP

10% GDP

2001

38.28

38.28

38.28

2006

43.88

47.06

44.87

2011

55.14

64.57

50.98

2016

69.34

86.75

57.41

2021

86.93

114.40

68.48

2026

108.17

147.93

105.50

2031

132.67

186.93

163.08

2036

158.48

223.13

223.12

34

National Energy Map for India: Technology Vision 2030

3.1.1.1.1.4

Demand for irrigation

Besides China, the irrigation system in no


other country is as extensive as in India. It is
the irrigation system that has fuelled Indias
growth in agricultural production. Irrigation
plays a vital role in Indian agriculture for
two important reasons. First, India has a
monsoon-dependent farming system, with
large areas receiving inadequate rainfall.
Moreover, much of this rainfall is restricted
temporally to a few months while the rest of
the year is predominantly dry. In such a circumstance, it is only with irrigation that cultivation on an annual basis is possible.
Second, irrigation has acquired an additional importance since the Green Revolution in India. The Green Revolution has
been characterized by the use of high-yielding crop varieties, fertilizers, and other inputs. These inputs into agriculture are
combined with a regular water supply provided by irrigation. In such a situation, irrigation
has
assumed
considerable
significance at the state, regional, and national levels.

3.1.1.1.1.5

Gross irrigated area

GIA increases at the rate of 0.97% during


the forecast period (200136) (determined
by the equation above) and increases from
about 78 Mha in 2001 to 110 Mha by 2036
in the low- and medium-growth scenarios.
In the high-growth scenario, it has been
assumed that the government allocates
funds to make more canals and builds more
infrastructure for irrigation. Therefore, the
percentage area under irrigation follows the
rate of increase during 19712001, thereby
increasing from 41% in the base year to 65%
by 2036 (Table 3.3).
One of the biggest developments that has
taken place in Indian irrigation after Independence is in the field of groundwater irrigation, and one of the major engineering
inputs adopted has been irrigation pumps.
Farmers use electric-motor- and diesel-

Table 3.3 GIA and GCA under irrigation


under various growth scenarios

Year

6% and 8% GDP
GCA
GIA
under
(million
irrigation
hectares) (%)

10% GDP
GIA
(million
hectares)

GCA
under
irrigation
(%)

2001

78.90

41.22

78.90

41.22

Increase in cropping intensity is difficult in


the absence of proper irrigation facilities.
Therefore, it has been assumed that the increase in GCA is due to an increase in the
area irrigated, and thus, GIA is calculated as.

2006

83.34

42.55

88.93

45.26

2011

87.85

43.85

97.54

48.55

2016

92.42

45.11

106.46

51.84

2021

97.07

46.33

115.66

55.13

2026

101.79

47.51

125.16

58.42

GIAt, t-1 = GCAt GCA t-1

2031

106.58

48.66

134.95

61.71

2036

110.46

49.34

145.03

65.00

(3.5)

The GIA has increased from 38.4 Mha in


1971/72 to 76.3 Mha in 1998/99.

GIA gross irrigated area; GCA gross cropped area;


GDP gross domestic product

Sectoral demand projections, technological characterization, and resource availability

engine-operated irrigation pumps with a


preference for the former. Groundwater now
is an important source of irrigation and fulfils about 43.6% of the total irrigation demand in the country (CMIE 2004). The
contribution of groundwater irrigation in
achieving self-sufficiency in food grain production in the past three decades has been
phenomenal. In the coming years, groundwater utilization is likely to increase for the
expansion of irrigated agriculture. Given
that tube wells (especially, individual-owned
tube wells) are a perennial source of irrigation, as they encourage crop activity in raindeficient seasons with minimum risk, the
percentage area under groundwater irrigation is expected to increase with time.
Pump sets costing about 10 00015 000
rupees are encouraged in the wake of subsidized power tariffs, soft loans, and subsidies.

35

The government can make efforts to bring


about more area under irrigation by increasing the production of pump sets.
In the low-growth scenario, it is assumed
that the government does not provide incentives to bring more area under groundwater
irrigation. Therefore, the percentage GIA
under groundwater remains constant at
43.6%, that is, the 2001 level (CMIE 2004).
The projections of GIA for groundwater irrigation are shown in Table 3.4.
In the medium- and high-growth
scenarios, it is assumed that the government
has resources to allocate for boosting the
number of pump sets. Therefore, the percentage area under groundwater irrigation
increases at an average annual growth rate of
1.11%the rate of increase during 1971
2001 (CMIE 2004). Accordingly, the percentage area under groundwater irrigation

Table 3.4 GIA under groundwater irrigation at various GDP growth rate scenarios
6% GDP
GIA under
groundwater
irrigation
(million

GIA under
groundwater
irrigation

8% GDP
GIA under
groundwater
irrigation
(million

GIA under
groundwater
irrigation

10% GDP
GIA under
groundwater
irrigation
(million

GIA under
groundwater
irrigation

Year

hectares)

(%)

hectares)

(%)

hectares)

(%)

2001

34.40

43.60

34.40

43.60

34.40

43.60

2006

36.33

43.60

38.40

46.08

40.84

46.08

2011

38.30

43.60

42.79

48.71

47.33

48.71

2016

40.29

43.60

47.59

51.49

54.57

51.49

2021

42.3

43.60

52.83

54.43

62.64

54.43

2026

44.38

43.60

58.56

57.73

71.61

57.73

2031

46.46

43.60

64.82

60.81

81.58

60.81

2036

48.16

43.60

71.01

64.28

92.62

64.28

GIA gross irrigated area; GDP gross domestic product

36

National Energy Map for India: Technology Vision 2030

increases from 43.6% in the base year to


64% by 2036.

ture has been assumed to remain constant


over the years.

3.1.1.1.1.6 Groundwater
requirement

Total groundwater demand = water demand


per hectare GIA under groundwater irrigation

Table 3.5 gives the crop-wise GCA and water consumption. The weighted average of
water consumption for GIA under various
crops was calculated to get the water consumption per hectare of GIA. The weighted
water requirement per hectare for agricul-

Although groundwater is an annually


replenishable resource, its availability is
non-uniform in space and time. A complexity of factors hydrological and climatological controls the groundwater occurrence
and movement. Energy requirement for

Table 3.5 Crop-wise GCA and water consumption


Irrigation water

Water

requirement

consumption
3

Water

GCA

of GCA

consumption

(Mha)

irrigated

(MCM)

Crop

(mm)

Rice

300950

6250

45.16

53.9

152 133

Jowar

350650

5000

10.25

7.7

3946

Maize

400750

5750

6.42

22.9

8453

Wheat

300450

3750

27.49

87.2

89 892

5000

21.12

16.1

17 002

6800

6.22

1.6

677

12 500

4.22

92.0

48 530

Pulses

(m )

Percentage

Soyabean

500860

Sugar cane

10001500

Cotton

550950

7500

8.71

35.2

22 994

Tobacco

600

6000

0.43

46.0

1187

Groundnut

506

5060

24.28

25.2

30 960

Bajra

5000

8.9

8.3

3693

Gram

5000

6.15

29.1

8948

4350

1.29

23.3

1307

Sunflower
Total

350500

170.64

389 723
3

GCA gross cropped area; Mha million hectares; mm millimetres; m cubic metres; MCM million cubic
metres
Sources <http://www.iasri.res.in/agridata/db2002tb3_27.htm>; <http://www.ikisan.com/links/ap_irrigation.shtml>;
<www.Indiastat.com>; MoA 2004
Note Average figure is considered for water consumption.
For pulses, bajra, and gram, water consumption corresponding to Jowar is considered

Sectoral demand projections, technological characterization, and resource availability

pumping out water depends on the water


table.

3.1.1.1.1.7

Water head

It is a very difficult exercise to determine the


level of water table at the national level and
to forecast it. However, an attempt has been
made wherein maximum number of villages
in India at a particular water head is taken as
a representative figure of water head for India based on the Third Census of Minor Irrigation Schemes 2000/01 (MoWR 2005). The
Census reveals that shallow tube wells constitute 94.03% of the total tube wells in the
country. Andhra Pradesh, Bihar, Haryana,
Madhya Pradesh, Punjab, Uttar Pradesh,
and West Bengal constitute 85.7% of the total shallow tube wells in India. In these
states, pumps of 68 hp are dominant, constituting 26.4% of the total pumps, whereas,
pumps of 46 hp constitute 24% of the total
pumps. Moreover, in these states, maximum
number of villages, that is, 36% of the total
villages, is at a water head of less than 10 m
(metres). States like Haryana, Punjab, and
Uttar Pradesh having more than 89%, 90%,
and 62% of the NCA irrigated have maximum number of villages at 1015 m water
head. Consequently, these states have the
maximum number of pump sets of 68 hp.
This supports the fact that as the area under
irrigation increases, groundwater extraction
increases and so does the water head.
In 2001, we take the average water head at
10 m and, based on the discharge/groundwater exploitation, calculate it to go down in
the forecasted period by applying the following formula.
dh/dt = (Rc Q)/0.8Sy

(3.6)

37

where, dh/dt = change in water head to


change in time
Rc = recharge (recharge is 325 m3 for 140
Mha)
Q = discharge of water for irrigation
0.8 is the constant
Sy = specific yield of the aquifer
Specific yield of the aquifer (which is a
property of the aquifer determining the volume of water that can be taken out from the
aquifer per unit area per unit fall of water
table) is taken as 0.1. When extraction
reaches the limit of utilizable groundwater
potential, which means when static water
head is reached and thereafter there are fractured zones, then the specific yield is taken
as 0.25, and the water head decreases
sharply after this limit.

3.1.1.2 Technologies in the


agriculture sector
In the past two decades, there has been a
proliferation of groundwater irrigation in India and, therefore, large penetration of
pump sets. Estimates put the figure of diesel
pump sets in India at 6.5 million. To this, another 11 million pumps with electric motor
can be added (Bom and Steenbergen 1997).
The Minor Irrigation Census 2001 reveals
that 94% of the total tube wells in India are
shallow tube wells. About 85% of the shallow tube wells are accounted for by states
such as Andhra Pradesh, Haryana, Punjab,
Madhya Pradesh, Uttar Pradesh, West Bengal, and Bihar.
The configuration of pump sets in areas
with shallow water tables ranges between
2.5- and 10-hp engines. The typical irrigation tube well configuration differs within

38

National Energy Map for India: Technology Vision 2030

this broad range in different areas depending


on the depth of water table, prevailing land
ownership, soil conditions, and local tradition. However, the tube well configuration is
not optimal in terms of fuel consumption or
water saving. In fact, substantial improvement in well technology, pump set design,
and conveyance systems is possible at a
modest cost (Bom and Steenbergen 1997).
Modifications such as flow restriction/
drum cooling, reduced speed, and removed
foot value can help increase the fuel efficiency of a diesel pump set by 45%60%
(Bom, Van, Majumdar, et al. 2001). Electricity consumption for electric pump sets can
be reduced by 30%50% employing simple
measures, such as pipes with larger diameter
(Sant and Dixit 1996).
Therefore, diesel and electric pump sets
are mainly divided into two categories: standard and efficient (Table 3.6). An attempt
has been made to study the energy-saving
potential. Fuel consumption of the efficient
diesel pump is 45% lower than that of a standard pump set. For efficient electric pump
sets, it has been assumed that 30% efficiency
improvements would be realized by 2036.
Other than improvement in the efficiency of
pump sets, the efficiency scenario also considers augmentation of irrigation efficiency.

In India, the existent irrigation practice


results in considerable amount of water
wastage. For example, the evapotranspiration requirement for growing paddy is about
8001000 mm (millimetres), whereas in canal/tank command areas, farmers use as
much as 20002500 mm, which is wasteful
and also affects the yield due to drainage
problems. Scientists have found that there is
no need to flood the paddy field to a depth of
1520 cm (centimetres), as practised by
farmers, and it is enough to irrigate the field
to a depth of 35 cm as soon as the standing
water disappears. This can reduce the water
use by 30% while increasing the productivity
substantially. For row crops, such as cotton,
sugar cane, and vegetables, the furrow
method is suitable. In addition, the skip furrow, pair row, or alternate furrow method
can reduce the need for water by 25%30%,
without affecting the yield (Sivanappan
1995).
Therefore, the efficiency scenario also
considers the improvement in irrigation efficiency, whereby, the concern of water wastage is addressed and 30% reduction in the
water requirement of 2036 is realized.
Technical specifications are considered
for standard and efficient tractors. A 35-hp
standard tractor is priced at 260 000 rupees

Table 3.6 Technology characterization of pump sets


Diesel pump sets

Electric pump sets

Standard

Efficient

Standard

Efficient

Price (rupees)

10 000

14 600

8000

10 600

Water discharge (litres per second)

4.5

5.5

5.5

Diesel/electricity consumption

1.1 litres

0.6 litres

4.8

4.83.4

per hour

per hour

kWh

kWh

kWh kilowatt hour

Sectoral demand projections, technological characterization, and resource availability

and it ploughs 0.31 ha in one hour by consuming 4.5 litres of fuel. It is assumed that
an efficient tractor ploughs 0.40 ha of land
in 1 hour by consuming 3 litres of fuel per
hour and is priced at 310 000 rupees.

3.1.2

Transport sector

39

In the analysis, the focus is mainly on


road- and rail-based freight and passenger
traffic, although air- and coastal-based
movements are also included in the framework.
Figure 3.3 depicts the composition of
fleet of registered passenger vehicles consisting of cars, jeeps, taxis, and buses for the
period 19802003. The fleet of cars, jeeps,
taxis, and two-wheelers (depicted on primary y-axis in Figure 3.3) taken together exhibits an average annual growth rate of 13%
for the 19802003 period. In contrast, the
fleet of buses has registered a low growth of
7.4% for the same period. Two-wheelers account for more than four-fifth, that is, 84%,
of the total passenger vehicle fleet. The remaining 16% is accounted for by cars, jeeps,

The transport sector plays a crucial role in


shaping the nations economic development.
The GDP from the transport sector is the
aggregate of GDP from various means such
as railways, road, water, and air transport.
The GDP accruing from the services incidental to transport is also included in the
GDP generated by the transport sector. The
GDP (measured at 1993/94 prices) accruing
from the transport sector
activities (comprising railways, road, air, and coastal
Figure 3.3 Trends in the composition of
transportation) has infleet of registered passenger vehicles
creased at an average annual rate of 6.42% for the
time period 19902003,
doubling from 35 356
crore rupees in 1990/91 to
79 374 crore rupees in
2003/04 (MoSPI 2005).
Historically, road and
rail transport have dominated the passenger as
well as freight movement
within the country. The
road and rail transport
modes carried about 95%
of the total passenger and
freight traffic in the country in 2001 (GoI 2001).
Air and inland water transport assume importance
Source MoRTH (2005)
for long-distance travel.

40

National Energy Map for India: Technology Vision 2030

taxis, and buses. Of all the road passenger


to 541.2 billion passenger kilometres in
vehicles, the number of cars, jeeps, and taxis
2003. The freight traffic (both the revenuehas increased at an average annual growth
earning and non-revenue-earning traffic)
rate of 10%, whereas the two-wheelers have
handled by railways has more than doubled
exhibited the highest average annual growth
from 158.5 billion tonne kilometres in 1980
rate of 14% during the period 19802003.
to 384.1 billion tonne kilometres in 2003.
However, the bus fleet has grown at an average annual growth rate of 7%.
3.1.2.1 Transport sector end-use
Railways have been the principal mode of
long-distance freight and passenger transdemands
port within the country. The growth of railways is closely interlinked with the overall
3.1.2.1.1 Data problems in
economic, agricultural, and industrial develroad-based movement
opment of the country. Fuelled by the
countrys economic growth and an expandThe road passenger and freight transport
ing population base, Indian railways have
demand estimation and projection exercise
grown to a national network moving, on an
is beset with data gaps. Furthermore, no
average, 1.5 MT of freight and 14 million
reliable data at a point in time or over time
passengers per day (2003/
04) data.
The long-term trends of
Figure 3.4 Trends in passengers
passenger traffic (in terms of
and freight carried by railways
billion
passenger
kilometres1) and freight traffic (in terms of billion tonne
kilometres2) are shown in
Figure 3.4.
The passenger and freight
traffic handled by railways
has exhibited an upward
trend, as shown in the figure,
during the period 1980
2003, with the passenger
traffic recording an average
annual growth rate of 4.2%
and the freight traffic. The
passenger traffic more than
doubled from 208.6 billion
Source MoR (2005)
passenger kilometres in 1980
1
2

Passenger kilometres is the product of the number of passengers carried and average distance travelled.
Tonne kilometres is the product of the tonnes of freight moved and average distance travelled.

Sectoral demand projections, technological characterization, and resource availability

is available of the actual road passenger


and freight traffic. There exist wide variations in the estimates of various agencies
for the year 1999 and 2000 as shown in
Tables 3.7 and 3.8.

41

3.1.2.1.2 Methodology for


projecting mode-wise road
transport demand
A bottom-up approach has been deployed to
estimate and project the road passenger, and
freight transport demand. For estimating
and projecting the mode-wise transportation

Table 3.7 Comparison of the transport sector demand estimates by various agencies for the
year 1999
Estimated road traffic movement in 2000
Passenger traffic (billion

Freight traffic (billion

passenger kilometres)

tonne kilometres)

RITES study (1998)

1880

1136

Lucknow Plan (1984)

2152

1004

Study

MOST: Study on estimation of total road


transport in 2000
Vehicle Fleet Modernization Study (1988)

30004000

6001000

23003800

8001030

24004000

540900

3000

800

Steering Committee on Respective


Planning for Transport
India Infrastructure Report
Source Kapoor (2002)

Table 3.8 Comparison of the transport sector demand estimates by various agencies for the
year 2000
Estimates of

Indian

Demand estimates

Planning Commission

Roads Congress

Billion passenger kilometres

2450

2087

870

1102

Billion tonne kilometres


Source Kapoor (2002)

Taxis have been considered separately as they are used for carrying passengers on a commercial basis. The utilization rate for taxis is higher when compared to the utilization rates for cars and jeeps. This is due to the increased number of trips per day because of the commercial use of taxis.

42

National Energy Map for India: Technology Vision 2030

demands, the motorized transport vehicles


have been classified separately into transport
vehicles for passenger and freight movement
as follows.


Vehicles for passenger movement



Cars and jeeps

Taxis3

Two-wheelers

Buses

Three-wheelers

the number of vehicles (on-road/in use) of


the type j in the year t. O tj is the occupancy
rate (measured in number of persons per vehicle per trip) for the year t of the vehicle
type j. U tj is the utilization factor (kilometres
travelled by a vehicle per day) for the vehicle
of type j for the year t. Multiplying Utj by 365
gives the annual utilization rate for the vehicle type j for the year t.

3.1.2.1.2.1


Vehicles for freight movement



LCVs (Light goods/commercial
vehicles)

HCVs (Heavy goods/commercial
vehicles)

The objective is to estimate the travel demand separately for each of the vehicle types
(on-road/in use4) mentioned above. The following equation is used to estimate the total
passenger or freight travel demand in the
year t by the vehicle type j.
PKm tj or TKmtj = Vtj O tj (Utj 365)
(3.7)
where, PKmtj is the passenger travel demand
by the vehicle type j in the year t (measured
in passenger kilometres). TKmtj is the freight
travel demand by the vehicle type j in the
year t (measured in tonne kilometres). Vtj is

Cars

The historical annual time-series data on the


number of registered passenger cars for the
period 1980 until 20035 is used for estimating and projecting the travel demand by cars
until 2036. The relationship between the
registered car fleet (representing the stock of
cars) and car sales is
Carst+1 = Carst + Sales (during period
t and t+1)
(3.8)
As mentioned in Equation 3.8, the difference between cumulative number of registered vehicles at time t and time t+1 gives
the car sales between these two time periods.
Econometric
technique
(regression
model) is used for estimating the car sales
for the period 19802003. The variables that
are most likely to influence the passenger car
sales in India are the consumers purchasing

On-road vehicles refer to the vehicles actually plying on road.


The Motor Transport Statistics, official document of the Ministry of Shipping, Road Transport and Highways, Government of India, does not give the number of cars, jeeps, and taxis separately. The CMIE Infrastructure (2002 issue) gives
the number of registered cars, jeeps, and taxis separately. However, their total does not match with the total number
of registered cars, jeeps, and taxis reported in the Motor Transport Statistics. Furthermore, on analysing the historical
data of CMIE Infrastructure, cars and jeeps account for 91% of the total in all the years while the rest 9% are taxis.
Applying this percentage to the total numbers reported in the Motor Transport Statistics, the number of cars, jeeps,
and taxis is obtained separately. The two series so obtained are used for analysis.

Sectoral demand projections, technological characterization, and resource availability

power measured by the per capita income as


well as the percentage of population in urban
areas (urbanization index/urban size).
In order to measure the extent of responsiveness of demand for passenger cars in India to changes in per capita income, and to
account for the impact of increasing urbanization on car sales, loglinear (double log) specification of regression model was found
appropriate. The estimated regression equation is
Log (car sales) = 1.03 Log (PCY) + 0.16 (UI)
(10.7)
(3.36)
(3.9)
(adjusted R2 = 0.72)
where, PCY= per capita income
UI = urbanization index
Both the independent variables (per
capita income and urbanization index) are
found to be statistically significant in explaining the passenger sales as indicated by
values of the t-statistic (given in brackets)
associated with the coefficients of the model
estimated above. The adjusted R2 is a statis-

43

tical measure of goodness of fit of the model


to the historical data. In this case, it is as
high as 0.72, implying that 72% of the variation in passenger sales can be explained by
variations in the per capita income of
economy and the urbanization index.
Using Equation 3.9, car sales are projected till 2036. The number of registered
passenger cars for each year within the forecast period 200436 is obtained by adding
the forecasted annual sales figures to the
number of registered vehicles. The number
of cars in use/on-road is less than the total
number of registered cars. Therefore, the
number of passenger cars, in use is obtained
by deducting the number of cars considering
a lifetime of eight years.
The travel demand by cars (measured in
passenger kilometres) is estimated using
Equation 3.7. There exist variations in the
average annual utilization rate as reported in
different sources (Table 3.9).
Based on discussion with experts and
with reference to the above sources, the occupancy rate for cars is assumed to decline
from three persons per car in 1980 to 1.5
persons in 2036 (that is, decline by half).

Table 3.9 Assumptions on occupancy rate and utilization rate for cars
Assumptions on occupancy

Assumptions on utilization

Source

rate per car

rate per car

IEA (2004)

1.89 persons per car

8000 km/year equivalent to

in 2000 declining to

21.4 km/day (assumed constant

1.64 persons in 2035

throughout the projection period)

1.5 persons

7000 km/year (equivalent to

Kapoor (2002)

19.76 km/day) in 1995 increasing


by 100 km/year (0.27 km/day)
Bose and Chary (2003)

1.92.9 persons per car/jeep

26 km/day in 2000/01

44

National Energy Map for India: Technology Vision 2030

The rationale behind this assumption is that


with increasing passenger car sales, vehicle
ownership (number of vehicles owned per
capita) would rise. As a result, the number of
persons travelling per car is assumed to decline
during the entire period, from 1980 to 2036.
Similarly, with reference to the sources mentioned in the table, it has been assumed that
the utilization rate of passenger cars (effective average distance travelled by a passenger
car) would increase by 100 km every year
(that is, 0.27 km daily), starting from
21.4 km/day in 1980.

3.1.2.1.2.2

Taxis

The historical annual time-series data on the


number of registered commercial passenger
taxis for the period 1980 until 2003 is used
for estimating and projecting the travel demand by taxis until 2036.
Econometric
technique
(regression
model) is used for estimating the number of
commercial passenger taxis for the period
19802003. The percentage of population in
urban areas (urbanization index/urban size)
and the growth of the economy in general
measured by GDP are considered as variables significant in explaining growth in the
number of taxis plying on Indian roads.
In order to measure the extent of responsiveness of demand for taxi services in India
to changes in economic growth, and to account for the impact of increasing urbanization, loglinear (double log) specification of
regression model was considered appropriate. The estimated regression equation is
Log (Taxis) = 0.11 (UI) +0.70 Log (GDP)
(4.7)
(14.8)
(3.10)

(adjusted R 2 = 0.91)
where, UI = urbanization index
GDP = gross domestic product
Both the independent variables (GDP
and UI) are found to be statistically significant in explaining the equation as indicated
by values of the t-statistic (given in brackets)
associated with the coefficients of the model
estimated above. The adjusted R2 is as high
as 0.91, implying that 91% of the variation
in passenger sales can be explained by variations in the economic growth and the urbanization index.
The number of registered passenger taxis
for each year within the forecast period
200436 is obtained by inserting the projected values of GDP and UI. The number of
taxis in use/on-road is less than the total
number of registered taxis. Therefore, the
number of passenger cars in use is obtained
by deducting the number of taxis, considering a lifetime of eight years (same as that of
passenger cars).
The travel demand by taxis (measured in
passenger kilometres) is estimated using
Equation 3.7. The occupancy rate for taxis is
assumed to remain constant at three persons
per taxi throughout the projected period.
The effective distance travelled daily by a
taxi is assumed to increase from 60 km/day
in 2001 to 80 km/day in 2036. The rationale
behind assuming varying utilization rate lies
in the fact that with huge investments
pumped into the construction of roads and
highways, commercial passenger taxi services are being used for long-distance intercity travel as well.

Sectoral demand projections, technological characterization, and resource availability

3.1.2.1.2.3

Two-wheelers

The historical annual time-series data on the


number of registered two-wheelers for the
period 1980 until 2003 is used for estimating and projecting the travel demand by twowheelers until 2036.
TWt+1 = TWt + Sales (during time t and t+1)
(3.11)
where, TW = two-wheeler
As mentioned above, the difference between cumulative number of registered vehicles at time t and t+1 gives the
two-wheeler sales between the two time periods, t and t+1.
The variables most likely to influence the
two-wheeler sales in India are the proportion of the middle-income group residing in
urban areas (UMIG [urban middle-income
groups]) as well as the consumers purchasing power measured by per capita income. In
order to measure the extent of responsiveness of demand for two-wheelers in India to
changes in per capita income, and to account for the impact of rising proportion of
the UMIG on car sales, loglinear (double
log) specification of regression model was
found appropriate. The estimated regression
equation is
Log (two-wheeler sales) = 0.57 (UMIG) +

45

significant in explaining the sales of twowheelers, as indicated by the values of the tstatistic (mentioned in brackets) associated
with the coefficients of the model estimated
above. Furthermore, 81% of the variation in
the two-wheeler sales can be explained by
variations in the per capita income and
UMIG, given that the adjusted R 2 is as high
as 0.81. Using Equation 3.12, the twowheeler sales are projected till 2036.
The number of registered two-wheelers
for each year within the forecast period
200436 is obtained by adding the forecast
annual sales figures to the number of registered two-wheelers. The number of twowheelers in use/on-road is less than the total
number of registered two-wheelers. Therefore, the number of two-wheelers in use is
obtained by deducting the number of twowheelers, considering lifetime of eight years.
The travel demand by two-wheelers
(measured in passenger kilometres) is estimated using Equation 3.7. The assumptions
on occupancy rate and utilization rate for
two-wheelers as reported in different
sources are as follows.
For the purpose of our analysis, the occupancy rate for a two-wheeler is assumed to
be constant at 1.2 persons per two-wheeler
throughout the projection period (200436).
The average annual utilization rate is assumed to be constant at 27.4 km per twowheeler per annum (Table 3.10).

(3.37)

0.62 Log (PCY)


(11.2)

(3.12)

(adjusted R2 = 0.81)
Both the independent variables (per
capita income and percentage of the middleincome group) are found to be statistically

3.1.2.1.2.4

Buses

The historical annual time-series data on the


number of registered buses for the period
1980 until 2003 is used for estimating
and projecting the travel demand by buses
until 2036.

46

National Energy Map for India: Technology Vision 2030

Table 3.10 Assumptions on occupancy rate and utilization rate for two-wheelers
Assumptions on effective
Assumptions on occupancy

distance travelled per day

Source

rate per two-wheeler

by a two-wheeler

IEA (2004)

1.7 (assumed constant)

10 000 km/year equivalent to


27.4 km/day (assumed constant
throughout the projection period)

Kapoor (2002)

1.2 (assumed constant)

3500 km/year (equivalent to


9.6 km/day) assumed constant

Bose and Chary (1993)

1.21.7 (assumed constant)

25 km/day in 2000/01 (assumed


constant throughout the
projection period)

The estimated regression equation is


Log (Buses) = 11.06 + 3.51 Log (POP)
(-41.4)

(88.9)

(3.13)
(adjusted R2 = 0.99)
where, POP = population
The only independent variable, that is,
population, is found to be statistically significant in explaining the number of buses as
indicated by values of the t-statistic (given in
brackets) associated with the coefficients of
the model. In order to measure the extent of
responsiveness to the population base of the
Indian economy, loglinear (double log)
specification of regression model is found
appropriate. In this case, the adjusted R2 is
as high as 0.99, implying that 99% of the
variation can be explained by variations in
the population growth rate.
The number of registered buses for the
period 200436 is obtained using Equation
6

3.13. The number of buses plying on road is


obtained by taking into account the utilization rate of the fleet of buses (in %), as indicated by the data on fleet utilization of buses
operated by the SRTUs (state road transport
undertakings). The fleet-utilization rate is
estimated and projected (yt) for the period
200436 using a logistic curve represented
by the following equation.
Yt = 100[exp (1.78 + 0.474 t)/1 + exp
(1.78 + 0.474 t)]t = 1,2-49
(3.14)
where, 100 is the asymptotic limit for the
fleet utilization6; 1.78 and 0.474 are the values of the coefficients to be estimated from
historical time-series data; and t denotes the
time period
The travel demand by buses (measured in
passenger kilometres) is estimated using
Equation 3.7 as the product of number of
buses on road, the occupancy rate, and
the average annual utilization rate. The
occupancy rate for buses is assumed to be

The historical data on fleet utilization of buses operated by state road transport undertakings clearly shows that the fleet
utilization (%) lies in the range 90%95%. Thus, the maximum asymptotic limit is taken to be 100 for fleet utilization.

Sectoral demand projections, technological characterization, and resource availability

47

Table 3.11 Assumptions on occupancy rate and utilization rate for buses
Assumptions on occupancy

Assumptions on utilization

Source

rate per bus

rate per bus

IEA (2004)

28 persons per bus

40 000 km/year in 2000 (assumed


to be constant throughout the
projection period)

Kapoor (2002)

40 persons per bus (assumed

40 000 km/year in 1995, increasing

constant throughout the

by 400 km/year

projection period)
Bose and Chary (1993)

3047 persons per bus

constant at 50 persons per bus throughout


the projection period (200436). The average annual utilization is assumed to increase
by 400 km/year over the modelling time
frame starting from 40 000 km/year in 1995
(Table 3.11).

3.1.2.1.2.5

Three-wheelers

The historical annual time-series data on the


number of registered passenger three-wheelers for the period 1980 until 2001 is used for
estimating and projecting the travel demand
by three-wheelers until 2036.
Loglinear (double log) specification of
regression model is found appropriate to account for the responsiveness of threewheeler fleet to the increasing population.
The estimated regression equation is
Log (3-W) = 29 + 6.3 Log (POP)
(34) (50)

(3.15)
(adjusted R2 = 0.99)
where, POP = population
3-W = three-wheeler

46 355 km/year

The independent variable (population) is


found to be statistically significant in explaining the increasing number of threewheelers, as indicated by the values of the
t-statistic (given in brackets) associated with
the coefficients of the model estimated
above. In this case, the adjusted R2 is as high
as 0.99, implying that 99% of the variation
in three-wheelers can be explained by
variations in the population of Indian
economy.
The number of registered three-wheelers
for each year within the forecast period
200236 is obtained using the regression
equation estimated above by inserting the
values of forecast population into the regression equation.
The travel demand by three-wheelers
(measured in passenger kilometres) is estimated using Equation 3.8. The occupancy
rate for two-wheelers is assumed to be constant at two persons per three-wheeler
throughout the projection period (200236).
The average annual utilization rate is assumed to increase by 80 km/year from
29 200 km/year in 1980 until 2036.
The figures for mode-wise road passenger
demand expressed in billion passenger
kilometres are presented in Tables 3.123.14

48

National Energy Map for India: Technology Vision 2030

Table 3.12 Mode-wise road passenger travel demand (in billion passenger kilometres) under 6.7% GDP (gross domestic product) growth scenario
2001

2006

2011

2016

2021

2026

2031

Cars and taxis

102

139

195

346

574

1187

2307

Two-wheelers

255

341

332

413

524

678

891

1177

1594

2141

2790

3493

4234

4969

116

200

306

447

618

808

1003

1650

2274

2974

3996

5210

6908

9170

Mode

Buses
Three-wheelers
Total

Table 3.13 Mode-wise road passenger travel demand (in billion passenger kilometres)
under 8% GDP (gross domestic product) growth scenario
2001

2006

2011

2016

2021

2026

Cars and taxis

102

142

216

412

733

1550

3 117

Two-wheelers

255

344

354

466

616

823

1 107

1177

1594

2141

2790

3493

4234

4 969

116

200

306

447

618

808

1 003

1650

2280

3018

4114

5461

7416

10 196

Mode

Buses
Three-wheelers
Total

2031

Table 3.14 Mode-wise road passenger travel demand (in billion passenger kilometres)
under 10% GDP (gross domestic product) growth scenario
2001

2006

2011

2016

2021

2026

Cars and taxis

102

144

236

487

956

2167

4 760

Two-wheelers

255

351

394

558

799

1230

1 908

1177

1594

2141

2790

3493

4234

4 969

116

200

306

447

618

808

1 003

1650

2289

3077

4281

5866

8440

12 641

Mode

Buses
Three-wheelers
Total

for 6.7%, 8%, and 10% projected GDP


growth rates.

3.1.2.2 Freight transport


The historical annual time-series data on the
number of registered HCVs and LCVs for

2031

the period 1980 till 2002 is used for estimating and projecting the travel demand by twowheelers till 2036.
The variables most likely to influence the
growth in the number of HCVs and LCVs
plying on Indian roads are the values of the
output from the agriculture and industrial
sectors (measured by the GDP of agricul-

Sectoral demand projections, technological characterization, and resource availability

ture and industry). The number of HCVs


and LCVs is estimated separately by using
the linear specification of the regression
model as follows.
HCVs = (398100)+3.96 (GDPI + GDPA)
(4.36)

(19.61)

(3.16)
(adjusted R2 = 0.94)
LCVs = (792686) + 2.38 (GDPI + GDPA)
(6.42)

(9.14)

(3.17)
(adjusted R2 = 0.81)
where, GDPA = gross domestic product of
the agriculture sector
GDPI = gross domestic product of the
industrial sector
Both the independent variables (GDPA
and GDPI) are found to be statistically significant, as indicated by values of the t-statistic (given in brackets) associated with the
coefficients of the model estimated above. In
this case, the adjusted R2 is as high as 0.94
and 0.81 for the regression equations (Equations 3.16 and 3.17), estimated separately
for the HCVs and LCVs, respectively. This
implies that 94% and 81% of the variation in
number of HCVs and LCVs (respectively) can

49

be explained by variations in the GDPA and


GDPI.
The number of registered HCVs and
LCVs for each year within the forecast period 200336 is obtained from the estimated
regression equations by inserting the projected values of GDPA and GDPI.
The travel demand (measured in tonne
kilometres) for HCV is estimated using
Equation 3.7. The payload for HCV is assumed to increase by 0.1 tonne until 2036,
from 5.5 in 1995. Similarly, it is assumed
that the average annual utilization for HCV
will increase by 400 km every year until
2036, from 40 000 km in 1995 (Planning
Commission 2001).
Similarly, the travel demand (measured in
tonne kilometres) for LCV is estimated using Equation 3.7. The payload for LCV is assumed to be constant at 1.7 tonnes
throughout the projection period. Similarly,
it is assumed that the average annual utilization for LCV will increase by 200 km every
year, from 23 000 km in 1995 until 2036.
The above demand estimation and projection exercise has been undertaken for
6.7%, 8%, and 10% growth rates of GDP.
The projected figures for mode-wise freight
transport movement by road under alternative growth scenarios, expressed in billion
tonne kilometres, are presented in Tables
3.153.17.

Table 3.15 Mode-wise freight travel demand (in billion tonne kilometres); 6.7%
GDP (gross domestic product) growth scenario
Mode

2001

2006

2011

2016

2021

2026

2031

HCV

531

842

1268

1926

2933

4478

6838

LCV

37

50

78

120

181

269

398

Total

568

892

1347

2046

3114

4747

7236

HCV heavy commercial vehicle; LCV light commercial vehicle

50

National Energy Map for India: Technology Vision 2030

Table 3.16 Mode-wise freight travel demand (in billion tonne kilometres); 8%
GDP (gross domestic product) growth scenario
Mode

2001

2006

2011

2016

2021

2026

2031

HCV

531

914

1523

2487

3996

6341

9 955

LCV

37

57

99

162

256

393

593

Total

568

970

1622

2649

4252

6734

10 548

HCV heavy commercial vehicle; LCV light commercial vehicle

Table 3.17 Mode-wise freight travel demand (in billion tonne kilometres); 10% GDP (gross
domestic product) growth scenario
Mode

2001

2006

2011

2016

2021

2026

2031

HCV

531

1044

1858

3219

5615

10 085

17 948

LCV

37

66

124

214

365

632

1 078

Total

568

1111

1982

3433

5980

10 717

19 026

HCV heavy commercial vehicle; LCV light commercial vehicle

3.1.2.3 Rail transport


3.1.2.3.1

Passenger movement

The historical annual time-series data on the


passenger traffic (in billion passenger
kilometres) for the period 1980 until 2003 is
used for estimating and projecting the travel
demand by rail till 2036.
Log (rail passenger) = 0.78 Log (GDP) +
(3.83)

30.95 Log (POP)


(3.18)

(2.88)
2

(adjusted R = 0.98)
The independent variables (POP and
GDP) are found to be statistically significant
as indicated by values of the t-statistic (given
in brackets) associated with the coefficients
of the model estimated above in Equation

3.18. In this case, the adjusted R2 is as high


as 0.98, implying that 98% of the passenger
movement by railways can by explained by the
variations in the socio-economic indicators,
namely, GDP and population.
The projections for rail passenger transport demand for the period 200436 are obtained by inserting the projected values of
GDP and POP in Equation 3.18.
The demand estimation and projection
exercise has been undertaken for 6.7%, 8%,
and 10% growth rates projected for GDP.
The figures for projected rail passenger
travel demand expressed in billion passenger
kilometres are presented for the three alternative growth scenarios in Table 3.18.

3.1.2.3.2 Freight movement


The historical annual time-series data on the
freight traffic (in billion tonne kilometres)

Sectoral demand projections, technological characterization, and resource availability

51

Table 3.18 Rail passenger transport demand (in billion passenger kilometres) under
alternative GDP (gross domestic product) growth scenarios
2001

2006

2011

2016

2021

2026

2031

6.7

491

608

770

1000

1329

1791

2424

491

637

864

1184

1634

2264

3125

10

491

673

986

1458

2174

3254

4853

GDP growth rate (%)

for the period 1980 till 2003 is used for estimating and projecting the travel demand by
rail till 2036.
The variables that are most likely to influence the freight transport by rail are the values of outputs from the agriculture and
industrial sectors (measured by the GDP of
agriculture and industry). The linear specification of the regression model is found appropriate to estimate and project the freight
transport demand by rail.
Freight movement= (52.84) + 0.00045
(6.72)

(GDPI + GDPA)
(3.19)

(27.52)

(adjusted R2 = 0.97)
where,
GDPA = gross domestic product of the
agriculture sector
GDPI = gross domestic product of the
industrial sector

Both the independent variables (GDPA


and GDPI) are found to be statistically significant, as indicated by values of the t-statistic (given in brackets) associated with the
coefficients of the model estimated above. In
this case, the adjusted R2 is as high as 0.97,
implying that 97% of the freight movement
by railways can be explained by the variations in the GDPA and GDPI.
The projections for freight transport demand by rail for the period 200436 are obtained by inserting the projected values of
GDP and POP in Equation 3.19.
The demand estimation and projection
exercise has been undertaken for 6.7%, 8%,
and 10% growth rates of GDP.
The figures for projected rail freight
transport demand expressed in billion tonne
kilometres are presented for the three alternative GDP growth rates in Table 3.19.

Table 3.19 Rail freight transport demand (in billion tonne kilometres) under alternative GDP
(gross domestic product) growth rates
2001

2006

2011

2016

2021

2026

2031

6.7

336

423

534

691

912

1223

1662

336

451

621

863

1206

1691

2375

10

336

456

668

987

1481

2354

3758

GDP growth rate (%)

52

National Energy Map for India: Technology Vision 2030

Figure 3.5 Category-wise sale


of two-wheelers

Source SIAM (2005)

3.1.2.4 Description of technology


options in the transport sector
3.1.2.4.1

Two-wheelers

There are three different types of two-wheelers that have been considered in the model:
scooters, motorcycles, and mopeds. Figure
3.5 is the graphical representation of the category-wise sales of two-wheelers.
The figure indicates that the motorcycle
segment exhibits the highest growth rate
(37%) amongst the three categories of twowheelers. Motorcycles now dominate the
two-wheeler market that was dominated by
scooters and mopeds until the late 1990s.
At present, two-wheelers use petrol as
fuel and employ the spark-ignition system.
They can be classified further into those employing the two- and four-stroke technology.
The population of two-stroke engines is very
large. Two-stroke engines are widely used for
motorcycles, scooters, and mopeds, primarily because of their high specific power output, simple and compact design, lower

engine fraction, less


pumping losses at part
load,
better
cold
startability, and low
production and maintenance cost (MoPNG
2005). The disadvantages are high fuel consumption and high
unburnt hydrocarbon
emission. Hence, penetration of the fourstroke technology into
different segments of
two-wheelers has been
increasing rapidly over
the last few years. This
can
be
attributed
partly to the enforcement stringent emission
regulations and partly to the fast-changing
consumer preferences. However, penetration of the four-stroke technology is limited
in the scooter and moped category as compared to motorcycles. As such, many buyers
still prefer two-stroke to four-stroke. The
techno-economic parameters of two-wheelers are presented in Tables 3.20 and 3.21.

3.1.2.4.2

Three-wheelers

A wide variation exists in the Indian threewheeler market in terms of the current technological status as well as its progression
over the modelling time frame. Three-wheelers powered by petrol two-stroke engines occupy a major share in the Indian
three-wheeler market. The penetration of
three-wheelers powered by petrol fourstroke engine is lower as compared to its
two-stroke counterpart due to the resistance
offered
by
owners/operators
of
autorickshaws. This resistance is derived
from the notions that the maintenance

Sectoral demand projections, technological characterization, and resource availability

53

Table 3.20 Technological characterization of two-stroke two-wheelers

Two-wheeler
category

Technology

Motorcycle

Improved engine with

Efficiency

Investment

Fixed operating

Start

(km/litre)/

cost*

and maintenance

year

(MJ/km)

(rupees)

cost (rupees/km)

2001

53.83

36 000

0.18

improved oxicat
using petrol as fuel
Scooters

Hydrogen IC engine

2031

0.56

42 000

Improved engine with

2001

66.11

32 000

0.14

improved oxicat
using petrol as fuel
Mopeds

Hydrogen IC engine

2031

0.16

37 000

Improved engine with

2001

78.51

22 000

2031

0.38

25 000

0.18

improved oxicat
using petrol as fuel


Hydrogen IC engine

MJ megajoules; IC internal combustion


* Investment cost here is the vehicle price.
Source T E R I (2004)

Table 3.21 Technological characterization of four-stroke two-wheelers

Two-wheeler
category

Technology

Motorcycles

Improved engine with

Investment

Fixed operating

Start

Efficiency

cost*

and maintenance

year

(km/litre)

(rupees)

cost (rupees/km)

2001

85.64

43 500

0.11

improved oxicat
using petrol as fuel
Scooters

Hydrogen IC engine

2031

0.36

50 000

Improved engine with

2001

71.10

39 000

0.13

improved oxi-cat
using petrol as fuel
Mopeds

Hydrogen IC engine

2031

0.42

45 000

Improved engine with

2001

94.21

34 000

2031

0.32

40 000

improved oxi-cat
using petrol as fuel


Hydrogen IC engine

MJ megajoules; IC internal combustion


* Efficiency of hydrogen IC engine technologies is given in MJ/km.
Source T E R I (2004)

0.12

54

National Energy Map for India: Technology Vision 2030

expense of a three-wheeler employing a


four-stroke engine is much higher than that
of a two-stroke engine. The CNG (compressed natural gas) three-wheelers are
prevalent mainly in the four-stroke version.
The
penetration
of
CNG-based
autorickshaws is limited mainly to major
metropolitan cities like Delhi and Mumbai.
The limited penetration of CNG threewheelers can be attributed primarily to the
inadequate CNG supply infrastructure and
the high investment cost entailed in developing this infrastructure. Diesel three-wheelers
powered by four-stroke technology are also
available in the country. The introduction of
hybrid electric vehicles7 (powered by CNG
and petrol) as well as the electric/battery-operated vehicles is likely only by 2020 and
2025, respectively. The introduction of

hybrids before the battery-operated vehicles


is due to concerns regarding the range of
battery-operated vehicles. Three-wheelers
and electric vehicles are also commercially
available in the country. Scooter India Ltd,
Mahindra Eco Mobiles, Bajaj, Eicher, and so
on are entering the electric three-wheeler
market. The three-wheelers are used for
commercial purposes and thus, have a high
daily utilization. The techno-economic parameters for three-wheelers are given in
Table 3.22.

3.1.2.4.3

Cars

As per the classification norms adopted by


SIAM (Society of Indian Automobile
Manufacturers) in 2002, passenger cars are

Table 3.22 Technological characterization of three-wheelers


Fixed operating and
Efficiency

Investment cost

maintenance cost

(km/litre)

(rupees)

(rupees/km)

Technology

Start year

Petrol two-stroke

2001

36.00

75 000

0.27

Petrol four-stroke

2001

41.00

100 000

0.22

CNG four-stroke

2001

95 000

0.22

Diesel four-stroke

2001

125 000

0.21

Battery operated

2026

115 000

0.22

Petrol hybrid

2021

120.00

125 000

0.30

CNG hybrid

2021

120.00

125 000

0.30

Hydrogen four-stroke

2031

51.00

114 000

8.45

1.00*
27.00
0.36*

CNG compressed natural gas; MJ megajoules


* Efficiency expressed in MJ/km.
Source T E R I (2004)

HEVs (hybrid electric vehicles) use the combination of engine of a conventional vehicle and electric motor powered by traction batteries and/or fuel cells. This combination helps in achieving both the energy and environment
goals. In HEV propulsion, energy is available from more than one source. The three configurations of HEVs are series
hybrid system, parallel hybrid system, and split hybrid system.

Sectoral demand projections, technological characterization, and resource availability

classified, according to lengths, under the


following five categories.
 Mini (upto 3400 mm)
 Compact (34014000 mm)
 Mid-size (40014500 mm)
 Executive (47015000 mm)
 Luxury (5001 mm and above)
The classification is further extended to
take into account the fuel- and technologywise break-up. Petrol-based cars (based on
internal combustion engine) constitute the
majority of the passenger car segment. In India, indirect injection diesel engine is used in
passenger cars. However, diesel car sales
have not kept pace with the corresponding
rise in the variant (Table 3.23). The benefit
offered by diesel cars in terms of higher fuel
efficiency relative to the gasoline cars is offset by the higher maintenance/servicing cost.
However, due to the pricing policies of fuels,
the running cost of diesel cars is lower as
compared to petrol cars. This makes diesel
engines more popular for taxis.

55

Table 3.23 Percentage of cars sold by


various manufacturers
Petrol

Diesel

Model

car (%)

car (%)

Fiat Siena

70

30

Fiat Uno

45

55

Mitsubishi Lancer

90

10

Ford Ikon

79

21

Mercedes Benz

45

55

GM Astra

85

15

Source The Economic Times (2002)

New technologies, such as battery-operated cars, are also available commercially in


the country. At present, the Bangalore-based
electric car company REVA is the sole
manufacturer of electric cars in India. Furthermore, cars running on alternative fuels
such as CNG have also penetrated the Indian market. The technology characterization of cars is given in Table 3.24.

Table 3.24 Technological characterization of cars


Fixed operating and
Efficiency

Investment

maintenance cost

Technology

Start year

(km/litre)

cost (rupees)

(rupees/km)

Small car diesel

2001

13.39

388 000

0.80

Small car gasoline

2031

12.25

387 000

1.43

Small car gasoline hybrid

2021

14.70

670 140

1.43

Small car diesel hybrid

2021

16.06

671 140

0.80

Battery-operated car

2001

14.70*

249 500

0.64

CNG car

2001

13.37**

354 000

1.64

Large car based on diesel

2001

10.85

646 000

0.80

Large car based on gasoline

2001

9.55

625 667

1.43

MJ megajoules; CNG compressed natural gas


*Efficiency expressed in MJ/km.
** Efficiency expressed in km/kg.
Source Figures of fuel economy compiled from Overdrive and Autocar (October 2005); T E R I (2004)

56

National Energy Map for India: Technology Vision 2030

3.1.2.4.4

Buses

3.1.2.4.5 Goods vehicles

The fuels used by buses plying on Indian


roads are mostly diesel and CNG. Until
1991, buses powered by compression ignition engines consuming diesel were plying
on Indian roads. DTC (Delhi Transport
Corporation) became the first transport corporation in the country to have inducted
CNG buses in its city fleet in 2001. The entire fleet of DTC buses has been replaced by
CNG buses. Table 3.25 presents the technological characteristics of buses indicated by
efficiency, investment cost, and so on.

