The Demand and Supply in India

While installed capacity and electricity generation has steadily increased over the years, the peak demand shortage of electricity has been rising. Demand-supply gap was reported to be about 9%, the peak demand shortage was reported to be over 15% in the year 2007-2008 [23]. A significant portion of the population living in rural area still do not have access to electricity. An ambitious plan to increase rural electrification and eliminate the shortage "Power for All by 2012" envisions installed capacity to increase to 200 GW.

Much of the expected growth in electricity generation in India over the next few decades will likely be based on coal, particularly domestic coal. The demand for utility-generated electricity is projected to more than double from about 520 TWh in 2001-2002 to about 1,300 TWh by 2016-2017, with an annual growth rate of about 6-7% [24]. Longer-term scenarios indicate demand to be around 3,6004,500 TWh by 2031-2032, with the installed capacity (including captive power) to be about 800-1,000 GW by 2031-2032 [25]. Hence, it is clear that India's demand for electricity is projected to rise rapidly over the next 20-30 years.

The projected rapid growth in electricity generation over the next couple of decades is expected to be met by using coal as the primary fuel for electricity generation (see Table 11.1). Table 11.1 assumes that Indian GDP will grow at an average rate of 9%. Other resources are uneconomic (as in the case of naphtha or LNG), have insecure supplies (diesel and imported natural gas), or simply too complex and expensive to build (nuclear and hydroelectricity) to make a dominant contribution to the near-to-mid term growth [20]. Liquid fuels such as heavy oils have limited use in the power sector for economic and environmental reasons. Prospects for gas-

Table 11.1

A "middle of the road"

scenario for sources of electricity generation in India [20]

Electricity

Thermal

Thermal fuel demand

generation

Hydro

Nuclear

Renewables

energy

Coal

NG

Oil

Year

(TWh)

(TWh)

(TWh)

(TWh)

(TWh)

(Mt)

(BCM)

(Mt)

2003-2004

592

74

17

3

498

318

11

6

2006-2007

724

87

39

8

590

379

14

6

2011-2012

1,091

139

64

11

877

521

21

8

2016-2017

1,577

204

118

14

1,241

678

37

10

2021-2022

2,280

270

172

18

1,820

936

59

12

2026-2027

3,201

335

274

21

2,571

1,248

87

15

2031-2032

4,493

401

375

24

3,693

1,659

134

20

based power are limited by supply constraints, as many of the recent natural gas based power plants in the private sector have been facing fuel supply shortages. India has significant hydroelectricity resources, but there are a number of problems, including shortage of funds, inter-state water use conflicts, lack of suitable transmission infrastructure, long gestation periods, geological uncertainty in the Himalayan regions, high environmental impacts, and problems of resettlement and rehabilitation of displaced people [26]. The potential for nuclear power development is not high in the short to medium term, because of limited domestic natural uranium resources and various international restrictions that have held back the Indian nuclear power industry [27]. Electricity from renewable sources are relatively small and used mainly in niche applications; even wind power, which has grown significantly in the last decade, is mainly concentrated in a few states in India.

Thus, coal will continue to energize the Indian power sector and its role cannot be understated. Use of India's significant domestic coal resources for power generation would enhance energy security - which is an emerging priority in the country. India's domestic oil and natural gas reserves are minimal (about 0.5% of world reserves), and over three-quarters of India's petroleum consumption was met through imports in 2004-2005. Based on the Planning Commission [25] scenarios, coal-based capacity of utility power plants is likely to be in the range of 200400 GW in 2030, up from about 68 GW in 2005.

The projected high growth of coal power has significant implications for India's GHG