Both the heavy and light goods vehicles use


diesel and ULSD (ultra low-sulphur diesel)
as fuels. The parameters related to cost, efficiency, and so on associated with each of the
technologies are shown in Table 3.26.

3.1.2.4.6

Locomotives

Diesel and electric locomotives are used for


both passenger- and freight-based rail movement. The technological details of these options are provided in Tables 3.27 and 3.28.

Table 3.25 Technological characterization of buses


Start year of

Life

Efficiency

Investment cost

Types of buses

technology

(years)

(km/litre)

(million rupees/bus)

Diesel bus

2001

15

4.63

2.48

CNG bus

2001

15

3.84*

3.66

Hybrid electric bus

2021

15

6.71

8.38

powered by diesel
* Efficiency expressed in km/kg

Table 3.26 Technological characterization


of goods vehicles
Table

Types of

Start

good

year of

vehicles

technology (years) (km/litre)

HCV: diesel

2001

15

5.0

HCV: ULSD

2031

15

5.0

LCV: diesel

2001

15

8.5

LCV: ULSD

2031

15

8.5

Life

Efficiency

HCV heavy commercial vehicle; LCV light commercial vehicle; ULSD ultra-low sulphur diesel

3.27 Technological

characteriza-

tion of locomotives (freight)


Fuel

Investment

efficiency

cost (million

Type

(Mtoe/btkm) rupees/btkm)

Diesel locomotive

0.0041

344

Electric locomotive

0.0021

450

Mtoe/btkm million tonnes of oil equivalent per billion tonne kilometres

Sectoral demand projections, technological characterization, and resource availability

Table 3.28 Technological characterization


of locomotives (passenger)
Fuel

Investment

efficiency

cost (million

Type

(Mtoe/bpkm) rupees/bpkm)

Diesel locomotive

0.0041

156

Electric locomotive

0.0021

132

Mtoe/bpkm million tonnes of oil equivalent per billion passenger kilometres

3.1.2.5 Alternative fuels for transport


3.1.2.5.1 Biofuels
Biofuels are receiving a great deal of attention as a substitute to petroleum since they
can be produced from several agricultural
sources and also because of their low-emission characteristics. The two biofuels considered as the potential fuels for surface
transportation are bio-diesel and ethanol.
The term bio-diesel refers to the neat ethyl
esters of vegetable oils. Presently, pure 100%
or neat methyl esters of rapeseed, soyabean,
sunflower, talon, and other fats and oils are
used as diesel fuel without any substantial
modification to the existing design of the
engine. According to a survey of 26 countries by the IEA (International Energy
Agency), biofuels are being produced for the
past six years in 21 countries, mainly in the
European Union, East Europe, Malaysia,
and the US, with an overall capacity of about
1.3 MT. In most of the developed countries,
bio-diesel is produced from saffola, sunflower, peanut, and so on that are essentially
edible in the Indian context. On the other
hand, there are a host of forest and non-edible plant resources from which oil can be

57

generated. Biofuels have the following advantageous properties: high oil-bearing capacity, low cost, easy to develop and use,
environmentally safer and compatible, biodegradable, non-toxic, and free of sulphur
and aromatic compounds.
In this analysis, the maximum production
of bio-diesel is assessed based on the potential area for jatropha plantation, which is estimated at about 40.03 Mha. Based on the
seed yield of 2 tonnes/hectare, oil yield of
27%, and percentage area brought under the
plantation of jatropha over the modelling
time frame, Table 3.29 provides the estimates of bio-diesel production as used in
this study. Based on the discussion with experts, it has been assumed that 5% of the
potential area is likely to be brought under
jatropha plantation by 2011, 25% by 2021,
and 100% by 2036.
Various scenarios have been developed
for the transport sector, which represent different types of policy interventions, technical measures, and so on. A detailed
description of the transport sector scenarios
is given in Chapter 4. Assumptions for each
of the scenarios are detailed in Table 3.30.
Table 3.29 Estimates of bio-diesel
production

Year

Area under

Bio-diesel

plantation (%)

(million tonnes)

2006

2011

2.0

2016

10

3.9

2021

25

9.8

2026

70

27.5

2031

90

31.9

2036

100

35.4

58

National Energy Map for India: Technology Vision 2030

Table 3.30 Assumptions in various transport scenarios


Scenario

Parameter

Business-as-usual

Share of rail vis--vis road in pas-

Year 2001

Year 2036

23%

23%

37%

17%

80%

51%

senger movement


Share of rail vis--vis road in freight


movement

Share of public transport modes


vis--vis personalized transport
modes in road transport

High efficiency

Bio-diesel penetration in transport

No bio-diesel penetration in transport

Autonomous efficiency improve-

Fuel economy of existing motorized transport

ments in transport

modes constant throughout the period 200136

Share of rail vis--vis road in pas-

23%

35%

37%

50%

80%

60%

senger movement


Share of rail vis--vis road in freight


movement

Share of public transport modes


vis--vis personalized transport
modes in road transport

Autonomous efficiency improve-

Fuel economy of existing motorized transport

ments in transport

modes increasing by 50% throughout the period


200136

Bio-diesel

Bio-diesel penetration in transport

Maximum level of bio-diesel penetration is


35.4 million tonnes by 2036

Hybrid

Combination of high efficiency


and bio-diesel scenario

3.1.3

Industry sector

The Indian industrial sector is a major energy user, accounting for 48% of the commercial energy consumption. The increased
energy intensity in Indian industry is partly
due to investments in basic and energy8

intensive industries due to the emphasis laid


in the past development plans on achieving
self-reliance. Industrial fuel use (including
non-energy uses) grew from 45.7 Mtoe in
1984/85 to 76 Mtoe in 2001/02. The industrial sector8 contributed about 25% of
Indias GDP in 2002/03 (CMIE 2004).

According to the Central Statistical Organization, Ministry of Statistics and Programme Implementation, Government of India, the industrial sector is subdivided into manufacturing, mining, and electricity.

Sectoral demand projections, technological characterization, and resource availability

Production (as a proxy of demand) in


each of the industrial sub-sectors is estimated using econometric techniques. Linear
regression analysis is carried out for each of
the major industry sub-sectors, taking production as the dependent variable and using
various macro-economic indicators, such as
GDP (aggregate), GDP of industrial sector,
services, and agriculture, as the independent
variables. As described in the earlier chapter,
in the present study three GDP growth
rates 6.7%, 8%, and 10% have been considered for demand projections.

3.1.3.1 Industrial sectoral demands


The demand for industrial goods in seven
energy-intensive industry sectors is estimated and projected. Time-series production data (1980/81 to 2003/04) was
considered. Production (as a proxy of demand) in each of the industrial sub-sectors
is estimated using econometric techniques.
The sections below present the demand projections for different industrial sub-sectors
considered in the analysis.

59

demands for caustic soda and soda ash have


been considered in this study.

3.1.3.1.1.1 Demand for caustic


soda
The caustic soda industry in India is approximately 65 years old. There are about 40
major caustic soda plants in India. The average plant size is about 150 TPD (tonnes per
day), which is relatively small compared to
the average size of 500 TPD in developed
countries. The production of caustic soda
was about 1.73 MT in 2001/02.
Regression analysis was used to project
the future caustic soda demand in the country. Since caustic soda is used in many industries, its production has been correlated with
the GDP contributed by the industrial sector in the country, using data from 1980/81
to 2003/04. The following linear relationship
is established.
DCS,t = 286 + 0.0042 (GDPI,t)

(3.20)

(16.26)

(R2 = 0.92)

3.1.3.1.1

Demand for chlor-alkali

Chlor-alkalis are used as feedstock in many


industries. The chlor-alkali industry is characterized by the production of three inorganic chemicals: caustic soda, soda ash, and
chlorine. Although they have different end
uses, caustic soda and chlorine are produced
simultaneously in the same plant; the process for soda ash production is different.
Contrary to the US and European countries
the demand for chlor-alkalis in India is
driven by caustic soda while chlorine is considered as a by-product. Therefore, only the

where, DCS,t and GDPI,t represent the demand of caustic soda (in thousand tonnes)
and GDP contributed by the industrial sector (at 1993/94 prices in crore rupees) in the
year t, respectively. The figure in parenthesis
is the value of t-statistics. Table 3.31 presents the projected demand of caustic soda
in the country.

3.1.3.1.1.2 Demand for soda ash


Soda ash (sodium bicarbonate) is one of the
basic ingredients for manufacturing soaps,

60

National Energy Map for India: Technology Vision 2030

Table 3.31 Demand projection of caustic


soda in India
Demand (thousand tonnes)

Year

6.7%

8%

10%

GDP

GDP

GDP

growth

growth

growth

rate

rate

rate

2001/02

1 732

1 732

1 732

2006/07

2 209

2 346

2 462

2011/12

2 896

3 360

3 846

2016/17

3 909

4 873

6 108

2021/22

5 404

7 131

9 810

2026/27

7 615

10 500

15 863

2031/32

10 886

15 529

25 765

2036/37

15 722

23 032

41 961

per capita income, the following equation is


estimated
Log (DSA,t) = 0.79 Log (PGDPt) + 0.84 [AR(1)]
(80.3)
(3.21)
(R 2 = 0.97)
where, DSA,t represents the demand of soda
ash (in thousand tonnes) in the year t and
PGDPt represents the per capita GDP in the
year t (at 1993/94 prices in rupees per
capita). The coefficient 0.79 associated with
Log (PGDPt) indicates the income elasticity
of demand for soda ash. The [AR (1)] term is
used to correct for autocorrelation in the
random error terms. The projected demand
of soda ash is given in Table 3.32.

GDP gross domestic product

3.1.3.1.2 Demand for aluminium


detergents, and glass. About 40% of the soda
ash produced in India is consumed by the
detergent industry, 20% by the glass industry, and 16% by the sodium silicate industry.
The remaining is consumed by the chemical
industry. In India, soda ash is not obtained
as a naturally occurring product. It is produced through a synthetic manufacturing
process. Currently, there are six soda ash
manufacturing plants in India. In view of the
local availability of inputs such as salt, limestone, coke, water, chemical compounds,
and power, five out of six soda ash plants are
located in the state of Gujarat. The domestic
demand was 1.82 MT in 2003/04, while the
total production was 2.23 MT.
Soda ash is used as a raw material for
household consumer goods such as glass,
soaps, and detergents whose demands are a
function of per capita income of the consumers. Thus, in order to capture the responsiveness of this demand to changes in

Aluminium is an essential raw material for


modern manufacturing. It is a light-weight,
Table 3.32 Projected demand of soda
ash in India
Demand (thousand tonnes)
6.7%

8%

10%

GDP

GDP

GDP

Year

growth

growth

growth

2001

1 560

1560

1 560

2006

2 260

2040

2 160

2011

3 140

2450

2 790

2016

4 380

3000

3 620

2021

6 150

3750

4 720

2026

8 690

4760

6 200

2031

12 350

6150

8 200

2036

17 660

8010

10 900

GDP gross domestic product

Sectoral demand projections, technological characterization, and resource availability

high-strength, corrosion-resistant metal


with high electrical and thermal conductivity. Aluminium is extensively used in the
power (for transmission and distribution),
transport, construction, and domestic sectors. Aluminium is easy to recycle. Its production is highly electrical-energy-intensive,
and it requires uninterrupted power supply
(commencing with an installed capacity of
4055 tonnes in 1950/51, the aluminium industry has grown to 880 000 tonnes by
2003/04, with an average annual growth rate
of 5.7%. While 73% of aluminium was imported in 1950/51, since 2000/01, India has
become an exporter of aluminium).
In India, five industries account for the
entire production of aluminium (TERI
2005b). Of these, four units HINDALCO
(Hindustan Aluminium Company Ltd),
MALCO (Madras Aluminium Company
Ltd), INDAL (Indian Aluminium Company
Ltd), and BALCO (Bharat Aluminium
Company Ltd) belong to private sector
and NALCO (National Aluminium Company) is a public sector unit. HINDALCO
and NALCO together account for 76% of the
total installed capacity in India.
Since aluminium is used for infrastructure development in the power, transport,
and construction sectors, a rapid growth in
its demand is expected along with the expected high economic growth rate. In the
present study, aluminium demand has been
correlated with GDP, using the linear regression technique. Using GDP and aluminium
consumption data for the period 1980/81 to
2002/03, the following linear relationship
has been obtained.
DAL,t = 27 + 0.00051 (GDPt)
(14.35)

(R2 = 0.90)

(3.22)

61

Table 3.33 Demand projections of


aluminium
Demand (thousand tonnes)
6.7%

8%

10%

GDP

GDP

GDP

growth

growth

growth

Year

rate

rate

rate

2001

636

636

636

2006

888

950

1 002

2011

1179

1383

1 597

2016

1601

2019

2 556

2021

2216

2954

4 100

2026

3113

4328

6 586

2031

4422

6347

10 591

2036

6328

9312

17 040

GDP gross domestic product

where, DAL,t and GDPt, respectively, represent the demand of aluminium (in thousand
tonnes) and GDP of entire economy (at
1993/94 prices in crore rupees) in the year t.
The projected demand for aluminium is
given in Table 3.33 for 6.7%, 8%, and 10%
GDP growth rates.

3.1.3.1.3 Demand for steel


The iron and steel sector is one of the largest
energy-consuming sectors in the Indian
manufacturing industry. Crude steel production, which was 1.4 MT in 1950/51, has
increased to 30 MT in 2000/01 (SAIL
2002). During the first two decades of the
Five Year Plan, that is, 195060 and 1960
70, the economy saw growth in steel production touching 8%. The growth rate of steel
production declined during the next two decades to pick up again in the 1990s to about

62

National Energy Map for India: Technology Vision 2030

6.65%. However, the industry grew in a


highly protected and controlled environment, with massive import tariffs, and administrative
control
over
process,
distribution, and imports. The centralized
planning process allocated resources for the
industry. The major change in policy decisions started in 1999, with de-licensing of
the steel industry. Decontrol of the production, distribution, pricing, and import/export of steel products has made a significant
impact on the industry.
Steel being a vital input for economic development, a linear relationship is obtained
between demand for steel and GDP.
DS,t = 9381 + 0.032 (GDPt)
(25.76)

(3.23)

Table 3.34 Demand projections for


finished steel in India
Demand (thousand tonnes)

Year

6.7%

8%

10%

GDP

GDP

GDP

growth

growth

growth

rate

rate

rate

2001

31 372

31 372

31 372

2006

44 768

48 630

51 913

2011

63 010

75 856

89 334

2016

89 540

115 861

149 601

2021

128 210

174 641

246 661

2026

184 624

261 008

402 977

2031

247 884

387 909

654 726

2036

386 756

574 369

1 060 171

GDP gross domestic product

(R2 = 0.97)
where, DS,t represents the demand for finished steel (in thousand tonnes) in the year t.
Table 3.34 presents the estimated demand
for finished steel in India.

3.1.3.1.4 Demand for cement


Cement is a key component of infrastructure
development. It is used in the construction
of buildings, bridges, roads, airports, and so
on. India is the second-largest producer of
cement in the world. Cement production capacity in India has grown from 3.2 MT in
1950 to 136 MT in 2002/03 (CMA 2004).
A tremendous growth in cement production has been registered, especially during
the past two decades. During this period
(19812001), the production has increased
from about 21 MT to 107 MT, with an annual average growth rate of 8.4%. However,
the per capita cement consumption of 110

kg (kilograms) in India is much below the


world average per capita of 273 kg. It even
falls much behind almost all Asian major cement producers like Japan (540 kg), South
Korea (1090 kg), Taiwan (754 kg), Thailand
(300 kg), and Indonesia (150 kg). In view of
the expected high infrastructure growth in
India, the growth of cement is also expected
to be high.
A linear regression has been established
for cement demand projection in India.
DC,t = 19 + 0.0001 (GDPt)
(62.25)

(3.24)

(R 2 = 0.99)
where, DC,t represents the demand for cement (in MT) in the year t. Table 3.35 presents the projected demand for cement in
India under 6.7%, 8%, and 10% GDP
growth scenarios.

Sectoral demand projections, technological characterization, and resource availability

Table 3.35 Cement demand projections


Demand (thousand tonnes)
6.7%

8%

10%

GDP

GDP

GDP

growth

growth

growth

Year

rate

rate

rate

2001

107

107

107

2006

148

167

184

2011

204

254

309

2016

286

382

509

2021

405

570

831

2026

579

846

1350

2031

833

1252

2186

2036

1203

1782

3532

GDP gross domestic product

3.1.3.1.5 Demand for cotton


The Indian textile industry contributes
about 3% to GDP and 14% of the total industrial production. This sector also contributes to 27% of the national export
earnings. Moreover, the textile industry
plays a major role in employment generation, accounting for about 27% of the total
work-force of the country (second after the
agriculture sector).
The textile industry can be classified into
two categories: (i) organized sector and (ii)
unorganized or rural sector. The organized
segment of the textile industry produces 4%
of the total fabrics produced in the country,
with most of it being manufactured in power
looms. The total yarn required by both the
organized and the decentralized sectors is
produced entirely within the organized segment. The cotton textile/man-made fibre industry is the single-largest organized
industry in the country. The decentralized

63

segment comprises mainly small power


looms and the handloom units.
Cotton is the predominant fabric used in
the Indian textile industrynearly 60% of
the overall consumption in textiles and more
than 75% in spinning mills is cotton. India is
among the worlds largest producers of cotton, with over 9 Mha of land under cultivation, and an annual crop output of about
1.7 MT (2001/02) (MoA 2004).
Clothes are essential commodities in the
basket of consumption goods for every consumer. Cotton cloth being a high-value commodity, its consumption is influenced by the
consumers purchasing power measured by
the per capita income. Thus, in order to
measure the income elasticity of cottoncloth demand, the following linear regression relationship has been established.
Log(DCC,t) = 0.81 [Log(PGDPt)] + 0.57AR(1)
(249.3)
(3.25)
(R2 = 0.94)
where, DCC,t represents the demand of cotton cloth (in thousand tonnes) in the year t
and PGDPt represents the per capita GDP in
the year t (at 1993/94 prices in rupees per
capita). Table 3.36 presents the projected
demand for cotton cloth in India under
6.7%, 8%, and 10% GDP growth scenarios.

3.1.3.1.6 Demand for fertilizer


The inorganic, organic, natural, or synthetic
chemical elements that provide nutrient for
the growth of plants are generally considered
as fertilizers. These play an exceedingly important role in the countrys performance in
the agriculture sector. They are usually classified according to the plant nutrients. Three

64

National Energy Map for India: Technology Vision 2030

Table 3.36 Cotton cloth demand


projection
Demand (thousand tonnes)

Year

6.7%

8%

10%

GDP

GDP

GDP

growth

growth

growth

rate

rate

rate

2001

2 210

2 210

2 210

2006

2 520

2 680

2 800

2011

3 030

3 470

3 910

2016

3 730

4 530

5 500

2021

4 680

5 950

7 790

2026

5 990

7 870

11 100

2031

7 780

10 490

15 940

2036

10 220

14 050

23 010

GDP gross domestic product

types of primary fertilizers are used in India:


N (nitrogen), P2O5 (phosphorous), and K
(potassium). Secondary and micronutrients
also play an important role in plant growth.
However, the primary nutrients are relevant
in the present context of the energy consumption as most of the energy input is in
the form of primary nutrient fertilizers, particularly nitrogenous fertilizers. Fertilizers
containing only one primary nutrient are
called straight fertilizers whereas those
with more than one are called complex fertilizers. India produces nitrogenous and
phosphatic fertilizers only. Due to the unavailability of raw materials, the entire requirement of potassic fertilizers is met
through import. During 2001/02, production figures of nitrogenous and phosphatic
fertilizers were 10.7 and 3.9 MT, respectively (in terms of N and P2O5 nutrients).

Fertilizer production is estimated using


the production of high-yielding varieties of
crops. The following linear regression equations are established for demand projection
of nitrogenous and phosphatic fertilizers in
India.
DN,t = 5480 + 197.4 (PHYV,t)
(20.55)

(3.26)

(R2 = 0.95)
DP,t = 2102 + 68.5 (PHYV,t)
(18.60)

(3.27)

(R2 = 0.94)
where, DN,t and DP,t represent the demand of
nitrogenous and phosphatic fertilizer, respectively, in thousand tonnes (in terms of
nutrient N and P2O5) in the year t and PHYV,t
production of high-yielding varieties crops
(in thousand tonnes).
Production of high-yielding variety crops
has been estimated using the GIA and GDP
(discussed in detail in the section on demand for agriculture sector). Table 3.37 presents the projected demand for fertilizers in
India.

3.1.3.1.7 Demand for paper


The pulp and paper industry provides employment to about 3.5 million people directly and indirectly. The Indian pulp and
paper industry recorded a constant average
annual growth rate of 5.47% over the past
three years. Broadly, there are two types of
paper products: paper and paperboard, and
newsprint. Paper and paperboard can fur-

Sectoral demand projections, technological characterization, and resource availability

Table 3.37 Demand projection for fertilizer

65

Table 3.38 Projected demand for paper


and paper board in India

Demand (thousand tonnes)


6.7% and 8% GDP

10% GDP

Demand (thousand tonnes)

growth rate

growth rate

6.7%

8%

10%

Year

P 2O 5

GDP

GDP

GDP

2001

10 690

3873

10 690

3 870

growth

growth

growth

2006

12 351

4090

14 010

4 670

Year

rate

rate

rate

2011

13 692

4555

16 570

5 550

2001

4 950

4 950

4 950

2016

15 051

5027

19 220

6 470

2006

6 929

7 615

8 198

2021

16 432

5506

21 950

7 420

2011

9 345

11 479

13 719

2026

17 833

5993

24 770

8 400

2016

12 823

16 949

22 238

2031

19 256

6487

27 680

9 410

2021

17 839

24 765

35 508

2036

20 409

6887

30 680

10 450

2026

25 096

36 034

56 363

2031

35 613

52 385

89 370

2036

50 836

76 185

141 820

P 2O 5

GDP gross domestic product; N nitrogen;


P2O5 phosphorus pentaoxide

GDP gross domestic product

ther be sub-divided into industrial grade


(wrapping and packaging, specialty, kraft,
and so on) and cultural (writing and printing) paper. The output of the Indian paper
industry is about 5.4 MT, with a turnover of
about 120 billion rupees.
Paper consumption in India was about
5.5 kg per capita in 2003 as against the world
average of 50 kg (TERI 2005b). Moreover,
the demand for paper and paper products in
India has continuously been increasing over
time. Since the demand for paper is directly
related to economic development, India will
have higher growth in future as compared to
the average worldwide growth rate. Demand
for paper and paperboard has been estimated using per capita GDP to account for
both demographic and economic growth impacts on paper demand. The following linear
relationship has been established for demand projection.

DP,t = 2658 + 0.638 (PGDPt)


(40.48)

(3.28)

(R2 = 0.98)
where, D P,t and PGDPt represent demand for
paper and paperboard (in thousand tonnes)
and per capita GDP (at 1993/94 prices in
rupees) in the year t, respectively. Table 3.38
presents the projected demand for paper and
paperboard in India.

3.1.3.1.8 Demand of other


industries
The other energy-consuming industries include small-scale industries such as food
processing, glass and ceramics, sugar mills,

66

National Energy Map for India: Technology Vision 2030

brick making, foundry, and leather/tanning.


These industries are quite fragmented. In
the model, all these industries are grouped
under a single sub-sector, since data on production of each of these industries is not
available. In this study, the residual energy
consumption of the industrial sector (energy
not accounted for in the seven industries described above) is assigned to other industries. For demand projection in this study, it
is assumed that other industries will grow at
the same growth rate as that of GDP growth.
Table 3.39 presents projected useful energy
demand for other industry. Efficiency of energy utilization in other industry is considered at 40% for 2001. Further, it is assumed
that efficiency of utilization of energy of
other industry will increase to 44% and 57%
in the BAU (business-as-usual) and high
efficiency scenario, respectively.

Table 3.39 Energy demand projection for


other industries
Demand (thousand tonnes)
6.7%

8%

10%

GDP

GDP

GDP

growth

growth

growth

Year

rate

rate

rate

2001

726

726

726

2006

1004

1066

1 169

2011

1389

1566

1 883

2016

1920

2302

3 033

2021

2656

3382

4 884

2026

3673

4969

7 866

2031

5080

7301

12 668

2036

7026

10 728

20 402

GDP gross domestic product

3.1.3.2 Description of technology


options in the industry sectors
This section describes the status of each of
the industrial sector technological options
and its penetration level, as assumed across
different scenarios.

3.1.3.2.1 Caustic soda industry


Caustic soda is produced by the electrolysis
of brine (a solution of common salt and water). In this process, chlorine and caustic
soda are produced simultaneously. Additionally, hydrogen is also produced. The production of caustic soda is a very
electric-energy-intensive process. In view of
high electric tariff in India, it is reported that
the cost of power accounts for about 50%
65% of the total production cost (Pramanik
2002).
Worldwide, there are three processes used
for manufacturing caustic soda: (i) diaphragm cell process, (ii) mercury cell process, and (iii) membrane cell process. The
diaphragm cell process is the oldest among
all three. However, in India, presently, none
of the plants are using this technology
(AMAI 2004). In 1996, majority of the
plants in India were using mercury cell process (56% of the total installed capacity).
During 2004, this share reduced to 29%.
The share of membrane cell process increased from 56% in 1996/97 to 71% in
2003/04. Table 3.40 presents the time trend
of percentage share of different processes
used for caustic soda production in India
(AMAI 2004).
Membrane process is the most energy-efficient process followed by the mercury cell
process. Therefore, the shift towards more

Sectoral demand projections, technological characterization, and resource availability

Table 3.40 Production of caustic soda


through different processes: 1998/99 to
2003/04
Percentage share
Process

1996/97 1998/99 2001/02 2003/04

Membrane

56

65

69

71

37

34

31

29

<1

cell
Mercury
cell
Diaphragm
cell

penetration of the membrane cell process


has resulted in the reduction of average specific energy consumed during caustic soda
production. As per a study by the LBNL
(Lawrence Berkeley National Laboratory),
US, the specific energy consumption during
caustic soda production in India is about
36% lower than that in the US (LBNL
2005). Similarly, the specific energy consumption is also lower than the reported values for the European Union (LBNL 2005).
In India, due to environmental concerns
(heavy metal pollution), no new plants based
on mercury cell process are allowed. Therefore, the specific energy consumption is ex-

67

pected to decrease in the near future. However, the current process (the membrane cell
process) is a mature technology that has very
little scope for further efficiency improvement. Moreover, due to the lack of domestic
production of membrane cell in the country,
India is entirely dependent on imported
technology of membrane cell. Therefore, all
new plants are coming with state-of-the-art
technology. A new technology called ODC
(oxygen depolarized cathodes) is currently
developed. In Europe, a new plant using the
ODC technology has been built in Germany
at Brunsbuttel (LBNL 2005). It is reported
that the ODC technology has a substantial
potential for saving electricity (440530
kWh/t) (LBNL 2005). In the present analysis, it is assumed that in India, ODC technology will be commercially available from
2016. Since this technology is still in the development phase and a reliable cost figure is
not available, the capital cost of the ODC
plant is assumed to be 10% higher than the
cost of the membrane-cell-based plant.
Since no new plants based on the mercury
cell technology are being built and cost data
is also not available, for modelling purpose,
the capital cost is taken to be the same as
that for the membrane-cell-based plant.
Table 3.41 presents the technological char-

Table 3.41 Technological characterization of caustic soda industry


Average specific

Repair and

electricity

Capital cost

maintenance cost

consumption

(million rupees/

as a percentage

Process

(kWh/t)

MTPA)

of capital cost

Life (year)

Mercury cell

3300

41 000

2.5

10

Membrane cell

2848

41 000

2.5

10

ODC

2363

45 100

2.5

10

ODC oxygen depolarized cathodes; MTPA million tonnes per annum; kWh/t kilowatt-hour per tonne

68

National Energy Map for India: Technology Vision 2030

Table 3.42 Details of Indian soda ash plants

Year of

Capacity

Total

(thousand tonnes

capacity

Company

commissioning

Process

per year)

(%)

Tata Chemicals

1948

Standard Solvay

875

33

Saurashtra Chemicals Ltd

1960

Standard Solvay

650

25

GHCL

1988

Akzo dry lime

525

20

Nirma Ltd

1998

Akzo dry lime

365

14

Tuticorin Alkalis

1982

Modified Solvay

115

DCW Ltd

1939

Standard Solvay

96

GHCL Gujarat Heavy Chemicals Ltd; DCW Dhrangadhie Chemical Works

Table 3.43 Technological characterization of soda ash industry


Repair and
Average specific

maintenance

consumption

Capital cost

cost as a

Fuel

Electricity

(million rupees/

percentage

Process

(GJ/t)

(kWh/t)

MTPA)

of capital cost

Life (year)

Solvay

15.93

282

19 800

2.5

10

Modified Solvay

14.48

257

19 800

2.5

10

9.31

607

24 800

2.5

10

Akzo dry lime

GJ/t gigajoules per tonne; kWh/t kilowatt-hour/tonne; MTPA million tonnes per annum

acterization of caustic soda industry in the


model (TERI 2004; CMIE 1996).

3.1.3.2.2 Soda ash industry


The manufacture of soda ash includes pulverizing of the salt, brine purification,
absorption of ammonia in brine, and carbonation. The precipitate of sodium bicarbonate is filtered and calcined to obtain soda
ash. The technologies mostly used by the industries are Solvay process, modified Solvay
process (or dual process), and Akzo dry-lime
process. The Akzo dry-lime process is con-

sidered as a state-of-the-art technology. In


India, soda ash is produced in six plants.
Table 3.42 presents the production capacity
and the technology being used in these six
plants (LBNL 2005). It may be noted that
three of these plants are based on the standard Solvay process (62% of the production
capacity), one unit on the modified Solvay
process (4% of the production capacity),
and the remaining two units use the Akzo
dry-lime process (34% of the production capacity) (LBNL 2005). Technology characterization of soda ash industry considered in
the model is given in Table 3.43.

Sectoral demand projections, technological characterization, and resource availability

3.1.3.2.3 Aluminium industry


Bauxite is the primary raw material used in
production of primary aluminium. India has
about 3037 MT of bauxite reserves and
ranks sixth in the world. The BHH (Bayer
HallHeroult) process being used for more
than 100 years is practically the only viable
commercial manufacturing process used for
the production of aluminium. Though considerable research efforts have been made
for alternate processes for aluminium production, these are not yet commercialized.
Production of aluminium has two distinct
processes: production of alumina from
bauxite ore (Bayer process) and conversion
of alumina to aluminium in smelters (smelting process). A process flow diagram for primary aluminium production is shown in
Figure 3.6.
There are five different steps involved in
the manufacturing of alumina: (i) bauxite
crushing/grinding/slurrying, (ii) digestion
(iii) precipitation, (iv) evaporation, and (v)

Figure 3.6 Primary aluminium production

69

calcination of aluminium hydrate. The extraction of aluminium involves the electrolysis of alumina at 950970 oC in electrolytic
cells (smelter). While the cathode in the electrolytic cells is made of carbon, two types of
anodes are used (i) Soderberg (or self-baking) and (ii) pre-baked. In India, about 76%
of the installed capacity is based on prebaked system while only 24% is based on the
Soderberg technology (TERI 2004).
Electricity cost forms about 40% of the
total production costs and hence, energy efficiency continues to be a major area of focus
for the aluminium industry. In India, the industry average for the electrical consumption in smelters has reduced from
18 00020 000 kWh/tonne of aluminium
produced in 1960s to 14 00017 000 kWh/
tonne of metal produced in 2000s (TERI
2005b).

3.1.3.2.3.1 Energy efficiency options


The aluminium manufacturing process is
highly electrical-energy-intensive. The breakup of energy indicates that more than 80% of
the energy is electrical energy, and is consumed in the smelting of alumina. The major
energy-saving opportunities in the Indian aluminum industry lie in the switch over to gassuspension calciners (as against rotary kilns)
and waste heat utilization, and converting the
smelters from Soderberg systems to pre-baked
systems. The other operational improvements
include current efficiency improvements and
reduction in operating voltage (TERI 2005b).
In the MARKAL model, the aluminium
industry is modelled in two steps: (1) Bayer
process, and (2) smelting process. Table 3.44
presents the technological characterization
of the aluminium industry in India. Economic life of the aluminium plant is taken as
30 years, and the annual repair and mainte-

70

National Energy Map for India: Technology Vision 2030

Table 3.44 Technological characterization of the aluminium industry


Average specific energy
consumption (per
tonne of aluminium)

Capital cost

Technology

Fuel (GJ)

(dollars/tonne)

Bayer process

32.00

583

1200

Improved Bayer process

28.80

525

1500

Soderberg process

1.81

17 449

2900

Pre-baked process

3.03

15 613

3000

Improved pre-baked process

2.50

13 200

3300

Electricity (kWh)

GJ gigajoules; kWh kilowatt-hour


Sources Vasudevan (1999); TERI (2004); <http://www.aluminum.org/Content/ContentGroups/News_Releases1/
October_2005/AlumPriceTrends.pdf>

nance cost is assumed at 2.5% of the total


capital cost.
Further, it is assumed that the improved
Bayer process and the improved pre-baked
process will be available only in the (EFF)
high-efficiency scenario by 2011.

nology used in India. Repair and maintenance cost is considered at 4% of the capital
cost of the plant (Hidalgo et al. 2005).

3.1.3.2.4

Though the specific energy consumption of


the Indian integrated steel plants decreased
significantly (by about 22%) from 1990/91
to 2003/04 (Figure 3.7), it is still high when
compared to the US and Japan. This indicates scope for further improvement in energy efficiency. Table 3.46 presents the
energy-efficiency measures applicable to the
integrated steel plants in India (LBNL
1999). Similarly the efficiency improvement
measures for EAF-based plants are given in
Table 3.47 (LBNL 1999). The data on cost
estimates for different efficiency improvement options is only available for 1995 in
dollars (LBNL 1999). The same value is
converted to Indian rupees for 2001/02
prices by using the exchange rate for 1995/96

Iron and steel industry

The four different steel manufacturing technologies existing in the country are: (a) BF
BOF (blast furnacebasic oxygen furnace),
(b) scrapEAF (scrapelectric arc furnace),
(c) DRIEAF (direct reduction ironEAF),
and (d) COREX. In scrapEAF, the process
scrap steel is used in place of iron ore. There
are eight integrated steel plants in India producing steel using the BFBOF process.
During 2001/02, of the total 31.37 MT of
steel produced in India, 12.98 MT was produced in those eight integrated steel plants.
Table 3.45 presents the process-wise breakup of steel production in India as well as the
technological characterization of the tech-

3.1.3.2.4.1 Energy efficiency


options

Sectoral demand projections, technological characterization, and resource availability

71

Table 3.45 Production and technological details of Indian steel industry during 2001/02
Production

Capital cost

Specific fuel consumption

Process

(million tonnes)

(dollars/tonne)

Fuel (GJ/t)

Electricity (kWh/t)

BFBOF

12.98

240

29.01

401

ScrapEAF

7.87

173

2.23

622

DRIEAF (coal-based)

5.66

214

26.63

453

DRIEAF (gas-based)

3.46

214

22.63

453

COREX*

1.40

583

28.81

Total

31.37

GJ/t gigajoules per tonne; kWh/t kilowatt-hour per tonne; BFBOF blast furnacebasic oxygen furnace; EAF
electric arc furnace; DRI direct reduction iron
* In COREX plant, electricity requirement is met through internally generated electricity using COREX gas in
cogeneration plant.
Sources SAIL (2002); OECD (2001); CCME (2002); TERI estimates

Figure 3.7 Time trend of specific energy


consumption of SAIL steel plants

Source SAIL (2006)

and inflation rate during that period (5.76%


per annum).
In view of the large number of mitigation
options, for modelling purpose in the

MARKAL model, the abovementioned


options
are
grouped into different categories. For example, integrated
steel plants are divided into
existing efficient plants. It is
assumed that only the retiring
capacity could be retrofitted.
Similarly, two categories are
considered for scrap-EAF
and DRIEAF: (a) existing
and (b) efficient. The specific
energy consumption of new
categories of plants has been
estimated in terms of energy
savings from the existing
plants.
During 2001/02, the share
of steel production through
BFBOF and scrapEAF
plants was 41% and 24%, respectively. The scrapEAF technology uses
scrap steel in place of iron ore. In India,
scrap steel is obtained from domestic old
steel, ship breaking, and import of scrap

72

National Energy Map for India: Technology Vision 2030

Table 3.46 Efficiency improvement measures for integrated steel plants


Fuel

Electricity

Retrofit cost

savings

saving

(million

Option

(GJ/t)

(GJ/t)

rupees/MTPA)

Adopt continuous casting

0.24

0.08

554.30

Preventative maintenance

0.43

0.02

0.50

Pulverized coal injection to 130 kg/thm

0.69

0.00

529.70

Hot blast stove automation

0.33

0.00

254.60

Use of waste fuels in sinter plant

0.04

0.00

53.80

Improved blast furnace control systems

0.36

0.00

275.00

Energy monitoring and management system

0.11

0.01

7.00

Programmed heating-coke plant

0.05

0.00

14.40

Controlling oxygen levels and VSDs on combustion air fans

0.29

0.00

20.40

Automated monitoring and targeting system

0.00

0.12

29.20

Process control in hot strip mill

0.26

0.00

28.30

Efficient ladle pre-heating

0.02

0.00

2.30

Improved process control

0.01

0.00

13.90

Recuperative burners

0.61

0.00

101.10

Recovery of blast furnace gas

0.06

0.00

45.50

Sinter plant heat recovery

0.12

0.00

30.60

Energy-efficient drives (rolling mill)

0.00

0.01

7.90

Heat recovery on the annealing line

0.17

0.01

71.90

Cogeneration

0.03

0.35

673.50

Reduced steam use (pickling line)

0.11

0.00

74.70

Hot charging

0.52

0.00

607.10

Recuperator hot blast stove

0.07

0.00

55.20

Variable speed drive: flue gas control, pumps, fans

0.00

0.02

60.30

BOF gas and sensible heat recovery

0.92

0.00

1020.40

Waste heat recovery (cooling water)

0.03

0.00

32.50

Coke dry quenching

0.37

0.00

104.40

Top pressure recovery turbines (wet type)

0.00

0.10

199.00

Insulation of furnaces

0.14

0.00

404.90

Coal moisture control

0.09

0.00

25.50

Total

6.07

0.72

5308.40

GJ/t gigajoules per tonne; MTPA million tonnes per annum; kg/thm kilogram/tonnes of hot metal;
BOF basic oxygen furnace; VSD variable speed drive
Sources LBNL (1999); TERI estimates

Sectoral demand projections, technological characterization, and resource availability

73

Table 3.47 Efficiency improvement measures for EAF-based steel plants


Fuel

Electricity

Retrofit cost

savings

saving

(million rupees/

Option

(GJ/t)

(GJ/t)

MTPA)

Oxy-fuel burners

0.00

0.14

223

Scrap pre-heating, post combustion:

0.70

0.43

278

Bottom stirring/stirring gas v

0.00

0.07

28

Improved process control (neural network)

0.00

0.11

44

Scrap preheating: tunnel furnace (CONSTEEL)

0.00

0.22

232

Controlling oxygen levels and VSDs on combustion air fans

0.29

0.00

20

Process control in hot strip mill

0.26

0.00

28

Efficient ladle pre-heating

0.02

0.00

Energy monitoring and management system

0.02

0.01

Recuperative burners

0.61

0.00

101

Twin-shell DC w/scrap pre-heating

0.00

0.07

278

Flue gas monitoring and control

0.00

0.05

93

Transformer efficiency: UHP

0.00

0.06

128

EBT on existing furnace

0.00

0.05

148

Foamy slag practice

0.00

0.07

464

Waste heat recovery from cooling water

0.03

0.00

32

Insulation of furnaces

0.14

0.00

405

Total

0.67

1.28

2512

Shaft furnace (FUCHS)

GJ/t gigajoules per tonne; MTPA million tonnes per annum; VSD variable speed drive; DC direct current;
UHI ultra high power; EBT eccentric bottom tapping; EAF electric arc furnace
Sources LBNL (1999); TERI estimates

from other countries. In view of the existing


low per capita steel consumption, domestic
availability of steel scrap is low in the country.
In view of the low per capita steel consumption in India, and due to the environmental concerns associated with ship
breaking, production of steel through scrap
EAF technology is expected to reduce in the
future. Accordingly, the share in 2036 is expected to reduce to 10%. Because of the

high decommissioning cost of BFBOF


plant, all existing plants are expected to produce steel in the future also. Furthermore,
due to economy of scale of BFBOF plants,
a single plant caters to significant domestic
demand. Table 3.48 provides our assumptions regarding the maximum/minimum
levels of BFBOF and scrapEAF plants
in 2001 and 2036 under the BAU and EFF
scenarios.

74

National Energy Map for India: Technology Vision 2030

Table 3.48 Level of share of BFBOF and Scrap-EAF steel plants


Share (%)
Scenario

Parameter

Level

2001

2036

BAU

Share of BFBOF

Minimum

41

20

BAU

Share of scrapEAF

Maximum

24

10

High efficiency

Share of BFBOF

Minimum

41

80

High efficiency

Share of scrapEAF

Maximum

24

10

BAU business-as-usual; BF blast furnace; BOF basic oxygen furnace; EAF electric arc furnace

3.1.3.2.5 Cement industry

Figure 3.8 Time trend of process


profile of cement industry

Three different cement manufacturing processes in the country are: (a) wet process, (b)
semi-dry process, and (c) dry
process. The contribution of cement production from the wet
and semi-dry processes has
been decreasing over the past
four decades. Until 1960, the
major share of cement capacity
was from the wet process
(94.4%); the semi-dry process
contributed 4.5%; and the dry
process only 1.1%. During
2003, the share of wet process
Source TERI (2004)
was only 3.7% whereas the dry
process accounted for 94.7% of the total installed capacity. Figure 3.8 presents the time
Table 3.49 Percentage distribution of
trend of process-wise cement production cacement production in the year 2002/03
pacity in India (TERI 2005). Table 3.49 presents the process-wise production share
Process
Total production (%)
during 2002/03 (CMA 2003).
Dry process
94.1
There are more than 13 different varieties
Wet process
1.3
of cement produced in India. Amongst them
Semi-dry process
0.2
the three main varieties are: OPC (Ordinary
Others
4.4
Portland Cement), PPC (Portland Pozzolana Cement), and PSC (Portland Slag
Source CMA (2003) (others are added in the dry
process in the model)
Cement) (Figure 3.9). These three varieties

Sectoral demand projections, technological characterization, and resource availability

Figure 3.9 Time trend of percentage distribution


of different variety of cement in India

Source Cement Statistics (2003)

accounted for more than 99% of the total


production in India during 2001/02 (CMA
2003). The variation in cement products is
due to the type of additives blended with the
clinker at the stage of grinding and their
share in per tonne of cement. Table 3.50 presents the typical share of additive used in
OPC, PPC, and PSC cement (Das 1997).
While PSC can be used for all purposes for

Table 3.50 Percentage distribution of


input material for different varieties of
cement production in India
Percentage distribution
Input material

OPC

PPC

PSC

Clinker

95

80

65

Fly ash

15

Slag

30

Gypsum

OPC Ordinary Portland Cement; PPC Portland


Pozzolana Cement; PSC Portland Slag Cement

75

which OPC is used, PPC cannot be used for pre-stressed


and high-strength concrete,
as in bridges and airports.
On the basis of the technology level, the dry process
plants are further classified
into three main categories:
(a) 4-stage pre-heater precalcinator, (b) 5-stage preheater pre-calcinator, and (c)
6-stage pre-heater, twinstream, pre-calcinator, pyrostep cooler. Table 3.51
presents the technological
details of process-wise cement
production
(TERI
2005b and NCCBM 2003).
For estimating variety-wise specific heat
consumption for plants using different
technology levels, their respective clinker-tocement ratio (Table 3.52) and specific heat
consumption for clinker production are used.
However, specific electricity consumption is
assumed to be the same for all varieties of cements, depending on the technology used.
It may be noted that wet and semi-dry
process technologies were commercialized
during the 1950s and 1970s (TERI 2005b).
These few available plants are almost at the
end of their economic life. Therefore, it is assumed that all wet and semi-dry process
plants will die out by 2011 (TERI 2005b).
Similarly the 4- and 5-stage dry-process
plants were commercialized in the country
during the 1980s and 1990s. Therefore, it is
assumed that all 4- and 5-stage plants will be
retrofitted to 6-stage plants within the next 20
and 30 years, respectively, in a phased manner.
Coal is the primary fuel for the cement
industry. It is used for both thermal application as well as electricity generation in the

76

National Energy Map for India: Technology Vision 2030

Table 3.51 Technological details of process-wise cement production in India


Specific

Specific

Capital

heat

power

cost (million

consumption

consumption

rupees/

(kcal/kg

(kWh/tonne

MTPA of

Life

Process

of clinker)

of cement)

cement)

(years)

Wet

1300

115

3300

10

900

110

3300

10

4-stage pre-heater pre-calcinator

800

105

3300

20

5-stage pre-heater pre-calcinator

750

88

3500

30

665

68

3800

50

Semi-dry
Dry process

6-stage pre-heater, twin-stream,


pre-calcinator, pyro-step cooler

kcal/kg kilocalories per kilogram; kWh/tonne kilowatt-hour per tonne; MTPA million tonnes per annum
Sources TERI (2004); NCCBM (2003); TERI estimates

Table 3.52 Variety-wise percentage distribution of cement production in 2001 and 2036
Production (%)
Scenario

Parameter

Level

2001

2036

BAU

Share of OPC

Minimum

56

28

Share of PSC

Maximum

12

12

Share of PPC

Maximum

32

60

Share of OPC

Minimum

56

Share of PSC

Maximum

12

30

Share of PPC

Maximum

32

65

High efficiency

BAU business-as-usual; OPC Ordinary Portland Cement; PSC Portland Slag Cement; PPC Portland Pozzolana
Cement

captive plants. Besides the linked quota, the


cement industry takes coal from the open
market and through import. The present
cost of gas is uneconomic for cement plants
(as compared to imported coal) as no plant
is using natural gas for process heating.

However, in some plants, natural gas is used


for captive generation. Moreover, in the
model, 6-stage natural-gas-based plants (for
all three varieties of cement) are also modelled to allow the model to choose natural
gas for its future economic viability.

Sectoral demand projections, technological characterization, and resource availability

3.1.3.2.5.1
options

Energy efficiency

The energy efficiency options for the cement


industry are conversion of 4- and 5-stage cement plants to modern 6-stage plants (with
pre-heater, twin-stream, pre-calcinator, and
pyro-step cooler) and higher share of
blended cement in the total cement production.
Clinker production is the most energy-intensive process in the manufacture of cement. Due to lower clinker requirements in
the blended cement, its specific energy consumption is lower than the OPC cement.
The energy cost accounts for about 30%
50% of the production cost of cement.
Therefore, the share of blended cement production in India is increasing, it has increased from 28% in 1993/94 to 44% in
2000/01. It is also opined that the share of
blended cement will continue to increase in
the future also.
Since the share of PSC remained almost
constant from 1993/94 to 2000/01, in the
BAU scenario, the share of PSC is assumed
to be the same (12%) during the entire modelling period. The share of PPC that uses fly
ash (a waste from power plant) will contribute upto 60% of the total cement production. While in the EFF scenario, the share of
PSC and PPC cement is assumed to increase
to 30% and 65%, respectively. Table 3.52
presents the maximum/minimum share assumed for different varieties of cement production in the year 2001 and 2036 in the
BAU and EFF scenarios.

77

3.1.3.2.6 Textile industry


The textile production process consists of
four main activities: spinning, weaving, knitting, and wet processing. The production
from fibres to spun yarn takes place through
the spinning process and constitutes the first
stage. Then the yarn is weaved to make fabrics in looms. These fabrics then undergo
several different processes including bleaching, printing, dyeing, and finishingthese
are grouped under the category of wet processing. The industry uses cotton, jute, wool,
silk, and synthetic fibres as raw material. In
India, cotton accounts for about 60% of the
raw material being used in the industry. India is also the largest producer of cotton.
The textile industry can be classified into:
(i) textile mills comprising composite and
spinning mills in the organized segment and
(ii) small power loom and handloom units in
the unorganized sector. The organized sector
produces only 4% of the total fabrics produced in the country. Yarn is produced by
the mills in the organized segment but is
consumed by power loom and handloom in
the unorganized sector as well.
There is a wide variation in the processes
and technologies employed in different factories across India. Composite mills cover
complete sets of processes, from raw material to final products. However, most manufacturing units tend to deal only with a part
of the process. The primary energy inputs in
the textile industry are steam and power.
The requirement of steam and power varies
with the yarn count, yarn productivity, type
of fabric (product mix), fabric productivity,
and extent of wet processing (dyeing and
printing). In view of the increased mechani-

78

National Energy Map for India: Technology Vision 2030

zation, the energy consumption in the textile


industry has also increased. Specific energy
consumption of modern textile mills is
higher due to replacement of manual labour
by electric power. Moreover, there is a trend
of shift towards more mechanization.

3.1.3.2.6.1
options

Energy efficiency

Some of the major energy saving options in


textile mills as reported in a study conducted
by TERI are as follows (TERI 1995 and
TERI 2005a).
Adoption of new spinning processes: it is possible to save 15%20% of the energy requirement in spinning by adoption of new
spinning technologies like friction spinning
and air-jet spinning. Modifications in ring
frame spinning machines that account for
majority of the power consumption in a
composite textile mill can reduce energy
consumption by 5%10%.
Use of advanced drying processes: processes
like high-speed drying machine and stenters
for reducing energy consumption (20%
30%) can be adopted. Use of radio frequency dryers can eliminate use of thermal
energy in drying applications.
Use of solar energy for water heating: in the
textile industry, 80% of the energy used is
utilized in wet processing, with temperatures
ranging from 40 oC to 140 oC. There is substantial scope to reduce fossil fuels used in
boilers by utilizing solar thermal energy.
The energy costs in textile production account for up to 17% of the total manufacturing costs (ADB 1998). Therefore, energy
conservation has become quite important.
Most of the textile units in India have made
lot of efforts towards energy conservation on

a short- and medium-term basis. As a result


of these efforts, the extent of energy savings
reported by many mills varies from 5% to
15%. Some of the progressive mills have invested a huge amount of money for implementation of long-term measures such as
boiler replacement, cogeneration system,
and changing of process machines. These
measures have resulted in energy savings to
the extent of 20%25%. Moreover,
electric energy consumption is expected to
continue rising over time due to increasing
automation and higher running speeds for
machines.
The textile sector is very diverse and thus,
data collection is a challenging task. Therefore, due to unavailability of adequate disaggregated data on technologies, this
sub-sector is not modelled in detail and is
captured as two technologies (existing and
efficient), representing the cotton textile industry. The specific energy consumption of
an efficient mill is taken to be 10% lower
than the existing one. Further it is assumed
that efficient mill will be available by 2011.
Table 3.53 presents technological characterization of the textile sector.

3.1.3.2.7 Fertilizer industry


The fertilizer industry is one of the largest
consumers of energy. Earlier in an fertilizer
industry, various feedstock like firewood,
coke, lignite, and coke oven gas were utilized
for ammonia production. This wide spectrum of feedstock changed gradually with
the advent of new process techniques and
availability of petroleum-based feedstock
(naphtha, fuel oil, natural gas, and so on).
Over the past decade, there has been a noticeable decline in the use of coal and naph-

Sectoral demand projections, technological characterization, and resource availability

79

Table 3.53 Technological characterization of a cotton textile industry


Capital cost
Energy consumption

(million rupees/

Life time

Technology

Thermal (GJ/t)

Electricity (kWh/t)

MTPA)

(year)

Existing

32.69

3500

280 000

30

Efficient

29.42

3150

280 000

30

GJ/t gigajoules per tonne; kWh/t kilowatt-hour per tonne; MTPA million tonnes per annum
Sources ARRPEEC (2003); CMIE (1996); Swaminathan and Rudramoorthy (2004); TERI (2004)

tha as feedstock, and natural gas has increasingly been used instead (Table 3.54) (T E R I
2005b).
In view of the largest share of urea and
SSP (single super phosphate) in the production of nitrogenous and phosphatic fertilizers, respectively, only the production of urea
and SSP is considered in this study. The
principle raw materials used for making urea

are ammonia and carbon dioxide. Production of ammonia is the highest energy-intensive process in fertilizer manufacturing. It
accounts for almost 80% of the energy consumption in the manufacturing processes of
a variety of final fertilizer products. Therefore, ammonia is considered as a key intermediate for determining the overall energy
efficiency of fertilizer production. Besides

Table 3.54 Installed capacity according to sources of feedstock (percentage) used for nitrogenous fertilizer production
Natural

Electric

Coke

Fuel

Ammonia

Period

Naphtha gas

power

oven gas

Lignite

Coal

oil

(external supply)

1965

43.5

14.0

30.3

12.2

1970

65.3

10.2

6.0

13.3

5.2

1975

73.2

13.7

3.1

7.3

2.7

1980

51.7

13.0

1.7

1.4

9.9

19.6

2.7

1985

42.6

24.0

1.4

1.1

7.7

19.8

3.4

1990

30.4

41.9

1.0

0.9

5.6

14.5

5.7

1995

27.4

47.6

1.4

5.0

13.5

5.1

1997

24.5

53.9

1.5

3.1

11.9

5.1

1998

28.5

50.0

1.4

2.9

11.2

6.0

1999

30.8

47.2

1.3

2.7

10.7

7.3

2000

29.9

45.4

1.3

2.6

10.3

10.5

Source FAI (various years)

80

National Energy Map for India: Technology Vision 2030

air as the source of nitrogen, the ammoniamanufacturing process requires various raw
materials such as water, natural gas, naphtha, fuel oil, coal, and coke oven gas. Natural
gas is the best feedstock for ammonia production. Worldwide, about 83% of ammonia
production capacity is based on natural gas
(GoI 2003). However, in India, the choice of
feedstock was determined by the Government of India, depending on the availability
of resources (TERI 2005b). Feedstock
choice was not necessarily governed by the
energy efficiency consideration. In India,
during 2003/04, about 64% of ammonia
production was based on natural gas, 12%
on fuel oil and LSHS, and 24% on naphtha
(TERI 2005b).
Better feedstock and process technologies, together with improved operation and
maintenance practices, retrofitting, and so
on, have resulted in significant amount of
energy savings during ammonia production.
The average specific energy consumption for
ammonia production in India has declined
significantly from 13.7 Gcal (gigacalories)/
tonne in 1985/86 to 9.14 Gcal/tonne in
2003/04 (a remarkable reduction of 33%)
(TERI 2005b; Das 1997). The reported lowest specific energy consumption of an am-

monia plant in India is about 7.3 Gcal/tonne


during 2003/04, while the reported figure of
the lowest specific energy consumption all
around the world was 7 Gcal/tonne of ammonia production (TERI 2005b) during the
same period. Moreover, the slightly higher
energy consumption can be attributed to the
hot and humid condition in India, and consequently higher cooling water temperature
as compared to the western countries. Furthermore, the average energy consumption
of 25% of the most-efficient Indian ammonia plants is 8.14 Gcal/tonne. This figure is
lower than 8.49% for the most-efficient 25%
ammonia plants in the world. The FAI (Fertilizer Association of India) is targeting to
reduce specific energy consumption to the
level of 6.5 Gcal/tonne within the next 15
years (TERI 2005b). Table 3.55 presents the
feedstock-wise specific energy consumption
for urea production in India (TERI 2005b).
SSP is the only straight phosphatic fertilizer produced in India. The raw materials
used in the production of SSP are rock phosphate and sulphuric acid. In SSP plants, the
major energy consumption is in the form of
electricity for rock-grinding and materialhandling equipment. Most of the SSP plants
have their own sulphuric acid production

Table 3.55 Specific energy consumption for urea production in India


Fuel* (Gcal/tonne of urea)

Electricity (kWh/tonne of urea)

Feedstock

All India average

Best plant in India

All India average

Best plant in India

Natural gas

5.61

4.94

261

235

Naphtha

6.04

5.46

261

235

Fuel oil

8.00

7.42

261

235

* Fuel used for both feedstock and heat production, specific ammonia requirement for urea production is taken
at 0.58 tonne (TERI 2004)
Gcal gigacalories; kWh kilowatt-hour
Source TERI (2004)

Sectoral demand projections, technological characterization, and resource availability

facility. A major portion of the power required for production is used in the
sulphuric acid plant. A small amount of
steam is also required for granulated SSP.
Since most of the SSP plants are located
along with the sulphuric acid plants, surplus
steam is always available. The average specific electricity requirement for SSP production is 34.9 kWh/tonne of SSP (Das 1997).

3.1.3.2.7.1
options

Energy efficiency

In this study, natural-gas-based urea plants


are classified into three categories: (a) existing plant having specific energy consumption equal to all India average, (b) efficient-1
plant having efficiency equal to todays best
plant in India, (c) efficient-2 plant with specific energy consumption equal to FAI target
(6.5 Gcal/tonne of ammonia). For a naphtha-based plant, only existing and efficient
(specific energy consumption equal to todays
best plant) are considered. In case of a fuel-oilbased urea plant and SSP plant, only one category (existing plant) is considered. Since
the average specific energy consumption
takes into consideration all the existing
plants (inefficient and efficient), the introduction year for efficient-1 plants is considered
2006. For efficient-2 plants, the introduction
year is 2016 (target year set by FAI).
As mentioned earlier, natural gas is the
best feedstock for urea production. It is reported that the worldwide share of natural
gas for ammonia production is more than
80% (LBNL 2005). However, the use of
natural gas in India for urea production is
constrained due to its unavailability. In this
study, the share of natural gas is assumed
constant at 64% over the entire modelling

81

time period in a BAU scenario. In the EFF


scenario it is assumed that the share of natural gas for urea production will increase to
100% by the year 2036.

3.1.3.2.8 Pulp and paper industry


Paper making essentially consists of four
major stages: preparation of pulp; stock
preparation; sheet formation; and water removal and sheet finishing. Different types of
processes are used in the paper industry depending upon the type of raw material used
and the end product desired. Although the
kraft sulphate process, semi-mechanical process, and sulphite process are the most
popular ones, the kraft technology accounts
for about 80% of the pulping in the Indian
industry. Therefore, in this study, only the
kraft process is considered.
Based on the installed capacity, the Indian mills are categorized into two types:
large mills (with an installed capacity of
more than 100 TPD) and small mills (capacity less than 100 TPD). There are 525 pulp
and paper mills with an installed capacity of
6.5 MT and production capacity of 5.5 MT.
Paper production can also be classified on
the basis of raw material: wood- and bamboo-based
(38%), agricultural-residuebased (32%), and waste-paper-based (30%).
Out of 525 units, 67% are waste-paperbased, 28% are agro-based, and the remaining 5% are forest-based. All 27 large mills
use hardwood and bamboo, while the
smaller ones utilize agri-residue and waste
paper. These small mills account for more
than 50% production capacity with poor energy and environment performance levels.
Agricultural residues are emerging as a
significant alternative raw material source

82

National Energy Map for India: Technology Vision 2030

for the pulp and paper industry in India. The


use of agricultural residues has grown since
the early 1970s, partly due to the reducing
resources of wood and bamboo, and partly
due to the governments industrial policy
encouraging investment in agri-residuebased paper production. The agri-residuebased paper mills mainly use bagasse and
straw as raw material. Even if the theoretical
availability of bagasse and straw is high,
there are limitations in their use due to seasonal availability, transportation cost, and
environmental problems. The third raw material is waste paper. It comes from both domestic and imported sources. The installed
capacities of Indian mills vary over a wide
range, from 5 TPD to 600 TPD.
Pulp and paper production is highly energy-intensive. Most of the energy (80%
85%) is used as process heat and 15%20%
as electrical power. The technological
characteristics of kraft mills are shown in
Table 3.56 (TERI 2005b).
Coal and electricity are the main sources
of energy for the industry. In addition to
coal, internally available waste biomass is
also used to supplement heat requirement.
In Indian mills, internally available biomass
contributes to about 35% of the total thermal energy requirement of the mill (CSE

2004). It is also reported that in 2001/02, of


the total electricity consumed in large-scale
wood-based mills, about 81% was self- generated primarily through cogeneration (CSE
2004).
The capital cost of wood-based mill is
worked out using the values of average costs
of four mills installed during 1998, and by
using inflation rate. For agri-residue- and
waste-paper-based mills, the cost of cogeneration facility is subtracted from the cost of
wood-based mill. The annual repair and
maintenance cost is assumed at 1.5% of the
capital cost for all types of mills. The economic life of all paper mills is considered at
30 years.

3.1.3.2.8.1 Energy efficiency


options
Many of the paper mills that exist today have
been installed over a span of more than 100
years, and the technologies range from very
old ones to the most modern ones. Indian
plants are well below the standards of energy
performance when compared to their counterparts in the developed countries. Being
protected from international competition
for about four decades, Indian paper mills,

Table 3.56 Technological characteristics of paper mills


Specific energy consumption

Capital cost

Thermal energy

Power consumption

(million rupees/

Life

Input material

(GJ/t of paper)

(kWh/t of paper)

MTPA)

(year)

Agri residue

27.3

1250

90 700

30

Wood

27.3

1450

93 700

30

Waste paper

11.3

725

45 400

30

GJ/t gigajoules per tonne; kWh/t kilowatt-hour per tonne; MTPA million tonnes per annum

Sectoral demand projections, technological characterization, and resource availability

83

Table 3.57 Energy conservation options for Indian paper mills


Savings

Energy saving options

Retrofit cost

Thermal

Power

(million

(GJ/t of

(kWh/t of

rupees/

paper)

paper)

MTPA)

Remark

3667

Applicable to all

150

Applicable to all

117

Applicable to all

183

Applicable to all

233

Applicable to all

Cogeneration
Blow heat recovery

3.32

Fibre recovery system

0.40

Oxygen de-lignification

0.54

Replacement of turbine with

15

32

DC drive
Press section re-building/long

0.66

300

Applicable to all

Hot dispersion system

120

500

Applicable to all

Drum chipper

11

100

Only in wood-based plant

Long-tube falling-film evaporators

0.83

3288

Only in wood-based plant

8.97

60

Only in wood-based plant

nip (shoe) press

High solid concentration of


black liquor
Continuous digester

5.81

75

685

Only in new woodbased plant

GJ/t gigajoules per tonne; kWh/t kilowatt-hour per tonne; MTPA million tonnes per annum; DC direct current
Source TERI (2004)

in general, did not keep up with the technological advancement in the other parts of the
world. A few large paper mills have implemented new technologies because of high
product quality, international competition,
mounting pressure from environmental
regulatory, rise in energy prices, and so on.
Most of the paper mills operating in India,
particularly the small ones, are very old, using outdated technology. In fact, most of the
Indian mills have imported old, used machinery from Europe. However, several paper mills are taking steps to restructure,
upscale, and replace old and outdated machinery with new ones. A remarkable gap

between specific energy consumption in India and developed countries indicates the
scope for efficiency improvement. Table 3.57
presents the suitable options for Indian paper mills (TERI 2005b).
For modelling purpose, agri-residue and
waste-paper-based mills are classified into
two categories (1) existing mills and (2) efficient mills, that include efficiency improvement options listed in Table 3.57. Retrofit
option is also considered for retiring capacity. For wood-based paper mills, the three
categories considered are: (1) existing mill,
(2) efficient-1 mill, with efficiency improvement options listed in Table 3.57, and (3)

84

National Energy Map for India: Technology Vision 2030

efficient-2 mills, that incorporate all efficiency improvement measures. Retrofit option in wood-based mills is consider only
from existing to efficient-1 mill.
In view of the high cost of financing and
small-scale nature of waste paper and agriresidue-based paper mills in India, it is assumed that in a BAU scenario, all existing
waste-paper and agri-residue-based mills
will remain operational beyond their economic life, without any improvement in their
energy efficiency. Similarly, in case of woodbased paper mills, efficient-2 mills are not
allowed in the BAU scenario. In the EFF
scenario, all retrofit options are allowed, and
wood-based efficient-2 mills are also allowed
by 2011.
As mentioned earlier, the Government of
India is encouraging the use of agri-residue
for paper production. However, its use is restricted by localized availability. The maximum potential of pulp production from
agri-residue is estimated at 14 MT (CPPRI
2003) for 2001that translates into 9.8 MT
of paper production. During the same year,
production of agri-residue-based paper was
about 1.58 MT, which is only 16% of the
maximum potential. In the last decade, the
aggregated growth of wheat, paddy, and
sugar cane crops was about 2%. Residues of
these crops are used for paper production.
Therefore, in this study, it is assumed that
the potential will also increase by an average
annual growth rate of 2% during the modelling period. It is assumed that 35% of the
maximum potential of agri-residue-based
paper could be achieved by 2036 as compared to 16% in the year 2001. The percentages share of maximum potential translates
into 9% of the total paper production in
2036. It may be noted that the growth in paper demand is higher than the growth rate of

potential of agri-residue-based paper.


Therefore, despite the increased penetration
level, to the maximum potential, of agri-residue-based paper, its overall percentage contribution to total paper production will
decrease significantly from 32% in the 2001
to 9% in 2036.
During 2001, the share of waste-paperbased paper production was 30% of the total
production. Waste paper is obtained from
domestic collection and through import.
Due to exclusive reuse of paper in India, the
collection rate is relatively low (22%) as
compared to other countriesChina (33%),
Thailand (42%), and Germany (71%). The
collection rate is expected to be constant in
the future. This essentially means that domestic waste paper can only contribute upto
15% of the total paper production, and the
remaining 15% is produced by using imported waste paper. In view of environmental concerns, there is a possibility of a ban on
import of waste material to India as sometimes these materials also contain hazardous
waste. Therefore, in this study, it is assumed
that the import of waste paper will be completely stopped by 2036 in a phased manner.

3.1.4

Residential sector

The population of India was about 1.027


billion in 2001 as per Census 2001 of the
Government of India (GoI 2001).
The average number of members per
household is 5.15 in rural areas and 4.47 in
urban areas. Out of 10 households, seven in
India are in the rural areas, and 0.09% of the
households do not have a dwelling unit. Of
the every 100 households in the rural areas,
36 are pucca houses, 43 are semi-pucca
houses, and the rest are kuchcha houses. On

Sectoral demand projections, technological characterization, and resource availability

85

the other hand, out of evFigure 3.10 Time trend of fuel and electricity
ery 100 households in urconsumption in the residential sector
ban areas, 77 are pucca
structures, 20 semi-pucca,
and only 3 are kuchcha
structures. Plinth level of
the house, that is, the
height of ground floor of
the house from the land
on which the building is
constructed, is zero for
36% of the rural and 32%
of the urban households.
On an average, a rural
household occupies 38 m2
(square metre) of floor
area and an urban houseSource CEA (2004); MoPNG (2004)
hold occupies 37 m2. The
poorest segment, that is,
households in the lowest MPCE (monthly
leum gas) (propane), firewood, crop residue,
per capita consumption expenditure) class
dung, and other renewable sources such as
of less than 225 rupees in rural areas, occupy
solar energy.
2
31 m of floor area and those in urban slums,
Figure 3.10 indicates that commercial en29 m2. About 30% of the dwelling units in
ergy use has been growing quite rapidly in
rural and 4% in urban areas do not have bathe residential sector. During the period
sic facilities like drinking water, electricity
19902003, of the three commercial fuels,
for lighting, and a toilet. About 97% of the
consumption of LPG has grown at the anrural and 99% of the urban households get
nual rate of 11.26%. The average annual
drinking water within half a kilometre of
growth rate of electricity consumption has
their premises (MoSPI 2004).
been 8.25%. However, kerosene consumption has grown at the rate of 0.85% only.
Since 2000, kerosene consumption in the
3.1.4.1 End-use demands in the
residential sector has declined in absolute
terms. Kerosene use in the residential sector
residential sector
came down by 13.9% during 200003. This
Energy services make up a sizeable part of
high rate of consumption of LPG and electhe total household expenditure. The resitricity vis--vis kerosene explains the substidential sector in India is responsible for
tution of kerosene, a primary source of
13.3% of the total commercial energy use
energy, amongst the lower- and middle-in(TERI 2004). The energy sources utilized by
come groups.
the residential sector in India mainly include
Despite its impressive growth in the resielectricity, kerosene, LPG (liquefied petrodential sector, the fuel consumption is still

86

National Energy Map for India: Technology Vision 2030

Figure 3.11 Percentage distribution of


households by source of cooking in rural India

Source MoSPI (1997, 2001)

very low in India as compared to that in


other countries. Commercial energy consumption in the residential sector in the US
for 2002 was 2466.91 Mtoe (US DoE 2003)
whereas for India, the figure is only about 22
Mtoe (TERI 2004). The per capita energy
use in the residential sector of the US is
about 8.56 ToE/year while this is as low as
0.22 ToE/year for India.
Households use energy for many purposes: cooking; cooling and heating their
homes; heating water; and for operating
many appliances such as refrigerators,
stoves, and televisions.
The energy mix for cooking in the domestic sector in India shows that traditional fuels are predominantly used in the household
sector. In the rural areas of the country, the
households use mainly three primary
sources of energy for cooking: firewood and
chips, dung cake, and LPG. Fuelwood is a

major source of cooking for


61.1% of the total households
in India. Among the different
sources, firewood and chips
are used by almost threefourths of the rural households. Only 3% of the
households have switched
away from it since 1993/94
(Figure 3.11).
As can be seen in Figure
3.12, in urban areas of the
country, the households use
mainly three primary sources
of energy for cooking: firewood and chips, kerosene, and
LPG. Of these, LPG is predominant, with 45% of the
households using it. About
22% of the urban households
use firewood and chips. There
has been an increase of about 15% in the number of households using LPG and a decrease of
about 8% in the number of households using
firewood and chips since 1993/94.
Although electricity, kerosene, gas,
candles, and other oils are used for lighting,
at the national level, kerosene and electricity
constitute the primary fuel for lighting in
99% of the households. There has been an
increase in the percentage of households using electricity as the primary source of lighting over the years. During the period 1993/
94 to 1999/2000, the number of households
using electricity as the primary source of
lighting grew at the rate of 11% for rural and
6% for urban India. However, an estimated
84 million households still do not have access to electricity. The majority of these
households are using fuel-based lighting systems, mainly in the form of kerosene. These
systems are less energy-efficient than electri-

Sectoral demand projections, technological characterization, and resource availability

Figure 3.12 Percentage distribution of


households by source of cooking in urban India

Source MoSPI (1997, 2001)

cal lighting systems, and have a wide range


of adverse social and environmental impacts.
The Rajiv Gandhi Grameen Vidyutikaran
Yojana of the Government of India (MoP
2005) plans to provide electricity to all
households in the next five years. It should
be noted here that providing access to electricity to all households does not necessarily
imply that every household will have a metered connection. Therefore, we expect that
all households may have access to electricity
by 2010/11 but actually every household will
have a metered connection only by 2020/21.
The amount of energy that the households consume and the types of fuel they use
also depend on a variety of other factors. The
micro-perspective of each consumer is the
driving force behind the sectors use of energy, and opportunities for change in the de-

87

mand and supply patterns.


This is because, a households
total energy consumption and
use of mix of fuels are the result of the familys attempt to
provide for its various needs
by employing its labour or
cash and specific technologies
that use a certain type of energy. Other factors include
issues of supply such as availability of fuels, energy prices,
and technologies, which have a
very large range of end-use efficiencies and hence, a large
potential for energy saving.
The rising rate of growth of
GDP, growth in disposable income, improved lifestyles, and
the rising purchasing power of
people with higher propensity
to consume with preference
for sophisticated appliances
and modern fuels would provide constant
impetus to the growth of energy demand in
the residential sector.
For the present study, on the basis of end
use, a households energy consumption has
been divided into six categories.
 Lighting
 Cooking
 Space conditioning
 Refrigeration
 Water heating
 Others
The energy demand for fans, air conditioners, and air coolers has been categorized as
energy demand for space conditioning. The
category others comprises energy demand for
appliances such as televisions, washing machines, VCRs/VCPs, and music systems.

88

National Energy Map for India: Technology Vision 2030

3.1.4.1.1 Demand for lighting

Table 3.58 Income categories based on

Electricity and kerosene being the primary


fuels used for lighting, the energy demand
for lighting has been estimated for households that have electrified source of lighting
and for those that depend on kerosene for
lighting.

MPCE in rural and urban areas


Rural

Urban

Class

(rupees)

(rupees)

Low

< 615

< 665

Middle

615950

6651925

High

> 950

> 1925

MPCE monthly per capita consumption expenditure

3.1.4.1.2 Electricity demand for


lighting
Data on income-wise number of lighting devices and usage is not available. Therefore,
for estimating the electricity demand for
lighting, households have been divided into

three categories in rural and urban areas


based on MPCE (Table 3.58).
The number of light points per household
has been assumed as shown in Table 3.59.
It has further been assumed that for rural
households, a light point is used for 4 hours

Table 3.59 Number of lighting points per household in various income classes in rural and
urban areas
Lamp

Lamp

Rural

type

wattage points

RL

GLS

60

RM

RH

Light

Lamp

Lamp

Light

Urban

type

wattage

points *

UL

GLS

60

GLS

60

TL

55

GLS

60

GLS

60

TL

55

GLS

60

GLS

60

GLS

60

TL

55

UM

TL

55

UH

TL

55

TL

55

GLS

60

TL

55

GLS

60

GLS

60

GLS

60

CFL

11

RL rural low; RM rural middle; RH rural high; UL urban low; UM urban middle; UH urban high;
GLS generalized lighting system; TL tube light; CFL compact fluorescent lamp
* These are total light points actually used at a time by a household.

Sectoral demand projections, technological characterization, and resources availability

per day whereas for urban households, the


usage is 5 hour per light point per day. The
lighting requirement has been taken as 100
lux per light point.
DLi = HHi Lpi H 100 365

89

7 lux per hour (Stanford University 2003).


DLi = HHi H 365

(3.30)

where,
DLi = annual demand for lighting by
unelectrified households in the ith income
group
HH i = number of unelectrified households in the ith income group
H = hours of usage

(3.29)

where,
DLi = annual demand for lighting by electrified households in ith income group
HHi = number of electrified households
in the ith income group
Lpi = light points per household in the ith
income group
H = hours of usage

The demand for kerosene-based lighting


is expected to decrease and become zero by
2021 because of the assumption that as per
the Rajiv Gandhi Grameen Vidyutikaran
Yojana of the Ministry of Power (MoP
2005), all households may have access to
electricity by 2010/11. However, every
household is assumed to have a metered
connection only by 2020/21.
Demand for lighting for various GDP
growth scenarios is presented in Table 3.60.

3.1.4.1.3 Kerosene demand for


lighting
It has been assumed that the unelectrified
households used one lamp for lighting.
A hurricane lamp gives an illuminance of
70 lux per hour while a wick lamp provides

Table 3.60 Demand for lighting (trillion lux hours)


8% GDP

6.7% GDP

10% GDP

Electricity-based

Kerosene-based

Electricity-based

Kerosene-based

Electricity-based

Kerosene-based

Year

Rural

Rural

Urban

Rural

Rural

Urban

Rural

Rural

Urban

2001

36.0

33.8

2.8

0.7

36.0

33.8

2.8

0.7

36.0

33.8

2.8

0.7

2006

54.9

44.3

2.1

0.5

51.1

43.2

2.1

0.5

56.6

45.1

2.1

0.5

2011

77.1

57.6

1.4

0.3

69.9

55.1

1.4

0.3

80.4

59.6

1.4

0.3

2016

100.3

72.6

0.7

0.2

91.8

69.0

0.7

0.2

104.7

75.4

0.7

0.2

2021

120.9

89.0

0.0

0.0

112.9

84.7

0.0

0.0

124.3

91.9

0.0

0.0

2026

129.1

104.3

0.0

0.0

125.7

101.1

0.0

0.0

129.9

105.5

0.0

0.0

2031

133.4

118.0

0.0

0.0

132.6

117.0

0.0

0.0

133.4

118.2

0.0

0.0

2036

136.0

131.1

0.0

0.0

135.9

131.0

0.0

0.0

136.0

131.1

0.0

0.0

Urban

GDP gross domestic product

Urban

Urban

90

National Energy Map for India: Technology Vision 2030

Table 3.61 Useful energy demand for cooking (petajoules)


2001

2006

2011

2016

2021

2026

2031

2036

Rural

700.60

724.25

758.32

790.42

814.98

830.04

837.38

838.59

Urban

228.51

260.33

299.30

341.51

384.49

426.68

468.21

509.31

3.1.4.1.4

Demand for cooking

NSS (National Sample Survey) for 1999/


2000 (Figures 3.13 and 3.14).
As the households shift from one income
class to another over time, and as their purchasing power increases, the demonstration
effect sets in. In other words, person always
aspires to reach the consumption level of
relatively higher income groups. Therefore,
as a household moves up the income ladder,
it tries to adopt the consumption pattern of
the higher income group. It also aspires to
acquire the basket of goods/appliances possessed by the relatively higher income group.

Cooking requires energy in the form of heat.


Cooking energy consumption has been estimated separately for rural and urban regions.
The per capita per day useful energy
requirement for cooking is taken to be 620
kcal in rural areas and 520 kcal in urban areas (ABE 1985)
Since the per capita cooking energy requirement remains constant, the total energy demand for cooking increases at the
rate of population growth,
that is, at the rate of 2.32%
in urban areas and at 0.51%
Figure 3.13 Number of households (per 1000) in highest
in rural areas during the time
income class possessing specified durable goods (rural)
period
200136
(Table
3.61).

3.1.4.1.5 Demand for


electrical appliances
The energy demand for appliances in the country depends on the number of
appliances being used/expected to be used, hours of
usage, and wattage of the appliance.
Data on penetration of
appliances per 1000 households is available from the

Source MoSPI (2001)

Sectoral demand projections, technological characterization, and resources availability

91

Useful energy demand for refrigeration is expected to increase at the rate of 13.03%
and 7.05%, respectively, during the same time period. TVs,
VCRs/VCPs, washing machines, and music systems
comprise the category others. The useful energy demand for this category is
expected to increase at the
rate of 11.1% in rural areas
and 7.7% in urban areas during 200136. The energy demand is likely to increase at a
relatively faster rate in rural
areas as a result of greater
reach of these appliances in
the rural market.
Useful energy demand for
space conditioning, refrigeration and others
under various GDP growth rate scenarios is
presented in Tables 3.63, 3.64, and 3.65.

Figure 3.14 Number of households (per 1000) in highest


income class possessing specified durable goods (urban)

Source MoSPI (2001)

For the highest income groups in rural


and urban, the increase in penetration of appliances over the forecast period has been
calculated based on the growth rate of penetration of appliances for the same income
group during 1993/94 to 1999/2000. The
penetration rate per 1000 households has
been capped in the case of growth rate being
unreasonably high.
Based on the appliance penetration rate
(Figures 3.13 and 3.14), the income shifts
over time, and the usage norms (Table 3.62),
the energy demand has been calculated.
The demand for fans, coolers, and air
conditioners has been categorized under
space conditioning.
In the BAU scenario, useful energy demand for space conditioning is expected to
increase at the rate of 14.16% in rural areas
and at 12.87% in urban areas during 2001
36 due to the air conditioners becoming
more popular and affordable in the future.

Table 3.62 Usage norms for electrical


appliances
Working

Working

hours/

hours/

Device

day

Fan

10

60

225

1500

150

24

2400

365

AC

2100

100

Cooler

250

90

Washing machine

0.5

1000

200

TV

3.1

120

365

VCR/VCP

20

25

Music system

60

200

Geyser
Refrigerator

Watt

year

92

National Energy Map for India: Technology Vision 2030

Table 3.63 Useful energy demand for various end uses (petajoules) at 6.7% GDP growth rate
2001

2006

2011

2016

2021

2026

2031

2036

21.66

46.44

104.94

234.27

426.41

697.41

1067.67

Space conditioning

Rural

10.38

Urban

23.51

35.70

59.40

114.56

248.89

510.40

952.27

1623.24

Refrigeration

Rural

8.08

23.51

59.46

134.82

264.67

391.58

500.60

586.43

Urban

41.77

63.30

95.46

143.17

210.85

292.20

376.11

452.40

Rural

2.76

6.21

13.32

27.26

50.75

73.53

93.57

109.77

Urban

7.66

11.02

16.23

24.78

38.97

58.92

81.41

102.59

Others

GDP gross domestic product

Table 3.64 Useful energy demand for various end uses (petajoules) at 8% GDP growth rate

Space conditioning

Refrigeration

Others

2001

2006

Rural

10.38

23.57

Urban

23.51

2016

2021

2026

2031

2036

56.76

133.45

279.92

461.34

710.66

1069.70

37.50

69.22

145.42

310.48

576.15

984.40

1628.31

8.08

27.13

78.48

178.90

320.33

424.34

510.02

587.51

Urban

41.77

67.73

109.03

166.96

240.18

314.05

383.76

453.21

Rural

2.76

6.85

16.50

34.62

60.17

79.16

95.21

109.96

Urban

7.66

11.62

18.48

29.76

46.48

65.31

83.82

102.86

Rural

2011

GDP gross domestic product

Table 3.65 Useful energy demand for various end uses (petajoules) at 10% GDP growth rate

Space conditioning

Refrigeration

Others

2001

2006

Rural

10.38

25.07

Urban

23.51

2016

2021

2026

2031

2036

65.81

155.01

302.30

470.23

711.32

1069.70

38.88

78.19

172.60

349.81

599.98

989.36

1628.31

8.08

30.06

95.55

212.40

347.54

432.62

510.49

587.51

Urban

41.77

71.11

120.42

186.29

258.65

322.24

385.08

453.21

Rural

2.76

7.35

19.30

40.17

64.75

80.58

95.29

109.96

Urban

7.66

12.08

20.49

34.23

51.58

67.80

84.25

102.86

Rural

GDP gross domestic product

2011

Sectoral demand projections, technological characterization, and resources availability

3.1.4.1.6 Demand for water heating

93

Table 3.66 Percentage distribution of


households in various income groups

Data on penetration of geysers is not available with the NSSO (National Sample Survey Organization) for 1999/2000. Therefore,
it has been assumed that the penetration rate
of geysers is equal to that of air conditioners
and coolers. Moreover, apart from electricity, LPG, kerosene, and firewood are also
used for meeting the energy needs for heating water in the country. It has been assumed that 80% of the total households in
the country do not require hot water because
of hot/moderate climatic conditions or because of their preferences. Specifically, it can
be observed in rural areas that people do not
heat water for bathing. Instead, they rely on
fresh water at early morning hours. Therefore, households requiring hot water but not
having geysers have been assumed to depend
on fuels other than electricity. For estimating energy demand for lighting, households
have been divided into three categories in
rural and urban areas (Table 3.66).
It has been assumed that a household depending on firewood, on an average, requires
1 kg of wood for heating water per day. On
the other hand, for households using LPG, it
has been assumed that an LPG cylinder of
14.2 kg lasts roughly 30 days, that is, 0.5 kg
per day, and that 30% of the LPG is consumed for heating water, that is, 0.15 kg/day/
household. An electric rod has been assumed to be consuming 2 kW/h electricity.
Dw = HH N

(3.32)

where,
Dw = energy demand for water heating
HH = number of households using different fuels for lighting
N = the usage and fuel consumption
norms

using sources other than geyser for


heating water
Electric

Income
class

Firewood

rod

LPG

RL

100

RM

70

10

20

RH

60

20

20

UL

60

30

10

UM

20

20

60

UH

30

70

RL rural low; RM rural middle; RH rural high;


UL urban low; UM urban middle; UH urban high;
LPG liquefied petroleum gas

The useful energy demand for heating


water is likely to increase at the rate of
13.65% and 8.27% in rural and urban areas,
respectively, during the time period 200136
for 8% GDP. The useful energy demand for
heating water under various GDP growth
rate scenarios is presented in Table 3.67.

3.1.4.2 Description of technology


options in the residential sector
3.1.4.2.1

Lighting

Although the light bulb was invented in


1854, the first usable electric lamp was developed in 1879. The early lamp had a delicate carbon filament with a very short life.
The first commercial lamp with tungsten
filament was made in 1905. Since then, the
lamps have undergone a process of continuous improvement. New ways of generating
light have been invented, and new technolo-

94

National Energy Map for India: Technology Vision 2030

Table 3.67 Useful energy demand for heating water


(petajoules) under the three GDP growth rates
8% GDP

6.7% GDP

3.1.4.2.1.2 Compact
fluorescent lamps

10% GDP

These are essentially fluorescent tubes packaged in the


2001
1.4
5.8
1.4
5.8
1.4
5.8
compact form and are, there2006
4.7
8.8
4.1
8.4
5.1
9.2
fore, easy to use. CFLs give
2011
14.0
14.5
10.6
12.6
17.0
16.3
out excellent light with sig2016
33.6
24.6
25.3
20.0
40.0
28.9
nificant energy savings and
great look. They also have a
2021
62.4
40.3
51.4
33.0
67.7
45.4
very long life.
2026
84.6
58.4
78.0
51.9
86.3
60.9
The development of light2031
103.5
75.8
101.5
73.3
103.6
76.2
ing in India started 70 years
2036
120.7
93.1
120.5
92.9
120.7
93.1
ago. During the pre-IndepenGDP (gross domestic product)
dence era, the lighting industry in India was in its infancy,
importing finished products
and assembling components.
gies have been developed with the objective
Through a gradual and evolutionary proof achieving economy, efficient use of lightcess, the lighting industry in India is today a
ing, comfort, and aesthetic applications.
self-sufficient producer of lighting systems.
Broadly there are GLS (generalized lightAs per the ISLE (Indian Society of Lighting system); incandescent lamps; tungsten
ing Engineers) (1999), the demand for GLS
halogen lamps; CFLs (compact fluorescent
is increasing by approximately 5% every
tubes); gaseous discharge lamps such as
year. The production of GLS has reached a
mercury vapour, sodium vapour, metal hafigure of 750 million pieces per annum, out
lide; light-emitting diodes; and so on.
of which 500 million pieces are produced by
the organized sector and 250 million pieces
by the unorganized sector, each having over
3.1.4.2.1.1 Incandescent gener20% higher installed capacity. However, the
alized lighting system bulbs
market is still at a low level of sophistication.
Incandescent lamps of 25 W (watt), 40 W,
60 W, and 100 W in clear bulb form the largIt is the earliest and simplest of lamps, and
est segment. Fluorescent lamps used to be
consists of a gas-filled glass tube with tungavailable only in cool daylight colour temsten wire filament, which glows when elecperatures, and were restricted to the linear
tric current is passed through it. The GLS
20-W and 40-W execution. The energy-savbulb is often described as poor mans light
ing 18-W and 36-W linear fluorescent lamps
bulb but with the escalating energy costs.
are now available in the market. The demand
Only the rich are able to afford these grossly
growth of fluorescent lamps declined from
inefficient lamps.
7% to 5.5%, and in 1998/99, 145 million
Year

Rural

Urban

Rural

Urban

Rural

Urban

Sectoral demand projections, technological characterization, and resources availability

pieces were sold, 10% of which were manufactured by the organized sector. The demand for CFLs is growing at a steep rate of
35% per annum, with sales in 1998/99 crossing 6.5 million pieces.
The GLS lamps account for nearly 80%
of the lighting source market, and the rest is
claimed mainly by the tubes market. CFLs
have managed to gain a share of 1%2%.
This low share is due to high per unit price.
Table 3.68 gives the characteristics of electricity-based lighting devices.
Despite the developments, the domestic
market for lighting equipment remains sluggish and localized. Major share of the market
is limited to urban areas and even there,
power shortages, voltage fluctuations, and so
on, limit the usage of electricity-based lighting equipment. Moreover, India is yet to
achieve 100% electrification. Therefore, the
use of kerosene-based lighting devices becomes imperative in the country, particularly in the rural areas. Moreover, the cost

Table 3.68 Techno-economic parameters


for various lighting devices
Device

GLS

FTL

CFL

100 W

40 W TL +

(13 W

15 W

CFL + 3 W

Choke

Choke) 2

Characteristics
Lumen output

1360

2500

2 200

Lux available

100

100

100

20

240

1 360

1000

5000

10 000

Total assembly
cost (rupees)
Life (hours)

FTL fluorescent tube light; CFL compact fluorescent lamp; W watt


Note The figures have been normalized to 100 Lux.

95

Table 3.69 Techno-economic parameters


for kerosene-based lighting devices
Wick
Consumption of kerosene

Hurricane

0.008

0.05

10.000

100.00

7.000

70.00

45.000

135.00

3.000

3.00

(litre per hour)


Lumen output
Lux available
Total assembly cost
(rupees)
Life (years)

Source Rubab and Khandpal (1997)

per lumen is more important to a user than


efficiency in lumen per watt. Kerosene
lamps are a cheaper source of lighting, and
this makes up for their inefficiency but not
for their poor quality of light (Table 3.69).

3.1.4.2.2

Cooking

Households in India use various fuels for


meeting the energy requirements for cooking. Among the traditional fuels, firewood is
used for cooking. Even the high-income
groups, especially those in rural areas, are
reluctant to switch away from using freely
available firewood.
Biogas is produced by the anaerobic digestion of animal dung and other biomass.
The gas can be burnt in a specially designed
stove that produces little CO (carbon monoxide) and no smoke. Furthermore, the digester slurry provides more fixed nitrogen to
the soil than dung.
Charcoal emits relatively less smoke but
generates considerable CO. Converting
wood to charcoal has long been a way to improve fuel quality.

96

National Energy Map for India: Technology Vision 2030

Crop residues and other biomass wastes


are alternative cooking fuels. When they have
no fertilizer value, their use reduces the
problem of waste disposal and the demand
for fuelwood. Plant stalks and straw can generally be burnt in traditional fuelwood
stoves.
A variety of stoves made up of mud are
used in the country, which use firewood,
crop residue, or dung. Many attempts have
been made to improve the energy efficiency
of these stoves.
Kerosene is an important cooking fuel
among the urban poor. However, it is a
smelly fuel that blackens pots and ranks low
in convenience of use as compared to the
more modern fuels like LPG and electricity.
Electricity can be termed as the cleanest
fuel. However, because of its expensive nature and unreliable supply, its use in cooking
is still minimal.
LPG is recommended both for its higher
efficiency and lower environmental impact
than the alternatives. Techno-economic pa-

rameters of various cooking devices are


shown in Table 3.70.

3.1.4.2.3 Electrical appliances


3.1.4.2.3.1

Refrigerators

Among the consumer durables, refrigerators


rank next to televisions in the Indian middleclass homes.
The refrigerator market in India has two
segments: the conventional direct-cool system having a share of about 83% and the
frost-free type, which accounts for the remaining 17%. The frost-free type enjoys a
price supremacy between Rs 6000 and 8500.
Households account for 85% of the refrigerator market, and the remaining 15% is institutional. Rural areas have a share of just
22% in the total refrigerator sales as compared to the urban areas (78%). The 165-litre refrigerators, which were the most

Table 3.70 Techno-economic parameters of various cooking devices


Device
Liquefied petroleum gas stove

Capital cost (rupees)

Efficiency (%)

Life (years)

1 200

60

20

Kerosene stove: wick

150

40

Kerosene stove: pressure

250

45

Dung chulha

10

Firewood based chulha

10

10

800

55

5 000

100

400

71

15

1 460

100

10

10 000

100

15

Biogas burner
Electric oven
Electric hot plate
Solar cooker
Crop residue chulha
Microwave oven

Sectoral demand projections, technological characterization, and resources availability

Table 3.71 Characterization of refrigerators


Standard

Efficient

Cost (rupees)

8000

15 000

Capacity (watt)

1570

1 115

Working hours/day

24

Working days/year
Life (years)

characteriza-

tion of fans
Efficient

Cost (rupees)

1000

1300

24

Capacity (watt)

60

55

365

365

Working hours/day

10

10

25

25

Working days/year

200

200

Life (years)

20

20

Fans

Electric fan is a necessity for more than six


months in most parts in a tropical country
like India.
In India, 65% of the fans are ceiling fans
and 33% are wall/table ones, whereas, pedestal fans make up for a small share of 2%.
About 45% of the market for fans is organized and 55% is informal. Urban areas account for a bigger market share (58%)
compared to rural areas (42%). Table 3.72
gives the technological characterization of
fans.

3.1.4.2.3.3

3.72 Technological

Standard

preferred over, have now given way to 185


225 litre ones, and recently 200300 litre refrigerators are witnessing an emerging trend.
Table 3.71 gives the technological characterization of refrigerators.

3.1.4.2.3.2

Table

97

Air conditioners

Among the consumer durables, the market


for ACs (air conditioners) is growing at a fast
pace.
Reduction in excise and import duties on
components has brought down the price of
the products manufactured by the organized

and unorganized market, and has expanded


the market. However, still the unorganized
market of ACs has a 25% market share. The
domestic sector accounts for 20% of the total ACs. Window ACs are the most popular
type with a share of 48% of the total market.
Packaged/ducked and mini split make up for
40% and 12% of the AC market, respectively. Table 3.73 gives the characterization
of ACs.

3.1.4.2.3.4 Washing machines


Increasing incomes and changing lifestyles
have resulted in a spectacular increase in the
Table

3.73 Technological

characteriza-

tion of air conditioners


Standard

Efficient

Cost (rupees)

20 000

45 000

Capacity (watt)

2000

1300

Working hours/day

Working days/year

120

120

Life (years)

15

15

6510

2893

Investment cost
(million rupees/PJ)
PJ petajoules

98

National Energy Map for India: Technology Vision 2030

penetration of washing machines, especially


in urban households. About 82% of the
washing machines are sold in urban areas
while the rural market accounts for only
18%. A price differential of about 10 000
15 000 rupees between a semi-automatic
and a fully automatic washing machine
makes the semi-automatic one more popular
with a share of 85% in the market, and fully
automatic accounts for 15% of the market.

3.1.4.2.3.5

3.1.4.2.3.6 Audiovideo systems


The audio industry can be divided into various segments: radios, cassette recorders/
players, CD players, and their combination.
CD-based systems are a recent development
but are replacing the cassette players very
rapidly. The market is divided into organized
and unorganized segments. Rural and urban
areas have a 50:50 share in the market.
VCRs and VCPs were a craze till late 1990s.
With the advent of VCDs, there has been a
sharp decline in the VCR/ VCP market. Video
systems are more popular with urban areas.
They have a share of 90% and the rural areas
have a share of 10%. About 60% of the market
is organized and 40% is unorganized. Table
3.74 gives the characterization of washing
machines, televisions, VCRs/ VCPs, and music systems.

Television

About 75 million households in India possess a television. The market for CTVs
(colour televisions) is expanding very fast.
Between 1996 and 1999, the market registered a growth rate of 28%. About 60% of
the market is organized whereas 40% is unorganized. About 98% of the products are
conventional, and flat-screen televisions
have negligible share of 2%. Urban areas
have a share of 60% in the CTVs market and
rural areas account for the remaining 40%.
However, in case of black and white television, the rural areas account for 75% of the
total market and the share of urban area is
25%.

3.1.5

Commercial sector

The commercial sector comprises various


institutional and industrial establishments
such as banks, hotels, restaurants, shopping
complexes, offices, and public departments
supplying basic utilities. In other words, the

Table 3.74 Characterization of washing machines, televisions, VCRs/ VCPs, and music systems
Washing machine

Television

VCR/VCP

Music system

Cost (rupees)

7500

8000

2500

1500

Capacity (watt)

1000

120

20

60

Working hours/day

0.5

3.1

Working days/year

200

365

25

200

Life (years)

15

20

20

20

Sectoral demand projections, technological characterization, and resources availability

commercial sector is a subset of the services


sector as defined by the Central Statistical
Organization, Government of India.9 Given
the structural changes in the economy, especially during the post-liberalization period,
the services sector now accounts for a high
share (about 50% share of the GDP of services sector in aggregate GDP) in the total
national income. Economic growth has
paved the way for increasing demand for services fuelled by rising personal disposable
incomes/enhanced purchasing power. Moreover, the structural reforms in the banking
sector has led to a fall in interest rates and
resulted in real estate boom, encompassing
construction of large-scale commercial
buildings, shopping malls, and so on, especially in urban centres. Coupled with this,
increased spending by the government on
providing public services such as public
lighting, water works, and sewer pumps has
given a fillip to the commercial sector. Energy consumption in the commercial sector
has, thus, increased as a consequence of the
accelerated growth of the commercial sector.
Most commercial energy is used in buildings or structures for the purpose of space
heating, water heating, lighting, cooking,
and cooling. Energy consumed for services
not associated with buildings such as for
traffic lights, city water, and sewer services is
also categorized under commercial sector
energy use.

99

3.1.5.1 End-use demands in the


commercial sector
In India, the commercial energy demand estimation and projection are beset with numerous data gaps, particularly with respect
to the reporting of the number of commercial establishments/consumers, their energy
consumption patterns, degree of usage of
energy for different end-use energy consuming activities, and penetration of appliances
and other end-use devices in the sector.
Therefore, the entire demand estimation
exercise is driven by assumptions on the distribution of fuels consumed for cooking,
lighting, space conditioning, refrigeration,
and miscellaneous services.
For the purpose of energy demand estimation and projections in the commercial
sector, a top-down approach is used in
which the total fuel consumption is first estimated and projected using an appropriate
econometric model. The projected fuel consumption is then divided amongst various
end-use activities involving that particular
fuel.
Fuels such as LPG and kerosene, and traditional fuels such as firewood/charcoal are
used for cooking in the commercial sector.
The historical data on LPG consumed in the
commercial sector for the period 19802002
(MIE 2005) is used for estimating and projecting the total LPG consumption. LPG is
used as fuel for cooking in hotels and restaurants, that is, under the purview of the services sector. Thus, a high rate of growth of
the services sector measured by the GDP

The services/tertiary sector, as defined by the Central Statistical Organization, consists of trade, hotels and restaurants, financing, insurance, real estate and business services, public administration, defence, and other services.

100

National Energy Map for India: Technology Vision 2030

generated by the sector results in high LPG


consumption and vice-versa. The appropriate regression equation is as follows.
Log(LPG C,t) = 0.58 Log(GDPS t) + 0.94
(6.55)

AR (1)

(24.7)

(3.32)

(Adjusted R2 = 0.98)
where, LPGC,t is the LPG consumption in
the commercial sector (in thousand tonnes)
in the year t and GDPSt is the GDP contributed by the services sector (in crore rupees
at 1993/94 prices) in the year t. The values in
the brackets give the t-statistic associated
with the coefficients. The loglog specification of the regression model is found appropriate as the coefficient associated with the
LPG consumption measures the income
elasticity of LPG consumption. The coefficient 0.58 being less than 1 implies that LPG
consumption is income-inelastic. This
means that LPG is a necessary fuel for cooking in the commercial sector. The AR (1)
term corrects for the auto correlated disturbances present in the data. The adjusted R2
is a measure of the goodness of fit of the regression equation. It is as high as 0.98 and
this implies that 98% of the variation in LPG
consumption can be explained by GDP generated by the services sector. The t-statistic
associated with the coefficients presented in
brackets above clearly shows that the variables are statistically significant in explaining LPG consumption.
However, due to other exogenous factors
such as constraints on the accessibility to the
small vendors, eateries in the rural and remote areas use kerosene as a fuel for cooking. Historical data on kerosene consumed
in all sectors is available but the quantities

consumed in the commercial sector are not


known. Hence, it has been assumed that
1.42 MT of kerosene is consumed in the
commercial sector in 2001 (14% of total
kerosene consumed). The underlying rationale is that kerosene consumption would decline in absolute terms in the future as
bottlenecks to the accessibility of LPG are
expected to ease in the future. However, the
extent of decline in kerosene consumed in
the commercial sector is not reported.
Hence, it has been assumed that the consumption of kerosene in the commercial sector would remain constant at the 2001
consumption level of 1.42 MT over the
modelling time frame of 2001 till 2036.
Moreover, in the commercial sector in India,
firewood-based stove is used commonly for
grilled food items. It has been assumed that
10% of the total useful energy demand in the
commercial sector is met by firewood.
Therefore, the end-use devices in the
commercial sector comprise the LPG
burner, wick-type kerosene stove, and firewood-based stove. The efficiency of these
devices is listed in Table 3.75.
The energy demand for cooking in the
commercial sector under different GDP
growth scenarios (expressed in Mtoe) is presented in Table 3.76.

Table

3.75 Technological

options

for

cooking in the commercial sector


Technology

Efficiency (%)

LPG burner

60

Wick-type kerosene stove

48

Firewood-based stove

10

LPG liquefied petroleum gas

Sectoral demand projections, technological characterization, and resources availability

101

Table 3.76 Energy demand for cooking in commercial sector (in Mtoe)
GDP growth rate (%)

2001

2006

2011

2016

2021

2026

2031

6.7

65

81

100

125

157

198

250

65

83

107

139

180

234

302

10

65

84

114

155

212

290

397

Mtoe million tonnes of oil equivalent

3.1.5.2 Electricity demand in the


commercial sector
Electricity consumption in the commercial
sector is estimated using the historical data
on electricity sale to the commercial sector.
Electricity consumption in the commercial
sector has been growing at an average annual
rate (Figure 3.15) of 8.1% per annum. The
growing electricity demand can be explained
by the increasing demand for services mea-

Figure 3.15 Trend of electricity consumption


in the commercial sector (19802003)

Source CEA (2004)

sured by value of output from the services


sector, that is, GDP of the services sector.
The appropriate regression model for estimating electricity demand in the commercial sector is as follows.
Log(ELCC,t) = ()2.87 + 0.97
(-2.58)

(11.36)

Log(GDPSt) + 0.70 AR (1)


(4.89)

(3.33)

(Adjusted R2 = 0.99)
The coefficient associated with
GDPS is 0.97. This implies that
1% rise in value added by the services sector would increase electricity demand by 0.97%, implying
that electricity demand is incomeinelastic. This further implies that
electricity is necessary for the
commercial sector in carrying out
its operations.
However, the bifurcation of
electricity consumption amongst
various electricity consuming activities such as lighting, space conditioning, and refrigeration is
based on electricity usage norms.
Based on the Presidents address
at the CPWD (Central Public
Works Department) in 2004, it has

102

National Energy Map for India: Technology Vision 2030

been assumed that 60% of the total electricity is consumed for lighting, 32% for space
conditioning, and 8% for refrigeration in the
commercial sector. These shares are assumed to remain constant over the modelling time frame. The efficiency of
technologies for lighting in the commercial
sector is shown in Table 3.77.
Upper and lower bounds represent the
realistic levels of penetration of each of the
above technologies. It is assumed that 50%

Table 3.77 Technologies for lighting in the


commercial sector
Technologies

Efficiency

GLS (generalized lighting

Normalized to 1

system)
Tube light

1.818

CFL (compact fluorescent

3.125

lamp)

of the total lighting demand is met by GLS,


49% by tube lights, and 1% by CFLs. These
shares are fixed for the modelling time frame
200136. Thus, the electricity demand for
lighting (in GWh) under different scenarios
is presented in the Table 3.78.
The technologies for space conditioning
together with their efficiency in the commercial sector are listed in Table 3.79.
The total electricity demand for space
conditioning in the commercial sector is met
by fans and air conditioners. The share of
fans in the total electricity is assumed fixed
at 70% and the remaining 30% is met by air
conditioners. Each of these electrical appliances has an efficient counterpart. Under
the pessimistic scenario, it is assumed that
the penetration of efficient appliances is only
to the extent of 45% within both the fan and
air conditioner segments. These shares
are assumed based on the shares of the
organized market dealing with electrical
appliances.

Table 3.78 Electricity demand for lighting in the commercial sector (in GWh)
GDP growth rate (%) 2001

2006

2011

2016

2021

2026

2031

2036

6.7

14 484

19 813

26 971

37 504

53 059

76 066

110 113

160 445

14 484

21 260

31 726

47 342

70 646

105 420

157 312

234 746

10

14 484

22 429

36 594

59 702

97 404

158 913

259 264

422 986

GDP gross domestic product; GWh gigawatt hour

Table 3.79 Technologies for space conditioning in the commercial sector


Technologies

Efficiency

Fan (standard)

Normalized to 1

Fan (efficient)

10% efficient compared to standard (1.1)

Air conditioner (standard)

Normalized to 1

Air conditioner (efficient)

50% more efficient compared to standard

103

Sectoral demand projections, technological characterization, and resources availability

Table 3.80 Electricity demand for space conditioning in the commercial sector (in GWh)
GDP growth rate (%) 2001

2006

2011

2016

2021

2026

2031

6.7

7725

10 567

14 384

20 002

28 298

40 569

7725

11 339

16 920

25 249

37 678

56 224

83 900

125 198

10

7725

11 962

19 517

31 841

51 949

84 753

138 274

225 593

58 727

2036
85 571

GDP gross domestic product; GWh gigawatt hour

Table 3.81 Electricity demand for refrigeration in the commercial sector (in GWh)
GDP growth rate (%) 2001

2006

2011

2016

6.7

1931

2642

3596

5001

1931

2835

4230

10

1931

2991

4879

2021

2026

2031

2036

7 074

10 142

14 682

21 393

6312

9 419

14 056

20 975

31 299

7960

12 987

21 188

34 569

56 398

GDP gross domestic product; GWh gigawatt hour

Thus, the electricity demand for space


conditioning (in GWh) under different scenarios is presented in Table 3.80.
The demand for refrigeration is met by a
standard refrigerator alone, with its efficiency
normalized to one. Thus, the electricity demand for refrigeration (in GWh) under different scenarios is presented in Table 3.81.

The appropriate regression model for estimating and projecting electricity demand
in the commercial sector is as follows.
Log(ELCo,t) = 0.74 Log(GDPSt) + 0.91
(32.58)

AR(1)

(12.5)

(3.34)

(Adjusted R2 = 0.98)

3.1.6 Electricity demand in other


sectors
The other sectors consuming electricity consist of public lighting, public water works, and
sewage pumping. The electricity consumption
in these sectors is assumed to be a function of
the expenditure incurred by the government
on providing services to these sectors.
The historical time-series data clearly depicts that electricity consumption has grown
at an average annual growth rate of 6% from
19802003 (Figure 3.16).

The coefficient associated with GDPS is


0.74. This implies that 1% rise in value
added by the services sector would increase
the electricity demand by 0.74% implying
that electricity demand is income-inelastic.
This further implies that electricity is a necessity for the other sector in carrying out its
operations.
Electricity demand projections (in GWh)
for other services under different growth
scenarios are presented in Table 3.82.

104

National Energy Map for India: Technology Vision 2030

Figure 3.16 Trend of electricity consumption in


other electricity consuming sectors (19802003)

Source CEA (2004)

3.2 Description of resource supply


and conversion technologies
3.2.1

Coal and lignite

Coal is increasingly catering to our growing


energy needs. It meets about 60% of our
commercial energy needs, and about 70% of
the electricity produced in India comes from
coal. With proper technologies and initiatives for better management, it is possible to

reduce the hazards otherwise associated with coal.


Through scientific mining
practices followed by land
reclamation, beneficiation
to reduce ash at source, and
better ways of utilization of
coal like liquefaction of
coal, coal gasification, in
situ coal gasification, and
coal-bed methane recovery,
coal can be used judiciously
as a major source of energy.
The geological coal resources of the country are
estimated at 220.98 billion
tonnes as on January 2001.
Of this, proven reserves are
84.41 billion tonnes, while
98.55 billion tonnes are indicated reserves and 38.02 billion tonnes are
inferred reserves. Coal continues to remain
the principal source of commercial energy,
accounting for nearly 50% of the total supplies.
The current estimates of geological lignite reserves in India are 34.76 billion
tonnes spread over Tamil Nadu and
Pondicherry (87.5%), Rajasthan (6.9%),
Gujarat (4.9%), Kerala (0.31%), and Jammu
and Kashmir (0.37%). The lignite deposits
in the southern and western regions have

Table 3.82 Electricity demand projections for other services (in GWh)
GDP growth rate (%) 2001

2006

2011

2016

2021

6.7

21 551

23 868

30 858

40 229

52 876

69 986

93 137

124 412

21 551

25 188

34 931

48 059

65 793

89 789

122 294

166 359

10

21 551

26 239

38 953

57 371

84 078

122 830

179 089

260 791

GDP gross domestic product; GWh gigawatt hour

2026

2031

2036

Sectoral demand projections, technological characterization, and resources availability

Table 3.83 Maximum values of domestic


coal availability
Fuel (MT)
Coking coal
Non-coking coal
Lignite

2001/02

2036/37

27

50

299

550

25

50

MT million tonnes

emerged as an important source of fuel supply for states like Tamil Nadu, Rajasthan,
and Gujarat. Over the years, considerable
emphasis has been placed on the development of lignite for power generation.
The indigenous production of coking coal
in the country was 30 MT during 2001/02
and is expected to increase to 50 MT by
2036/37. The production of non-coking coal
was about 299 MT in 2001/02 and the maximum production is expected to be no more
than 550 MT in 2036/37. The values of indigenous production of different types of
coal are shown in Table 3.83.

3.2.1.1 Status of coal to oil


technologies in India
In India, studies on coal hydrogenation are
restricted to laboratory-scale R&D activities, principally at the CFRI (Central Fuel
Research Institute), Jharkhand. A 0.5 TPD
high-pressure plant was set up at the CFRI
to study the hydrogenation of coal. The
single-stage process followed by the plant
yielded 25% oil amidst many operational
problems.
Studies on the continuous reactor elsewhere have shown a very poor conversion of
distillate product. The reactor also faces tre-

105

mendous difficulties in terms of operation,


valve erosion, choking, and so on. Basic
studies on reaction kinetics and mechanism,
action of catalyst, solvent quality, characterization of products, and comparative amenability of Indian coal towards hydrogenation
have been carried out in detail. This coal hydrogenation technology is quite different
from the commercial operation undertaken
during the modelling time frame and hence
is not considered in our analysis.

3.2.1.2 Status of coal gasification


in India
Though coal reserves in India are abundant,
the quality of coal in general is inferior, with
mineral content as high as 50%. Since reserves of oil and natural gas in the country
are meagre, they need to be substituted with
coal to the extent feasible. At the same time,
all three fuels, especially coal, need to be
conserved for the future generation. The energy sector requires efficient, clean, and dependable energy supplies. Hence, coal has to
be utilized with a multi-pronged strategy
that aims at higher efficiency, ensures its environmental acceptance and judicious use,
thus prolonging its availability, considers it
as a replacement for oil, and so on. This is
possible only through sustainable development, and gasification is the best option to
achieve it. The major advantage of gasification is that coal is converted into a gaseous
fuel that is a clean form of energy and easy to
handle. Thus, in gaseous form, coal is able to
substitute for petroleum products and natural gas.
Synthesis gas has a wide range of application. It can be used in a combined cycle system that ensures an efficient and clean

106

National Energy Map for India: Technology Vision 2030

generation of electric power. It is suitable for


the manufacturing of hydrogen and chemicals such as ammonia, methanol, and acetic
acid; as substitute natural gas; as a reducing
gas for metallurgical purposes; and so on. It
can be used in multipurpose plants for the
simultaneous production of electric power,
chemicals/fertilizers, and fuels that also improve the economics of coal gasification.
India already has some experience in coal
gasification and has even made advances in
developing an indigenous technology.
The scenario of coal gasification, which is
intimately connected to the particular characteristics of Indian coal, is not as bright as
that of oil gasification. Indian coal has the
advantage of relatively low sulphur content.
The problem lies in the extremely high ash
content, which can often be as high as 40%,
and nature of the ash, which contains very
high amounts of silica and alumina. (Typical
figures from the Talcher coalfield show that
60% and 30% of the ash contains silica and
alumina, respectively. The ash deformation
temperature is 11701240 oC and the fusion
temperature is above 1400 oC.) This high ash
content combined with a high melting point
presents great difficulties to all slagging processes. Any gasifier operating in slagging
mode consumes more oxygen because of the
heat required to keep the ash molten at the
slag tap. In most coal types, this disadvantage is outweighed by the advantages of
high-temperature operation, which ensures
elimination of all volatiles in the gas, and reduced methane slip. Thus, modern process
developments have taken the high-temperature route. The high-ash content of the
Indian coals, however, makes modern hightemperature processes extremely expensive
due to their high oxygen demand. Besides,
there are problems of handling large volumes of silica in an entrained flow process.

Thus, when looking at gasifying Indian


coal, the tendency has been to take into account non-slagging processes. The Indian
Institute of Chemical Technology Unit at
Hyderabad is a small test unit involved primarily in research and coal testing. The
BHEL (Bharat Heavy Electricals Ltd) Unit
at Trichy is an indigenous development, also
aimed at finding a way to improve coal use in
India. It is, however, necessary to take cognizance of the fact that since most Indian coals
have low sulphur content, relatively simple
gas cleaning technologies can be introduced
in conventional combustion plants to meet
the environmental requirements.
Indian scientists and engineers have
gained experience in the gasification of coal
through moving bed process on pilot/demonstration scale. This process (Lurgi dry ash
process) is a commercially proven process in
Germany and South Africa, and uses highash coal for power generation and production of synthesis gas, chemicals, and liquid
fuels. Therefore, it may be a low risk or
mostly no risk strategy to pursue with moving bed gasification process.
Fluidized bed gasification process is superior to moving bed process for utilization
of high-ash Indian coals through gasification
route. The country has very limited experience in fluidized bed process. Internationally also, the experience gained so far is
limited only to low-ash coals. The first
107-MW IGCC (integrated gasification
combined cycle) demonstration plant based
on air blown, pressurized, and fluidized bed
process (that is, KRW [KelloggRust
Westinghouse] process) has been established
at Reno, USA (Pinion pine IGCC power
project). The plant is already in operation.
Results and performance of this plant would
help India in adopting the fluidized bed
process.

Sectoral demand projections, technological characterization, and resources availability

India can go in for a hybrid concept, that


is, a combination of moving bed and fluidized bed gasification processes. Based on the
results obtained from this concept, a fluidized bed coal gasification system can be
added to the moving bed plant at the same
location. As India has a vast reserve of coal,
it will be advantageous for it to adopt two
coal gasification processes. The hybrid concept results in the economy of coal, as coal of
varying sizes supplied to a power plant can
be utilized, that is, 650 mm size coal can be
used for moving bed and coal below 6 mm
for fluidized bed. Moreover, moving bed
cannot tolerate more than 10% of coal fines
due to operational problems.
The Trichy BHEL pilot plant established
in 1988 has gained rich experience in designing, engineering, fabrication, erection,
and operation of the integrated gasification
combined cycle technology. In fact, the
BHELs operational experience of over 5000
hours of the PFBG (pressurized fluidized
bed gasification)-based IGCC is significant
in the context of just about 100 hours logged
on by other plants using similar coal gasification technology in USA and other countries. The combined cycle technology uses
gas turbinesteam turbine combination for
power generation, and instead of natural gas,
uses coal gas along with steam for power
generation in the turbines to achieve higher
efficiency. Gasification is the cleanest
method of utilization of coal, while combined cycle generation gives the highest efficiency. Hence, the integration of the two
technologies for power generation in IGCC
plants offers the benefit of very low emissions, higher efficiency, and the potential for
lower cost of electricity generation. The
BHEL Trichy set up a 6.2-MW IGCC power
plant at a cost of 15 crore rupees in 1989,
which is the first coal-based IGCC in Asia

107

and the second in the whole world. In 1996,


a PFBG demonstration plant of 150 TPD
capacity was designed and retrofitted in the
6.2-MW plant to supply coal gas to the existing unit.

3.2.1.2.1 Status of coal-bed


methane in India
There are very good prospects for the development of coal-bed methane in India. The
coal-bearing formations of India occur in
two distinct geological horizons in the Lower
Gondwana (Permian) belts of India and the
Tertiary sediments (EoceneOliocene) of
north-eastern India, Rajasthan, Gujarat, and
Jammu and Kashmir. Methane gas is entrapped within these formations at a wide
range of sub-surface depths. Indian coal has
gas content values ranging from 1 to 23 m3
(cubic metres)/tonne.
The coal-bed methane occurrence is predicted in Damodar Valley basin, a potential
source presently under consideration. Also,
Amlabad, Jharkhand, is expected to give
higher specific gas yield compared to Raniganj
field, West Bengal. Amlabad is well known as
a potential source of coal-bed methane.
Giving highest priority to the efficient use
of energy resources and long-term
sustainability of energy supplies, the Government of India requested international assistance in coal-bed methane recovery and
its commercial utilization. The country is
one of the chief producers of coal from underground mines in the world. One of the
major fields in Jharia is on fire as can be seen
from satellites in space. Two of the mines in
this coalfield are particularly gassy, and
have been selected as demonstration sites for
a GEF (Global Environment Facility)
project.

108

National Energy Map for India: Technology Vision 2030

In India, the Reliance Gas has carried out


comprehensive geologic assessment of
coal/lignite basins, based on which about
20 000 km2 (square kilometres) of area has
been identified as a prospective site for coalbed methane, with an estimated in-place resource of about 2000 BCM (billion cubic
metres). The recoverable reserve of about

800 BCM and gas production potential of


about 105 million cubic metres per day over a
period of 20 years have been estimated. Coalbed methane potential is thus about 1.5 times
the present natural gas production in India,
which is capable of generating about 19 000
MW of electricity. The potential of gas production in India is given in Table 3.84.

Table 3.84 Coal-bed methane production potential in India

Basin/area

CBM production

Energy equivalent

potential (million

Power

cubic metres/day)

generation (MW)

LNG (MTPA)

Cambay Basin
North Gujarat

30.0

5500

7.50

19.0

3500

4.75

12.0

2200

3.00

Jharia

3.5

650

1.00

East Bokaro

2.5

450

0.60

North Karanpura

6.0

1100

1.50

Rajmahal

4.5

800

1.20

Birbhum

6.0

1100

1.50

Singrauli

1.0

180

0.25

Sohagpur

4.0

720

1.00

Satpura

1.5

270

0.40

Ib River

5.0

900

1.25

Talcher

2.5

450

0.60

Wardha Valley

1.5

270

0.40

Godavari Valley

4.0

720

1.00

Cauvery Basin

2.5

450

0.60

105.5

19 260

26.55

Barmer Basin
South Rajasthan
Damodar Basin
Raniganj

Rajmahal Basin

Others

All India

CBM coal-bed methane; MW megawatts; LNG liquefied natural gas; MTPA million tonnes per annum

Sectoral demand projections, technological characterization, and resources availability

3.2.2

Hydrocarbons

The year 2004/05 was a mixed one for the


Indian oil and gas sector. The import dependency was over 75%, as the country imported 95.86 MT of crude oil for refinery
throughput of 127.368 MT. The year witnessed extreme volatility in the international
crude oil market, with crude oil touching an
all time high of over 70 dollars per barrel.
Increasing input costs but stagnant retail
prices of the transport fuels resulted in losses
for oil companies in the country. There were
some positive developments too. Under the
fifth round of the NELP-V (New Exploration
Licensing Policy-V), 20 blocks were offered
and an overwhelming response was received
from both Indian and international companies. Sixty-nine bids were received for these
blocks and finally 18 of these blocks were
awarded to different companies and consortium. Indias second LNG (liquefied natural
gas) terminal was commissioned at Hazira,
Gujarat, this year. The terminal is the investment of Shell Ventures and includes an LNG
receiving and storage terminal within a functional port. Following section highlights the
key developments in the E&P (exploration and
production) of oil and natural gas. Subsequent
sections deal in detail with crude oil, petroleum products, and natural gas.

3.2.2.1 Exploration and


development
3.2.2.1.1

Overview

In continuation with the previous year,


2004/05 saw significant activity in exploration and development of oil and gas. In

109

2004/05, ONGC (Oil and Natural Gas


Corporation Ltd) had four new oil and gas
finds at Vashista (eastern offshore), D-33
(western offshore), Wamaj (Gujarat), and
Tiphuk (Assam shelf). The total reserve accretion to ONGC for the year was about
49.40 MT.
ONGC also reported a new offshore oil
discovery in the Cambay Basin. Oil India
had three discoveries in Assam, namely
Samdang (Eocene), West Zaloni, and North
Tanali. The GSPCL (Gujarat State Petroleum Corporation Ltd)-led consortium with
Geo Global Resources and Jubiliant made a
gas discovery at KG-8 well, which it won in
the second round of the NELP. The
GSPCLs claim of 20 TCF (trillion cubic
feet) of gas remains to be certified by an independent agency. Apart from these domestic
finds,
2004/05
saw
significant
developments in Indias efforts towards acquiring oil and gas equity abroad. ONGC
signed important deals in Egypt, Qatar, and
Venezuela.

3.2.2.1.2 Crude oil/natural gas


production
The crude oil production for 2004/05 was
33.98 MT, of which 11.59 MT was onshore
and 22.39 MT offshore. The natural gas
production was 31.77 BCM, of which
8.97 BCM was onshore and 22.88 BCM
offshore (MoPNG 2005). Company-wise
details of crude oil and natural gas are given
in Tables 3.85 and 3.86.
The two national oil companies ONGC
and OIL (Oil India Ltd) accounted for
87.34% and 79.66% of the total crude oil
and natural gas production in the country,
respectively, with ONGC accounting for the

110

National Energy Map for India: Technology Vision 2030

Table 3.85 Company-wise crude oil production (MT)


Offshore

Onshore
Year

OIL

ONGC

1994/95

2883

9130

1995/96

2882

1996/97

Private/JV

Total

ONGC

12 017

20 226

8971

26

11 879

2870

8504

38

1997/98

3094

8387

1998/99

3295

1999/2000

Private/JV

Total

Grand total

251

20 477

32 494

22 665

624

23 289

35 168

11 412

20 181

1307

21 488

32 900

42

11 523

19 863

2472

22 335

33 858

8100

77

11 472

18 286

2965

21 251

32 723

3283

7921

94

11 298

16 727

3924

20 651

31 949

2000/01

3286

8428

293

12 007

16 629

3788

20 417

32 424

2001/02

3183

8635

71

11 889

16 073

4070

20 143

32 032

2002/03

2950

8445

75

11 470

17 559

4013

21 572

33 042

2003/04

3002

8384

74

11 460

17 681

4240

21 921

33 381

2004/05

3196

8321

74

11 591

18 164

4226

22 390

33 981

OIL Oil India Ltd; ONGC Oil and Natural Gas Corporation Ltd; JV joint venture; MT million tonnes
Source MoPNG (2005)

Table 3.86 Company-wise production of natural gas (MCM)


Year

OIL

ONGC

Private/JV

1995/96

1433

20 875

331

22 639

1996/97

1496

21 281

479

23 256

1997/98

1670

23 050

1681

26 401

1998/99

1713

22 841

2874

27 428

1999/2000

1729

23 252

3465

28 446

2000/01

1861

24 020

3596

29 477

2001/02

1619

24 041

4054

29 714

2002/03

1744

24 244

5407

31 395

2003/04

1880

23 584

6491

31 955

2004/05

2007

22 985

6782

31 774

OIL Oil India Ltd; ONGC Oil and Natural Gas Corporation Ltd;
JV joint venture; MCM million cubic metres
Source MoPNG (2005)

Total

Sectoral demand projections, technological characterization, and resources availability

major share, as per 2005 data. Private players continued to make their presence felt in
crude oil production, with a share of 18.87%
in 2004/05 in offshore production, up from
virtually nil some years back. However, their
share in onshore production is still less than
1%. Their share in natural gas production
has also gone up from 2% in 1996/97 to
21.34% in 2004/05, which is slightly higher
than the previous year and promises to go up
even further with several NELP fields yielding natural gas.
However, an important cause of concern
is that the domestic crude oil production in
the country has not kept pace with rising
demand. The R/P (reserves/production) ratio for crude oil has stagnated over the past
few years at 22 years. For gas, the R/P ratio is
marginally better at about 29 years. In 2004/
05, India imported 95.86 MT of crude oil
for a total refinery throughput of 127.368

Figure 3.17 Production and import


of crude oil over the years

Source MoPNG (2005)

111

MT. This translates into a crude oil import


dependency of almost 75%. Figure 3.17
summarizes the trend in Indias import dependency. The IEA (International Energy
Agency) (2002) has projected that if this
trend continues, then Indias import dependency may increase to 94% by 2030. However, the crude import dependency gives a
partial picture. In fact, with an increase in
refining capacity and India becoming a net
exporter of petroleum products, countrys
net import dependency has decreased from
80% in 1999/2000 to nearly 70% in 2004/05
(MoPNG 2005).
The Government of India has initiated
many steps to ensure oil security for the
country. One such step was to intensify domestic exploration and development efforts
to explore new fields and increase the reserve base of the country. Hydrocarbon Vision
2025 laid down a phased programme for reappraising all the sedimentary
basins of the country by 2025
(Planning Commission 1999).
This includes intensive exploration in the producing basins
to upgrade yet-to-find hydrocarbon resource and promote
exploration in non-producing, poorly explored, and
new frontier basins like the Himalayan foothold. To meet
these objectives, the DGH (Directorate General of Hydrocarbons) has conducted a number
of studies to upgrade information on the unexplored or less
explored regions in the country. About 1.96 million km2 of
the regions of which 86% are
offshore and the rest on-land
have already been covered

112

National Energy Map for India: Technology Vision 2030

under these efforts. These surveys have given


information about structure, tectonics, and
sedimentary thickness of these areas.
Overseas acquisition of equity oil is another major strategy adopted to enhance oil
security of the country. The Government of
India aims to produce 20 MTPA (million
tonnes per annum) of equity oil and gas
abroad by 2010. Under the Tenth Five Year
Plan, the target for oil and gas equity abroad
was 5.2 MT and 4.88 BCM, respectively.
The likely achievement under the plan period is expected to be about 16.45 MT for
oil and 4.41 BCM for natural gas. The potential in-place reserves of oil for the block
have been estimated to be more than 600
million barrels.

plored. Though the bidding for exploration


blocks started as early as 1979, earlier
rounds were not successful. In all, nine
rounds were conducted from 1979 to 1995,
which resulted in a total investment of 2 billion dollars. In the ninth round, the concept
of JV (joint venture) fields was mooted,
which met with moderate success. In 1997/
98, the Government of India announced the
NELP with the twin objectives of enhancing
the indigenous production by attracting private capital and foreign technology for Indian upstream sector and for mapping the
sedimentary basins of the country as extensively as possible. Under this framework, total freedom has been given to market crude
in the domestic market and a company can
bid directly without the participation of the
ONGC or the OIL, which was mandatory
earlier.
Till date, five rounds of the NELP have
been conducted, and a total of 109 onshore
and offshore blocks have been awarded compared to 21 blocks in 199297. This has led
to a number of new operating companies in
the private and joint sectors entering the upstream petroleum sector. The details of five
NELP rounds are given in Table 3.87.
There was a mixed response in the first two
rounds of the NELP. One of the criticisms

3.2.2.1.3 New Exploration


Licensing Policy
The DGH has divided Indias topography
into 26 sedimentary basins comprising
1.35 million km2 of onshore area and
0.39 million km 2 of offshore area (up to
200 metre isobaths). Despite several developments in the countrys hydrocarbon sector, plenty of areas, which may have
hydrocarbon reserves, remain to be ex-

Table 3.87 Progress during NELP rounds


NELP I

NELP II

NELP III

NELP IV

NELP V

Offered

48

25

27

24

20

Awarded

25

23

23

20

18

18

14

14

16

10

Blocks

Awardees
PSU and PSU-led consortiums
Private players and consortiums

NELP New Exploration Licensing Policy; PSU public sector undertaking

Sectoral demand projections, technological characterization, and resources availability

often made about these rounds was that the


blocks offered under the successive rounds
were largely recycled from the previous
rounds and were the ones that national oil
companies did not consider as prospective.
The NELP-III, launched in April 2002, had
an attractive feature to counter these criticisms. All the 27 blocks offered under the
NELP-III were divided into three categories: Category 1 comprised those blocks that
had never been offered before; Category 2
comprised those blocks that were offered
before but extensive data is now available;
Category 3 comprised those blocks that were
offered before with limited data provided by
the ONGC and the OIL, but were now being
offered with re-interpreted, repackaged, and
reprocessed data. The 20 blocks under the
NELP-IV attracted several international as
well as private players, including Cairn Energy, Hardy Exploration and Production
Inc., Canada GeoGlobal Resources Ltd, Reliance Industries Ltd, Jubilant Enpro, Enpro
Finance, and GSPCL.

3.2.2.1.4

Strategic reserves

In a major move aimed at enhancing energy


security of the country, on 7 January 2004,
the union cabinet approved the setting up of
strategic storage facilities for 5 MT of crude
oil, sufficient to meet 15-day consumption at
three locations on the east and west coasts.
The construction of underground rock caverns has been proposed at Mangalore
(1.5 MT), Visakhapatnam (1 MT), and at a
suitable location south of Mangalore
(2.5 MT). This strategic storage will be in
addition to the existing storage facilities for
crude and petroleum products and will provide an emergency response mechanism in

113

case of short-term disruptions. Currently,


the total crude oil storage capacity of domestic refineries is 19 days (5.7 MT). Besides,
the country at present has tankages to provide for 45-day cover to petroleum products.
The IEA requires oil-importing member
countries to hold stocks equivalent to
90 days of net imports. Though India is not a
member of the IEA, after the setting of proposed strategic storage, it will also have gross
storage capacity in line with the IEA guidelines. According to some reports, India will
seek Saudi Arabias help in building strategic
oil reserves. It was proposed that IOC (Indian Oil Company), a major public sector oil
company, float a SPV (special purpose vehicle) for the purpose of construction and
operation of the storage system. However,
the project has not taken off yet, mainly because of the issue of funding and the high
crude oil prices in the international market.
With increased availability of natural gas
in the country, the Government of India is
also considering building of underground
natural gas storage facilities for strategic use.
The government has recognized that with
the growing importance of natural gas as
fuel/feedstock for several key sectors like
power, fertilizer, steel, transport, and domestic, creation of strategic gas storage systems would be imperative for assuring
uninterrupted supplies. An expert team has
recommended building of reserves for 15
days of gas consumption at the current rate
of consumption of about 1000 million standard cubic metres or 1 BCM of gas. Initial
investment estimates for creating an underground gas storage facility have been pegged
at 100 million dollars. It has been proposed
that a detailed feasibility survey be carried
out for development of underground gas
storage facilities in the country, which may

114

National Energy Map for India: Technology Vision 2030

be funded by the OIDB (Oil Industry Development Board) through an initial grant.

3.2.2.2 Global hydrocarbon


reserves
The global hydrocarbon reserves as per the
BP (2006) indicate that oil availability at the
current R/P ratio is expected to be about
40.7 years. The global natural gas availability
at the current R/P ratio is 65 years. Appendix
4 gives information on the region-wise hydrocarbon reserves till the end of 2005, and
the daily production and R/P ratios over the
past 26 years, from 1980 to 2005 (BP 2006).

3.2.2.3 Refineries in India


As of July 2005, there are a total of 18 refineries in the country17 in the public sector
and one in the private sector. Company-wise
location and capacity of the refineries (as on
1 July 2005) are given in Table 3.88.

Table 3.88 Oil refinery capacity in India


(2005)
Name of the

Location of

Capacity

company

the refinery

(MTPA)

IOCL

Guwahati

1.00

IOCL

Barauni

6.00

IOCL

Koyali

13.70

IOCL

Haldia

6.00

IOCL

Mathura

8.00

IOCL

Digboi

0.65

IOCL

Panipat

6.00

HPCL

Mumbai

5.50

HPCL

Visakhapatnam

7.50

BPCL

Mumbai

6.90

CPCL

Manali

9.50

CPCL

Nagapattinam

1.00

KRL

Kochi

7.50

BRPL

Bongaigaon

2.35

NRL

Numaligarh

3.00

MRPL

Mangalore

9.69

Tatipaka

Andhra Pradesh

0.08

refinery
(ONGC)

3.2.2.3.1 Brief description of


existing refineries
3.2.2.3.1.1 Guwahati Refinery,
Indian Oil Corporation Ltd (Assam)
Guwahati Refinery, the first in public sector,
was set up in collaboration with Rumania at
a cost of 17.29 crore rupees and commissioned on 1 January 1962 with a design capacity of 0.75 MTPA. The present capacity
(2004/05) of this refinery is 1 MTPA. A
Hydrotreater Unit for improving the quality
of diesel has been installed, which was

RPL
Total

Jamnagar

33.00
127.37

IOCL Indian Oil Corporation Ltd;


HPCL Hindustan Petroleum Corporation Ltd;
BPCL Bharat Petroleum Corporation Ltd;
CPCL Chennai Petroleum Corporation Ltd;
KRL Kochi Refineries Ltd; BRPL Bongaigaon
Refinery and Petrochemicals Ltd; NRL Numaligarh
Refinery Ltd; MRPL Mangalore Refinery and
Petrochemicals Ltd; ONGC Oil and Natural Gas
Corporation Ltd; RPL Reliance Petroleum Ltd;
MTPA million tonnes per annum

Sectoral demand projections, technological characterization, and resources availability

commissioned in 2002. The refinery also installed in 2003 an Indmax Unit, a novel
technology developed by its R&D Centre for
upgrading heavy-end LPG, motor spirit,
and diesel.

3.2.2.3.1.2 Barauni Refinery,


Indian Oil Corporation Ltd (Bihar)
Barauni Refinery in the eastern India was
built in collaboration with the Soviet Union
at a cost of 49.4 crore rupees and went on
stream in July 1964. The initial capacity of
2 MTPA (in November 1967) was increased
to 3 MTPA by 1969. The current capacity
(2004/05) of this refinery is 6 MTPA.
A CRU (Catalytic Reformer Unit) was also
added to the refinery in 1997 for the production of unleaded motor spirit. Projects are
also being planned for meeting improving
fuel quality.

3.2.2.3.1.3 Koyali Refinery, Indian


Oil Corporation Ltd (Gujarat)
Gujarat Refinery was built with the Soviet
assistance at a cost of 26 crore rupees and
went on stream in October 1965. The refinery had an initial installed capacity of
2 MTPA and was designed to process crude
from Ankleshwar, Kalol, and Nawagam
oilfields of ONGC in Gujarat. In September
1967, the capacity of the refinery was increased to 3 MTPA, which was further increased to 4.3 MTPA (2004/05) through
debottlenecking measures and to 7.3 MTPA
in October 1978 with the setting up of an
expansion project worth 56.07 crore rupees.
With the addition of additional processing

115

facilities, the refinery could achieve a capacity of 9.5 MTPA in 1989. The refining capacity was further increased to 12.5 MTPA
with the commissioning of a 3 MTPA CDU
(Crude Distillation Unit) in September
1999. The current refining capacity (as of
2004/05) of this refinery is 13.70 MTPA. In
order to improve fuel quality, motor spirit
quality improvement facilities are being
planned to be installed.

3.2.2.3.1.4 Haldia Refinery, Indian


Oil Corporation Ltd (West Bengal)
Haldia Refinery for processing 2.5 MTPA of
Middle East crude was commissioned in
January 1975 and comprised two sectors:
one for producing fuel products and the
other for producing lube base stocks. The
fuel sector was built with French collaboration while the lube sector resulted from Romanian collaboration. The capacity of the
refinery was increased to 2.75 MTPA in
1989 through debottlenecking measures.
With the commissioning of a new CDU of
1 MTPA in March 1997, the capacity was
further increased to 3.75 MTPA. The
present refining capacity (as of 2004/05) of
this refinery is 6 MTPA.

3.2.2.3.1.5 Mathura Refinery,


Indian Oil Corporation Ltd
(Uttar Pradesh)
Mathura Refinery with a capacity of
6 MTPA was set up at a cost of 253.92 crore
rupees. The refinery was commissioned in
January 1982, excluding FCCU (Fluidized
Catalytic Cracking Unit) and Sulphur

116

National Energy Map for India: Technology Vision 2030

Recovery Units, which were commissioned


in January 1983. The refining capacity of
this refinery was increased to 7.5 MTPA in
1989 by debottlenecking and revamping. A
DHDS (Diesel Hydrodesulohurization)
Unit was commissioned in 1989 for the production of diesel with low sulphur content of
0.25% wt (max.). The present refining capacity (as of 2004/05) of this refinery is 8 MTPA.

3.2.2.3.1.6 Digboi Refinery (Assam)


The refinery was set up at Digboi in 1901 by
Assam Oil Company Ltd. The Indian Oil
Corporation Ltd took over the refinery and
marketing management of Assam Oil Company Ltd with effect from 14 October 1981
and created a separate division. This division
has both refinery and marketing operations.
The refinery at Digboi had an installed capacity of 0.5 MTPA. The refining capacity of
the refinery was increased to 0.65 MTPA in
July 1996 by modernizing the refinery. A
new delayed Coking Unit of 170 000 TPA
(tonnes per annum) capacity was commissioned in 1999. A new Solvent Dewaxing
Unit for maximizing production of microcrystalline wax was installed and commissioned in 2003. The refinery has also
installed a Hydrotreater to improve the quality of diesel.

3.2.2.3.1.7 Panipat Refinery,


Indian Oil Corporation Ltd
(Haryana)
The refinery was set up in 1998 at Baholi village in Panipat district, Haryana, at a cost of
3868 crore rupees. The refining capacity of

this refinery was 6 MTPA in 2004/05. It was


increased to 12 MTPA in 2005/06.

3.2.2.3.1.8 Mumbai Refinery,


Hindustan Petroleum Corporation
Ltd (Maharashtra)
The refinery at Mumbai came into stream in
1954 under the ownership of ESSO. The
Government of India acquired it in March
1974. The HPCL (Hindustan Petroleum
Corporation Ltd) came into existence on
15 July 1974, after the merger of these companies. The installed capacity of the Mumbai
refinery of HPCL was 3.5 MTPA, which was
increased to 5.5 MTPA in 1986 following an
expansion programme.

3.2.2.3.1.9 Visakh Refinery,


Hindustan Petroleum Corporation
Ltd (Andhra Pradesh)
Visakh Refinery went on stream under the
ownership of M/s Caltex India Ltd in 1957.
In May 1978, M/s Caltex Oil Refinery (India)
was amalgamated with HPCL. The installed
capacity of 1.5 MTPA was increased to
4.5 MTPA in 1985 and 7.5 MTPA in 1999
through an expansion programme.

3.2.2.3.1.10 Bharat Petroleum


Corporation Ltd (Maharashtra)
The refinery at Mumbai came on stream in
January 1955 under the ownership of
Burmah-Shell Refineries Ltd. Following the
governments acquisition of the Burmah-

Sectoral demand projections, technological characterization, and resources availability

Shell, name of the refinery was changed to


Bharat Refineries Ltd on 11 February 1976.
In August 1977, the company was given its
permanent name Bharat Petroleum Corporation Ltd. The installed capacity of 5.25 MTPA
was increased to 6 MTPA in 1985. The current (as on 2004/05) refining capacity of the
refinery is 6.9 MTPA.

3.2.2.3.1.11 Manali Refinery,


Chennai Petroleum Corporation
Ltd (Tamil Nadu)
CPCL (Chennai Petroleum Corporation
Ltd), formerly known as MRL (Madras Refineries Ltd), was formed as a JV in 1965 between the Government of India, AMOCO,
and NIOC (National Iranian Oil Company),
having a share holding in the ratio
74%:13%:13%, respectively. From the
grass-roots stage, the CPCL refinery was set
up with an installed capacity of 2.5 MTPA in
a record time of 27 months at a cost of
43 crore rupees, without any time or cost
over run. The Manali refinery has a capacity
of 9.5 MTPA and is one of the most complex
refineries in India with fuel, lube, wax, and
petrochemical feedstock production facilities.

3.2.2.3.1.12 Cauvery Basin


Refinery, Chennai Petroleum
Corporation Ltd (Tamil Nadu)
CPCLs second refinery is located at
Cauvery Basin at Nagapattinam. The initial
unit was set up with a capacity of 0.5 MTPA
in 1993, and later on, the capacity was enhanced to 1 MTPA.

117

3.2.2.3.1.13 Kochi Refineries Ltd


(Kerala)
KRL (Kochi Refineries Ltd) is a public sector undertaking, set up in pursuance of a formation agreement dated 27 April 1963
between the Government of India, Phillips
Petroleum Co. of USA, and Duncan Brothers of Calcutta, with an authorized capital of
15 crore rupees. The installed capacity of
2.5 MTPA was increased to 3.3 MTPA in
September 1973 and to 4.5 MTPA in
November 1994. The capacity of the refinery
was further enhanced to 7.5 MTPA in
December 1995.

3.2.2.3.1.14 Bongaigaon Refinery


and Petrochemicals Ltd (Assam)
On 20 January 1974, M/s BRPL
(Bongaigaon Refinery and Petrochemicals
Ltd) was incorporated in Assam under the
Companies Act, 1956, with an authorized
capital of 50 crore rupees. The refinery was
installed with a crude processing capacity of
1 MTPA and comprised a Petrochemicals
Complex consisting of Xylene, DMT (DiMethyl Terephthalate), and PSF (Polyester
Staple Fibre) Units. The complex was built
and commissioned in phases. From April
1987, the capacity of the CDU was increased to 1.35 MTPA by debottlenecking.
Now the authorized capital (equity) of the
company is 200 crore rupees. The paid-up
capital as on date is 199.82 crore rupees. As
a part of the restructuring steps taken up by
the Government of India, IOCL (Indian
Oil Corporation Ltd) acquired the
governments equity in 2000/01. In view of
this, BRPL became subsidiary of IOCL in

118

National Energy Map for India: Technology Vision 2030

2001. The capacity of the refinery has been


increased to 2.35 MTPA in June 1995 by
installing an additional unit.

3.2.2.3.1.17 Tatipaka Refinery, Oil


and Natural Gas Corporation Ltd
(Andhra Pradesh)

3.2.2.3.1.15
Ltd (Assam)

A mini refinery of ONGC with a capacity of


about 0.1 MTPA and an approved cost of
29.9 crore rupees was commissioned in September 2001 at Tatipaka in East Godavari
district of Andhra Pradesh.

Numaligarh Refinery

NRL (Numaligarh Refinery Ltd), popularly


known as Assam Accord Refinery, has been
set up as a grass-root refinery at Numaligarh
in the district of Golaghat (Assam) at an approved cost of 2724 crore rupees. This
project has been set up in fulfilment of the
commitment made by the Government of
India in the historic Assam Accord, signed
on 15 August 1985. NRL was incorporated
on 22 April 1993. The refining capacity of
this refinery is 3 MTPA (as on 2004/05).

3.2.2.3.1.16 Mangalore Refinery


and Petrochemicals Ltd (Karnataka)
The government approved on 11 April 1991
the setting up of a 3 MTPA Oil Refinery
at Mangalore at an estimated cost of 1160
crore rupees, including foreign exchange
component of 300 crore rupees. The project
has been implemented by a JV company with
HPCL, Mumbai, and Indian Rayon and Industrial Ltd, Gujarat, as co-promoters.
The refinery was commissioned in March
1996. MRPL (Mangalore Refinery and Petrochemicals Ltd), which was a joint sector
company, became a public sector undertaking subsequently on acquisition of majority
of shares by ONGC. The capacity of the refinery was assessed at 3.69 MTPA and was
been further enhanced to 9.69 MTPA in
September 1999.

3.2.2.3.1.18 Reliance Petroleum


Ltd (Jamnagar, Gujarat)
The private sector refinery RPL (Reliance
Petroleum Ltd) was commissioned on
14 July 1999 with an installed capacity of
27 MTPA at Jamnagar. The capacity of this
refinery as on 2004/05 is 33 MTPA.

3.2.2.3.2 Refining capacity and


capacity utilization
To meet the growing demand of petroleum
products, the refining capacity in the country has been gradually increased over the
years by setting up new refineries as well as
by enhancing the refining capacity of the existing refineries. The total refining capacity
in the country as on 1 July 2005 stands at
127.37 MTPA.
The refining capacity, actual crude
throughput,
and
capacity
utilization
during the past five years are indicated in
Table 3.89.

Sectoral demand projections, technological characterization, and resources availability

119

Table 3.89 Refining capacity, actual crude throughput, and capacity utilization during the
past five years
2000/01

2001/02

2002/03

2003/04

2004/05

Refining capacity (as on 1 April)

114.59

114.66

116.96

127.37

127.37

Actual crude throughput (MTPA)

103.10

106.50

10.60

118.70

124.30

91.00

93.00

95.00

99.00

Capacity utilization (%)

MTPA million tonnes per annum

3.2.2.3.3 Expansion of existing


refineries

3.2.2.3.4 Hydrocarbon resources


(input to the model)

Expansion plans of the refining capacities of


the existing refineries of the HPCL are detailed below.
 HPCL is enhancing the refining capacity
of Mumbai Refinery from 5.5 MTPA to
7.9 MTPA at an estimated cost of 1152
crore rupees. The project is expected to
be completed by December 2006.
 Expansion of Visakh Refinery of HPCL
from 7.5 MTPA to 8.33 MTPA is taking
place at an estimated cost of 1635 crore
rupees. The project is expected to be
completed by December 2006.

The latest estimates indicate that India has


about 0.4% of the worlds proven reserves of
crude oil. The domestic crude consumption
is estimated at 2.8% of the worlds consumption. The balance of recoverable reserves as
estimated in the beginning of 2001 is 733.70
MT of crude and 749.65 BCM of natural
gas. The share of hydrocarbons in the primary commercial energy consumption of the
country has been increasing over the years
and is presently estimated at 44.9% (36%
for oil and 8.9% for natural gas). The demand for oil is likely to increase further during the next two decades. The transport
sector will be the main driver for the projected increase in oil demand. Consequently,
the import dependency for oil, which is

Table 3.90 provides details of the new


refineries planned in the Eleventh Five Year
Plan.

Table 3.90 New refineries planned in the Eleventh Five Year Plan
Capacity

Expenditure

Actual/anticipated

Name of refineries

(MTPA)

(in crore rupees)

completion date

IOCL, Paradip

8312

March 2010

BPCL, Bina

6354

September 2009

HPCL, Bhatinda

9806

December 2006

IOCL Indian Oil Corporation Ltd; BPCL Bharat Petroleum Corporation Ltd; HPCL Hindustan Petroleum
Corporation Ltd; MTPA million tonnes per annum

120

National Energy Map for India: Technology Vision 2030

presently about 70%, is likely to increase


further during the Tenth and Eleventh Plans.
India has about 0.4% of the worlds natural gas reserves. Initially, the gas reserves had
been developed largely for use as petrochemical feedstock and for the production of
fertilizers, but gas is now increasingly being
used for power generation, in industrial applications and, more recently, in the transport sector. Presently, the share of power
generation capacity based on gas is about
10% of the total installed capacity. The India
Hydrocarbon Vision 2025 of the government
identifies natural gas as the preferred fuel for
the future and several options are being explored to increase its supply including building facilities to handle imports of LNG and
bringing gas from major gas-producing
countries by setting up pipelines. India is
also reported to have significant deposits of
gas hydrates. However, the true extent of this
resource and its potential for commercial
exploitation are still being evaluated. In ad-

dition, deep-sea gas reserves are unknown


and need to be explored.
Crude oil production in 2001/02 was
32 MT while crude imports were about
80 MT. The production levels have remained
more or less stagnant over the past few years
while the imports of crude and products
have been increasing. The refining crude
throughput in 2001/02 was 107 MT with a
production of 100 MT.
The production of natural gas in 2001/02
was 29.71 BCM. Natural gas may be imported in the form of LNG by trans-national
pipelines. At present, India is importing
natural gas in the form of LNG by two terminals, and three more terminals are being
planned. The daily availability of natural gas
in India through domestic extraction and
import through LNG terminals and pipelines, as considered in our model, is shown
in Table 3.91. Besides these levels, we have
assumed LNG imports from the outer
harbour at an additional cost.

Table 3.91 Natural gas availability


Natural gas availability (MSCMD)
2006/07

2011/12

2016/17

2021/22

2026/27

Total domestic

84

123

125

125

125

Total LNG import

25

65

95

125

135

IranPakistanIndia

30

90

90

90

MyanmarIndia

30

30

30

Total pipelines

30

120

120

120

25

95

215

245

255

109

218

340

370

380

Trans-national pipelines

Total imports
Total

MSCMD million standard cubic metre daily; LNG liquefied natural gas

Sectoral demand projections, technological characterization, and resources availability

3.2.2.3.5

Energy prices

121

Table 3.92 Prices of different types of coal


in three different scenarios

The economic costs of energy resources have


been considered in the model. Accordingly,
taxes and subsidies are not considered to reflect the price differentiation across various
consuming segments/uses. As such, c.i.f.
(cost insurance freight) prices are considered for imported fuels while f.o.b. (freight
on-board) prices are taken into account for
domestic extraction and exports. Owing to
large variation in the fuel prices during the
past three to four years, we have considered
current fuel prices for this analysis. For coal,
correction factors are used with f.o.b. price,
taking into account different calorific values
of domestic coal, and imported and exported coal. For non-coking coal, an import
price of 60 dollars per tonne is used. Table
3.92 presents the prices considered for different types of coal.
The current f.o.b price for petroleum
products is estimated by using average value
of the ratios of their prices with respect to
the crude oil price (average value during the
period 200104). The c.i.f. prices are estimated by adding load port charges, freight,
insurance, and ocean losses to the f.o.b.
prices. Table 3.93 presents the prices considered for crude oil and other key petroleum
products.
For LNG, the c.i.f. cost of the latest Iranian deal (3.515 dollars/MMBTU), with an
additional re-gasification cost of 0.58 dollar/
MMBTU, has been used. For the import of
natural gas by pipelines, re-gasification cost
is not included. For domestic natural gas,
f.o.b. price of 3.21 dollars/MMBTU has
been considered. These prices have been deflated for 2001. Table 3.94 presents prices of
natural gas considered in this study.

Current

price
Current

deflated

price

to 2001

(dollar/

(dollar/

tonne)

tonne)

Import

60

50

Export

41

34

Domestic

35

29

Import

85

71

Export

59

49

Domestic

59

49

Domestic

25

21

Fuel
Non-coking
coal

Coking coal

Lignite

1 dollar is 47.7 rupees for 2001 and 43.53 rupees for


2005.

3.2.3

Power sector

Total installed capacity of power utilities increased from 5106 GW (gigawatts) in 1950
to 264 231 GW in 1991, registering an annual growth rate of 10.4% over the period.
Until 1980s, the growth rate in hydro power
and thermal power was comparable, but
during the 1980s, hydro power generation
increased at a rate of 4.4% compared to the
growth rate of 11.6% in the thermal power.
Owing to the decline in hydro power development and prevailing peak power deficits,
coal-fired thermal power units are often
used for meeting peak loads. Ten nuclear
power plants account for 2.5%2.7% of total
utility generation.
The poor performance of Indias existing
generating units has been a principal cause
of power shortages and unreliable power

122

National Energy Map for India: Technology Vision 2030

Table 3.93 Price of crude and other petroleum products


f.o.b./

Current

Current price

price

deflated to 2001

Fuel

c.i.f.

Unit

Crude oil

f.o.b.

dollars/bbl

60

50

c.i.f.

dollars/bbl

62

51

f.o.b.

dollars/tonne

531

443

c.i.f.

dollars/tonne

544

453

f.o.b.

dollars/tonne

627

523

c.i.f.

dollars/tonne

641

534

f.o.b.

dollars/tonne

567

472

c.i.f.

dollars/tonne

580

484

f.o.b.

dollars/tonne

567

472

c.i.f.

dollars/tonne

580

484

f.o.b.

dollars/tonne

544

453

c.i.f.

dollars/tonne

557

464

f.o.b.

dollars/tonne

554

462

c.i.f.

dollars/tonne

873

728

HSD

Gasoline

Kerosene

ATF

Naphtha

LPG

HSD high speed diesel; ATF aviation turbine fuel; LPG liquefied petroleum gas;
f.o.b. freight on-board; c.i.f. cost insurance freight; bbl barrel

Table 3.94 Prices of natural gas


Current

Current price

price

deflated to

(dollars/

2001 (dollars/

MMBTU)

MMBTU)

Domestic natural gas

3.210

2.68

Import of natural gas

3.515

2.93

4.100

3.42

by pipelines
LNG import by terminal

LNG liquefied natural gas; MMBTU million British


thermal unit

supply. The primary culprits are coal-fired


thermal power stations that account for over
65% of the total installed capacity. The average PLF (plant load factor) of thermal
power stations in India is less than 60%, but
varies considerably across regions. In 1989/
90, the southern region had the highest PLF
of 65.6%, while the eastern and the northeastern regions recorded very low PLFs of
38.5% and 26.8%, respectively. In contrast,
hydro power stations have far better track
record due to the fact that their performance
relies largely on water flow.
However, not all thermal power generating stations have such dismal records. For
instance, the performance of 500-MW and
200-MW units has been satisfactory, and
their PLFs have been higher than the

Sectoral demand projections, technological characterization, and resources availability

national average. It is, in fact, the thermal


units of 120 MW, 140 MW, and less that are
the cause for concern. Most of these units
have already logged more than 100 000 running hours, and their performance can only
be improved through a long-term rehabilitation or re-powering programme.

3.2.3.1 Thermal power generation


Till 1969, the thermal power generation
plants in India were in the capacity range of
3060 MW, having moving grate stoker or
pulverized coal firing and conventional
steam cycle with steam parameters of 90 ata
(atmospheres absolute) and 540 oC, and no
reheating (Table 3.95). This gave heat rates
above 2200 kcal/kWh for the turbinegenerator system. With pulverized coal firing,
there has been a gradual rise in unit ratings
to 210, 250, and 500 MW over the years. The
heat rate has thus been improved to a level of
1950 kcal/kWh for 250- and 500-MW units.
The earlier heat rate of 1970 for a 210-MW
unit has also been improved recently by

123

39 kcal/kWh (BHEL 2002) through T4


blading, used in place of the earlier T2 type
blading, and implemented for Khaperkheda
TPS extension units 3 and 4 of Maharashtra
State Electricity Board. Introduction of T4
blade profiles for the future 250- and 500MW units will also improve upon the existing heat rates. However, as far as sub-critical
steam cycle is concerned, the plant efficiency has reached virtually its peak. Further
improvement will be possible only by adopting super-critical steam parameters and
other advanced cycles based on PFBC and
gasification.
While using premium fuels like natural
gas and naphtha, contemporary design of
gas turbines (Table 3.96) has been adopted
in the country, and the combined cycle
power generation efficiency to the level of
53% has been achieved at ISO conditions,
that is, 15 C ambient temperature, 60%
relative humidity, and barometric pressure
corresponding to mean sea level. The efficiency levels in Indian conditions are, thus,
50%51%. Now, we have to look further to
achieve higher efficiencies.

Table 3.95 Power generation steam cycles with different unit ratings
Turbine heat rate

*Gross plant heat

Unit rating (MW)

Cycle parameters

(kcal/kWh)

rate (kcal/kWh)

70

90 ata, 537 oC, non-reheat

2200

2588

120/130

130 ata, 537 oC/537 oC, reheat

1980

2330

210

150 ata, 537 oC/537 oC, reheat


1970

2318

1970

2314

1945

2288

(with motor-driven BFP)


250

150 ata, 537 oC/537 oC, reheat


(with motor-driven BFP)

500

170 ata, 537 oC/537 oC, reheat


(with steam-driven BFP)

*Considering boiler efficiency as 85%. For net heat rate, auxiliary power consumption also to be considered.
MW megawatts; ata atmospheres absolute; BFP back focal plane; kcal kilocalories; kWh kilowatt-hours

124

National Energy Map for India: Technology Vision 2030

Table 3.96 Contemporary gas turbines using natural gas as fuelperformance at ISO
conditions

ISO rating

Heat rate

Efficiency

Exhaust

GT inlet

CCPP

flow

temperature

efficiency

Model

(MW)

(kcal/kWh)

(%)

(kg/s)

( C)

(%)

V94.2

163.3

2496

34.5

526.0

1060

52.5

PG9171(E)

126.1

2545

33.8

418.0

1124

52.7

GT13E2

172.2

2363

36.3

532.0

1150

53.1

M701

144.1

2472

34.8

440.8

1120

51.4

MW megawatts; kcal kilocalories; kWh kilowatt-hours; kg kilogram; s seconds; GT gas turbine;


CCPP combined cycle power plant

From atmospheric pollution control


point of view, there has been a significant
progress with respect to control of particulate matter emissions to the desired levels of
150 mg/Nm3 (milligrams per Newton per
cubic metre) for most of the 200- and 210MW units, and 100 mg/Nm3 for 500-MW
units. Emissions from the older units, in
which retrofit of modified ESP (electrostatic
precipitator) has not been done, are high.
However, there are no mandatory controls
desired for SOx (oxides of sulphur) and NOx
(oxides of nitrogen). We in India are lucky
that coal contains generally less than 0.5%
sulphur, and SOx emissions are within limits.

3.2.3.1.1

Advanced technologies

3.2.3.1.1.1 Flue gas desulphurization


and deNOx system
Even though SOx emissions from individual
stacks, while using low-sulphur coal, are
within limits, those from super thermal
power stations within a small space may lead

to overall high concentration of SOx, leading


to acid rain. In such cases, removing SO x by
scrubbing off flue gases with lime, known as
FGD (flue gas desulphurization), may become necessary. This will lead to an increase
in capital and operating cost. Literature survey reveals that the increase in capital cost
will be of the order of 15%20%, and cost of
generation may increase by 10%15%.
The FGD technology is fully established
in advanced countries for the past two decades, and can be obtained for applications
in India whenever required.
Presence of NOx in the flue gases of pulverized coal-fired boilers can be controlled
at the combustion stage (through low-NOx
burners/overfire air) or through SCR (selective catalytic reduction). In this process,
NOx and NH3 (ammonia) react to form nitrogen and water vapour. The capital cost of
SCR system is in the range 90100 dollars
per kW of the installed capacity. The systems
can be designed both for high dust applications (before subjecting dust to APH [air
pre-heater] and low dust applications (after
subjecting dust to ESP). However, India
lacks experience with respect to application.

Sectoral demand projections, technological characterization, and resources availability

3.2.3.1.1.2
cycle

Supercritical steam

The steam cycle operating at steam pressure


above 225.36 ata is called supercritical
steam cycle. At this pressure, the density of
water and steam is same. Thus, there is no
need for a boiler drum that separates steam
from water. The boiler used for this application is called once-through unit. The rest of
the power plant remains the same, except the
number of HP/LP (high pressure/low pressure) heaters chosen to optimize the cycle.
The improvement in heat rates while adopting supercritical parameters for Indian ambient conditions is shown in Figure 3.18.
It may be seen from this figure that compared to the base case of steam parameters
(170 ata/537 oC/537 oC), the improvement
in heat rate will be 2.1% when steam parameters adopted are 246 ata/537 oC/565 oC and
5% when USC (ultra-supercritical) paramFigure 3.18 Improvement in heat
rates with steam parameters

125

eters of 306 ata/598 oC/598 oC are adopted.


For a pithead 3 660 MW supercritical
station, the capital cost saving projected
in 1999 was about 2.5% as compared to
4 500 MW units. In developed countries,
where the technologies for supercritical
power plants are mature, the capital cost per
kW is virtually the same as that of sub-critical plants. Thus, selection of a sub-critical or
supercritical unit often depends upon a
power producers experience and the pressure to reduce fuel consumption (giving
benefits of reduction of cost of power generation as well reduced emissions of particulates, SOX, NOX, and CO2).
In terms of operational availability and
reliability, the EPRI (Electric Power Research Institute) study of supercritical plants
operating in USA has confirmed that outage
rates are comparable to drum-type units, after initial period of learning of technology
operations.
With the commercial introduction of new steel alloys with higher allowable
stresses and longer life at elevated temperatures, a number of power plants with
USC parameters (above 280
ata with double reheat or
306 ata/598 oC/598 oC) have
come up in advanced countries like Japan, EU, and
USA. Based on these successes, researchers continue
to improve designs and materials, and it appears that
the USC plants with main
steam parameters of 357 ata/
625 oC/625 oC will become
fully commercial in the next
510 years.

126

National Energy Map for India: Technology Vision 2030

3.2.3.1.1.3
turbines

Advance class gas

With the increase in the cost of premium fuels like natural gas, naphtha, and LNG, there
is an ever-increasing pressure on gas turbine
designers and manufacturers of higher efficiency combined cycle systems to produce
power at competitive rates compared to
coal-fired plants. The improved efficiency
obviously leads to reduction in emissions of
SOx, NO x, and CO2 also.
Introduction of advance class turbines
with inlet temperature in the range 1250
1350 oC has led to combined cycle power
plant efficiency of about 58% on LHV (low
heating value) basis and under ISO conditions (Table 3.97). Corresponding value in
Indian conditions is in the range 55%
56.5%. A number of plants are in operation
throughout the world. However, there are
only a few in India (for example, 2 9 FA at
Dabhol and 3 6 FA at Kovilkallapal,
Peringulam, and Dhuvaram). Advance class
gas turbines with dry low NOx combustion

system using natural gas also generate less


than 25 PPM (parts per million) NOx.
Further research to improve efficiency is
in progress, and gas turbines employing
steam injection with gas inlet temperature of
1430 oC and combined cycle efficiency of 60%
are available commercially in the UK and
USA.

3.2.3.1.1.4 Coal-based
combined cycle systems
The approach towards further improvement
in efficiency of, or reduction of pollution
from, coal-based power generation leads to
two thermodynamic cycles including gas
turbine in topping cycle and a steam turbine
in a bottoming cycle, and hence is called
combined cycle. However, gas turbines need
clean fuel gas or clean flue gas. Therefore,
use of coal calls for its conversion to clean
combustion products or coal gas at high
pressure. Two technologies have been developed: (a) PFBC and (b) IGCC.

Table 3.97 Advance class gas turbinesperformance at ISO conditions


Exhaust
ISO rating

Heat rate

Efficiency

flow

CCPP
GT inlet/exhaust
o

efficiency

Model

(MW)

(kcal/kWh)

(%)

(kg/s)

temperature ( C)

(%)

V94.3A

278.0

2239

38.4

670.0

1300/582

57.5

9FA

255.6

2331

36.9

641.0

1300/602

57.1

GT26

281.0

2245

38.3

631.7

1280/615

57.8

M701F

270.3

2250

38.2

650.8

1350/586

57.3

M701G

334.0

2180

39.4

736.8

1400/587

58.7

MW megawatts; kcal kilocalories; kWh kilowatt-hour; kg kilogram; s seconds; GT gas turbine;


CCPP combined cycle power plant

Sectoral demand projections, technological characterization, and resources availability

3.2.3.1.1.4.1 Pressurized fluidized


bed combustion
In the PFBC concept, the conventional combustion chamber of the gas turbine is replaced with PFB combustor (bubbling or
circulating) and hot gas clean-up system.
The combustion products pass through gas
turbine and the heat recovery steam generator. The system is thus a combined cycle,
which is capable of giving generation efficiency 5%6% higher than sub-critical
steam cycle plants. Therefore, the system is a
strong competitor for USC steam cycle.
Six commercial PFBC demonstration
plants (each less than 100-MW capacity) are
operating around the world. The application
is generally CHP (combined heat and
power). A 360-MW unit based on ABB technology and a 250-MW unit based on Hitachi
technology were commissioned in 2003/04
in Japan. The operating experience obtained
from these units will have a strong influence on
the future of commercial PFBC technology.
In India, only BHEL has done R&D work
on pilot-scale PFBC, and tested combustion
characteristics of few coal types. Recently,
they have also tested ceramic-candle-based
hot gas clean-up system. The data generated
will be useful in designing a demonstration
plant in India.

3.2.3.1.1.4.2 Integrated
gasificaiton combined cycle
Coal gas can be produced by reacting coal
with air/steam or oxygen/steam; the former
reaction produces low CV (calorific value)
gas whereas the latter reaction produces medium CV gas. For combined cycle operation,

127

it is economical to adopt pressurized gasification. The hot raw gas from the gasifier is
cooled by generating steam through HRSG
(heat recovery steam generation). This steam
is integrated in the combined cycle with the
steam produced from HRSG downstream of
the gas turbine. Part of the steam produced
is used in the gasifier. Thus, the cycle is
called IGCC.
Typically, the IGCC efficiency is the
product of the gasifier efficiency (achievable
90%) and the combined cycle efficiency
(55% with contemporary gas turbines, as
explained in Section 4.3), giving a value of
41%42% compared to 40% achievable
through USC steam cycle. This will proportionately reduce CO2 emission. The SO x
emission can be brought down to 40115
mg/Nm3, as the sulphur is removed in the
gasification process itself. The NOx emission
has also been reported to reduce to levels
below 125 mg/Nm3. A number of commercial
plants using coal or refinery residues as fuel
have come up all over the world (Table 3.98).
The main barriers to widespread adoption of IGCC technologies are: (a) high capital cost compared to pulverized coal plant
and (b) demonstration of high availability, at
least equal to existing PC plants. However,
the costs are coming down. A recent joint
study by Texaco, General Electric, and
Praxair has shown that for a 550-MW power
block, with the introduction of 9H gas turbine technology with firing temperature in
the range 14001450 0C, the efficiency,
capital cost, and cost of generation have significantly improved (Figure 3.19) for the period 19942000.
In India, pioneering work has been done
on coal-based IGCC by BHEL on a 6.2MWe pilot plant at Trichy, using both pressurized moving bed gasifier and PFBG.

128

National Energy Map for India: Technology Vision 2030

Table 3.98 Integrated gasification combined cycle experience in the world


Project

Process

Start-up

Output

Feed

Power block

GSK (Japan)

Texaco

2001

540 MW

VB Tar

2xGE 9EC

Fife Power (Scotland)

BGL

2000

400 MW

Coal/RdF

2xGE 9FA

Shell Pernis (the Netherlands)

Shell

1997

120 MW + H 2

Heavy oil

2xGE 6B

Sierra Pacific (1) (Nevada)

KRW

1998

100 MW

Coal

GE 106 F

Elcogas (Spain)

Pernflow

1998

300 MW

Coal/coke

KWU V94.3

ISE (Italy)

Texaco

2000

520 MW

Asphalt

2xKWU V94.3

SARAS (Italy)

Texaco

2000

550 MW

VB Tar

3xGE 109E

Star (Delaware)

Texaco

1999

240 MW

Petcoke

2xGE 6FA

API (Italy)

Texaco

2000

275 MW

VB Tar

ABB 13 E2

Cool Water (California)

Texaco

1984

120 MW

Coal

GE 107E

Dow Plaquemine (USA)

Destec

1986

220 MW

Coal

GE 107E

Demkolee (the Netherlands)

Shell

1993

250 MW

Coal

KWU V94.2

Tampa Electric (Florida)

Texaco

1996

260 MW

Coal

GE 107 FA

Texaco-Eldorado (Kansas)

Texaco

1996

40 MW

Petcoke

GE 6B

PSI-Wabash (1) (Indiana)

Destec

1996

262 MW

Coal

GE 7FA

Schwarze/Pumpe (Germany)

Noell

1996

40 MW

Coal/oil

GE 6B

Fife Power (Scotland)

BGL

1999

120 MW

Coal/sldg

GE 106FA

Total (France)

Texaco

2004

365 MW

Ref. residue

ABB

EXXON (USA)

Texaco

1999

40 MW

Petcoke

GE 6B

EXXON (Singapore)

Texaco

2000

180 MW

Ref. residue

2xGE 6FA

NPRC (Japan)

Texaco

2003

340 MW

Asphalt

Repsol (Spain)

Texaco

2004

824 MW

Ref. residue

CITAGO (USA)

Texaco

2004

350 MW

Petcoke

MW megawatts; BGL British gas Lurgi; KRW KelloggRustWestinghouse

Based on this work, design of a 100-MW


IGCC demonstration plant with PFBG has
been developed. It is learnt that BHEL and
National Thermal Power Corporation are
jointly working for setting up a plant of this
rating. Also a techno-economic feasibility
study for a 500-MW IGCC plant is being
worked out. The Council of Scientific and
Industrial Research has also published in

1992 a feasibility assessment report of


IGCC for a 500600 MW plant with the
primary objective of selecting gasification
technology for its application for high-ash
Indian coal (base case of North Karanpura
coal with HHV [high heating value] of
3332 kcal/kg). This study gave the cost
comparison as presented in Table 3.99.

Sectoral demand projections, technological characterization, and resources availability

129

natural gas for power generation is picking up, the advantages being no particulate
matter pollution and reduced
CO2 emission per kWh of
power generated. The present
environment policy defines
primarily for particulate matter control, but gives no strict
conformance standards for
other gaseous pollutants like
SOx, NO x, and CO2 (except a
gazette notification of the
Ministry of Environment and
Forests
stipulating
NOx
emissions for gas turbines).
The higher chimney height
may disperse SOx and NOx in
low
concentrations
over
larger area, but does not reduce/eliminate their effects.
Besides, the international
protocols in future may require limiting
emissions of CO2 and NOx, the greenhouse
gases that lead to global warming.
The integrated policy for technology and
environment for thermal power generation
should encompass the following action
plans.

Figure 3.19 Economic impact of integrated gasification


combined cycle design study improvements

3.2.3.1.2 Technology and


environment policy
Coal is the primary fuel for thermal power
generation in India. In the process, it gives
rise to atmospheric pollution due to particulate matter, SO x, NOx, and CO2. The use of

Table 3.99 Cost comparison of different IGCC technologies (1989 pricing)


IGCC plant

Net power output (MW)


Capital cost ratio
Cost of generation ratio

PC plant

Entrained

Fluidized

Moving

Without

With

bed

bed

bed

FGD

FGD

564.40

496.20

577.20

585.70

549.00

2.17

1.33

1.36

1.00

1.22

1.18

1.32

1.00

1.17

1.94

MW megawatts; IGCC integrated gasification combined cycle; PC pulverized coal; FGD flue gas
desulphurization

130

National Energy Map for India: Technology Vision 2030

All future coal-based thermal power


plants of 250 MW and above should have
supercritical steam parameters. Immediately, studies should also be initiated for
ultra-supercritical steam parameters and
the aim should be to establish these plants
in next six to seven years.
CFBC (circulation fluidized bed combustion)-based plants of 250 MW, with high
sulphur lignite and petcoke, and very high
ash coal/washery rejects should be
encouraged.
Environment (Protection) Amendment
Rules, 1997, for using washed coal for the
plants located beyond 1000 km should be
enforced without giving further extension. This will definitely reduce the problems related to particulate emissions and
fly ash disposal.
All the generating stations should be directed to examine the techno-economic
feasibility of using blended coal in a mixture of high-ash and good quality coal
from other mines in India or through import of coal. This can be easily established
through generation efficiency (specific
fuel consumption) tests on an operating
station.
Benchmark for the introduction of IGCC
technology in India should be seven to
eight years. A decision for a 250300MW commercial demonstration plant
should be taken up immediately.
Regular energy audit of operating plants
for generation efficiency should be made
mandatory, and the recommendations for
improvements should be implemented.
This is possible under the Energy Conservation Act, 2001.
The new Electricity Tariff Policy (draft
circulated in March 2004) should
suitably reward improvements in energy

efficiency through sharing the benefits


between the power generator and the consumer.
The coal pricing should be linked to the
calorific value of the delivered fuel so that
supplier has an incentive to improve quality and the power generator gets good and
consistent quality of fuel.
The development of advanced technology
for thermal power generation is very
closely linked to the environment policy
with respect to emissions of particulate
matter, SOx, NOx, and CO2. It takes 10
15 years for introduction of any new technology. Thus, we must have long-term environment policy to guide the development and introduction of new technologies.

3.2.3.1.3 Technology forecast till


2030
It is felt that till 2007, no new technology
will be introduced. All new plants will be
based on sub-critical steam parameters. In
addition, stress will be on renovation and
modification or performance improvement
of old power plants to get higher output/PLF
from them.
The technology for natural gas-/naphthafired combined cycle plants will also not undergo much change except that plants with
Tech. FA will be introduced at few sites.
The period 200712 will see the commissioning of the first thermal plant with
supercritical steam parameters, and also setting up of a 100-MW coal-based IGCC
plant. This period may also see the introduction of the first combined cycle plant based
on gas turbine with Tech. H. Based on the
experience gained from the introduction of

Sectoral demand projections, technological characterization, and resources availability

these new technologies, more plants will


come up in the subsequent plan period of
201217. During this period, the first
commercial IGCC technology will come up.
This will also set up the trend for the refinery rejectsvistar- and petcoke-fired IGCC
plants.
During 201722, the first coal-fired
power plant with ultra-supercritical steam
parameters is also likely to come up. This
will be followed by the introduction of this
technology fully. Then, till 2030, no new
technology will be introduced. However,
further improvement in steam temperature
may be witnessed. This will mainly depend
upon the development of high-temperature
metallic alloys internationally.
During 202227, a demonstration plant
for the generation of power using naturalgas-based solid oxide fuel cell technology
may come up, and the first commercial plant
based on this technology will then come up
during 202732. During this decade, new
coal-based plants will be based on ultrasupercritical steam parameters.

3.2.3.2 Hydroelectric potential


India is endowed with economically viable
hydro potential. The CEA (Central Electricity Authority) has assessed Indias hydro
power potential to be about 148 700 MW of
installed capacity. The hydroelectric capac-

131

ity currently under operation is about 26


000 MW and 16 083 MW capacity is under
various stages of development. The CEA has
also identified 56 sites for pumped storage
schemes with an estimated aggregate installed capacity of 94 000 MW. In addition, a
potential of 15 000 MW in terms of installed
capacity is estimated from small, mini, and
micro hydel schemes.
It may be noted that due to lower cost of
per unit power generation by large hydro,
this option is introduced into the model as
an upper bound over the modelling time
frame as shown in Table 3.100. Hydro capacity utilization is assumed to be 32%.

3.2.3.3 Nuclear energy resources


Nuclear energy has the potential to meet the
future electricity demand of the country.
The country has developed the capability to
build and operate nuclear power plants observing international standards of safety.
The current installed capacity of nuclear
power plants is 2860 MW, accounting for
2.8% of the total installed capacity of the
country. The NPCIL (Nuclear Power Corporation of India Ltd) proposes to increase
the installed capacity to 9935 MW by 2011/
12. The future strategies focus on a threestage nuclear power programme for the optimal utilization of the available nuclear
energy resources. The first stage of 10 000

Table 3.100 Upper bound on installed capacity of large hydro-based power generation
(in GW)
2001/ 02

2006/07

2011/12

2016/17

2021/22

2026/27

2031/32

2036/ 37

24.9

37.0

60.54

84.08

107.63

131.17

150.0

150.0

132

National Energy Map for India: Technology Vision 2030

MW of nuclear power generation is based on


PHWR (pressurized heavy water reactor)
technology using indigenous natural uranium resources. The second stage is proposed to be based on FBR (fast breeder
reactor) technology using plutonium extracted by reprocessing of the spent fuel obtained from the first stage. In the third stage,
the countrys vast thorium resources will be
utilized for power generation.
India has limited availability of uranium
resources (about 70 000 tonnes), but has
one of the largest resources of thorium in the
world, amounting to 360 000 tonnes. Therefore, India needs to adopt a fuel cycle that
maximizes the energy yield of the nuclear
energy producing ores. The adoption of the
three-phase
development
of
nuclear
programme in India was envisaged by Dr
Homi Bhabha way back in 1944. India is
currently in the second phase where the
FBRs are to be commissioned.
Indias nuclear programme is described
below in three stages.
1 Stage I construction of natural uraniumbased, and pressurized heavy-water-moderated and cooled reactors. Spent fuel
from these reactors can be reprocessed to
obtain plutonium.
2 Stage II construction of FBRs fuelled
by the plutonium produced in Stage I.
These reactors are also to breed U-233
from thorium.
3 Stage III power reactors using U-233/
thorium as fuel.
Indias uranium resource base can only
support 10 000 MW of power generation
through the PHWR route, which is the Stage
I of Indias nuclear programme. Stage II,
that is, the FBR route, will require the plutonium derived from the Stage I. This has

technological limitations with respect to the


production of plutonium by using the fuel in
the oxide form. If the FBRs are fuelled by
using metallic fuel, the rate of plutonium
generation is twice as fast as the MOX (metallic oxide) route, which will generate the
required fuel for rapid growth of FBRs. India currently has the experience and capability to use only MOX-derived fuels and it
needs to invest in the development of metallic fuel based reactors. Therefore, it currently needs international cooperation to
meet its fuel requirements in the Stage II so
that the FBRs become self-sustaining.
In the model, nuclear-energy-based power
generation has been included as per the government plans. The installed capacity of the
nuclear-energy-based power generation in
2001/02 was 2820 MW and increased to 3310
MW as on 31 January 2006. This capacity is
expected to increase to 6780 MW by 2010 and
21 180 MW by 2020. Accordingly, as shown in
Table 3.101, we expect 21.18 GW of nuclearenergy-based capacity to materialize by 2020
under the baseline as well alternative scenarios. Beyond 2021, in the baseline scenario,
we assume that availability of nuclear fuel
would be constrained and that the generation
capacity would remain constant from 2021 till
2035 in the baseline. However, in the alternative scenario that considers an aggressive
pursuit of nuclear-energy-based power generation, we consider the nuclear generation
capacity to increase to 70 GW by 2031/32 by
being able to import nuclear fuel (enriched
uranium) (Table 3.101).
Beyond 2030, enough plutonium is expected to be generated so that the thorium
plutonium fuel cycle (advanced fast breeder
reactors) can be commissioned. This could
enable a maximum potential generation
capacity of about 530 GW (after 2030).

Sectoral demand projections, technological characterization, and resources availability

133

able energy technologies) are environmentally sustainable and have a vast potential
that can be exploited for energy generation
in the future.

3.2.3.4 Renewable energy sources


India is endowed with abundant natural and
renewable sources of energy like sun, wind,
and biomass. The country has been able
to achieve significant capacity addition of
1367 MW through wind farms and ranks
fifth in the world after Germany, USA,
Spain, and Denmark in the generation of
wind energy, as per 2004/05 data. The available renewable resources need to be exploited by giving a commercial orientation
wherever possible. It may be necessary to
continue with subsidies in the case of socially oriented programmes to meet the energy
requirements
of
rural
areas,
particularly, remote villages, which may be
difficult to service through the conventional
power grid in the near future. Table 3.102
gives the available potential and the actual
potential exploited till August 2001 for various renewable sources of energy as provided
by the MNES (Ministry of Non-conventional Energy Sources).
Apart from these resources, the country
has significant potential for ocean thermal
power, sea wave power, and tidal power,
which at this point of time are not expected
to be realized due to high cost.
Renewable natural sources, such as biomass, wind, water, and solar energy, have been
included in the model. The RETs (renew-

3.2.3.4.1 Wind energy


Wind-based generation capacity has been
rapidly growing in India. The installed wind
power capacity increased from 40 MW at the
beginning of the Eighth Plan to 992 MW in
December 1998 (MNES 2004). The potential of wind farms is estimated at 28 910 MW
or 1038 TWh (terrawatt-hours) (TERI 1995).

3.2.3.4.2 Solar energy


Apart from using solar energy for the generation of grid-based power, decentralized
solar devices are also included in the model.
PV (photovoltaic) systems have emerged as
useful power sources for applications such as
lighting, water pumping, telecommunications, and power for meeting the requirements of villages, hospitals, lodges, and so
on. Based on the reports from the state
implementing agencies, 15 206 home-lighting systems, 20 484 solar lanterns, and 437
street lighting systems were installed in
1997/98.

Table 3.101 Installed capacity of nuclear energy based power generation


Expected installed capacity (GW)
Scenario

2001/02

2006/07

2011/12

2016/17

2021/22

2026/27

2031/32

2036/37

BAU

2.8

3.31

6.78

13.98

21.18

21.18

21.18

21.18

NUC

2.8

3.31

6.78

13.98

21.18

45.5

70

70

BAU business-as-usual; GW gigawatts; NUC High nuclear capacity

134

National Energy Map for India: Technology Vision 2030

Table 3.102 Renewable energy source potential

Source/technology

Unit

Biogas plants

Million

Biomass-based power

MW

Efficient wood stoves

Million
2

Potential/

Potential

availability

exploited

12

3.22

19 500

384.00

120

33.86

20

1.74

Solar energy

MW/km

Small hydro

MW

15 000

1398.00

Wind energy

MW

45 000

1367.00

Energy recovery from wastes

MW

1700

16.20

MW megawatts; sq km square kilometres

3.2.3.4.3

Small hydel

The total potential for small hydro power up


to 3 MW in India has been estimated at
about 10 000 MW (MNES 2004/05). The
installed capacity of units less than 3 MW
was 170 MW in 1997 while an additional
191 MW capacity was under construction.
Their installed capacity as on 31 March
1998 was 155 MW.
The MNES has identified the potential
for small hydel sites of up to 3 MW as
2852 MW and for sites between 3 and
15 MW as 5519 MW (MNES 1999).

3.2.3.4.4 Biomass gasifiers


Decentralized biomass-based power plants
are ideal in cases where it is either too costly
to extend the grid or the power demand is
very low.
Biomass is produced by numerous small
agro-processing industries such as cigarette
factories, cashew-processing units, and
ayurvedic medicine manufacturing units.
The main problem is of collecting and trans-

porting the biomass to places where it may


be required.
The biomass yield is estimated at
35 tonnes/hectare/year, and biomass consumption is 1.2 kg/kWh, assuming a PLF of
60% for biogas plants.
Due to the poor quality and unreliability
of the grid, industries in many states are
forced to switch over to diesel-based captive
power generation. The low cost of procuring
biomass makes it desirable to couple these
gensets with gasifiers. Dual-fuel (gasifier
and diesel) electric power generators, therefore, offer a great potential for fuel saving
and decentralized power generation.
Till 1998, more than 1000 wood gasifiers
have been installed in the country with a
generating capacity of 14 MW. A 0.5-MW
grid-connected gasifier-based R&D project
was also commissioned in 1997.

3.2.3.4.5 Biomass consumption


The MNES has already implemented three
major BCPPs (biomass-consumption-based
power projects). A 6-MW prosopis-based

Sectoral demand projections, technological characterization, and resources availability

project was set up in the state of Andhra


Pradesh in June 1999 and a 5-MW ricehusk-based project in Madhya Pradesh was
commissioned in August 1999. A 12-MW
cane trash and bagasse-based private sector
project, supported by IREDA (Indian Renewable Energy Development Agency),
came up in Tamil Nadu.
During 199497, 18 BCPPs with a total
capacity of 69 MW were installed for supplying power to the grid. So far, over 100 million units of electricity have been fed to the
grid from these plants. Seventeen projects
aggregating 97 MW are under implementation and once these are commissioned, more
than 800 million units will be fed to the grids
every year, saving 0.5 MT of coal.

3.2.3.4.6 Cogeneration potential


from bagasse
The biomass waste generated from the sugar
industry has a large potential for generating
power. Although the total installed capacity
as on 31 March 1998 is only 82 MW, it has
been estimated that nearly 3500 MW of
power can be generated from this industry if
the existing sugar mills adopt modern techniques of cogeneration. High capital investment costs and lack of proper mechanisms
for pricing and wheeling of power exported
by the cogenerating industries are the main
obstacles to the development of this technology at this stage.

10

100 hectares = 1 km 2.

135

3.2.3.5 Traditional fuels


Biofuels play an important role in the energy
scenario of the developing countries. In
terms of their use in physical energy, biofuels
are very much similar to coal. However, due
to their low calorific content as well as low
end-use efficiencies associated with their
use, the useful energy demand met by these
sources is much smaller.
The Indian residential sector continues to
be dominated by biofuels, with about 95% of
rural households and 40% of urban households still relying mainly on these traditional
energy forms. All these fuels are generally
collected free of cost and do not find their
way to commercial markets. Moreover, the
supply RES (reference energy system) of the
traditional energy forms is simplistic and
consists of only the domestic availability of
the resource, as there are no associated imports or exports for these fuels.

3.2.3.5.1

Fuelwood

According to the IREP (Integrated Rural


Energy Programme 1992), the supply of
fuelwood was estimated at 169 MT (3294 PJ
[petajoules]). However, this level of
fuelwood use is considered to be unsustainable in the long run. The sustainable
fuelwood supply is, therefore, estimated
based on future estimates of the area under
forests and a sustainable yield of 55 tonnes /
km2 of forestland. In 1997, the area under
forests was 63 million hectares10 and this is
projected to increase to 93 million hectares

136

National Energy Map for India: Technology Vision 2030

by 2020 (DISHA 2000). The supply of


fuelwood is assumed to decline from the current levels to 51.2 MT (998 PJ) by 2020, and
remain at this level henceforth. The supply
of fuelwood is considered at zero cost in the
model.

3.2.3.5.2

dung is, therefore, really constrained by the


restrictions on utilization levels of technologies using the fuel and the share of population using this form of energy in the future.
Dung can be used directly in the form of
dung cakes for cooking in the traditional
cook stoves or in the form of biogas that is a
cleaner form of using energy.

Dung

Dung and crop residue are generally used by


households that own cattle or farmlands.
Therefore, the issue of unsustainable use of
these fuels as in the case of fuelwood does
not arise. However, estimates on the availability and use of dung and crop residue vary
widely.
The supply of dung depends on the cattle
population in the country, the proportion of
dung collected, and the share used for producing energy. Dung has a calorific value of
3290 kcal/kg. Estimates on the availability of
dung range from 30 MT to 100 MT for
2001. The model assumes a dung availability
of about 100 MT at zero cost. The REDB
(rural energy database) estimates an average
availability of 106.9 MT of dung. The use of

3.2.3.5.3 Crop residue


Biomass production is pegged at 127 MT/
year, of which half goes to the sugar industry.
With a calorific value of 3500 kcal/kg, its
production is kept constant at 912 PJ in the
model.

3.2.3.6 Power generation technologies: techno-economic input


parameters
Table 3.103 provides the characteristics of
all the power-generating technologies input
to the model.

Annual
operation and
Capital

maintenance

cost (million

cost (million

Life

Efficiency

Technology

factor

Plant characteristics

rupees /GW)

rupees/GW)

(years)

(%)

Coal-fired plantold (before 1980)

0.58

Base load

Centralized

Sunk costs

988

10

22.7

Availability

Coal-fired plantold (after 1980)

0.58

Base load

Centralized

Sunk costs

988

30

29.5

New coal plant (sub-critical)

0.85

Base load

Centralized

39 547

988

30

32.3

Retrofit coal plant (first built before 1980)

0.85

Base load

Centralized

15 000

988

30

30.0

Retrofit coal plant (19802000)

0.85

Base load

Centralized

12 500

850

30

32.2

CFBC

0.85

Base load

Centralized

45 653

1141

30

39.0

IGCC (refinery residue)

0.85

Base load

Centralized

52 753

1141

30

46.0

IGCC (coal)

0.85

Base load

Centralized

52 753

1141

30

44.0

Coal supercritical

0.85

Base load

Centralized

42 600

1065

30

37.7

Coal pressurized bed combustion

0.85

Base load

Centralized

45 653

1141

30

43.0

Coal ultra-supercritical

0.85

Base load

Centralized

51 120

1331

30

44.0

Lignite power plant (existing subcritical tech)

0.58

Base load

Centralized

40 000

988

30

29.5

Small generator set (2 kW)

0.20

Base load

Decentralized

27 000

712.5

10

25.0
28.0

Existing open cycle gas based

0.90

Standard

Centralized

Sunk costs

520

20

Existing combined cycle gas based plant

0.90

Base load

Centralized

Sunk costs

399

25

44.1

New open cycle gas based plant

0.90

Standard

Centralized

15 975

240

20

39.0

NGCC (New)

0.90

Base load

Centralized

22 000

330

25

53.8

NGCC (New high efficiency)

0.90

Base load

Centralized

27000

405

25

60.0

Hydro reservoir new

Fixed capacity

Standard

Centralized

40 000

600

50

32.3

Small hydro grid connected

Fixed capacity

Standard

Centralized

90 000

1350

40

32.3

Heavy water reactor 1 (using natural uranium)

0.90

Base load

Centralized

60 000

1500

25

21.4

Light water reactor 1 (using enriched uranium)

0.90

Base load

Centralized

78 750

1969

25

17.0

Decentralized electricity from fuelwood

0.20

Standard

Decentralized

27 000

713

15

21.7

Solar photovoltaic with battery bank

0.29

Standard

Decentralized

300 000

4500

25

Solar photovoltaic without battery bank

0.29

Standard

Decentralized

200 000

1000

25

Grid interactive solar photovoltaic power

Fixed capacity

Standard

Centralized

250 000

1250

25

Wind turbines

Fixed capacity

Standard

Centralized

38 000

570

20

kW kilowatt

137

CFBC circulating fluidized bed combustion; IGCC integrated gasification combined cycle; NGCC natural gas combined cycle; Rs/GW rupees/gigawatts;

Sectoral demand projections, technological characterization, and resources availability

Table 3.103 Techno-economic parameters of power generating technologies

Energy scenarios

4.1

Introduction

Scenarios are images of alternative futures.


Energy scenarios provide a framework for
exploring future energy perspectives, including various combinations of technology options and their implications. Many scenarios
in the literature illustrate how energy system
developments will affect national and international issues. Scenarios are neither predictions nor forecasts. Each scenario can be interpreted as one particular image of how the
future could unfold. Scenarios are useful
tools for investigating alternative future developments and their implications, for learning about the behaviour of complex systems,
and for policy-making. Some scenarios describe energy futures that are compatible
with sustainable development goals, such as
improved energy efficiencies and adoption
of advanced energy supply technologies.
Sustainable development scenarios are also
characterized by low environmental impacts
(local, regional, and global) and equitable
allocation of resources and wealth.
Sustainable development has become a
synonym for desirable transitions into the
new millennium. This is often reflected in
energy scenarios that consider conditions for
achieving sustainable development. Because
energy systems change slowly, energy
scenarios have long time horizonsoften

4
extending over 100 years into the future.
These long time periods are needed to allow
transition to sustainable development paths.

4.2 Brief review of the literature


on energy scenarios
The development of scenarios to investigate
alternative future developments under a set
of assumed conditions dates far back in history. Scenarios were, and continue to be, one
of the main tools for dealing with the complexity and uncertainty of future challenges.
Perhaps most famous in the literature is
the use of scenarios by the Shell Group in
the wake of the so-called oil crisis to plan its
corporate response strategies (Schwartz
1991). Today, scenarios are quite widespread
and are found in enterprises of all kinds
around the world. Many are quantitative, as
is often the case with enterprises in the energy sector. Some of them also include concepts of sustainability. Recently, the
WBCSD (World Business Council for Sustainable Development) presented a set of
scenarios that were developed in collaboration with 35 major corporations (WBCSD
1998).
A number of global studies have used
scenarios as a tool to assess future paths of
energy system development over the past

140

National Energy Map for India: Technology Vision 2030

30 years. One of the first global studies to


employ scenarios for this purpose was conducted by the IIASA (International Institute
for Applied Systems Analysis) during the
late 1970s (Hafele 1981). Another influential series of scenarios that included the assessment of sustainable development was
developed by the WEC (World Energy
Council) (WEC 1993). The IPCC (Intergovernmental Panel on Climate Change) has
used scenarios since its inception to assess
greenhouse gas emissions and climate
change. In 1992, it developed a set of very
widely-accepted scenarios that gave a detailed account of energy sector developments. The set includes six scenarios called
IS92, three of which describe futures that
include characteristics of sustainable development (Pepper, Leggett, Swart, et al.
1992).
A growing number of global studies consider futures with radical policy and
behavioural changes to achieve sustainable
development
(Goldemberg,
Johansson,
Reddy, et al. 1988). One of the first global
scenarios to focus on achieving sustainable
development
was
put
forward
by
Greenpeace International (Lazarus, Greber,
Hall, et al. 1993). Another among the first
global energy scenarios, with characteristics
of sustainable development, describes a
transition to renewable energy futures
(Johansson, Kelly, Reddy, et al. 1993). In its
second assessment report, the IPCC also
considered a range of global energy scenarios, based on some elements of the IS92
set, with varying degrees of sustainability
(Ishitani, Johansson, Al-Khouli, et al. 1996).
In more recent studies, sustainable development scenarios are usually included
among other alternative futures. This class of
sustainable scenarios can be characterized

by low environmental impacts at all scales


and more equitable allocation of resources
and wealth relative to current situations. Recently, the Global Scenario Group presented
a set of three scenarios that received considerable attention (Raskin, Gallopin, Gutman,
et al. 1998). These scenarios were based on
elaborate narratives describing alternative
futures, including some that are decisively
sustainable. The set of scenarios developed
by the WBCSD also includes narratives and
describes alternative development paths,
some of which place strong emphasis on sustainable development (WBCSD 1998).
There is also substantial literature on global energy scenarios that serves as a reference for showing that under business-asusual conditions, many of the developments
crucial for the achievement of sustainability
would not be realized. Many of these global
energy scenarios are limited to developments during the next 2030 years.
The literature on sustainable energy scenarios is vast, and this brief review cannot
give a comprehensive account. The IPCC
has developed a database that includes a
number of global energy scenarios that can
be characterized as describing sustainable
development (Morita and Lee 1998). This
database, which includes more than 400 global and regional scenarios, illustrates that
the literature is quite rich. Not all the scenarios can be described in this chapter.
The IPCC, in its recent Special report on
emissions scenarios considers 40 scenarios
that include a large number of sustainable
futures (Nakicenovic, Alcamo, Davis, et al.
2000). This set of scenarios is unique in
many respectsit was developed using six
different models, covers a wide range of
alternative futures based on the scenarios
in the literature, includes narrative

Energy scenarios

descriptions of alternative futures, and has


been reviewed extensively.

4.3.1

141

Economy-wide scenarios

4.3.1.1 Business-as-usual scenario


4.3 Energy scenarios for
sustainable development in India
Eight alternative development scenarios
namely, BAU (business-as-usual), LG (low
growth), HG (high growth), EEF (high efficiency), NUC (high nuclear), REN (aggressive renewable energy), HYB (hybrid), and
HHYB (high-growth-cum-hybrid) are
analysed in this exercise.
The aforementioned eight scenarios can
be broadly classified into two categories:
(1) varying economic growth rate scenarios,
and (2) technological progression scenarios.
Economic growth scenarios are prepared
based on different projected GDP (gross domestic product) growth rates for the
economy as a whole. However, technological
progression scenarios deal with varying levels
of technology penetration across different time
horizons in the modelling framework.
It may be noted that these eight scenarios
provide a holistic picture of the entire integrated energy system of the economy. In addition to these economy-wide scenarios, alternative scenarios encompassing different
policy and technology options related to the
transport sector having a high share in the
consumption of petroleum products are
analysed in detail in view of high import dependency, especially in the case of petroleum products.
The section below briefly explains the
underlying assumptions for each of the
above-mentioned scenarios.

This scenario is characterized as the most


likely path of development in the absence
of any major intervention. This scenario
incorporates existing government plans and
policies.
In the BAU, an 8% GDP growth rate
(uniform growth rate over the entire modelling time frame, 200131) reflects the Government of Indias expectations as highlighted in various government policy documents.
The estimates regarding the domestic
availability of various fuels are also incorporated in this scenario. Maximum availability
of imported natural gas is considered as per
the Government of Indias plan for
transnational gas pipelines and the construction of LNG terminals. However, there are
no import constraints on coal and oil to satisfy energy demand.
With regard to technology penetration in
the power sector, limited deployment of
clean coal technologies is assumed. The penetration of various renewable energy technologies is considered as per the existing
trend and expert opinion. The nuclear-energy-based power generation capacity is
constrained to the extent of 21.18 GW (gigawatts) from 2021 onwards in view of the
non-availability of indigenous nuclear fuel
and import restrictions. The capacity realizations of large hydroelectric plants to a
maximum level of 150 GW are assumed as
per the expectations of the Government of India. Autonomous efficiency improvements are
built as per the current technological diffusion
in both conversion and end-use sectors.

142

National Energy Map for India: Technology Vision 2030

Thus, although a substantial improvement over the current situation, this scenario
falls short of achieving a transition towards
sustainable development.

4.3.1.2 Low-growth scenario


This scenario assumes a low GDP growth
rate of 6.7% relative to the 8% GDP growth
rate assumed in the BAU scenario. Thus, the
impact of projected GDP growth rates on
the future trajectories of energy demand is
captured by this scenario.
All other underlying assumptions with respect to resource availability, technology
progression, and other parameters are similar to those in the BAU scenario.

4.3.1.3 High-growth scenario


This scenario assumes a very high GDP
growth rate of 10% (uniform over the modelling time frame, 200131) relative to the
GDP growth rate of 8% assumed in the BAU
scenario. This scenario paints an optimistic
picture of the Indian economy and envisages
the ensuing influence a growth rate of such
magnitude would have on overall energy
consumption in the country. It also reflects
significant structural changes in the Indian
economy by apportioning a greater percentage (94%) of the GDP generated by the services and industry sectors relative to the
GDP contributed by the agriculture sector
in the aggregate GDP. The macroeconomic
shifts in the GDP amongst the agriculture,
industry, and services sectors of the
economy manifest themselves in the form of
changing the demand of industrial output
and transport and commercial services,
thereby exhibiting differences in the inter-

sectoral energy consumption patterns. The


rationale for choice of different GDP growth
rates was explained in Chapter 2.
As in the case of the LG scenario, all
other underlying assumptions with respect
to resource availability, technology progression, and other parameters are similar to
those in the BAU scenario.

4.3.1.4 High-efficiency scenario


This scenario takes into account the energyefficiency measures spanning across all
sectors.
On the supply side, advanced gas-based
power generation (for example, the H-frame
combined-cycle gas turbine) with 60% efficiency is assumed to be commercially available by 2016/17. Renovation and modernization of old coal plants are allowed only till
2011 as per the governments plan. In view
of the possibility of greater technology transfer across countries and a greater thrust on
indigenous R&D (research and development) in the power sector in this scenario, all
clean coal technologies are allowed to penetrate in an unconstrained manner to their
maximum capacity from their year of introduction. The availability factor of wind
power plants is assumed to increase from
17.5% in 2001 to 26% in the year 2011 and
35% in 2016 and onwards as compared to
the constant figure of 17.5% in the BAU scenario.
On the demand side, efficiency improvements, such as increased share of efficient
electrical appliances used to meet the demands for space-conditioning, lighting, and
refrigeration in residential and commercial
sectors, are considered in various end-use
sectors In addition, this scenario also incorporates the faster rate of displacement of in-

Energy scenarios

ferior fuels like firewood and kerosene by


clean fuels such as LPG (liquefied petroleum gas) vis--vis the BAU scenario for
cooking in the residential and commercial
sectors. Furthermore, energy-efficient measures in transport sectors in the form of
policy interventions by the government
such as increased share of rail vis--vis road
in passenger and freight movement, and promoting public transport are also incorporated in this scenario. The industry sector
also boasts of measures that lead to significant energy savings. For instance, in the iron
and steel industry, the penetration of efficient BF-BOF (blast furnacebasic oxygen
furnace) is allowed up to 80% of the manufacturing capacity by the year 2036. Further,
a higher share of blended cement in total cement production (95% by the year 2031, up
to 100% by the year 2036) is allowed, an increased share of natural gas (100% by the
year 2036) is used in the fertilizer and other
sectors, etc. The details related to the level of
efficiency improvements in different sectors
were described in Chapter 3.
However, this scenario assumes a projected GDP growth rate of 8% (uniform over
the modelling time frame, 200131) as in
the BAU scenario.

4.3.1.5 High nuclear capacity


scenario
In this study, nuclear-energy-based power
generation has been included as per government plans. The installed capacity of nuclear
power plants was 2.82 GW in 2001/02 and

Ministry of Power, Government of India


Nu Power, Vol. 18 (23), Department of Atomic Energy, 2004
3
Anil Kakodkar, Department of Atomic Energy
2

143

3.31 GW on 31 January 20061. The nuclearenergy-based power generation capacity is


expected to increase to 6.78 GW2 by 2010
and further to 21.18 GW by 20203 as per the
first stage Indian nuclear power programme.
Beyond 2021, in the BAU scenario, the
nuclear-energy-based power generation capacity is constrained in view of the nonavailability of indigenous nuclear fuel and
the import restrictions that have several geopolitical dimensions associated with it. The
NUC scenario assumes importance in view
of the latest development in the nuclear sector due to enhanced international civil
nuclear cooperation and the Government of
Indias initiative in this direction. This scenario considers an aggressive pursuit of
nuclear-energy-based power generation
whereby the nuclear-energy-based generation capacity is considered to increase to 40
GW by 2021 and 70 GW by 2031/32, driven
by the assumption that the country is able to
import nuclear fuel (enriched uranium).
Table 4.1 presents the expected installed
capacity of nuclear-energy-based power generation over the modelling time frame in the
NUC scenario vis--vis the BAU scenario.

4.3.1.6 Aggressive renewable


energy scenario
In this scenario, high penetration of renewable energy is considered. Anout 4233 potential sites are identified for small hydro
power plants in the country. The corresponding capacity is worked out at about
10 GW (MNES 2005a). It is assumed that

144

National Energy Map for India: Technology Vision 2030

Table 4.1 Installed capacity of nuclear-energy-based power generation


Expected installed capacity (GW)
Scenario

2001/02

2006/07

2011/12

2016/17

2021/22

2026/27

2031/32

BAU

2.82

3.31

6.78

13.98

21.18

21.18

21.18

NUC

2.82

3.31

6.78

13.98

40.0

55.0

70.0

GW gigawatts; BAU business-as-usual; NUC high nuclear capacity


Note All other assumptions are similar to those in the BAU scenario.

the maximum identified potential could be


tapped by 2016. Similarly, for wind power
generation in India, gross potential is estimated at 49 GW (MNES 2005a). However,
the technically feasible potential is reported
at 13 GW (MNES 2005a). In the REN
scenario, it is assumed that 12 GW of wind
capacity could be created by 2036. In this
scenario, in addition to the increase in the
capacity of wind-based power generation,
the availability factor of wind power plants is
also assumed to increase from 17.5% in

2001 to 26% in the year 2011 and 35% 2016


onwards.
Tables 4.2 and 4.3 present the level of the
installed capacity of small hydro-based and
wind-based power generation, respectively.
India is blessed with abundant sunshine
as most parts of the country have 230300
sunny days in a year. Average daily solar radiation incident over the land area is in the
range of 47 kWh/m2 (kilowatt hours per
square metre). The potential of SPV (solar
photovoltaic) power in India is estimated at

Table 4.2 Installed capacity of small hydro-based power generation


Lower bound on installed capacity of small hydro in GW
Scenario

2001/02

2006/07

2011/12

2016/17

2021/22

2026/27

2031/32

BAU

1.5

2.0

8.0

8.0

8.0

8.0

8.0

REN

1.5

2.0

8.0

10.0

10.0

10.0

10.0

2026/27

2031/32

GW gigawatts; BAU business-as-usual; REN aggressive renewable energy

Table 4.3 Installed capacity of wind-based power generation


Lower bound on installed capacity of wind turbine in GW
Scenario

2001/02

2006/07

2011/12

2016/17

2021/22

BAU

1.63

4.23

4.23

4.23

4.23

4.23

4.23

REN

1.63

5.00

7.00

8.00

9.00

10.00

11.00

GW gigawatts; BAU business-as-usual; REN aggressive renewable energy

Energy scenarios

20 MW/km2 (megawatts per square


kilometre) (MNES 2005a). The current cost
of an SPV cell is 150 rupees/ Wp (watt peak)
(MNES 2005b). Because of the high cost of
solar cells, the cost of electricity generation
from SPV is also very high. For example, the
cost of electricity generation from a grid-interactive SPV system without storage is estimated at 20 rupees/kWh (MNES 2005b).
For stand-alone systems, the cost of generation is higher due to the additional cost of
the battery. However, the National new and
renewable energy policy statement 2005 of the
Ministry of Non-conventional Energy
Sources reports that the cost of generation is
expected to reduce to the level of 4 rupees/
kWh by 2021/22 (MNES 2005b). Because
of high capital costs, the current installed capacity of the SPV system is only 2.25 MW
(GoI 2005). However, SPV production in
the country is increasing by an annual average growth rate of 25%. It is assumed that
the installed capacity of an SPV-based power
plant will increase up to 20 GW in 2036 in
the REN scenario.
Biomass can be used as a primary fuel by
direct combustion or as a secondary fuel
(solid, liquid, and gaseous) by conversion a
biological or thermochemical using process.
The main aim of the conversion process is to
increase efficiency of utilization for various

145

end-uses. Biomass gasification is basically


the conversion of solid biomass into a producer gas, which has carbon monoxide as a
combustible gas. Several institutes including
T E R I are engaged in the R&D of gasifier
technology in India. The potential for biomass-based power plants has been estimated
to be 16 GW, of which 234 MW has been established so far, and a target of installation
of 250 MW of biomass-based power is set for
the Tenth Five Year Plan (200207). Table
4.4 presents the lower bound on the installed
capacity of SPV- and biomass-based power
generation in the REN scenario.
In addition to the power generation technologies, bio-diesel is also assumed to be
available to the transport sector in this scenario. Based on the maximum potential area
that is available for plantation for bio-diesel
production, the lower bound is imposed on
the availability of bio-diesel in the REN scenario. Table 4.5 below presents the availability of bio-diesel for transportation in India
(detailed assumptions were given in the
analysis of the transport sector in Chapter 3)
However, this scenario assumes a projected GDP growth rate of 8% (uniform over
the modelling time frame) as in the BAU
scenario. All other assumptions are similar
to those in the BAU scenario.

Table 4.4 Installed capacity of SPV- and biomass-based power generation in aggressive
renewable energy scenario
Lower bound on installed capacity
2001/02

2006/07

2011/12

2016/17

2021/22

2026/27

2031/32

SPV (GWp)

0.00

0.05

0.14

0.39

1.04

2.78

7.46

Biomass (GW)

0.00

0.25

0.50

1.00

2.00

4.00

8.00

GW gigawatts; GWp gigawatt peak; SPV solar photovoltaic

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National Energy Map for India: Technology Vision 2030

Table 4.5 Availability of bio-diesel for transportation


Lower bound on the availability of bio-diesel in MT
Scenario

2001/02

2006/07

2011/12

2016/17

2021/22

2026/27

2031/32

REN

3.9

9.8

27.5

31.9

MT million tonnes; REN aggressive renewable energy

4.3.1.7 Hybrid scenario


This scenario is a combination of the BAU,
EEF, REN, and NUC scenarios. It describes
the energy future of the Indian economy by
incorporating the entire range of energy-efficient measures in the end-use sectors, the
complete deployment of clean coal technologies, aggressive penetration of nuclearenergy-based power generation technologies, and an aggressive push towards renewable energy sources.

4.3.1.7 High-growth-cum-hybrid
scenario
This scenario combines a high GDP growth
rate of 10% coupled with high efficiency levels, high nuclear capacity, and an aggressive
use of renewable energy. This scenario is
representative of the most optimistic scenario in terms of both economic growth and

technological advancements geared towards


steering the economy on the most energy-efficient path.

4.3.2 Intra-sector scenarios:


transport sector illustration
The transport sector is a major consumer of
petroleum products. From the point of view
of energy security concerns for the Indian
economy at large, five alternative scenarios
in addition to the BAU have been developed
using the MARKet ALLocation model.
These scenarios enable the analysis of the
impact of different policy and technology alternatives and their quantitative significance
on energy consumption in transport. Each of
the five scenarios encompass different policy
and technology options related to the transport sector. Table 4.6 lists these scenarios
and provides a description.

Energy scenarios

147

Table 4.6 Description of energy-efficient scenarios for the transport sector


Scenario

Description

Enhanced share of public transport

Share of public transport modes to increase to 60%


in 2036.

Increased share of rail in passenger and

Railway freight share to increase from 37% in 2001

freight movement vis--vis road

to 50% in 2036.
Railway passenger share to increase from 23% in 2001
to 35% in 2036.
Share of electric traction to increase for rail
passenger and freight to 80%.

Fuel efficiency improvements

Fuel efficiency of all existing motorized transport


modes to increase by 50% from 2001 to 2036.

Use of bio-diesel in transport

Enhanced penetration of bio-diesel by 65 Mtoe


by 2036.

Transport sector hybrid

Incorporates all the above-mentioned scenarios,


in addition to those in the BAU.

Mtoe million tonnes of oil equivalent

Model results and analyses

5.1

Introduction

This chapter presents the analytical results


of the scenarios mentioned in Chapter 4.
The results were obtained after running the
India MARKAL (MARKet ALlocation)
model for eight alternative scenarios: (1)
BAU (business-as-usual) at 8% GDP (gross
domestic product), (2) LG (low growth) at
6.7% GDP, (3) HG (high growth) at 10%
GDP, (4) EFF (high efficiency) at 8% GDP,
(5) NUC (high nuclear capacity) at 8%
GDP, (6) REN (aggressive renewable energy) at 8% GDP, (7) HYB (hybrid) at 8%
GDP, and (8) HHYB (high-growth hybrid)
at 10% GDP. In addition to these eight
economy-wide macro scenarios, the analytical results of five transport sector scenarios
are also presented in this chapter. The results of all the above-mentioned scenarios
pertain to the following issues: total and
fuel-wise energy requirement; trends in
sectoral energy mix; trends in energy supply
(domestic and imported resources); technology shifts; and cost implications.

5.2 Results and analysis of the


business-as-usual scenario
The BAU scenario, as described in Chapter
4, considers the Government of Indias

targets and existing policies and plans. In


addition, the adoption of efficient and new
technological options continues as per the
likely progression, without any major interventions.

5.2.1 Total commercial energy


requirements in the business-asusual scenario
Total commercial energy consumption increases by 7.5 times (6.9% growth rate) over
the 30-year period (2001/022031/32) in
the BAU. Table 5.1 presents the fuel-wise
commercial energy requirements. This data
is also represented pictorially in Figure 5.1.
Coal remains the dominant fuel as far as
the commercial energy consumption is concerned. Its consumption increases from
150 Mtoe (million tonnes of oil equivalent)
in 2001 to 1176 Mtoe in 2031, that is, by
about 7.9 times (compound average annual
growth rate of 7.1%).
The variation of percentage share of commercial fuels over the modelling time frame
is shown in Figure 5.2. The percentage share
of coal in the commercial energy mix is the
highest, ranging from 45% to 55% over the
entire modelling period. The share of oil in
total commercial energy ranges between
36% and 40% during 200131. The oil

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National Energy Map for India: Technology Vision 2030

Table 5.1 Commercial energy requirements in the BAU (Mtoe)


Fuel

2001/02

2006/07

2011/12

2016/17

Coal

150

193

242

344

466

757

1176

25

36

51

74

132

136

136

101

151

211

298

405

555

757

18

24

30

36

40

Nuclear energy

13

13

13

Renewable energy

285

391

527

749

1046

1497

2123

Natural gas
Oil

2021/22

2026/27

2031/32

Hydro power
(large and small)

Total

BAU business-as-usual; Mtoe million tonnes of oil equivalent

Figure 5.1 Commercial energy


use in the business-as-usual

requirement increases by about 7.5


times during the same period.
Although the use of natural gas increases over the modelling time period
in terms of magnitude, its share in total
commercial energy is observed to decrease after 2021. Indigenous gas production reaches its maximum capacity
by 2011/12 (~44 Mtoe). Imports of gas
increase till 2021 after which their increase is restricted due to infrastructural
constraints in the model. Due to its high
efficiency and better overall economics,
gas is a preferred option among the fossil
fuels for power generation and fertilizer
production in the model, especially post
2016/17.
The model indicates that hydro
power is also a preferred option, which
reaches the maximum allowed potential
over the time period. From ~25 GW
(gigawatts) in 2001/02, large hydro
power generation capacity increases to
61 GW by 2011/12, 108 GW by 2021/22,
and 150 GW by 2031/32. The installed

Model results and analyses

Figure 5.2 Percentage share of fuel


mix (business-as-usual scenario)

151

The share of renewable energy (solar, wind, and bio-diesel) in commercial energy supply remains lower than
1% throughout the modelling time
frame. None of the options are preferred in terms of their relative economics.
In the BAU, consumption of traditional fuels, such as firewood, crop
residue, and dung in the residential
and commercial sectors, decreases to
half the current level of consumption
during the modelling time frame (from
149 Mtoe in 2001 to 73 Mtoe in
2031). The percentage share of the traditional fuels in the total primary
energy (commercial and non-commercial) supply decreases from 36% in
2001 to 4% in 2031, as shown in
Figure 5.3. This is mainly due to
switching over from non-commercial
fuels to commercial ones for cooking
purposes in the residential sector.

capacity for small hydro is low initially but


increases to 8 GW by 2011/12.
Although the percentage share of hydro
power in the total power generation capacity is 23% in
Figure 5.3 Variation in percentage share of
2031, its contribution in the
traditional fuels in total primary energy supply
total commercial energy mix
is as low as 2% due to low
PLF (plant load factor) of
about 30%.
The country has a nuclear
power programme that is expected to increase the current
capacity (2004/05) of 2.7
GW to 6.78 GW by 2011/12
and 21.18 GW by 2021/22 in
the BAU scenario. This share
is, however, insignificant
(0.6%1.2%) in the total
commercial energy mix.

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National Energy Map for India: Technology Vision 2030

5.2.2 Import dependency of


fuels in the business-as-usual
scenario
The model results indicate that the maximum allowable indigenous production for
all fuels is achieved by 2016. The results further point to the fact that the dependency on
imports for coal, oil, gas, and nuclear fuel
would increase significantly in the future,
which is described in the following section.

5.2.2.1 Import dependency of coal


Although the production of
coal nearly doubles over the
30-year period, it reaches its
maximum annual production
capacity and the economy
needs to resort to increasing
coal imports, as shown in Table
5.2. The total coal import dependency (percentage of imported fuel to total fuel
consumption) increases from
3% to 70% over the modelling
time frame.
Import dependency of noncoking coal increases very rap-

idly in the BAU scenario, from almost 0% in


2001 to 71% by 2031. Figure 5.4 and Table
5.3 show variation in production, import,
and import dependency of non-coking coal
over the modelling time frame in the BAU
scenario.
Figure 5.5 and Table 5.4 show the production, import, and import dependency of
coking coal in the BAU scenario over the
modelling time frame. Due to the increased
steel demand and inadequate availability of
coking coal in the country, import dependency increases from 25% in 2001 to 75%
by 2031.

Figure 5.4 Production, import, and


import dependency of non-coking
coal in the business-as-usual scenario

Table 5.2 Annual production, import, and import dependency of coal

Production (million tonnes)


Import (million tonnes)
Total (million tonnes)
Import dependency (%)

2001/02

2006/07

2011/12

2016/17

2021/22

2026/27

2031/32

343

396

440

485

530

574

619

10

45

92

223

384

811

1438

353

440

532

708

913

1385

2057

10

17

31

42

59

70

Model results and analyses

Table 5.3 Production, import, and import dependency of


non-coking coal in the business-as-usual scenario
2001

2011

2021

2031

289

372

443

515

Import (million tonnes)

61

306

1265

Import dependency (%)

14

41

71

Production (million tonnes)

Figure 5.5 Production, import, and


import dependency of coking coal in
the business-as-usual scenario

Table 5.4 Production, import, and import dependency

153

5.2.2.2 Import dependency of natural gas


Gas is being targeted as the future fuel and it is likely that its
use would be more widespread. Large-scale investments would be required to
enable gas import, handling,
and transportation. As observed in Figure 5.6, the import dependency of gas in the
BAU scenario increases from
almost negligible levels in
2001 to 66% by 2021. In
2031, as per the model, it hovers at about 66%67% due to
constraints imposed on infrastructure (LNG [liquefied
natural gas] terminals and
pipelines), but is likely to be
higher if adequate facilities for
the import and distribution of
gas are made available. Natural gas is a preferred fuel for
power generation at current
prices as compared with coal
and is also more economical
for fertilizer production.

5.2.2.3 Import
dependency of
petroleum products

of coking coal in the business-as-usual scenario


2001

2011

2021

2031

Production (million tonnes)

30

37

47

57

Import (million tonnes)

10

32

78

173

Import dependency (%)

25

46

62

75

In the BAU scenario, import


dependency (Figure 5.7) of oil
increases from 68% in 2001 to
90% by 2031, mainly on account of the rapid growth in the
transport sector for moving

154

National Energy Map for India: Technology Vision 2030

Figure 5.6 Production, import, and import dependency


of natural gas in the business-as-usual scenario

both passengers and freight,


followed by growth in the industry sector.

5.2.3 Sectoral energy


consumption in the business-as-usual scenario

Figure 5.7 Production, import, and


import dependency of petroleum in
the business-as-usual scenario

Figure 5.8 and Table 5.5 show


the trends in commercial energy consumption from 2001
to 2031 in the BAU scenario.
The total consumption from
the end-use side grew by 8
times (CAGR [compounded
annual growth rate] of about
7%) over the modelling time
frame (200131). This is due
to the rapid increase in oil
consumption in the transport
sector, which grew by 13.7
times (CAGR of about 9%)
during the same period. This
rapid growth in the transport
sector can be attributed to a
shift towards more energy-intensive modes of transport for
passengers and freight.
The second highest contributor to this growth in commercial energy consumption is
increasing consumption in the
industrial sector, which increases by 7.9 times (CAGR of
about 7%) in the BAU scenario during 200131. This
rapid growth in energy consumption in the industrial sector is largely on account of the
growth in infrastructural demands of the country (steel

Model results and analyses

155

and cement demands) as


well as small-scale industrial growth.
The overall final energy consumption in the
residential
sector
increases by only 5.2 times
from 2001 to 2031. However, during the first two
decades, the increase in
energy consumption is almost twice that in the base
year (2001).
Figure 5.9 and Table
5.6 depict the trends in
sectoral shares in commercial energy consumption in the BAU over the
modelling time frame
(200131). The figure and

Figure 5.8 Sector-wise commercial energy


consumption in the business-as-usual scenario

Table 5.5 Sector-wise commercial energy consumption in the business-as-usual scenario


(in million tonnes of oil equivalent)
Sector
Agriculture
Commercial
Residential
Industry
Transport

2001

2006

2011

2016

2021

2026

2031

15

17

18

20

22

23

25

12

17

23

32

45

25

32

46

63

85

106

129

107

145

202

286

407

584

848

34

67

106

161

231

328

461

Table 5.6 Trends in sectoral shares in commercial energy consumption (in percentage)
Sector

2001

2006

2011

2016

2021

2026

2031

Agriculture

Commercial

Residential

13

12

12

12

11

10

Industry

57

54

53

52

53

54

56

Transport

18

25

28

29

30

31

31

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National Energy Map for India: Technology Vision 2030

Figure 5.9 Trends in sectoral shares in


commercial energy consumption

the table show that the percentage share of


industrial sector in commercial energy consumption is maximum throughout the modelling time frame, accounting for more than
50% of the total commercial energy consumption. Furthermore, the share of the
transport sector in total commercial energy
consumption is observed to increase from
18% in 2001 to 30% in 2031.

5.2.3.1 Supply and consumption


of coal in the business-as-usual
scenario

Table 5.7 presents the supply and consumption of coal in the BAU scenario from 2001
to 2031. The coal consumption increases
from 353 to 2057 MT (million tonnes) dur-

ing the modelling time frame


(200131). The share of
power generation in total coal
consumption is the highest
over the modelling time
frame. However, its share exhibits a decline from 70% in
2001 to 58% in 2031. This decline is due to the preference
of natural gas for power generation due to its better economics. While the share of the
process heating in coal consumption increases from 14%
in 2001 to 24% in 2031, the
percentage share of iron ore
reduction and captive power
generation in coal consumption remains almost constant
during the modelling time
frame.

5.2.3.2 Supply and consumption


of oil in the business-as-usual
scenario
Table 5.8 gives the supply and consumption
of petroleum and petroleum products in the
five end-use sectors in the BAU scenario
over the modelling time frame, from 2001 to
2031. The supply of petroleum products increases from 104 to 767 MT during the
modelling period. Similarly, their consumption increases from 91 to 686 MT during the
same period. The difference in the supply
and consumption is primarily due to fuel
and oil losses in the refinery processes. Figure
5.10 gives a graphical representation of the
sectoral consumption of petroleum products.
The total consumption of petroleum
products increases at the rate of 7% during

Model results and analyses

157

Table 5.7 Supply and consumption of coal (million tonnes) in the business-as-usual scenario

Supply (A)

2001/02

2006/07

2011/12

2016/17

2021/22

2026/27

2031/32

353

440

532

708

913

1385

2057

30

31

37

42

47

52

57

289

336

372

408

443

479

515

25

28

32

36

39

43

46

343

396

440

485

530

574

619

10

19

32

51

78

117

173

Non-coking coal

26

61

172

306

693

1265

Total net import

10

45

92

223

384

811

1438

49

71

109

157

234

337

498

Captive power

27

32

37

52

82

114

160

Ore reduction

31

42

58

81

112

155

214

Power

246

296

328

418

485

779

1185

Total consumption

353

440

532

708

913

1385

2057

A=B+C

Production (B)
Coking coal
Non-coking coal
Lignite
Total production
Net import (C)
Coking coal

Consumption
(D)
Industry
(process heating)

Table 5.8 Supply and consumption of petroleum products (million tonnes) in the businessas-usual scenario
2001/02

2006/07

2011/12

2016/17

2021/22

2025/26

2031/32

104

152

211

300

409

563

767

Production (B)

33

40

55

79

79

79

79

Net import (C)

71

112

156

222

330

484

688

Agriculture

10

10

11

Commercial

11

Supply (A)

A=B+C

Consumption (D)

Domestic

17

19

25

30

34

37

39

Industry

31

41

53

70

93

131

184

Transport

32

64

101

153

220

313

441

Total

91

136

192

268

364

500

686

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National Energy Map for India: Technology Vision 2030

200131. It grows fastest in the transport


sector at the rate of about 9.1% during the
same time period. The share of the transport
sector in total petroleum product consumption increases from 36% in 2001 to 64% in
2031. This points towards the fact that the
transport sector has limited options for
switching to efficient options that reduce the
consumption of petroleum products unlike
the industry and other oil-consuming sectors. This explains the continuously increasing percentage share of transport sector in
the consumption of petroleum products over
the modelling time frame.
Traditional fuels are used mainly in the
residential sector and to a very small extent
in the commercial sector. Given that these

fuels get increasingly replaced with modern


energy options such as kerosene and LPG
(liquefied petroleum gas), the final energy
use in the residential sector does not seem to
increase significantly due to the higher efficiency of the commercial energy forms.

5.2.3.3 Supply and consumption


of natural gas in the business-asusual scenario

Table 5.9 gives the net supply and consumption of natural gas over the modelling time
frame in the BAU scenario. The gas supply
increases from 26 BCM (billion cubic
metres) in 2001 to 139 BCM in 2031. These
estimates are based on the asFigure 5.10 Sectoral consumption of petroleum
sumption that the natural gas
products in the business-as-usual scenario
has a calorific value of 10 000
kcal
(kilocalories)/standard
cubic metre.
As already stated, due to
economic reasons, natural gas
is preferred in the fertilizer
sector, followed by the power
sector. The consumption in
the fertilizer sector is restricted to a certain extent because of the continued use of
other feedstocks like naphtha
and fuel oil.

Model results and analyses

159

Table 5.9 Supply and consumption of natural gas (billion cubic metres) in the business-asusual scenario
2001/02

2006/07

2011/12

2016/17

2021/22

2026/27

2031/32

26

36

52

75

135

139

139

Production (B)

26

31

45

46

46

46

46

Net import (C)

29

89

93

93

Industry (process)

Industry (captive)

13

Fertilizer

10

11

11

11

12

12

10

17

28

49

112

113

107

Supply (A)

A=B+C

Consumption (D)

Power
Transport
Total

26

5.2.4 Sectoral electricity


consumption in the
business-as-usual scenario
Figure 5.11 and
Table 5.10 present
sector-wise electricity consumption in
the BAU scenario
over the modelling
time frame (2001
31). The total electricity consumption
increases by 8.9
times over the modelling time frame.
This increase is
mostly in the industry and residential
sectors, and by
2031, these two sectors account for
nearly 80% of the

0.16

0.15
36

0.15
52

0.15
75

0.15
135

0.15
139

0.15
139

total electricity consumption as compared


with 63% in 2001. The consumption in the
domestic sector increases by 12.6 times during the modelling time frame.

Figure 5.11 Trend in the sectoral electricity


consumption in the business-as-usual scenario

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National Energy Map for India: Technology Vision 2030

Table 5.10 Trend in the sectoral electricity consumption in the business-as-usual scenario
(in terawatt hours)
Sector

2001/02

2006/07

2011/12

2016/17

2021/22

2026/27

2031/32

Agriculture

87

99

111

124

138

152

167

Commercial

48

63

91

132

191

276

399

Domestic

82

134

222

365

573

786

1034

163

237

369

571

874

1212

1748

17

27

40

56

79

112

Industry
Transport

Figure 5.12 shows the trends in percentnarios is presented in this section. It also
age distribution of electricity consumption
provides a deeper insight into the variations
in the BAU scenario over the modelling time
in the final energy and end-use consumption
frame. The percentage share of the industrial
mix under alternative sets of assumptions. A
sector in total electricity consumption indetailed examination of these trends and increases from 42% in 2001 to 51% by 2031.
vestment requirements would be used to
During the same period, the percentage
frame policies.
share of domestic sector in the electricity
consumption increases from
21% to 30%. However, there
Figure 5.12 Trends in percentage distribution of
has been a decline in the perelectricity consumption in the business-as-usual scenario
centage share of the agriculture sector in total electricity
consumption, from 22% to
5% over the modelling time
frame. The share of the commercial and transport sectors
in electricity consumption
has remained constant over
the 30-year modelling time
frame.

5.3 Inter-scenario
comparisons
A comparative analysis of the
key results across all the sce-

Model results and analyses

161

Table 5.11 Variations in commercial energy consumption across various scenarios (in Mtoe)
Scenario

2001/02

2006/07

2011/12

2016/17

2021/22

2026/27

2031/32

LG

285

361

456

605

816

1134

1579

BAU

285

391

527

749

1046

1497

2123

REN

285

391

524

740

1033

1479

2097

NUC

285

391

527

749

1030

1455

2061

EFF

285

379

479

623

838

1131

1542

HG

285

435

638

962

1438

2186

3351

LG low growth; BAU business-as-usual; REN aggressive renewable energy; NUC high nuclear capacity;
EFF high efficiency; HG high growth; Mtoe million tonnes of oil equivalent

5.3.1 Total and fuel-wise energy


requirements across different
scenarios
Table 5.11 presents the variations in commercial energy consumption across various

scenarios. These are pictorially represented


in Figure 5.13. In the BAU scenario, the total commercial energy consumption increases by 6.9% during the period 200131.
However, it increases by 5.9% and 8.6% in
the LG and HG scenarios, respectively. It
has been observed that in the EFF scenario,

Figure 5.13 Total commercial energy consumption across various scenarios

162

National Energy Map for India: Technology Vision 2030

characterized by the most probable growth


5.3.2 Electricity requirement
rate (8% GDP), the total commercial energy
across different scenarios
consumption increases only by 5.8%.
The difference in energy consumption
In the BAU (8% GDP growth), electricity
between the EFF scenario and the BAU sceconsumption increases at an average growth
nario in 2031 is 581 Mtoe (the saving in enrate of 7.6% over the period 200131, while
ergy consumption in the EFF scenario is
the rate of growth is 6.8%, 9.1%, and 6.9%,
twice the consumption in 2031). This differrespectively, in the LG (6.7% GDP), HG
ence is mainly on account of the reduction in
(10% GDP), and EFF scenarios (Figure
consumption of coal by 337 Mtoe and that
5.15).
of oil by 244 Mtoe for the period 200131.
In the agriculture sector, electricity conThis reduction in consumption of coal and
sumption increases by about 2.2% over the
oil can be attributed to the adoption of en30-year period in the BAU scenario. Howergy-efficient technologies by the power, inever, the EFF scenario indicates that elecdustrial, and transport sectors.
tricity consumption increases only by 1.2%
The diagrammatic representation of the
during the same period on account of effidetailed energy balance across various scecient pump sets and judicious water utilizanarios for 2001 and 2031 is provided
tion as well as the water table remaining
through the Sankey diagrams in Appendix 5
nearly constant.
and the decadal energy balance are shown in
Appendix 6.
Figure 5.14 provides a comFigure 5.14 Average annual fuel
parison of the fuel costs across
cost across various scenarios
various scenarios. It can be observed that the cost reduces by
30% in the EFF scenario as compared to that in the BAU in 2031.
In the REN scenario, although
consumption of coal and oil reduces by 31 and 28 Mtoe, respectively, in 2031 as compared to the
BAU, the fuel cost increases marginally by 5000 crore rupees due
to the higher cost of bio-diesel. In
the NUC scenario, the fuel cost is
marginally higher when compared
to the BAU scenario.

Model results and analyses

163

Figure 5.15 Comparison of electricity


consumption across various scenarios

In the industrial sector, the growth rate of


electricity consumption comes down from
8.2% in the BAU scenario to 7.6% in the
EFF scenario. This reduction is primarily
due to the adoption of energy- efficient technologies in the various industrial sub-sectors.
The electricity consumption increases by
8.8% in the residential sector in the BAU
scenario during the 30-year period. However, in the EFF scenario, it reduces by 7.9%,
with a reduction by 23% in absolute levels in
2031. This is primarily due to the adoption
of efficient lighting systems, refrigerators, air
conditioners, and other appliances.
Electricity consumption in the transport
sector in the BAU scenario exhibits a growth

rate of 8.7% over the 30-year period, while


in the EFF scenario it exhibits a growth rate
of 10.9% over the same time period. This is
on account of the increase in the share of
rail-based movement for passengers and
freight as well as higher electrification of rail.

5.3.2.1 Projected generation


capacity across scenarios
Figure 5.16 presents a comparison of
electricity generation capacity mix across
various scenarios. In the BAU scenario, the
total generating capacity increases from
125 GW in 2001 to 795 GW in 2031

164

National Energy Map for India: Technology Vision 2030

Figure 5.16 Comparison of power generation capacity


mix (including decentralized) across various scenarios

(6.3 times). The coal-based capacity decreases from 466 GW in 2031 in the BAU
scenario to 349 GW in the EFF scenario.
Gas-based capacity increases from 137 GW
in the BAU scenario in 2031 to 141 GW in
the EFF scenario.
The total power generating capacity remains almost constant in the BAU, NUC,
and REN scenarios. However, there exists
variation in the technology deployment for
power generation across various scenarios.
In the NUC scenario, the nuclear power
generation replaces coal-based generation.

Same happens in the REN scenario in which


renewable-energy-based generation replaces
gas-based generation that is already at its
maximum because of the non-availability of
infrastructure to import additional gas.
Figure 5.17 presents a comparison of the
average annualized investment costs across
various scenarios for 2011, 2021, and 2031.
During the past five-year period of modelling time frame (202631), a reduction of
18 000 crore rupees per annum is effected
by way of reduction in annualized capital costs
of coal-based power plants (centralized).

Model results and analyses

165

Figure 5.17 Average annualized investment cost in the


centralized power generation across various scenarios

However, there is an increase in the annualized cost of gas-based power plants (centralized) by 5000 crores vis--vis the BAU
scenario. The increase in the cost of gasbased power plants is due to increased capacity of gas-based generation as well as
penetration of H-frame combined cycle gas
turbine that has higher capital cost.
In the NUC scenario, although the annualized costs for coal-based capacity decrease
by 29 000 crore rupees as compared to the
BAU scenario, the increase in the annualized
cost of nuclear power capacity (43 crore rupees) is more than the cost reduction.

5.3.2.2 Technology deployment


in the power sector across the
business-as-usual and highefficiency scenarios
Table 5.12 presents the technology deployment in the power sector in 2021 and
2031 for the BAU and EFF scenarios. Pictorial representation of the same is given in
Figure 5.18.
The total installed capacity for power
generation from both centralized and decentralized
technologies
decreases
from

166

National Energy Map for India: Technology Vision 2030

Table 5.12 Comparison of technology deployment for centralized and decentralized


power generation in the BAU and EFF scenarios for 2021 and 2031 (in GW)
Year 2021

Year 2031

Technology

BAU

EFF

BAU

EFF

Coal sub-critical

170

92

456

135

Coal-efficient

10

Coal IGCC

47

213

Gas-based

118

95

137

89

CCGT (H-frame GT)

10

53

Diesel

116

116

158

158

21

21

21

21

441

392

795

681

Hydro power (large and small)


Nuclear energy
Renewable energy
Total

BAU business-as-usual; EFF high efficiency; IGCC integrated gasification combined cycle;
CCGT combined cycle gas turbine; GW gigawatts

441 GW in the BAU scenario to 392 GW in


the EFF scenario in 2021, which is about
11% reduction to meet the required demand. Similarly, in 2031, the power generating capacity reduces from 795 to 681 GW,
which amounts to 14% reduction. This is
primarily due to the improvement in efficiency in the various end-use sectors.
The model results indicate that IGCC
(integrated gasification combined cycle) is
preferred to super-critical- and ultrasupercritical-based power generating technologies. In the BAU scenario, IGCC
technologies were not introduced in the
model. These were introduced in the EFF
scenario; due to better economics, the model
preferred IGCC to other coal-based technologies.
In the BAU scenario, gas-based power
generation hits the upper limits based on the
availability of natural gas in 2021 and 2031,

replacing sub-critical coal-based power generation. This is primarily due to the higher
efficiency of the CCGT (combined cycle gas
turbine) compared to rankine cycle power
generation in coal-based power generation.
IGCC and H-frame CCGT are almost
equally preferred options for power generation in the EFF scenario. IGCC based on
imported coal has better economics (lower
cost of generation) and, hence, is a preferred
option as against the IGCC based on indigenous coal. In the EFF scenario, the installed capacity based on H-frame CCGT
technology hits the upper bound based on
the limits of gas availability.
In the BAU scenario, for 2021, the subcritical coal-based generation capacity is
175 GW, whereas the power generation capacity of natural-gas-based CCGT is 118
GW. However, in the EFF scenario, the subcritical coal-based generation capacity is

Model results and analyses

Figure 5.18 Comparison of fuel-wise technology


deployment in the business-as-usual and
high-efficiency scenarios in the power sector

reduced to 92 GW, and IGCC is preferred to


the extent of 47 GW and efficient CCGT
(H-frame) to the extent of 10 GW. In 2031,
IGCC is the preferred option in the EFF
scenario among the coal-based technologies,
with the generation capacity of 213 GW that
is much more than the sub-critical coalbased generation capacity of 135 GW. In
2031, efficient CCGT generation capacity
increases to 53 GW compared to negligible
generation capacity in the BAU scenario.
The nuclear-energy-based generation capacity remains constant at 21 GW throughout
the decade (202131). The hydro capacity
remains at 116 GW (in 2021) and 158 GW
(in 2031) in both the scenarios.

167

5.3.3 Coal requirement across various


scenarios
Figure 5.19 shows the sector-wise coal consumption
across
various
scenarios. The rate of coal
consumption
grew
at
7.1% in the BAU scenario
during the modelling time
frame. In contrast, it grew
at a rate of only 6% in the
EFF scenario over the
modelling time frame. In
the NUC and the REN
scenarios, the consumption growth was only marginally lower at 6.8% and
7.0%, respectively. The
HG scenario (based on a
GDP growth rate of 10%)
exhibits
the
highest
growth rate of coal consumption at 9%.
The coal consumption in 2031 in the
EFF scenario is only 839 Mtoe, which is
lower than the BAU scenario by 337 Mtoe.
The power sector has the maximum share
in coal consumption across all scenarios, followed by the industrial sector for process
heating and captive power generation. The
coal consumption for process heating and
captive power generation is the least in the
EFF scenario due to the adoption of efficient technologies by the end-use sectors. It
is about 34% lower than that in the BAU
scenario in 2031. Coking coal is used for ore
reduction in the blast furnace for making
iron. The coking coal consumption is the
highest in the EFF scenario because of

168

National Energy Map for India: Technology Vision 2030

Figure 5.19 Sector-wise coal consumption across


different scenarios for 2011, 2021, and 2031

increased iron making through the blast


furnace route, which is environmentally
preferred to the direct reduction route.
The coking coal consumption in 2031
is about 1.6 times higher in the EFF
scenario than the BAU scenario.

5.3.3.1 Import dependency


of coal across different
scenarios
Figure 5.20 shows the import dependency of coking coal across various scenarios for 2011 and 2031. Because of
the non-availability of high-grade coking coal, India is highly dependent on
coking coal for iron making. This dependency is the highest in the EFF scenario because of the adoption of blast
furnace route for iron making in integrated steel plants.
India is highly dependent on coal for
its energy requirement. However, due
to growing energy demands and constraints on the coal-mining capacity,
India will have to resort to imports.
Other additional factors responsible for
increased dependency on imports are:
(a) location of mines predominantly in
the eastern part of the country and (b)
location of load centres of coal primarily in the south and west. The Indian
government already has a policy to locate thermal power plants based on imported coal in coastal locations.
The import dependency of non-coking coal is the highest at 82% in the HG
scenario as compared to 71% in the
BAU scenario in 2031 (Figure 5.21). In
2011, it is 3% in the EFF scenario and

Model results and analyses

Figure 5.20 Comparison of import dependency


of coking coal across various scenarios

169

zero in the LG scenario,


and it is the highest for the
HG scenario at 27% in the
same year.

5.3.3.2 Average
annual cost of coal
across various
scenarios

Figure 5.21 Import dependency of non-coking


coal across various scenarios

The average annual cost of


coal in each of the decadal
years (2011, 2021, and
2031) in all the sectors of
the economy is shown in
Figure 5.22.
In the BAU scenario, the
annual cost nearly doubles
from 2011 to 2021, and increases further by 2.6 times
from 2021 to 2031. The
coal cost is minimal in the
LG scenario (GDP 6.7%),
334 000 crore rupees in
2031. However, in the EFF
scenario, the coal cost is
367 000 crore rupees in
2031, even when the energy
demand is much higher
than the LG scenario. In
the EFF scenario, the coal
cost increases by only 1.7
times from 2011 to 2021
and by 2.5 times for the period 202131. In 2031, the
coal cost is 25% lower in
the EFF scenario than the
BAU
scenario.
Correspondingly, the cost of coal
is 7.6% lower in the NUC

170

National Energy Map for India: Technology Vision 2030

scenario than the BAU scenario as nuclear power replaces coal-based power
generation in 2031. The
coal cost is only marginally
lower (in 2031) in the REN
scenario when compared
with the BAU scenario.

Figure 5.22 Comparison of average annual


cost of coal across various scenarios

5.3.4 Petroleum
product requirement
across various
scenarios
Total petroleum consumption increases by 7.6 times
during the 30-year period in
the BAU scenario. In the
EFF scenario, the corresponding increase is only
5.1 timesthe decrease being accounted for mainly by
the transport sector.
The oil imports remain
high in all the scenarios due
to constant production of
domestic crude. In the BAU
scenario, the import dependency is 74% and 90%, respectively, in 2011 and
2031. In the EFF scenario,
it is 71% and 85%, respectively, and 78% and 90% in
the NUC scenario for 2011
and 2031, respectively. Figures 5.23 and 5.24 and their
corresponding
tables
(Tables 5.13 and 5.14)
present domestic production, net import, and import

Figure 5.23 Production, import, and import dependency


of petroleum products across various scenarios in 2011

Model results and analyses

Figure 5.24 Production, import, and import dependency of


petroleum products across various scenarios in 2031

Table 5.13 Production, import, and import dependency of


petroleum products across various scenarios in 2011
Production

Net import

Import dependency

Scenario

(Mtoe)

(Mtoe)

(%)

BAU

55

156

74

EFF

55

137

71

REN

55

190

77

NUC

55

194

78

LG

55

133

71

HG

55

204

79

BAU business-as-usual; EFF high efficiency; REN aggressive


renewable energy; NUC high nuclear capacity; LG low growth;
HG high growth; Mtoe million tonnes of oil equivalent

171

dependency of petroleum
products across different
scenarios for 2011 and
2031.
This has implications
with respect to energy securitythe EFF scenario is
the best for the economy in
terms of energy security
and monetary savings due
to reduced petroleum imports.
Figure 5.25 presents the
average annual cost of oil
and oil products across
various scenarios for 2011,
2021, and 2031. It is observed to be doubling every
decade in the BAU scenario. Compared to this,
the increase is only by about
1.6 times in the EFF scenario over the two decades.

5.3.4.1 Sectoral
petroleum consumption trends across
scenarios
The petroleum consumption in the transport sector
increases by about 13.6
times in the BAU scenario
over the 30-year time period as compared to an increase by 7.8 times in the
EFF scenario. This indicates that the magnitude of
increase in the petroleum
consumption in the trans-

172

National Energy Map for India: Technology Vision 2030

sumption of petroleum
products is attributed to
petroleum products across various scenarios in 2031
the efficient modes for
road-based passenger and
Production
Net import
Import dependency
freight vehicles, along
Scenario
(Mtoe)
(Mtoe)
(%)
with a shift in the share of
BAU
79
688
90
rail-based movement and
EFF
79
443
85
higher utilization of pubREN
79
687
90
lic transport. In the case
NUC
79
742
90
of renewable energy, this
LG
79
506
87
decrease is due to the
availability of bio-diesel.
HG
79
1079
93
In the industry sector,
BAU business-as-usual; EFF high efficiency; REN aggressive
total
petroleum consumprenewable energy; NUC high nuclear capacity; LG low growth;
tion increases by six times
HG high growth; Mtoe million tonnes of oil equivalent
in the BAU scenario and
by 4.7 times in the EFF
Figure 5.25 Average annual cost of oil and oil
scenario. Naphtha conproducts across various scenarios
sumption decreases by
about 26% in the EFF
scenario as compared to
the BAU scenario in
2031. This is due to the
shift towards natural-gasbased fertilizer production.
In the commercial sector, the EFF scenario indicates a slight increase in
the consumption of petroleum products as compared
to
the
BAU
scenario, as there is a shift
from traditional fuels to
kerosene and LPG.
In the residential sector, the consumption of
port sector declined by almost 50% in the
petroleum products increases in the EFF
EFF scenario vis--vis the BAU scenario
scenario compared to the BAU scenario due
over the 30-year time frame (200131). In
to the displacement of traditional fuels at a
the EFF scenario, the decline in the conrelatively faster rate.
Table 5.14 Production, import, and import dependency of

Model results and analyses

Figure 5.26 Comparison of petroleum


product consumption across various
scenarios in the end-use sectors

173

Figure 5.26 presents a comparison of


the sectoral consumption of petroleum
products across various scenarios for
2011, 2021, and 2031.

5.3.4.2 Capacity and


investments in the oil refinery
As observed in Figure 5.27, only the
EFF scenario has the potential to reduce refinery capacity, which decreases
by 19% and 26%, respectively, by 2021
and 2031 when compared with the BAU
scenario. Annualized refinery costs for
the same years decrease by 29% and
40%, respectively (Figure 5.28).

5.3.5 Natural gas requirement


across various scenarios
Natural gas production in the country is
estimated to increase from 26 BCM in
2001 to 45 BCM in 2011 and 46 BCM
by 2021 and 2031.
In 2011, imports of natural gas decrease marginally in the EFF scenario as
compared to the BAU scenario (as well
as other scenarios). However, in 2021, a
decrease in gas imports is observed only
in the NUC scenario. This is due to the
replacement of gas-based power generating capacity by nuclear capacity. Gas
is a preferred option, especially for
power generation as well as in the fertilizer sector. However, its offtake through
imports in the model is similar across all
the scenarios and reaches its maximum
infrastructural constraint by 2011 (Figure 5.29). Similar trends are indicated
with regard to cost of natural gas supply
as seen in Figure 5.30.

174

National Energy Map for India: Technology Vision 2030

Figure 5.27 Refinery capacity


across various scenarios

5.4 Comparison of
hybrid scenarios
A comparative analysis of
the impacts of two hybrid
scenarios (namely, HYB
and HHYB, explained in
detail in Chapter 4) on the
energy system is presented
in this section.

5.4.1 Commercial
energy consumption

Figure 5.28 Refinery investment


cost across various scenarios

Table 5.15 gives the commercial energy consumption over the modelling
period across four scenarios, namely, BAU, HYB,
HG, and HHYB. The energy consumption grows
from 285 Mtoe in 2001 to
1503 Mtoe in 2031 in the
HYB scenario. In the
HHYB scenario, the energy
consumption grows from
285 Mtoe in 2001 to 2320
Mtoe in 2031. The commercial energy consumption in 2031 is lower by
29.2% in the HYB scenario
when compared with BAU
scenario. The consumption
in the HHYB scenario is
higher by about 9.3% compared to the BAU scenario
in 2031.
However, the consumption in the HHYB scenario

Model results and analyses

Figure 5.29 Import of natural gas


across various scenarios

Figure 5.30 Average annual cost of


natural gas across various scenarios

is about 1.5 times higher than the consumption in the HYB scenario in 2031.
The commercial energy supply in 2011,
2021, and 2031 is shown in Figure 5.31.

175

5.4.2 Generation
capacity mix
Figure 5.32 shows the
power generation capacity
mix in the BAU, HYB, HG,
and HHYB scenarios for
2011, 2021, and 2031. It
can be seen that the coal
power generation is the
highest in the HG scenario
in all the years. In the HYB
scenario, nuclear power
generation displaces coaland gas-based power generation but hydro-based
power generation capacity
increases marginally. The
renewable energy generation capacity reaches its
maximum potential of 26
GW in the HYB and
HHYB scenarios in 2031.
Hydro- and nuclear-based
power generation is exploited to its maximum potential of 160 and 70 GW,
respectively, in 2031. However, coal-based generation
capacity accounts for over
59% of the total power generation capacity in the
HHYB scenario and about
42% of the total power generation capacity in the
HYB scenario. Technology
deployment for power generation for 2021 and 2031 across the BAU,
HYB, HG, and HHYB scenarios is presented in Table 5.16 and Figures 5.33 and
5.34.

176

National Energy Map for India: Technology Vision 2030

Table 5.15 Comparison of commercial energy consumption across various scenarios (in Mtoe)
Scenario

2001/02

2006/07

2011/12

2016/17

2021/22

2026/27

2031/32

BAU

285

391

527

749

1046

1497

2123

HYB

285

379

478

619

823

1101

1503

HG

285

435

638

962

1438

2186

3351

HHYB

285

405

544

760

1087

1576

2320

BAU business-as-usual; HYB hybrid; HG high growth; HHYB high-growth hybrid; Mtoe million tonnes of oil
equivalent

5.4.3 Electricity consumption in


the end-use sectors
Figure 5.35 shows the electricity consumption in the BAU, HYB, HG, and HHYB scenarios for 2011, 2021, and 2031. It is seen
that the industry and domestic sectors are
the largest consumers of electricity, accounting for almost three-fourth of the total electricity consumption across all scenarios
during the entire modelling time frame.

5.4.4 Coal consumption in the


end-use sectors
The coal consumption in the various enduse sectors in the HYB scenario in 2011,
2021, and 2031 is shown in Tables 5.17
5.19. The coal consumption in 2031 is 1.7
times higher in the HG scenario compared
to the BAU scenario. The coal consumption
reduces by 35% in the HYB scenario when
compared to the BAU scenario and by 32%
in the HHYB scenario when compared to
HG scenario in 2031. However, the consumption in ore reduction increases in the
HHYB scenario when compared to the HG
scenario due to higher production of iron
and steel from the blast furnace route in
2031.

5.4.5 Import dependency of coal


Figures 5.36 and 5.37 show the import dependency of coking and non-coking coal respectively, in 2011 and 2031 across various
scenarios. The coking coal import dependency in the HYB and HHYB scenarios is
higher than that in the BAU scenario. For
non-coking coal, the import dependency is
the lowest in the HYB scenario but similar in
the HHYB and the BAU scenarios.

5.4.6 Import, import


dependency, and production of
petroleum products
Figures 5.38 and 5.39 and Tables 5.20 and
5.21 show the net import, import dependency, and production of the petroleum
products in the BAU, HG, and their respective HYB scenarios for 2021 and 2031. The
import dependency is lowest in the HYB
scenario and highest in the HG scenario for
all the years. This is primarily due to the fuel
demand in the transport sector, details of
which are explained under the transport scenario.

Model results and analyses

Figure 5.31 Commercial energy supply in


2011, 2021, and 2031

177

Figure 5.32 Generation capacity mix for


2011, 2021, and 2031 (centralized and
decentralized)

178

National Energy Map for India: Technology Vision 2030

Table 5.16 Technology deployment (including decentralized) during 2021 and 2031 in the
business-as-usual and high growth and their respective hybrid scenarios (in GW)
Year 2021

Year 2031

Technology

BAU

HYB

HG

HHYB

BAU

HYB

Coal sub-critical

170

88

264

107

456

131

728

171

Coal-efficient

10

10

Coal IGCC

32

96

160

387

118

89

114

90

137

91

125

90

Gas-efficient

10

10

10

53

23

23

Diesel

116

118

116

118

158

160

158

160

21

40

21

40

21

70

21

70

12

12

26

26

441

395

541

480

795

700

1076

935

Gas

Hydro power (large and small)


Nuclear energy
Renewable energy
Total

HG

HHYB

BAU business-as-usual; HYB hybrid; HG high growth; HHYB high-growth hybrid; IGCC integrated gasification
combined cycle; GW gigawatts

Figure 5.33 Comparison of fuel-wise technology deployment


for power generation across various scenarios for 2021

5.4.7 Consumption of
natural gas
Figure 5.40 shows the import of natural gas in the
BAU, HG, and their respective hybrid scenarios for
2011, 2021, and 2031. It can
be seen that the imports in
the BAU and the HG scenarios for 2021 and 2031 are
the same. The consumption
of natural gas in 2031 in the
BAU, HHYB, and HG scenarios hits the upper bound.
However, in the HYB scenario, the natural gas consumption for the same
period is below the upper
bound. This is due to the

Model results and analyses

Figure 5.34 Comparison of fuel-wise technology deployment


for power generation across various scenarios for 2031

Table 5.17 Coal consumption in various end-use sectors in 2011 (in Mtoe)
BAU

HYB

HG

HHYB

Industry (process heating)

48

40

57

46

Industry (captive power generation)

16

16

19

18

141

116

180

143

37

42

44

49

242

215

300

256

Sector

Power
Ore reduction
Total

BAU business-as-usual; HYB hybrid; HG high growth; HHYB high-growth hybrid

Table 5.18 Coal consumption in various end-use sectors in 2021 (in Mtoe)
Sector

BAU

HYB

HG

HHYB

Industry (process heating)

118

76

167

108

41

42

51

58

235

115

405

217

71

95

100

134

466

329

723

517

Industry (captive power generation)


Power
Ore reduction
Total

BAU business-as-usual; HYB hybrid; HG high growth; HHYB high-growth hybrid;


Mtoe million tonnes of oil equivalent

179

180

National Energy Map for India: Technology Vision 2030

Figure 5.35 Sectoral electricity


consumption for 2011, 2021, and 2031

Table 5.19 Coal consumption in various


end-use sectors in 2031 (in Mtoe)
BAU

HYB

285

146

490

253

91

106

139

160

Power

663

296

1148

581

Ore reduction

137

219

231

370

Total

1176

767

2008

1364

Sector

HG

HHYB

Industry
(process heating)
Industry (captive
power generation)

BAU business-as-usual; HYB hybrid;


HG high growth; HHYB high-growth hybrid;
Mtoe million tonnes of oil equivalent

preference of coal-based IGCC-based power


generation to the power generation by imported natural gas.

5.4.8 Sectoral end-use


consumption of the petroleum
products
Figure 5.41 shows that the transport and industrial sectors accounted for more than
80% in the total petroleum product consumption in 2011. Their share increases to
more than 90% by 2031. The petroleum
product consumption in the transport sector
accounted for more than 50% in all the scenarios in all the years.

5.5 Comparison of energy


intensity across different scenarios
Energy intensity indicates the extent to
which energy is efficiently utilized in generating a unit of income/output (GDP) for the
economy. Table 5.22 presents a comparison

Model results and analyses

Figure 5.36 Import dependency of coking coal


across various scenarios for 2011 and 2031

of energy intensity of GDP across the eight


economy-wide scenarios over the modelling
time frame.
Figure 5.42 presents the trends of energy
intensity for various scenarios over the modelling time frame. The figure clearly depicts

that the energy intensity exhibits


a declining trend from 0.022
kgoe (kilogram of oil equivalent)
per rupee of GDP in 2001 to
0.017 kgoe per rupee of GDP in
2031 (a decrease of 23%) in the
BAU scenario. It can be inferred
that owing to the GDP growth
rate of 8% and adoption of government plans and policies, the
economy is progressing along an
energy-efficient path in the BAU
scenario. However, the scenario
takes a conservative view with respect to the technology deployment by way of limited
penetration of clean-coal technologies, H-frame combined
cycle gas turbine, the timing of
penetration of efficient power
generation technologies, a low
degree of penetration of nuclear
energy and renewable energy, and so on.
In the EFF scenario, there is a decline in
energy intensity from 0.022 kgoe per rupee
of GDP in 2001 to 0.012 kgoe per rupee of
GDP in 2031. Thus, there is a decline by
27% in the energy intensity when compared

Table 5.20 Domestic production, net

Table 5.21 Domestic production, net

import, and import dependency of

import, and import dependency of

petroleum products in 2021

petroleum products in 2031

Net

Import

Production

import

dependency

Scenario

(Mtoe)

(Mtoe)

(%)

BAU

79

330

HYB

79

HG
HHYB

181

Net

Import

Production

import

dependency

Scenario

(Mtoe)

(Mtoe)

(%)

81

BAU

79

688

90

223

74

HYB

79

415

84

79

566

88

HG

79

1079

93

79

299

79

HHYB

79

641

89

BAU business-as-usual; HYB hybrid; HG high


growth; HHYB high-growth hybrid; Mtoe million
tonnes of oil equivalent

BAU business-as-usual; HYB hybrid; HG high


growth; HHYB high-growth hybrid; Mtoe million
tonnes of oil equivalent

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National Energy Map for India: Technology Vision 2030

Figure 5.37 Import dependency of


non-coking coal across various
scenarios in 2011 and 2031

Figure 5.38 Domestic production, net import, and


import dependency of petroleum products for 2021

Model results and analyses

Figure 5.39 Domestic production, net import, and import


dependency of petroleum products for 2031

Figure 5.40 Import of natural gas across various


scenarios for 2011, 2021, and 2031

183

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National Energy Map for India: Technology Vision 2030

Figure 5.41 Sectoral consumption of petroleum


products in 2011, 2021, and 2031

with the BAU scenario. In the HYB


scenario (that includes all plausible
energy-efficient measures considered in the EFF scenario coupled
with enhanced nuclear capacity and
accelerated penetration of renewable
energy), the energy intensity steadily
declines from 0.022 kgoe per rupee
of GDP in 2001 to 0.012 kgoe per
rupee of GDP in 2031. The extent of
decline is about 29% when compared with the BAU.
Thus, it can be inferred that there
exists a considerable scope for bringing about reduction in energy intensity, if policies are formulated to
promote clean-coal technologies (in
view of the economys continuous
dependence on coal) and barriers to
the uptake of more energy-efficient
technology options are removed.
With time-bound targets and concerted
action
plans
towards
strengthening indigenous research
and development facilities, there is a
possibility of further reduction in
energy intensity, as highlighted in
the HYB scenario.
However, the HG and HHYB
scenarios also exhibit a declining
trend in energy intensity; reducing
from 0.022 kgoe per rupee of GDP
in 2001 to 0.016 kgoe per rupee of
GDP in 2031 in the HG scenario
and further to 0.011 kgoe per rupee
of GDP in the HHYB scenario in the
same year. This implies that even
with a high growth rate of 10% GDP
over the period 200131, leading to
growth in commercial energy consumption, the economy can still
move along a declining energy-in-

Model results and analyses

Table 5.22 Energy intensity (kgoe/Rs of GDP) for various scenarios


Scenario

2001

2006

2011

2016

2021

2026

2031

LG

0.022

0.022

0.020

0.020

0.019

0.019

0.018

BAU

0.022

0.022

0.020

0.019

0.018

0.018

0.017

REN

0.022

0.022

0.020

0.019

0.018

0.018

0.017

NUC

0.022

0.022

0.020

0.019

0.018

0.017

0.017

EFF

0.022

0.021

0.018

0.016

0.015

0.013

0.012

HYB

0.022

0.021

0.018

0.016

0.014

0.013

0.012

HG

0.022

0.023

0.021

0.019

0.018

0.017

0.016

HHYB

0.022

0.021

0.018

0.015

0.014

0.012

0.011

LG low growth; BAU business-as-usual; REN aggressive renewable energy; NUC high nuclear capacity;
EFF high efficiency; HYB hybrid; HG high growth; HHYB high-growth hybrid; kgoe kilogram of oil
equivalent; GDP gross domestic product

Figure 5.42 Trends in energy intensity across


various scenarios, from 2001 to 2031

185

186

National Energy Map for India: Technology Vision 2030

tensity path if energy-efficient measures are


pursued aggressively.

5.6

Transport sector scenarios

of these scenarios, the figures for projected


energy consumption in the transport sector
are obtained. The optimal fuel technology
mix in each of these scenarios is modified
based on the assumptions relating to various
parameters such as inter-modal mix in total
transport demand, share of publicprivate
modes in transport demand, fuel economy,
and so on. This explains the difference in total
energy consumption across these scenarios
over the modelling time frame.
The total energy consumption in the
transport sector has increased by 14 times,
from 34 Mtoe in 2001 to 461 Mtoe in 2031,
registering an average annual growth rate of
9.1%. However, as shown in Figure 5.43,
there exists a possibility of achieving a reduction in energy consumption to a maximum level of about 35% in 2031 in the
TPT-HYB scenario vis--vis the BAU

A comparative analysis of the results is presented in detail for the five alternative transport sector scenarios described in Chapter 4.
The nomenclature used for the transport
sector scenarios in the graphical representation are: RAIL-ROAD (characterized by increased share of rail vis--vis road in
passenger and freight transport demand),
PUB-PVT (characterized by enhanced share
of public transport vis--vis personalized
mode of transport), FUEL EFF (fuel
economy improvements), BIODSL (penetration of bio-diesel), and TPT-HYB (combination of RAIL-ROAD, PUB-PVT,
FUELEFF, BIODSL, and BAU).
Table 5.23 presents the figures
for the projected commercial enFigure 5.43 Comparison of energy consumption
ergy consumption in the transport
in transport sector across various scenarios
sector
Figure 5.43 gives the comparison of total commercial energy
consumption (including electricity) in the transport sector across
various scenarios. The figure
clearly indicates that the projected
energy consumption (including
electricity) in the transport sector
exhibits a consistent upward trend
in all the five scenarios, including
the BAU, over the 30-year time
frame (200131). In all the transport sector scenarios, the freight
and passenger transport demand
exhibits an upward trend. Considering the optimal fuel technology
mix in the transport sector in each

Model results and analyses

187

Table 5.23 Total commercial energy consumption in transport sector (in Mtoe) across
various scenarios
Scenario

2001

2006

2011

2016

2021

2026

2031

BAU

34

67

106

161

231

328

461

RAIL-ROAD

34

67

105

158

223

312

430

PUB-PVT

34

68

107

154

219

310

436

FUEL EFF

34

63

94

135

184

249

336

BIODSL

34

67

104

157

222

310

433

TPT-HYB

34

64

94

126

171

228

302

BAU business-as-usual; Mtoe million tonnes of oil equivalent

scenario. In absolute terms, the energy consumption in the TPT-HYB scenario declines
by 125 Mtoe for 2031 vis--vis the BAU
scenario.
Tables 5.245.26 present the results for
the projected fuel mix in the transport sector
across various scenarios for 2011, 2021, and
2031.
The inter-scenario comparison of fuel
mix in the transport sector is presented pictorially in Figure 5.44.
Diesel consumption accounts for maximum share (more than three-fourth) in the
total energy consumption throughout the
period 200131 in the BAU. However, its

predominance as a major transport fuel


fades away due to substitution by electricity,
as a result of the enhanced share of electric
traction, and substitution by bio-diesel.
Other fuels like CNG (compressed natural
gas), electricity, and bio-diesel account for a
miniscule share in the total energy consumption, although the extent of their penetration
across various scenarios differs.
In absolute terms, the gasoline consumption has increased from about 7 Mtoe in
2001 to 40, 74, and 107 Mtoe in 2011, 2021,
and 2031, respectively, in the BAU, at an average annual growth rate of 10% during the
period 200131. This is because of the

Table 5.24 Projected fuel mix in transport sector (in Mtoe) across scenarios for 2011
Fuel

BAU

RAIL-ROAD

PUB-PVT

FUEL EFF

BIODSL

TPT-HYB

Gasoline

40.00

40.00

40.00

35.00

40.00

35.00

Diesel

60.00

58.00

60.00

53.00

58.00

50.00

Compressed natural gas

2.00

3.00

2.00

2.00

2.00

3.00

Electricity

0.15

0.15

0.15

0.13

0.15

0.15

Bio-diesel

0.00

0.00

0.00

0.00

2.00

2.00

Others

4.00

4.00

4.00

4.00

4.00

4.00

Mtoe million tonnes of oil equivalent; BAU business-as-usual

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National Energy Map for India: Technology Vision 2030

Table 5.25 Projected fuel mix in transport sector (in Mtoe) for various scenarios for 2021
Fuel
Gasoline

BAU

RAIL-ROAD

PUB-PVT

FUEL EFF

BIODSL

TPT-HYB

74.00

74.00

74.00

57.00

74.00

57.00

144.00

135.00

132.00

114.00

135.00

79.00

Compressed natural gas

5.00

6.00

5.00

5.00

5.00

7.00

Electricity

0.15

0.15

0.15

0.11

0.15

9.42

Bio-diesel

0.00

0.00

0.00

0.00

9.00

9.00

Others

9.00

9.00

9.00

9.00

9.00

9.00

Diesel

Mtoe million tonnes of oil equivalent; BAU business-as-usual

Table 5.26 Projected fuel mix in transport sector (in Mtoe) for various scenarios for 2031
Fuel

BAU

RAIL-ROAD

PUB-PVT

FUEL EFF

BIODSL

TPT-HYB

Gasoline

107.00

107.00

107.00

75.00

107.00

75.00

Diesel

325.00

290.00

300.00

232.00

297.00

138.00

Compressed natural gas

9.00

13.00

9.00

9.00

9.00

17.00

Electricity

0.15

0.15

0.15

0.10

0.15

24.19

Bio-diesel

0.00

0.00

0.00

0.00

28.00

28.00

19.00

19.00

19.00

19.00

19.00

19.00

Others

Mtoe million tonnes of oil equivalent; BAU business-as-usual

higher share of the road-based movement in


total passenger transport demand. Furthermore, the share of personalized modes of
road transport in the total passenger transport exhibits that majority of the road-based
passenger transport vehicles are gasolinebased.
Similarly, the diesel consumption in the
transport sector has multiplied 14-fold during the period 200131, increasing at an average annual growth rate of about 10%. This
rise is mainly because the share of the roadbased freight transport demand is projected
to increase to 73% till 2036 from 37% in
2001. The massive growth displayed by the
road-based freight transport demand, as

highlighted by various policy documents, is


on account of the movement of bulk and finished products for both long and short distances. Earlier, railways displayed strength
in the movement of bulk goods including
movement for very short distances. Finished
goods requiring higher flexibility handling
and better transit times have gradually been
moving to the roads with continued increase
in freight tariffs. Thus, the shift from rail to
road in freight transport demand has become clearly apparent in the BAU scenario
in the form of rising energy consumption.
Figure 5.44 clearly indicates that there is
a decline in diesel consumption to the extent
of 10, 65, and 187 Mtoe for 2011, 2021, and

Model results and analyses

Figure 5.44 Comparison of fuel mix in transport


sector across scenarios for 2011, 2021, and 2031

189

2031 when the BAU scenario is


compared with the TPT-HYB
scenario that combines all possible energy-efficient measures
induced by policy interventions
by the government.
If the railways are able to win
back their market share to the
extent of 50% in freight movement and 35% in passenger
movement vis--vis road over the
period 200136, as mentioned in
various policy documents of the
Government of India, reduction
in diesel consumption by 3%,
6%, and 11% can be achieved for
2011, 2021, and 2031. In absolute terms, the diesel consumption declines by 2, 9, and 35
Mtoe for 2011, 2021, and 2031
in RAIL-ROAD scenario when
compared to the BAU scenario.
Similarly, by enhancing the
share of public transport in total
passenger transport demand to a
maximum of 60% by 2036, the
consumption of diesel exhibits a
decline by 12 and 25 Mtoe for
2021 and 2031, respectively.
This is mainly because of the fact
that with the enhanced share of
public transport in transport demand, the spiralling passenger
transport demand would be catered to a greater extent by energy-efficient public transport
modes vis--vis the personalized
modes of transport that consume
more energy per passenger
kilometre.
In the BIODSL scenario, diesel is substituted with bio-diesel

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National Energy Map for India: Technology Vision 2030

to the extent of 2, 9 and, 28 Mtoe in 2011,


2021, and 2031, respectively.
Finally, in the TPT-HYB scenario, maximum possible savings in diesel consumption
to the extent of about 190 Mtoe can be
achieved if all the possible policies aimed at
oil conservation are promoted. Electricity
consumption in the transport sector increases from 2, 5, and 9 Mtoe in the BAU
scenario to 3, 7, and 17 Mtoe in the TPTHYB scenario in 2011, 2021, and 2031, respectively. This is mainly due to the
accelerated electrification of railway tracks
(that is, a higher share of electric traction
vis--vis diesel traction) both in passenger
and freight transport demand.
Moreover, in the TPT-HYB scenario, the
CNG consumption is also higher vis--vis
other scenarios because the CNG hybrid vehicles in this particular scenario start penetrating from 2021. However, it may be
noted that it is the inter-sectoral substitution
of natural gas in power generation and transport sectors that is dictating the quantum of
CNG availability to the transport sector.
Figure 5.45 presents the comparison of
the net import and import dependency of
petroleum products across various scenarios
for 2011, 2021, and 2031. The figure clearly
indicates that if thrust is provided on promoting energy efficiency thus reducing energy consumption in the transport sector,
the import dependency of petroleum products declines from about 74%, 81%, and
90% in the BAU scenario for 2011, 2021,
and 2031, respectively, to 72%, 76%, and 85%
in the TPT-HYB for the same time period.

Figure 5.46 presents a comparison of expenditure incurred by the economy on the


net import of products across various scenarios. As depicted in the figure, the net expenditure on import of petroleum products
has increased to 15 226 billion rupees in the
BAU scenario, 14 644 billion rupees in the
PUB-PVT scenario, 14 423 billion rupees in
the RAIL-ROAD scenario, 14 568 billion
rupees in the BIODSL scenario, 12 333 billion rupees in the FUEL EFF scenario, and
to 10 193 billion rupees in the TPT-HYB
scenario in 2031. Thus, a decline to the extent of 33% (that is, by more than one-third)
in the import bill of petroleum products can
be achieved if all possible energy-efficient
measures are undertaken.

5.7 Cumulative carbon dioxide


emissions
The cumulative CO2 emissions for the period 200136 in each of the scenarios are
given in Table 5.27. These emissions are significantly lower in the EFF and HYB scenarios: 25% and 29% lower than the
emissions in the BAU scenario, respectively.
In the HHYB scenario, the CO 2 emissions
are higher by only 8% compared to those of
the BAU scenario. The emissions are also
represented in Figure 5.47 to show the magnitude of variations across various scenarios.
CO2 emissions are the least in the EFF
scenario.

Model results and analyses

Figure 5.45 Comparison of net import and import


dependency of petroleum products across various
scenarios for 2011, 2021, and 2031

191

192

National Energy Map for India: Technology Vision 2030

Figure 5.46 Expenditure incurred


on import of petroleum products

Table 5.27 Cumulative carbon


dioxide emissions for different
scenarios (from 2001 to 2036)
Cumulative CO2
emissions
Scenario

(million tonnes)

LG

12 172

BAU

16 223

REN

15 805

NUC

15 678

EFF

12 113

HYB

11 501

HG

25 004

HHYB

17 533

LG low growth; BAU business-as-usual;


REN aggressive renewable energy;
NUC high nuclear capacity;
EFF high efficiency; HYB hybrid;
HG high growth; HHYB high-growth
hybrid; CO2 carbon dioxide

Figure 5.47 Cumulative carbon dioxide


emissions across various scenarios (200136)

Key observations and


recommendations

6.1 Key observations from the


model runs
The analysis of results in Chapter 5 provides
various key observations for Indias energy
sector over the next couple of decades.
In the BAU (business-as-usual) scenario,
total commercial energy consumption increases by 7.5 times, from 285 Mtoe (million
tonnes of oil equivalent) in 2001/02 to 2123
Mtoe in 2031/32. Furthermore, the BAU
exhibits a decline in energy intensity to the
extent of 23%, from 0.022 kgoe (kilograms
of oil equivalent) per rupee of GDP (gross
domestic product) in 2001/02 to 0.017 kgoe
per rupee of GDP in 2031/32. The HYB
(hybrid) scenario is representative of a
highly optimistic scenario that incorporates
all possible energy-efficient measures spanning across the entire Indian energy sector.
This scenario is also characterized by declining energy intensity, from 0.022 kgoe per
rupee of GDP in 2001/02 to 0.012 kgoe per
rupee of GDP in 2031/32. The decline in
energy intensity in this scenario is 29% from
the corresponding level in the BAU for
2031/32.
Interestingly, in the HHYB (high-growth
hybrid) scenario at 10% GDP growth, the
energy intensity is exactly halved from
0.022 kgoe per rupee of GDP in 2001/02 to
0.011 kgoe per rupee of GDP in 2031/32.

But due to the structural changes in the


economy, the rate of decline is lower in the
initial period as compared to the HYB scenario at 8% GDP growth rate. It may be
noted further that energy intensity in the
HHYB scenario is 8% lower compared to
that in the HYB scenario. Thus, it is evident
that even with the optimistic rate of GDP
growth of 10%, causing total commercial
energy consumption to rise from 285 Mtoe
in 2001/02 to 2320 Mtoe in 2031/32, the Indian economy can still progress along an energy-efficient path through a host of
energy-efficient technological options penetrating into the system, both on the demand
as well as the supply side.
The reduction in the final energy requirements in the NUC (high nuclear capacity)
and REN (aggressive renewable energy) scenarios is minimal. The final energy requirement in the NUC scenario in 2031 is 2061
Mtoe, and in the REN scenario is 2097
Mtoe.
On the supply side, coal still remains the
predominant fuel, accounting for 50% of the
total fuel mix, followed by oil contributing to
about 35%40% of the commercial energy
supply over the entire modelling period in
the BAU scenario. Natural gas is the preferred choice of fuel for power generation
and as a feedstock for fertilizer production.
The model results indicate that the overall
economics of using natural gas for fertilizer

194

National Energy Map for India: Technology Vision 2030

production is better than using it for power


generation. The current level of natural gas
utilization in the overall energy mix suffers
due to infrastructural constraints on the import of natural gas.
The model run indicates that clean coal
technologies for power generation are the
preferred options for the economy at large. If
commercially available clean coal technologies such as the ultra-supercritical boilers
and IGCC (integrated gasification combined cycle) are allowed to compete with the
sub-critical boilers and CCGTs (combined
cycle gas turbines), IGCC plants are the preferred choice and would compete with high
efficiency H-frame CCGT plants. The impact of the NUC scenario is primarily on the
power sector as it displaces coal-based generation. Similarly, the impact of REN is on
the power sector due to the introduction of
decentralized power generating technologies
like photovoltaic, wind, biomass-based
power, and small hydro. The impact of penetration of bio-diesel is felt only in the transport sector. Large hydro is a preferred
option across all the modelling scenarios,
reaching its full potential of 150 GW (gigawatts) by 2031. However, its contribution to
total energy supply is very small due to the
low plant load factor of about 30%.
Total investments in supply technologies
and fuels are the least in the EEF (high efficiency) scenario. For instance, the refinery
capacity requirements in the EEF scenario
decrease by 19% and 26%, respectively, by
2021 and 2031, when compared to the BAU
scenario. The corresponding annualized refinery costs also decrease by 29% and 40%,
respectively, for the same period in the EEF
scenario vis--vis the BAU.
Import dependency of all fossil fuels is
likely to increase significantly by 2031. For
coal, it is increasing from the negligibly low

level of 3% in 2001 to a staggering level of


70%, and for coking coal, it was thrice the
level in 2001 in the BAU in 2031. This rise in
import dependency of coking coal is primarily due to the increased demand of steel. In
2001/02, more than 60% of the total oil supply demand was met by imports. In the BAU,
it is expected that by 2031/32, only 10% of
the supply demand could be met by indigenously available oil, the remaining 90%
would be met by oil imports. From the viewpoint of energy security, the transport sector
has the largest capacity for reducing the use
of petroleum fuels. The final energy consumption of petroleum fuels in the transport
sector increases from 34 Mtoe in 2001 to
441 Mtoe (64% of total petroleum products)
in 2031 in the BAU scenario. Total
energy consumption is 461 Mtoe, which
includes electricity, primarily for rail
transportation.
In the HYB scenario of the transport sector, the consumption of petroleum products
is 232 Mtoe in 2031 and total energy is 302
Mtoe, which is about 34% lower than that in
the BAU scenario. Furthermore, bio-diesel
can play an important role in decreasing the
petroleum requirements in the transport
sector. This is clearly evident from the model
results which indicate that if the complete
potential of bio-diesel is exploited based on
the availability of degraded land in the country, as considered in the BIODSL (bio-diesel) scenario of the transport sector, 28
Mtoe of diesel can be displaced in the 2031
when compared with the BAU scenario.

6.2 Policy recommendations


emerging from the model runs
It can be observed from the key results
mentioned in the previous sections that even

Key observations and recommendations

under the HG scenario, the countrys energy


requirements would increase only by 15% if
it were to pursue a multi-pronged strategy of
adopting not only the policies of energy efficiency but also aggressive nuclear and aggressive renewable energy.
In order to address the earlier-mentioned
points, the following policies/measures are
suggested.

6.2.1 Providing thrust to


exploration and production of coal
Clearly, coal continues to be the mainstay of
energy production, accounting for about
45%55% of the commercial energy mix
throughout the modelling time frame.
By 2031, imports of coal in the BAU scenario are expected to be about 1176 Mtoe.
Even at the current price of 60 dollars per
tonne for imported coal, this would translate
to a foreign exchange outflow of about 4000
billion rupees.
With coal demand expected to increase in
the Asian market, the price of coal may also
increase rapidly, imposing an even higher
pressure on the economy in the future.
Therefore, it is extremely important to reduce the import dependency of coal by gearing up the exploration and production
activities in this sector with a view to increasing the extractable coal reserves. For
this, a multi-pronged approach would be
needed that would
 bring about technological upgrading of
mining technologies;
 open up the coal sector to private investors (a policy similar to the new exploration policy of the Ministry of Petroleum
and Natural Gas may be adopted after
modifications to suit the coal sector requirements);

195

enable the CMPDIL (Central Mine Planning and Design Institute Ltd) to undertake more intensive R&D (research and
development) and scale-up its efforts to
improve coal extraction technology and
methods, especially beyond the depth of
300 metres;
undertake joint ventures for the extraction of coal from deep coal seams with a
view to upgrade technology and improve
productivity; and
adopt advanced exploration and production technologies to identify and produce
coal from seams beyond 300 metres.

6.2.2 Involving private sector in


exploration and production of
hydrocarbons
Initiatives taken by the DGH (Directorate
General of Hydrocarbons) are already producing results in the exploration and production area. The recent findings of the
Reliance Industries Ltd and other joint venture operations indicate possibilities of
much greater findings in the oil and gas sector. The NELPV (New Exploration Licensing PolicyPhase V) is a step in the right
direction, but it is important to continue
pursuing exploratory efforts for tapping indigenous oil and gas.

6.2.3 Steps towards energy


security in hydrocarbons
The efficiency improvement on the demand
side has implications on the supply of petroleum products. Since there is an upper limit
on the domestic availability of crude oil at
77.3 MT by 2031/32, it becomes imperative

196

National Energy Map for India: Technology Vision 2030

for the Indian economy to meet the burgeoning oil demand through imports to
bridge the demandsupply gap. However,
the anticipated rise in oil demand is making
the Indian economy increasingly dependent
on oil imports, creating an additional financial burden on the Indian economy. This
makes the economy more prone to oil supply
shocks emanating from external factors such
as wars and political instability due to geopolitical situations. Another concern is that
of market risks arising from sudden increases in oil prices. The price rise adversely
hampers the process of economic growth
due to the inflationary impact caused by
northward bound oil prices.
Furthermore, since the bulk of oil consumption is in the transport sector, this sector presents the maximum potential for
oil-use efficiency, conservation, and substitution with alternative forms of energy from
the viewpoint of energy security.
The model results in the transport scenarios clearly indicate that if thrust is provided on promoting energy efficiency in the
transport sector, the import dependency of
petroleum products would decline from
about 74%, 81%, and 90% in the BAU to
72%, 76%, and 85% in the HYB scenario for
2011, 2021, and 2031, respectively. This decline in import dependency is mostly due to
the reduction in the quantities of petroleum
products imported mainly because of reduction in the energy consumption due to energy efficiency.
In the following section, the steps taken
by the Government of India towards meeting the energy security objectives are briefly
reviewed. The model results support these
policies.

6.2.3.1 Intensive exploration and


production
The Government of India has initiated many
steps to ensure oil security for the country.
One such step was to intensify domestic exploration and development efforts to explore
new fields and increase the reserve base of
the country. Hydrocarbon vision 2025 laid
down a phased programme for reappraising
100% of sedimentary basins of the country
by 2025 (Planning Commission 1999). It includes intensive exploration in producing
basins to upgrade yet-to-find hydrocarbon
resource and promotion of exploration in
non-producing, poorly explored, and new
frontier basins like the Himalayan foothold.
To meet these objectives, the DGH has conducted a number of studies to upgrade information on the unexplored or the less
explored regions of the country. About 1.96
million km2 (square kilometres) of the region
has already been covered under these efforts,
of which 86% is offshore and the rest onland. These surveys have given information
about the structure, tectonics, and sedimentary thickness of these areas.
Overseas acquisition of equity oil is another major strategy adopted to enhance the
oil security of the country. The Government
of India aims to produce 20 MTPA (million
tonnes per annum) of equity oil and gas
abroad by 2010. Under the Tenth Five Year
Plan, the target for oil and gas equity abroad
was 5.2 MT and 4.88 BCM (billion cubic
metres), respectively. The likely achievement
under the plan period is expected to be
about 16.45 MT for oil and 4.41 BCM in
the case of natural gas. The potential inplace reserves for the block have been estimated to be more than 600 million barrels.

Key observations and recommendations

197

6.2.3.2 Strategic reserves

6.2.4

Reduce coal requirements

In a major move aimed at enhancing energy


security for the country, on 7 January 2004,
the Union Cabinet approved the setting up
of strategic storage facilities for 5 MT of
crude oil, sufficient to meet 15 days of consumption at three locations on the east and
west coasts. The construction of an underground rock cavern has been proposed at
Mangalore (1.5 MT), Vizag (1 MT), and at
a suitable location south of Mangalore
(2.5 MT). This strategic storage will be in
addition to the existing storage facilities for
crude and petroleum products and will provide an emergency response mechanism in
case of short-term disruptions. Currently,
the total crude oil storage capacity with domestic refineries is 19 days (5.7 MT).
With increased availability of natural gas
in the country, the Government of India is
also considering the building of underground natural gas storage facilities in India
for strategic use. The government has recognized that with the growing importance of
natural gas as fuel/feedstock for several key
sectors like power, fertilizer, steel, and transport and domestic, creation of strategic gas
storage systems would be imperative for assuring security for uninterrupted supplies.
Initial investment estimates for creating an
underground gas storage facility have been
pegged at 100 million dollars. Detailed feasibility studies have been proposed to be carried out for development of underground
gas storage facilities in the country, which
may be funded by the OIDB (Oil Industry
Development Board) through an initial grant.

It is observed that coal would continue to


account for 50% of the energy mix, with
about 70% being used by the power sector.
Therefore, it is important to accelerate the
transition to the more efficient coal-based
power generation technologiesspecifically
the IGCC and the ultra-supercritical
technologies.
For this purpose, demonstration plants
using IGCC should be set up. Faster learning can be achieved by outright purchase of
technology. A relentless effort is required in
this direction to achieve continuous adoption of the emerging technologies. For example, in case of the indigenous
development of the supercritical boilers,
technology development was adopted in a
phased manner.
Apart from the power sector, the possibility for reducing coal exists in the steel reheating furnaces, the ceramic industry, brick
units, through adoption of improved technology in coal-based captive power generation units, and through the increased
adoption of blended cements. Appropriate
pricing of energy would play a crucial role in
this regard.

6.2.5 Reduce consumption of


petroleum products
Since the transport sector accounts for nearly
70% of the total petroleum consumption, the
following measures are recommended to reduce the consumption of petroleum products
and thereby their imports.
 Enhancing the share of public transportation, promoting MRTS (Mass Rapid

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National Energy Map for India: Technology Vision 2030

Transit System), ensuring better connectivity of trains to urban areas of the cities,
introducing high-capacity buses, etc.
Electrification of railway tracks to the
maximum extent possible.
Increasing the share of rail in freight
movement and enhancing container
movement, while introducing door-todoor delivery systems.
Introducing BharatIII norms across the
country for road-based personal vehicles.
Introducing cleaner fuels such as low sulphur diesel, ethanol blending, and biodiesel.

In the industry sector, given the inefficiency of diesel consumption by the DG


(diesel generator) sets for captive power generation, phasing out the use of diesel recommended. The provision of reliable power
supply is imperative to achieve this. This recommendation applies to the sectors as well
as agriculture.
The use of naphtha for fertilizer production and power generation should be avoided
to make it available for the petrochemicals
sector. Natural gas should therefore be made
available in adequate quantities for off-take
by the fertilizer industry and power plants.

6.2.6 Natural gas to be the


preferred fuel for the country
Natural gas availability needs to be facilitated by removing infrastructural constraints. It is the preferred option for power
generation as well as for nitrogenous fertilizer production. Besides its high end-use efficiency, it is a cleaner fuel and relatively
much easier to handle than coal. It is therefore important to enhance natural gas explo-

ration and production from deep-sea. Moreover, we should source gas from within the
Asian region (including Turkmenistan,
Bangladesh, Iran, and Myanmar).
In general, the resource needs to be
tapped to a greater extentsince the use of
natural gas has implications in several sectors such as fertilizers, cement, sponge iron,
power, and transport.

6.2.7 Make renewables


competitive and target their use in
remote areas and decentralized
power generation
Renewable-energy-based power generation
is not a preferred option due to the high
upfront costs and low capacity utilization of
these technologies. Apart from continuing
the schemes to provide support, large-scale
deployment of these technologies would
serve to bring down the costs further. The
governments policies in this regard are already on the right track but need to be
implemented aggressively, especially if the
target of providing electricity to all has to be
met by 2012.
Decentralized power generation, especially in remote locations where the grid
cannot be extended, should necessarily be
based on renewable energy forms to provide
these regions with access to clean and reliable energy.

6.2.8

Hydro power

Despite its low capacity utilization factor,


hydro power is a cheap option as indicated
by the model. Accordingly, investments in

Key observations and recommendations

hydropower should be accelerated to tap this


perennial source of power.

6.2.9

Nuclear power

Since additional nuclear-based capacity displaces coal, it is important to enhance the


penetration of this option to the extent possible. Efforts should be directed to step up
nuclear capacity to about 70 GW during the
modelling time frame, from 2001 to 2031.
However, if the modelling time frame is extended to 2050 and beyond, the positive impacts of nuclear energy can be captured. The
benefits become quite evident because of the
three-stage nuclear policy adopted by the
Government of India, especially with the introduction of the fast breeder reactors with
thorium as fuel. The estimated potential of
these reactors is about 530 GW.

6.2.10 Recommendations for the


industry sector
Energy efficiency in the various industry
sub-sectors can be achieved through the following measures.
 Ban import of second-hand machinery in,
for example, sponge iron plants and paper
mills.
 Use of cleaner fuels.
 Facilitate shifts towards cogeneration,
tapping waste heat for process heat.
 Provide support to large-, medium-, and
small-scale industry.
 Adopt sub-sectoral technology options
that will result in large-scale energy savings including
introducing blast furnace with top recovery turbine in integrated steel

199

plants, BOF (basic oxygen furnace) for


steel making, and continuous casting
for finished steel;
adopting and improvising COREX
process for integrated steel plants;
setting up new cement plants to adopt
six-stage preheating and use of blending materials like slag and fly ash;
moving towards larger integrated paper
mills with continuous digesters, black liquor boilers, and cogeneration; and
adopting efficient pre-baked electrodes in the aluminium manufacturing process.

6.2.11 Recommendations for the


residential and commercial sectors
The majority of energy consumed in the
residential and commercial sectors is
through lighting, space-conditioning, and
cooking. The measures that can have a major
impact on energy consumption in these sectors are enumerated below.
 Lighting is the major electricity consuming end-use in the residential sector. The
replacement of light bulbs with tube
lights and CFLs (compact fluorescent
lamps) can bring about huge energy savings. Towards this end, the cost of CFLs
needs to be reduced by promoting its
large-scale manufacturing.
 Even with a conservative estimate of efficiency improvement possibilities, there
exists tremendous scope for savings in
residential and commercial space-conditioning. For this, it is necessary to make
available efficient motors as against local
makes, provide incentives to buy from
government-certified outlets, and create
awareness among consumers.

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National Energy Map for India: Technology Vision 2030

Although traditional fuels such as dung,


firewood, and crop residue are freely
available, their low efficiencies, highly
polluting nature, and other social and environmental impacts associated with their
use do not make them a sustainable option in the long-term. Although government initiatives would ensure that the
majority of the population would be provided with access to modern fuels (city
gas and LPG [liquefied petroleum gas]),
some of the rural poor are expected to
continue supplementing their energy
needs with freely available traditional fuels. Hence, replacement of traditional fuels with cleaner fossil fuels is
recommended. For the population that
has not shifted to cleaner options,
programmes for improved cook stoves,
etc. should be introduced.

6.2.12 Rationalize agricultural


power tariffs
Power tariffs for the agricultural sector
should be at least at a level where the cost of
generation can be recovered.

6.3

Technology pathways

The model results indicate that maximum


reduction in the energy consumption in India can be achieved by carrying out interventions in the power sector on the supply side
and in the transport and residential sectors
on the end-use side.
The model results also indicate that if all
power generation technologies were allowed
to compete for new capacity additions, the

preferred choice of technologies in the order


of economic merit would be (1) large hydro;
(2) refinery-residue-based IGCC; (3) imported-coal-based IGCC; (4) high-efficiency CCGT (H-frame has turbine);
(5) indigenous coal-based IGCC; (6) normal CCGT; (7) ultra-super critical boiler;
(8) super-critical boiler.
Therefore, the Government of India
should pursue policies to accelerate the penetration of hydro-based power generation, as
this is a mature technology. However, there
are technical and non-technical barriers in
the adoption of other power generation technologies mentioned above.
The analyses of the model results at the
end-use side indicate that the maximum impact on final energy demand can be achieved
by the adoption of energy-efficient technologies in the end-use sectors like the transport
and residential.
In addition, the results indicate that
Indias commercial energy demand will grow
by 7.5 times during the next 30 years. Further, Indias energy import dependency will
increase significantly over the next 30 years,
with import dependency of coal expected to
increase from 3% to 70% and that of oil
from 68% to 90% during the same period.
Therefore, it becomes imperative to increase
the supply of indigenous energy resources.
Hence, India should plan to enhance efforts
in R&D in the exploration and production of
energy resourceespecially in the area of
deep-sea natural gas exploration, technologies to exploit coal from seams that are over
300 metres deep, in-situ coal gasification,
and gas hydrates.
A brief status of various technologies
and recommendations for their deployment
are indicated below. Also, Tables 6.1,
6.2, and 6.3 show the pathways that are

Key observations and recommendations

201

Table 6.1 Suggested technology deployment programme


201121

202131

Hydro power generation

Commercialize IGCC

Supercritical boilers/ultra-supercritical boilers

Ultra-supercritical boiler to be
commercialized

Demonstration
of commercialscale thoriumbased reactors
demonstrated

200611
Power generation technologies

Advanced gas turbines (for example, H-frame


turbine)
Refinery-residue-based IGCC
Demonstration of commercial scale IGCC
plants using indigenous and imported coals
Fast breeder nuclear reactor
End-use technologies
Cogeneration

State-of-the-art industrial processes to be adopted

State-of-the-art
industrial processes to be
adopted

In-situ coal gasification to be


commercialized

Natural gas
from gas hydrates to be
commercialized

Use of waste recovery in industrial processes


Lighting technologies: CFL, LED
Energy-efficient white goods: refrigerators,
alternating current
T&D loss reduction: HVDC, HVAC, and amorphous core transformer
R&D in exploration and production of fuels
Natural gas from gas hydrates
In-situ coal gasification
Deep-sea natural gas
CBM
Mining of coal from seams greater than 300
metres

Deep-sea natural gas commercially available


CBM production to be commercialized
Commercial mining of coal
from seams greater than 300
metres

CBM coal bed methane; CFL compact fluorescent lamp; LED light emitting diode;
HVDC high voltage direct current; HVAC high voltage alternating current;
IGCC integrated gasification combined cycle; T&D transmission and distribution;
R&D research and development

Table 6.2 Suggested technology deployment pathway for power generation

Table 6.3 Suggested technology deployment pathway for end-use sectors

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National Energy Map for India: Technology Vision 2030

apparent to achieve these goals over the


next 30 years.

duction of syn (synthetic) gas and use in


gas turbines for power generation. The government should adopt this technology as
soon as possible.

6.3.1 Power generation


technologies
6.3.1.3 Advanced gas turbines
6.3.1.1

Nuclear

Keeping the long-term time frame of 50


years or more, nuclear-based power generation would emerge as the clear winner in
terms of sustainable and energy-efficient
power
generation.
The
three-phase
programme proposed by the Department of
Atomic Energy, using fast breeder reactors
in the second phase and subsequently thorium-based reactors for power generation in
the third phase, is well conceived.

6.3.1.2 Integrated gasification


combined cycle
Because of the technical barrier to the adoption of Indian high-ash coals, it is recommended that commercial-scale coal-based
IGCC demonstration projects be set up on
indigenous and imported coal. This will facilitate familiarization with technology and
cost reduction of IGCC-based power plants.
With increased refining capacity, refinery
residue such as vacuum residue and petroleum coke will be available on large scale. It
is recommended that refinery-residue-based
IGCC power generation plants also be set
up. International experience in this technology is already available. Handling refining
residue is comparatively easier than handling high-ash coal for gasification for pro-

Adoption of aero derivative advanced gas


turbines like H-frame for power generation
should be aggressively promoted. In the future, it is possible that natural gas reserves
will increase especially due to the efforts of
the Government of India in deep-sea exploration and due to the viability of extracting
natural gas from gas hydrates. Therefore,
aggressive adoption of advanced gas turbines will also help in enhancing the efficiencies of IGCC plants. It will also be useful if
the Government of India can adopt a
research programme on advanced gas
turbines in national research institutions or
laboratories like National Aeronautics Ltd
and Hindustan Aeronautics Ltd.

6.3.1.4 Supercritical/ultrasupercritical boiler


Supercritical steam properties require once
through or Benson boilers, which are different from the drum-type boilers used for
power generation based on sub-critical conditions of steam. Since coal-based power
generation will continue to play a critical
role in the next 3050 years, it becomes essential to adopt well-proven technologies
like super-critical and ultra-supercritical
boilers in the immediate future, that is, in
the Eleventh Five Year Plan, instead of using

Key observations and recommendations

sub-critical technology. The Benson boiler


was first designed in 1924,1 and ever since
these boilers are being designed and operated at higher steam properties (for example,
pressures of 300 bar and temperatures
greater than 600 oC). It is strongly recommended that India adopt this technology
immediately. Experience worldwide has
shown that Benson boilers become cost effective if the unit size is around 1000 MW
(megawatts) or more.

6.3.2 Transmission and


distribution loss
It is also possible to reduce technical T&D
(transmission and distribution) losses to
8%12% as against 16%19% in the country. The technologies for these would be to
adopt very high voltage AC (alternating current) transmission and HVDC (high voltage
direct current) transmission. Distribution
losses can be reduced by adoption of an
energy-efficient transformer, which uses
high-grade steel in the transformer core.

6.3.3

End-use technologies

The adoption of energy-efficient technologies in the end-use energy-consuming sectors can have a major impact on the final
energy demand, primarily in transport and
residential sectors. In addition, there is a
possibility of technical loss reduction in the
transmission and distribution of power.

Siemens Power Generation (1995)

205

6.3.3.1 Industrial sector


Although commercial energy consumption
is the highest in the industrial sector, major
energy-intensive industries are already moving towards energy-efficient technologies.
The cement and the iron and steel sectors
are already adopting state-of-the-art technologies, barring a few old plants. However,
there are sectors where the energy-efficient
technologies can be penetrated at a faster
rate, especially for technologies which are
well proven; for example, cogeneration in
the industrial sector and use of waste heat in
the industrial processes. These technologies
are well known and can be promoted by the
Bureau of Energy Efficiency by proper dissemination of information.

6.3.3.2 Residential sector


Electricity consumption in the residential
sector will increase at the rate of 8.8%,
which is primarily due to increased utilization and the policies of the Government of
India to provide electricity to all. Promotion
of energy-efficient lighting like CFL and energy-efficient white goods like refrigerators
and air-conditioners can achieve a reduction
of about 23% in 2030. Although these
technologies are well known, the Government of India needs a policy to promote
these technologies.

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National Energy Map for India: Technology Vision 2030

6.3.3.3 Transport sector


The transport sector requires planning to
incorporate integrated transport systems in
urban areas so that public transport systems
are easily accessible to the public at large.
Apart from the shift to a public transport
system and the use of rail, energy-efficient

automobile technologies, which are continuously improving in the OECD (Organization


for Economic Co-operation and Development) countries, should be adopted. The
technological features are wide ranging
(from fuel injection improvements to efficient combustion and efficient control due
to electronic governance).

APPENDIX 1

Description of energy sector models

A1.1

Introduction

Energy models can be developed using the


bottom-up approach or the top-down approach. The bottom-up energy models are
developed from engineering data applied to
specific technologies whereas the top-down
energy models are based on statistical analysis of past data. Both can be useful in understanding the effects of policy on energy
markets. However, the bottom-up models
often neglect certain costs that reduce returns on investment below what is predicted,
resulting in unrealistic estimates of what will
occur if energy markets are shocked. On the
other hand, the top-down models are based
on the technology and institutions existing
at the time their data applies to, and hence
may underestimate the ability of markets to
adapt.
Within these two approaches, energy
models can be categorized into four broad
categories: (i) optimization models, (ii)
simulation models (bottom-up), (iii) energy
sector equilibrium models, and (iv) input
output models (top-down). The characteristic features of these models are summarized
below.

A1.2 Energy optimization models


These technology-oriented models minimize the total costs of the energy system, including all end-use sectors, over a 4050
year horizon. The costs include investment
and operation costs of all sectors based on a
detailed representation of factor costs. The
recent versions of these models allow demand to respond to prices. A link has also
been established between aggregate macroeconomic demand and energy demand. Projections of future development are often
implemented with a model generator via the
optimization algorithms based on linear programming. Given below are some examples
of these models.

A1.2.1 Model for Energy Supply


Systems Analysis and General
Environment
MESSAGE (Model for Energy Supply
Systems Analysis and General Environment)
is generally used for the optimization of energy supply systems. However, other systems

208

Appendix 1

supplying specified demands of goods,


which have to be processed before delivery
to the final consumer, could be optimized.
MESSAGE is an instrument for medium- to
long-term dynamic planning of the operation and expansion of energy systems. The
objectives include resource extraction analysis, estimation of import/export of energy,
energy conversion analysis, energy transport
and distribution analysis, final energy utilization by consumer analysis, recommendations for environmental protection policy
and investment policy, and analysis of opportunity costs (shadow prices and marginal
costs).

A1.2.2 AsiaPacific Integrated


Model
AIM (AsiaPacific Integrated Model) is a
technology selection framework for analysis
of country-level policies related to GHG
(greenhouse gas) emissions mitigation and
local air pollution control. It can also assist
in energy policy analysis. It simulates flows
of energy and materials in an economy, from
supply of primary energy and materials,
through conversion and supply of secondary
energy materials, to satisfaction of end-use
services. AIM/ENDUSE models these flows
of energy and materials through detailed
representation of technologies. Selection of
technologies takes place in a linear optimization framework where system cost is minimized under several constraints like
satisfaction of service demands, availability
of energy and material supplies, and so on.
Various scenarios including policy countermeasures can be analysed in AIM/
ENDUSE.

A1.2.3 Energy Flow Optimization


Models
EFOM-ENV (Energy Flow Optimization
Models) are national dynamic optimization
models (employing linear programming),
representing the energy producing and consuming sectors in each state/province. They
optimize the development of these sectors
under given fuel import prices and useful
energy demand over a pre-defined time horizon. The development of national energy
systems can be subject to energy and environment constraints like availability of fuel,
penetration rates of certain technologies,
emission standards, and emission ceilings.
The model databases contain a wide range of
conversion and end-use technologies such as
conventional technologies, renewable energy
technologies, efficient fossil fuel burning
technologies, combined heat and power
technologies, and energy conservation technologies in the demand sectors. The main
objective of EFOM-ENV is energy and
environment policy analysis and planning,
particularly cost-effectiveness analysis of
energy policy options for reducing pollutant
emissions.

A1.2.4 Modular Energy System


Analysis and Planning software
MESAP (Modular Energy System Analysis
and Planning software) is a modular
energy planning package developed with the
specific needs of developing countries in
mind. It is designed as a flexible planning
package providing energy analysts and planners with tools to perform complex energy

Appendix 1

analysis. It consists of basic techniques for


energy planning, a set of tested energy modules, and data management and processing
software. At the heart of MESAP is a network-oriented database. Its objective is to
assist in energy and environmental policy
analysis and planning.

A1.3 Simulation models


These models involve a detailed representation of energy demand and supply technologies, which include end-use, conversion, and
production technologies. Demand and technology developments are driven by exogenous scenario assumptions often linked to
technology vintage models and econometric
forecasts. The demand sectors are generally
disaggregated for industrial sub-sectors and
processes, residential and service categories,
transport modes, and so on. This allows development trends to be projected through
technology development scenarios. Quality
of the expert estimations is the decisive factor to ensure the quality of the simulation.
The main areas of application for simulation
models are research questions concerning
technologically oriented measures, where a
high level of detailed knowledge is necessary,
and where macro-economic interaction and
price are less important. Some of the simulation models include the following.

A1.3.1 Prospective Outlook on


Long-term Energy Systems
POLES (Prospective Outlook on Long-term
Energy Systems) is a simulation model providing long-term energy supply and demand

209

scenarios. It is based on a hierarchical system of interconnected sub-models at the international, regional, and national levels.
Simulation is carried out for the international energy markets, national energy balances, and technical subsystems for final
energy consumption, energy transformation,
and production. Technological development
and diffusion of new technologies as well as
GHG emissions of the energy sector are
taken into account.

A1.3.2 Model of Power system


planning and Comprehensive
Assessment
This model is composed of two parts. The
first part compares and assesses comprehensively the different development options of
the power system (decision-making analysis). It uses the AHP (Analytic Hierarchy
Process) for comparing and ranking different development options. The second part of
MOPCA (Model Of Power system planning
and Comprehensive Assessment) is a simulation model of the power producing options
for power system development planning
with constraints regarding financing, resources, and environment. In the first part,
the most important aspects of the power system such as energy independence, economic
aspects, system reliability, environmental
and ecological impacts as well as social impacts are taken into account. In the second
part, macro-economic analysis, power system analysis, and environmental burdens
analysis are carried out for the purpose of
power system development planning. The
two parts of MOPCA can be used separately.
The model is designed to serve small coun-

210

Appendix 1

tries, especially developing countries, and


regions of large countries.

A1.3.3 Brundtland Scenario model


BRUS (Brundtland Scenario) is a long-term
simulation model for the energy demand
and supply system. Being a technicaleconomic model, it allows for the calculation of
demand-driven scenarios for the total national energy system. The main purpose of
the model is to analyse cost-effective strategies for the reduction of CO 2 (carbon
dioxide). Simultaneously, potential minimizations of exhaustible resources are
analysed. The model is total (in contrast to
partial or marginal models), making it possible to introduce significant changes, for example, on the demand side, and even then
get reliable results for the total energy system. It is subdivided into different sectors of
energy demand and supply, which are integrated to provide useful and comprehensive
tool.

A1.3.4 Long-range Energy


Alternatives Planning
LEAP (Long-range Energy Alternatives
Planning) is an energy planning model that
covers energy demand, transformation, and
supply. It uses a simulation approach to represent the current energy situation for a
given area and to develop forecasts for the
future under certain assumptions. LEAP is a
computer-based accounting and simulation
tool designed to assist policy-makers in
evaluating energy policies and developing
sound, sustainable energy plans. LEAP can
be used to project the energy supply and

demand situation in order to glimpse future


patterns, identify potential problems, and
assess the likely impacts of energy policies. It
can assist in examining a wide variety of
projects, programmes, technologies, and
other energy initiatives, and in arriving at
strategies that best address environmental
and energy problems.

A1.3.5 Multinational Integrated


Demand And Supply
MIDAS (Multinational Integrated Demand
And Supply) is a large-scale energy system
planning and forecasting model. It performs
dynamic simulation of the energy system,
which is represented by combining engineering process analysis and econometric
formulations. The model is used for scenario
analysis and forecasting. MIDAS covers the
whole energy system and ensures, on an annual basis, the consistent and simultaneous
projection of energy demand, supply, pricing, and costing, so that the system is in both
quantity- and price-dependent balance. The
model output is a time-series of detailed
EUROSTAT energy balance sheets, lists of
costs and prices by sector and fuel, and a set
of capacity expansion plans including emission data.

A1.4 Energy sector equilibrium


models
These models are conceptually similar to the
economic equilibrium models that represent
decision-making processes of producers and
consumers. They typically simulate markets
for factors of production (such as labour,

Appendix 1

capital, and energy), products, and foreign


exchange, with equations that specify supply
and demand behaviour. They offer a closed
theoretical approach of obtaining market
equilibrium that can increasingly be adjusted for imperfect market conditions. The
only difference is that the non-energy markets are not represented here. These models
require the energy demand as an exogenous
input, which is typically based on other economic and demographic forecasts. These
models include the following.

A1.4.1

GEM-E3

The GEM-E3 model is an applied general


equilibrium model, simultaneously representing world regions or European countries, linked through endogenous bilateral
trade flows and environmental flows. GEME3 aims at covering the interactions between
the economy, the energy system, and the environment. It is built in a modular way
around its central CGE (computable general
equilibrium) core. It supports defining several alternative regimes and closure rules
without having to re-specify or re-calibrate
the model. Although global, the model exhibits a sufficient degree of disaggregation
concerning sectors, structural features of energy/environment, and policy-oriented instruments (for example, taxation). The
model formulates production technologies
in an endogenous manner allowing for pricedriven derivation of all intermediate consumption, and the services from capital and
labour. In the electricity sector, the choice of
production factors can be based on the explicit modelling of technologies. For the demand side, the model formulates consumer
behaviour, and distinguishes between

211

durable (equipment) and consumable goods


and services.

A1.4.2

PRIMES

The PRIMES model, used by the EU (European Union) environmental agencies, is designed only for measuring sectoral effects
and not economy-wide effects. PRIMES, a
partial equilibrium model, is primarily designed to show the effect of policy changes
on energy markets. It can calculate the direct
cost implications of reduced energy use, but
not the economy-wide impact on GDP
(gross domestic product), employment, and
investment.

A1.4.3 Energy and Power


Evaluation Program
ENPEP (Energy and Power Evaluation
Program) is a set of microcomputerbased energy planning tools that are
designed to provide an integrated analysis
capability. ENPEP begins with a macroeconomic analysis, develops an energy
demand forecast based on this analysis,
carries out an integrated demand/supply
analysis for the entire energy system, evaluates the electric system component of
the energy system in detail, and determines
the impacts of alternative configurations.
Also, it explicitly considers the impacts the
power system have on the rest of the energy
system and on the economy as a whole.
ENPEP is mainly employed for energy
policy analysis, energy tariff development,
energy project investment analysis, electric
system expansion planning, and environmental policy analysis.

212

Appendix 1

A1.4.4 Canadian Integrated


Modelling System
CIMS (Canadian Integrated Modelling System) is a nearly full equilibrium system,
which tracks the flow of energy in the entire
economic system beginning with production
processes through to the eventual end-use
by individual technologies. It may incorporate demand-dependent energy supply costs,
price-driven demand feedbacks, second order macro-economic effects, and energy
trade. CIMS is ideal for modelling policies
intended to affect energy efficiency, GHG
emissions, and air quality.

A1.4.5 National Energy Modelling


System
NEMS (National Energy Modelling System)
is a computer-based, energy economy modelling system of the US energy markets for
the medium-term period through 2020. Designed and implemented by the US Department of Energy, it represents domestic
energy markets by explicitly representing the
economic decision-making involved in the
production, conversion, and consumption of
energy products. NEMS provides a consistent framework for representing the complex
interactions of the US energy system and its
response to a wide variety of alternative assumptions and policies or policy initiatives.
As an annual model, it can also highlight the
impacts of transitions to new energy
programmes and policies.

A1.4.6

Inputoutput models

Inputoutput models are based on the time


series of the macro-economic interaction
matrices with their inputoutput tables, energy balances, and labour market statistics.
Activities are explained with respect to
sectoral development, energy carrier consumption, and emission development. This
segment includes the following.

A1.4.6.1 Energy Scenario


Generator
The main purpose of the ESG (Energy Scenario Generator) model is to generate consistent scenarios of economic development,
which simultaneously determine energy demand and supply as well as the major environmental impacts. The feedback between
economic development, energy demand, and
energy supply is fully integrated into the
model, that is, an energy technology model is
linked with a macro-economic model. The
model aims at coordination of macro-economic energy and environmental policies at
the national level. As inputs, this model requires data such as (i) base year energy balances, (ii) base year economic data, (iii) base
year inputoutput table, (iv) time series of
major economic data (consumption, trade,
investment), (v) data on disaggregated capital stocks, (vi) capital market data (interest
rates, inflation), (vii) population data, and
(viii) energy technology data like efficiency
(actual and expected future), disaggregated
investments (actual and expected), emission
data (plus reduction potential), labour input, and technology lifetime.

Appendix 1

A1.4.6.2

MEGEVE-E3ME

This is a general energyenvironment


economy model, developed for Europe, capable of addressing issues that link
developments and policies in the areas of
energy, environment, and economy. The
main purpose of the model is to provide a
framework for evaluating different policies,
particularly those aimed at achieving sustainable energy use over the long term.
MEGEVE-E3ME uses a neo-Keynesian
econometric inputoutput model in a general equilibrium framework. It provides detailed results for the economy, the energy
sector, and environmental emissions. Basic
input data are inputoutput tables; national
accounts; investment data; energy balances,
energy prices, and taxes; electricity station
data; and emissions into air.

A1.4.6.3

213

MICRO-MELODIE

MELODIE is a French macro-economic


model with a detailed technological description of the energy sector, especially in the
electricity sector. The model also computes
polluting emissions such as NOx, SO2, and
CO2. The economy, energy, and environment are then described in a single framework, but for each topic, a specific
methodology
has
been
developed.
MELODIE is adapted to measure any energy policy modifying the cost structure of
electricity supply. Input/output tables at current and constant prices, economic accounts
of the institutional sectors, and technological and economic data on the electricity sector including fuel cycle, international
economic data energy balances in physical
and monetary units, and environmental data
(polluting emissions) are the main inputs required for this model.

APPENDIX 2

Sectoral reference energy system


(RES)

Figure A2.1 Reference energy system for the agriculture sector

216

Appendix 2

Figure A2.2 Reference energy system for the transport sector

Appendix 2

Figure A2.3 Reference energy system for the residential sector

217

218

Appendix 2

Figure A2.4 Reference energy system for the industry sector

Appendix 2

Figure A2.5 Reference energy system for the electricity sector

219

APPENDIX 3

Socio-economic drivers of energy


demand

A3.1 Methodology for estimating


income-wise household distribution
The overtime proportion of households in
each expenditure class depends on factors
such as rate of growth of population, share of
urban population to rural population,
household size, and rate of growth of GDP.
Given these parameters, distribution of
households in various expenditure classes is
generated using a lognormal distribution for
MPCE (monthly per capita consumption
expenditure) data for rural and urban available from NSSO (National Sample Survey
Organization) for consumer expenditure
rounds; 1993/94 and 1999/2000.
The lognormal distribution of MPCE has
probability density function

f ( x ; , ) =

1
x 2

e (ln x )

/ 2 2

where, x is the household consumption expenditure for x > 0, where and are the
mean and standard deviation of the MPCEs
logarithm. The expected value is
E(X) = e+2/2

(A-3.1)

and the variance is


var (X) = (e2 1)e 2+2
The cumulative probability of population
below an expenditure level is given by
(ln (L) )/

(A-3.2)

where, L is the consumption expenditure


level.
In order to forecast the probability of
population in an expenditure class, the two
unknowns and for the above two
equations need to be estimated over the forecast period.
has been assumed to follow the past
trend of decline during 1993/94 to 1999/
2000 for rural and urban areas. , mean expenditure, has been determined by income
as per the Keynesian consumption theory.
Therefore, increase in GDP implies an increase in expenditure thereby implying a
rightward shift in the lognormal curve. Private final consumption expenditure has been
used for consumption expenditure. Therefore, forecast of growth rate of private final
consumption expenditure determines the
growth rate of MPCE. The growth rate of
private final consumption expenditure has
been forecasted using the following equation.

222

Appendix 3

PFCE = 115 235 + 0.54 (Y)


(-11.79) (20.83)
(Adjusted R2= 0.953)

(A-3.3)

where,
PFCE = private final consumption expenditure
and Y = GDP
Coefficient of GDP is the MPC (marginal
propensity to consume). In other words, an
MPC of 0.54 implies that one rupee increase
in income leads to an increase of 0.54 rupee
in consumption.
MPCE = PFCE/P
where,
H = population
In India, the per capita income increased
from 5823 rupees in 1981 to 12 281 rupees
in 2001. Correspondingly, the per capita expenditure increased from 5044 rupees to
8441 rupees during the same time period.
This increase in per capita expenditure was
at the annual rate of 2.48% during 1981
2001, when the per capita income growth
rate was 3.64%. The same is expected to increase at the rate of 4.8%, 6.0%, and 7.8%
with the per capita income growing at the
rate of 5.5%, 6.7%, and 8.5% at a GDP

growth rate of 6.7%, 8%, and 10% respectively during 200136.


The NSS (National Sample Survey) data
of per capita calorie intake by MPCE classes
has been used to find out the monetary cut
off corresponding to minimum calorie requirement norm. The national-level official
poverty line corresponds to a basket of goods
and services, which satisfies the calorie norm
of per capita daily requirement of 2400 kcal
(kilocalories) in rural areas. Accordingly,
people below an MPCE of 525 rupees in
rural areas and 575 rupees in urban areas
have been considered to be below poverty
line (Table A3.1).
For simplifying the analysis, these expenditure classes have been categorized into six
expenditure groups namely BPL (below
poverty line), L (low), LM (lower middle),
M (middle), UM (upper middle), and H
(high) in rural and urban areas. MPCE less
than or equal to 525615 rupees is considered to be under the BPL group. For the urban low-income group, the figure is 575
665 rupees (Table A3.1).
Based on the probabilities computed for
rural and urban population under various
GDP growth rate scenarios (Tables A3.2
A3.7), the number of households in rural
and urban areas is estimated for six expenditure classes.

Appendix 3

223

Table A3.1 Monthly per capita expenditure and calories intake


Rural

Urban

Monthly per

Calorie intake

Monthly per

Calorie intake

capita expenditure (in Rs)

(kcal)

capita expenditure

(kcal)

0225

1383

0300

1398

225255

1609

300350

1654

255300

1733

350425

1729

300340

1868

425500

1912

340380

1957

500575

1968

F380420

2054

575665

2091

420470

2173

665775

2187

470525

2289

775915

2297

525615

2403

9151120

2467

615775

2581

11201500

2536

775950

2735

15001925

2736

Above 950

3178

Above 1925

2938

Source NSO (2000)

Table A3.2 Probability of households (rural) 6.7% GDP


MPCE (in Rs)

1993

1999

2001

2006

2011

2016

2121

2026

2031

2036

0225

0.101

0.057

0.044

0.016

0.005

0.001

0.000

0.000

0.000

0.000

225255

0.048

0.034

0.028

0.014

0.004

0.001

0.000

0.000

0.000

0.000

255300

0.083

0.065

0.056

0.031

0.014

0.004

0.001

0.000

0.000

0.000

300340

0.079

0.065

0.059

0.038

0.019

0.006

0.001

0.000

0.000

0.000

340380

0.077

0.071

0.065

0.046

0.026

0.010

0.002

0.000

0.000

0.000

380420

0.075

0.070

0.068

0.052

0.032

0.014

0.004

0.001

0.000

0.000

420470

0.084

0.086

0.084

0.070

0.049

0.024

0.007

0.001

0.000

0.000

470525

0.082

0.087

0.087

0.079

0.061

0.034

0.012

0.002

0.000

0.000

525615

0.106

0.120

0.124

0.126

0.108

0.073

0.031

0.008

0.001

0.000

615775

0.122

0.148

0.159

0.185

0.189

0.155

0.090

0.030

0.005

0.000

775950

0.070

0.092

0.102

0.138

0.167

0.172

0.131

0.062

0.015

0.002

9501200

0.044

0.061

0.072

0.109

0.154

0.196

0.198

0.134

0.051

0.009

12001500

0.019

0.028

0.033

0.057

0.094

0.148

0.196

0.186

0.105

0.029

15002000

0.008

0.013

0.015

0.030

0.057

0.109

0.191

0.260

0.230

0.111

20002800

0.001

0.002

0.003

0.008

0.018

0.044

0.104

0.213

0.311

0.271

> 2800

0.001

0.001

0.001

0.001

0.003

0.009

0.032

0.103

0.282

0.578

MPCE monthly per capita expenditure; GDP gross domestic product

224

Appendix 3

Table A3.3 Probability of households (urban) 6.7% GDP


MPCE (in Rs)

1993

1999

2001

2006

2011

2016

2021

2026

2031

2036

0300

0.094

0.047

0.035

0.012

0.003

0.000

0.000

0.000

0.000

0.000

300350

0.046

0.031

0.025

0.011

0.003

0.001

0.000

0.000

0.000

0.000

350425

0.076

0.058

0.050

0.028

0.011

0.002

0.000

0.000

0.000

0.000

425500

0.079

0.067

0.061

0.038

0.019

0.005

0.001

0.000

0.000

0.000

500575

0.077

0.071

0.067

0.049

0.026

0.010

0.001

0.000

0.000

0.000

575665

0.086

0.085

0.083

0.066

0.043

0.018

0.004

0.000

0.000

0.000

665775

0.093

0.098

0.098

0.088

0.065

0.034

0.010

0.001

0.000

0.000

775915

0.097

0.109

0.111

0.111

0.094

0.059

0.022

0.004

0.000

0.000

9151120

0.106

0.125

0.132

0.145

0.142

0.110

0.055

0.013

0.001

0.000

11201500

0.117

0.146

0.158

0.195

0.223

0.220

0.158

0.064

0.011

0.000

15001925

0.064

0.081

0.089

0.122

0.164

0.203

0.203

0.132

0.040

0.004

19252400

0.033

0.043

0.047

0.069

0.100

0.148

0.193

0.181

0.093

0.018

24003200

0.021

0.026

0.030

0.045

0.071

0.120

0.199

0.268

0.228

0.090

32004000

0.007

0.008

0.009

0.013

0.023

0.044

0.089

0.167

0.225

0.160

> 4000

0.004

0.005

0.005

0.008

0.013

0.026

0.065

0.170

0.402

0.728

2121

2026

2031

2036

MPCE monthly per capita expenditure; GDP gross domestic product

Table A3.4 Probability of households (rural) 8% GDP


MPCE (in Rs)

1993

1999

2001

2006

2011

2016

0225

0.101

0.057

0.044

0.012

0.002

0.000

0.000

0.000

0.000

0.000

225255

0.048

0.034

0.028

0.010

0.002

0.000

0.000

0.000

0.000

0.000

255300

0.083

0.065

0.056

0.025

0.006

0.001

0.000

0.000

0.000

0.000

300340

0.079

0.065

0.059

0.031

0.010

0.002

0.000

0.000

0.000

0.000

340380

0.077

0.071

0.065

0.038

0.014

0.003

0.000

0.000

0.000

0.000

380420

0.075

0.070

0.068

0.046

0.020

0.005

0.001

0.000

0.000

0.000

420470

0.084

0.086

0.084

0.063

0.031

0.009

0.001

0.000

0.000

0.000

470525

0.082

0.087

0.087

0.073

0.043

0.015

0.003

0.000

0.000

0.000

525615

0.106

0.120

0.124

0.121

0.084

0.037

0.009

0.001

0.000

0.000

615775

0.122

0.148

0.159

0.188

0.166

0.097

0.032

0.005

0.000

0.000

775950

0.070

0.092

0.102

0.148

0.171

0.135

0.064

0.016

0.001

0.000

9501200

0.044

0.061

0.072

0.124

0.183

0.195

0.133

0.048

0.009

0.001

12001500

0.019

0.028

0.033

0.069

0.130

0.188

0.181

0.100

0.026

0.002

15002000

0.008

0.013

0.015

0.039

0.094

0.181

0.252

0.218

0.099

0.020

20002800

0.001

0.002

0.003

0.011

0.036

0.100

0.212

0.304

0.250

0.101

> 2800

0.001

0.001

0.001

0.002

0.008

0.032

0.112

0.308

0.615

0.876

MPCE monthly per capita expenditure; GDP gross domestic product

Appendix 3

225

Table A3.5 Probability of households (urban) 8% GDP


MPCE (in Rs)

1993

1999

2001

2006

2011

2016

2021

2026

2031

2036

0300

0.094

0.047

0.035

0.009

0.001

0.000

0.000

0.000

0.000

0.000

300350

0.046

0.031

0.025

0.009

0.002

0.000

0.000

0.000

0.000

0.000

350425

0.076

0.058

0.050

0.023

0.006

0.001

0.000

0.000

0.000

0.000

425500

0.079

0.067

0.061

0.033

0.010

0.002

0.000

0.000

0.000

0.000

500575

0.077

0.071

0.067

0.042

0.017

0.003

0.000

0.000

0.000

0.000

575665

0.086

0.085

0.083

0.059

0.028

0.008

0.001

0.000

0.000

0.000

665775

0.093

0.098

0.098

0.080

0.045

0.015

0.003

0.000

0.000

0.000

775915

0.097

0.109

0.111

0.104

0.071

0.030

0.006

0.001

0.000

0.000

9151120

0.106

0.125

0.132

0.142

0.119

0.065

0.019

0.002

0.000

0.000

11201500

0.117

0.146

0.158

0.200

0.213

0.164

0.075

0.016

0.001

0.000

15001925

0.064

0.081

0.089

0.134

0.181

0.191

0.131

0.047

0.007

0.000

19252400

0.033

0.043

0.047

0.080

0.130

0.174

0.168

0.092

0.022

0.002

24003200

0.021

0.026

0.030

0.053

0.107

0.183

0.243

0.207

0.088

0.014

32004000

0.007

0.008

0.009

0.021

0.041

0.088

0.158

0.201

0.143

0.042

> 4000

0.004

0.005

0.005

0.011

0.029

0.076

0.196

0.434

0.739

0.942

2121

2026

2031

2036

MPCE monthly per capita expenditure; GDP gross domestic product

Table A3.6 Probability of households (rural) 10% GDP


MPCE (in Rs)

1993

1999

2001

2006

2011

2016

0225

0.101

0.057

0.044

0.009

0.001

0.000

0.000

0.000

0.000

0.000

225255

0.048

0.034

0.028

0.008

0.001

0.000

0.000

0.000

0.000

0.000

255300

0.083

0.065

0.056

0.020

0.002

0.000

0.000

0.000

0.000

0.000

300340

0.079

0.065

0.059

0.027

0.005

0.000

0.000

0.000

0.000

0.000

340380

0.077

0.071

0.065

0.034

0.008

0.001

0.000

0.000

0.000

0.000

380420

0.075

0.070

0.068

0.040

0.012

0.002

0.000

0.000

0.000

0.000

420470

0.084

0.086

0.084

0.057

0.019

0.002

0.000

0.000

0.000

0.000

470525

0.082

0.087

0.087

0.069

0.029

0.005

0.001

0.000

0.000

0.000

525615

0.106

0.120

0.124

0.116

0.061

0.015

0.001

0.000

0.000

0.000

615775

0.122

0.148

0.159

0.187

0.136

0.047

0.006

0.000

0.000

0.000

775950

0.070

0.092

0.102

0.155

0.159

0.084

0.018

0.001

0.000

0.000

9501200

0.044

0.061

0.072

0.135

0.195

0.152

0.052

0.006

0.000

0.000

12001500

0.019

0.028

0.033

0.079

0.160

0.187

0.101

0.020

0.001

0.000

15002000

0.008

0.013

0.015

0.047

0.133

0.237

0.216

0.079

0.009

0.000

20002800

0.001

0.002

0.003

0.015

0.062

0.180

0.294

0.215

0.055

0.004

> 2800

0.001

0.001

0.001

0.002

0.017

0.088

0.311

0.679

0.935

0.996

MPCE monthly per capita expenditure; GDP gross domestic product

226

Appendix 3

Table A3.7 Probability of households (urban) 10% GDP


MPCE (in Rs)

1993

1999

2001

2006

2011

2016

2021

2026

2031

2036

0300

0.094

0.047

0.035

0.007

0.000

0.000

0.000

0.000

0.000

0.000

300350

0.046

0.031

0.025

0.008

0.001

0.000

0.000

0.000

0.000

0.000

350425

0.076

0.058

0.050

0.019

0.003

0.000

0.000

0.000

0.000

0.000

425500

0.079

0.067

0.061

0.028

0.006

0.001

0.000

0.000

0.000

0.000

500575

0.077

0.071

0.067

0.037

0.010

0.001

0.000

0.000

0.000

0.000

575665

0.086

0.085

0.083

0.054

0.017

0.002

0.000

0.000

0.000

0.000

665775

0.093

0.098

0.098

0.074

0.031

0.005

0.000

0.000

0.000

0.000

775915

0.097

0.109

0.111

0.099

0.052

0.012

0.001

0.000

0.000

0.000

9151120

0.106

0.125

0.132

0.139

0.094

0.032

0.004

0.000

0.000

0.000

11201500

0.117

0.146

0.158

0.204

0.194

0.100

0.021

0.001

0.000

0.000

15001925

0.064

0.081

0.089

0.143

0.188

0.149

0.053

0.006

0.000

0.000

19252400

0.033

0.043

0.047

0.088

0.151

0.170

0.095

0.018

0.001

0.000

24003200

0.021

0.026

0.030

0.064

0.141

0.224

0.201

0.073

0.007

0.000

32004000

0.007

0.008

0.009

0.022

0.062

0.137

0.190

0.119

0.024

0.001

> 4000

0.004

0.005

0.005

0.014

0.050

0.167

0.435

0.783

0.968

0.999

MPCE monthly per capita expenditure; GDP gross domestic product

A3.2 Rationale for choice of 8%


gross domestic product growth rate
The Tenth Five Year Plan covering the period
200207 prepared by the Planning Commission, GoI (Government of India) aims at
achieving an average growth rate of real
GDP of 8% per annum over the period
200207. The 8% average growth rate target
set for the Tenth Plan appears quite optimistic when compared with the short-term
GDP growth rate forecasts of other organizations. However, the rationale behind targeting 8% GDP growth rate is doubling the
per capita incomes over the next decade with
a more equitable regional distribution. This
would bring about substantial improvement
in the welfare of the entire population.
Furthermore, the Tenth Five Year Plan
has been prepared against the backdrop of

the performance of the Indian economy during the Eighth and the Ninth Plan periods.
During these plan periods many of the commonly held beliefs regarding the potentialities and constraints that govern the operation of the economic system have been questioned and highlighted.
There are three major experiences from
the previous plan periods, as highlighted in
the Tenth Five Year Plan that lay down the
guidelines for setting the growth targets for
the future.
Firstly, the growth rate of the Indian
economy is no longer constrained by the
availability of savings or investible resources.
The clearest evidence for this is given by the
persistent difference between the external
capital inflows and the CAD (current account deficit) that has existed through much
of the 1990s. CAD represents the excess of
total investment in the country over domes-

Appendix 3

tic savings while external capital flows represent the inflow of potential savings from
abroad. The excess of external capital inflows over CAD is therefore an indication of
the failure of investment demand to absorb
foreign savings. Thus, it can be stated that
the availability of investible resources was
not the primary constraint to growth and investment in India.
Secondly, the growth rate of an economy
is not wholly determined by the level of investment activity. The Tenth Five Year Plan
highlights the fact that the rate of real investment as a percentage of GDP was higher
during the Ninth Five Year Plan as compared
to the previous plan period. The Ninth Five
Year Plan recorded a real investment rate of
26.3% of GDP as compared to 24.9% during the Eighth Five Year Plan. However, the
economy registered an average annual GDP
growth rate of 6.7% per annum as against
5.3% during the Ninth Plan. This is explained by the fact that the investment rate
when measured in nominal terms has declined from 24.8% in the Eighth Plan to
24.3% in the Ninth Plan period. Also, the
nominal investment rate has been at or below the private savings rate. The Ninth Plan
period was characterized by a decline in the
levels of capacity utilization thereby explaining a decline in the investment rate in nominal terms.
Thirdly, the growth of the agriculture sector is a key determinant of the overall economic growth rate. Although the share of
agriculture in aggregate GDP has declined
to 26.9% of GDP reducing the sensitivity of
GDP growth rate to fluctuations in agricul-

227

tural performance, the agricultural incomes


play an important role in determining the
demand for non-agricultural commodities.
Therefore, growth of the agriculture sector
is a determinant of future growth rate.
The imperatives for achieving an 8% real
GDP growth rate given in the Tenth Five
Year Plan document of the Planning Commission are as follows.
(a) The Planning Commission envisages
that the investment rate be accelerated
from 24.4% in 2001/02 to 32.6% in
2006/07 for achieving a target GDP
growth rate of 8%. This targeted investment rate differs from the investment rate projected by other organizations such as IEG (Institute of Economic Growth).
In order to finance a gross capital
formation (investment) of this magnitude, the Tenth Five Year Plan targets a
domestic savings rate of 29.8% of
GDP and foreign savings rate of 2.8%.
That is, the domestic savings 1 rate
would have to rise by 6 percentage
points from the current levels over the
Tenth Five Year Plan period. Of this
6% increase in the domestic savings
rate, 2.11% is expected to be in the private sector and the rest in the public
sector. In this context, it is mentioned
that the savings rate in the domestic
household sector is expected to decline
during the Tenth Plan period. This is
because, on the one hand, rapid increase in personal disposal incomes (as
a result of rise in GDP) would raise the
savings rate and on the other, fiscal

Domestic savings comprise domestic public and domestic private savings. Domestic private savings are further subdivided into household savings and savings by the private corporate sector.

228

(b)

(c)

Appendix 3

policy would necessitate significant


stepping up of tax/GDP ratio. This
stepping up would tend to reduce the
household savings. Furthermore, the
savings rate of the private corporate
sector is determined mainly by its
share in GDP, its profit rate, and capital intensity. It is envisaged that in the
Tenth Five Year Plan, the savings rate
of this sector will rise sharply with improved capacity utilization thereby improving both its profitability and GDP
share. The Tenth Five Year Plan requires the government sector to reduce
its dissavings by nearly 2 percentage
points in order to meet the aggregate
domestic savings target.
The Tenth Five Year Plan projects the
exports to grow at the rate of 12.4%
and invisibles to perform strongly. This
would further raise the real GDP
growth rate by creating demand abroad
for domestic goods and services.
The Tenth Five Year Plan further recognizes four priority sectors that are
critical for generating high rate of economic growth. These sectors are agriculture, construction, transport, and
other services. Public investment in
the agriculture sector would be increased significantly to reduce the sensitivity of this sector to weather-related
fluctuations. The construction sector is
considered as a potential sector for
growth given that the land-related suggestions mentioned in the plan are
implemented judiciously. A faster
growth in other transport can be
achieved if required policy changes
permitting greater involvement of the
private sector are implemented. This,
coupled with high growth rates in the

information, communication, and entertainment sectors would lead to acceleration in growth of other services.
Thus, the 8% growth rate is considered
feasible in the Tenth Plan period since the
scope for realizing improvements in efficiency is very large both in the public and
private sector assuming that the policy imperatives discussed above materialize.
For these aforementioned reasons, TERI
has adopted the GDP growth rate of 8% for
energy demand projections for the Tenth
Five Year Plan period consistent with the
plans of the GoI. Based on the assumption
that the 8% growth rate can be sustained for
a period extending beyond the Tenth Five
Year Plan period, TERI has projected GDP
to grow at an average annual rate of 8% per
annum through the entire modelling period
(200136).

A3.3 Methodology for GDP projections under 6.7% GDP growth rate
In a separate exercise to project GDP growth
for India, TERI has modified the model developed by Goldman Sachs (2003) for longterm GDP projections in Brazil, Russia, India, and China popularly referred to as
BRICs countries. For this purpose, we have
used the growth accounting framework used
by Goldman Sachs, which was first developed by Solow in 1956. According to this
framework, growth in output can be broken
down into the following components.
(a) Growth in output due to measured
growth in labour input
(b) Growth in output due to measured
growth in capital input
(c) Technological progress

Appendix 3

A3.3.1

Assumptions

A3.3.1.1 Production function


The main point of departure from the
BRICs study16 is in our choice of a labour
augmenting Cobb Douglas production function. The production function exhibits constant returns to scale, and the technological
progress is of the type that increases the efficiency of the abundant factor of production,
which in the case of India is labour. Labouraugmenting technical change can be manifested in the adoption of technologies that lead
to the production of more labour-intensive
goods or in technologies that increase the efficiency of the labour input (Acemoglu 2002).
We believe that this specification is more
relevant than the Goldman Sachs specification, to the direction that Indian growth is
most likely to take.
Our production function is specified as
Y= (AL)1-K
where A= labour-augmenting technology
L = labour input
K = capital
= share of capital in income

A3.3.1.2

Convergence

One of the factors driving growth in the


model is the rate of growth of TFP (total
factor productivity). The difference between
the per capita income of the US and the per
capita income of India determines the potential for technological catch up. The rate
of convergence would depend on the initial
income of the developing country. Under
these conditions, technological progress
could be expected to be faster in developing

229

countries such as India than in the US. As


higher TFPG (total factor productivity
growth) rates and diminishing returns to
capital lead to higher output growth rates,
the potential for catch up decreases and the
developing country converges towards the
steady-state growth rate of technological
progress in the US.
Unconditional convergence would imply
that the steady-state balanced growth paths
for the developing and developed country
coincide (Islam 1998). This, however, need
not be the case when conditional convergence is assumed. In this case, any one or
more of the parameters defining steady state
can differ among countries. This model assumes the convergence of TFP growth rates
in steady state. The economies can, however,
differ in terms of steady-state growth rates of
population, savings rates, educational attainment, depreciation, and TFP levels (Jones
1997). The growth rates that a country can
achieve in the steady state would depend on
country-specific factors such as technique
choice, geography, and institutional structures that affect saving and investment rates,
physical and social infrastructure, education
levels, and quality of governance. This would
imply that given the same initial levels of per
capita income, a country with an underdeveloped infrastructure or lower levels of educational attainment would converge at
slower rates than a country with more
favourable conditions.
We use the same specification for the evolution of TFPG as in the BRICs paper. The
growth rate of TFP in the developing country is given by the following relation.
Log (At/At-1) = (long-run TFPG for the
US) Log [(per capita GDPDC)/(per capita
GDPUS)]

230

Appendix 3

where At = TFP level at time t


At-1 = TFP level at time t-1
Log [(per capita GDPDC)/(per capita
GDP US)] = conditional convergence rate for
the developing country
This specification assumes that the TFPG
rates along the path to steady state in the
developing country are higher than the
steady state TFP growth rate in the US . The
higher the rate of convergence (), and the
larger the difference in per capita incomes,
the higher the rate of TFP growth in the developing country relative to the long-run
TFPG rate in the US. Conventional estimates of the rates of convergence in per
capita income for developed countries to
their own steady states are about 2%
(Mankiew, Romer, and Weil 1992). We
would expect conditional convergence rates
in developing countries to be lower as a consequence of retarding institutional factors.
The BRICs paper has assigned a convergence rate of about 1.5% to developing
countries. It mentions that calculations for
long-term projections of GDP use lower initial convergence rates for Brazil and India.
These increase to 1.5% through the period
for which the projections are made. We have
assumed the conditional convergence rates
for India to be equal to 1.3% throughout our
analysis. We expect convergence rates for
India to be lower than those used for China
and Russia in the BRICs paper, because of
higher illiteracy levels, infrastructural
bottlenecks, and social constraints that affect the participation of women in the
workforce and the large proportion of the
population employed in subsistence or unorganized activities in both the agricultural
and urban sectors.
We have used long-term TFP growth rates
for the US to be consistent with those used

by the CBO (Congressional Budget Office)


of the Government of the US. The CBO
(2002) uses a TFP growth rate of 1.3% for
their long-term GDP projections. This was
revised upwards from 1% average annual
growth (CBO 1997). The CBO also uses
more conservative long-run US TFPG
(1.1%) rates for alternative projections.
The results from our analysis are very
sensitive to the assumptions made regarding
the convergence rates and long-run TFPG
rates. Changing long-term US TFPG rates
from 1.3% to a more pessimistic 1.1% would
change our results appreciably.

A3.3.1.3 Capital stock


The growth of net capital stock in the model
follows the equation given below.
Kt = Kt-1(1 ) + sYt-1
where Kt = net capital stock at time t
Kt-1 = net capital stock at time t-1
s = investment rate
Yt-1 = GDP at time t-1
From this specification we find that sY t-1
gives us the gross capital formation in time
t-1. This forms a part of the net capital stock
that is available for use in the following year.
To calculate the net capital stock for the initial year in our analysis, we have used data on
net capital stock and gross capital formation
from the National Accounts Statistics published by the CSO (Central Statistical Organization), GoI. To calculate the subsequent
capital series we assume that the investment
rate in India will remain at 24% throughout
the period for which projections are made.
We also assume that the depreciation rate
will remain at 5% for the entire period. This

Appendix 3

assumption is again a very stringent one and


the rates of capital attrition (a combination
of deterioration and technological obsolescence) can be expected to change. In the Indian case we could expect rates of capital attrition to rise in the long term as capital intensity and ICORs (incremental capital
output ratio) decline due to relocation of
capital from investment in infrastructure to
investment in production. Capital attrition
due to technological obsolescence could also
be expected to rise with changing market
structures favouring the increase in competition and a corresponding increase in the
share of R&D (research and development)
expenditures in total investment.
The share of capital in income, as computed from data on operating surplus and
net national product from the National Accounts Statistics, is approximately 60%. This
is on the higher side and we would expect
this share to decline in the long run with the
adoption of more labour-augmenting technologies, increased employment, and regulation in the unorganized sector. The long-run
share of capital in income could be taken as
1/3, which is the share of capital in the income of the US and several other developed
countries. For the purpose of our analysis we
keep the share of capital in GDP as 3/5.

A3.3.1.4

231

decline in population growth, a constant rate


of increase allows for future increases in the
rate of participation of women in the work
force. This is an expected consequence of increased expenditures on social infrastructure and increased life expectancies.

A3.3.1.5 Other assumptions


As in the BRICs paper, we assume that the GoI
continues to pursue liberal economic and social policy with emphasis on the gradual withdrawal of government intervention in industry
and trade, and increasing government expenditures on health and education.
We have used the estimates of the US per
capita GDP calculated in the BRICs paper
to arrive at TFP growth rate figures for India. We have deflated these values to 1993/94
rupee values. We have taken 2003 as the initial year in our analysis, and have used available data on GDP and capital stock valued at
1993/94 prices. Labour force, work force,
and population figures are in millions and
the values for the initial year are obtained
from the PFI.
We have computed long-term GDP
growth rates for India for the base model
with investment rates at 24%, depreciation
at 5%, convergence rate at 1.3%, and longterm US TFPG at 1.3%.

Demographics

We have used population figures given by the


PFI (Population Foundation of India). We
have projected population till 2030 assuming growth rates to decrease from current
levels of 2003 to about 0.9% in 2030. We
have assumed a constant rate of increase of
1.07% in the Indian work force. Assuming a
shift in the age structure of the population in
favour of people above the age of 65, and a

A3.3.2

Results

The results from the simulations in our base


model indicate that the long-term average
annual GDP growth rate for India is 6.7%
per annum for the modelling time frame
200136. TERI considers it be the lowgrowth scenario relative to the 8% GDP
growth rate adopted in the baseline scenario.

232

Appendix 3

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APPENDIX 4

Region-wise hydrocarbon reserves


at the end of 2005

Figure A4.1 Distribution of proved reserves of


hydrocarbons in 1985, 1995, 2005

236

Appendix 4

Figure A4.2 Production of crude oil in


different regions (million barrels daily)

Appendix 4

Figure A4.3 Reserves-to-production ratio and


reserves (in percentage) for crude oil

Figure A4.4 Proved reserves of gas at the


end of 2005 (trillion cubic metres)

237

238

Appendix 4

Figure A4.5 Distribution of proved


reserves in 1985, 1995, and 2005

Figure A4.6 Production of gas in different regions (billion cubic metres)

Appendix 4

Figure A4.7 Reserves-to-production ratio


and reserves (in percentage) for gas

239

APPENDIX 5

Sankey diagrams

Figure A5.1 Sankey diagram for the business-as-usual scenario (2001)

Figure A5.2 Sankey diagram for the business-as-usual scenario (2031)

Figure A5.3 Sankey diagram for low-growth scenario (2031)

Figure A5.4 Sankey diagram for the high-growth scenario (2031)

Figure A5.5 Sankey diagram for high energy efficiency scenario (2031)

Figure A5.6 Sankey diagram for high nuclear capacity scenario (2031)

Figure A5.7 Sankey diagram for renewable energy scenario (2031)

APPENDIX 6

Balance sheets

Table A6.1

Energy balance in the business-as-usual scenario in 2011 (all figures are in Mtoe)
Oil and

Supplydemand

natural

Petroleum

Hydro (large

Nuclear

Renewable

Total

gas

products

and small)

energy

energy

power

Total

242

51

211

18

527

45

14

96

14

Coal

Supply
Conversions
Power generation

82

Conversion losses and


auxiliary consumption
Power generation
Oil refining

110
12

Transmission and distribution

12
21

21
18

Consumption
Agriculture

Industry

102

23

54

23

202

Transport

104

106

Residential

27

19

46

Commercial

12

End-use consumption

102

23

199

61

384

Notes

Nil or negligible.
Figures may not add up to the total due to rounding off.
Energy supply from hydro and nuclear options are considered equal to the amount of electricity generated.
Energy consumption in industry includes energy use for process heating, captive power generation, and feedstock.

250

Appendix 6

Table A6.2

Energy balance in the business-as-usual scenario in 2021 (all figures are in Mtoe)
Oil and
natural

Petroleum

Hydro (large

Nuclear

Renewable

Total

Supplydemand

Coal

gas

products

and small)

energy

energy

power

Supply

466

132

405

30

13

76

59

159

51

Total
1046

Conversions
Power generation

178

Conversion losses and


auxiliary consumption
Power generation
Oil refining

210
28

28

Transmission and distribution

40

40
22

Consumption
Agriculture

10

11

Industry

231

23

96

58

407

Transport

226

231

Residential

37

48

85

Commercial

16

23

End-use consumption

231

23

377

138

768

Notes

Nil or negligible.
Figures may not add up to the total due to rounding off.
Energy supply from hydro and nuclear options are considered equal to the amount of electricity generated.
Energy consumption in industry includes energy use for process heating, captive power generation, and feedstock.

Table A6.3

Energy balance in the business-as-usual scenario in 2031 (all figures are in Mtoe)
Oil and
natural

Petroleum

Hydro (large

Nuclear

Renewable

Total

Supplydemand

Coal

gas

products

and small)

energy

energy

power

Supply

1176

136

757

40

13

215

56

448

49

Total
2123

Conversions
Power generation

325

Conversion losses and


auxiliary consumption
Power generation
Oil refining

497
50

Transmission and distribution

50
68

68
25

Consumption
Agriculture

11

14

Industry

513

31

190

114

848

Transport

452

461

Residential

42

86

129

Commercial

12

33

45

End-use consumption

513

31

708

256

1508

Notes

Nil or negligible.
Figures may not add up to the total due to rounding off.
Energy supply from hydro and nuclear options are considered equal to the amount of electricity generated.
Energy consumption in industry includes energy use for process heating, captive power generation, and feedstock.

Appendix 6 251

Table A6.4

Energy balance in the hybrid scenario in 2011 (all figures are in Mtoe)
Oil and
natural

Petroleum

Hydro (large

Nuclear

Renewable

Total

Supplydemand

Coal

gas

products

and small)

energy

energy

power

Supply

215

49

189

18

38

12

79

12

Total
478

Conversions
Power generation

74

Conversions losses and


auxiliary consumption
Power generation
Oil refining

90
12

12

Transmission and distribution

19

19
17

Consumption
Agriculture

Industry

98

24

48

21

191

Transport

89

93

Residential

27

17

44

Commercial

11

End-use consumption

98

24

177

55

356

Notes

Nil or negligible.
Figures may not add up to the total due to rounding off.
Energy supply from hydro and nuclear options are considered equal to the amount of electricity generated.
Energy consumption in industry includes energy use for process heating, captive power generation, and feedstock.

Table A6.5

Energy balance in the hybrid scenario in 2021 (all figures are in Mtoe)
Oil and

Supplydemand

Coal

Supply

natural

Petroleum

Hydro (large

Nuclear

Renewable

Total

gas

products

and small)

energy

energy

power

Total

329

129

299

31

24

11

823

Conversions
Power generation

43

48

72

41

148

Conversions losses and


auxiliary consumption
Power generation
Oil refining

113
22

22

Transmission and distribution

33

33
18

Consumption
Agriculture

10

Industry

214

30

79

47

370

Transport

10

144

171

Residential

37

39

76

Commercial

12

20

End-use consumption

214

40

268

116

655

Notes

Nil or negligible.
Figures may not add up to the total due to rounding off.
Energy supply from hydro and nuclear options are considered equal to the amount of electricity generated.
Energy consumption in industry includes energy use for process heating, captive power generation, and feedstock.

252

Appendix 6

Table A6.6

Energy balance in the hybrid scenario in 2031 (all figures are in Mtoe)
Oil and
natural

Petroleum

Hydro (large

Nuclear

Renewable

Total

Supplydemand

Coal

gas

products

and small)

energy

energy

power

Supply

767

136

484

41

42

33

126

42

170

32

Total
1503

Conversions
Power generation

254

Conversions losses and


auxiliary consumption
Power generation
Oil refining

202
41

41

T&D

51

51
19

Consumption
Agriculture

10

Industry

471

37

148

86

743

Transport

25

231

17

302

Residential

42

65

107

Commercial

13

25

38

End-use consumption

471

62

444

204

1209

Notes

28

Nil or negligible.
Figures may not add up to the total due to rounding off.
Energy supply from hydro and nuclear options are considered equal to the amount of electricity generated.
Energy consumption in industry includes energy use for process heating, captive power generation, and feedstock.

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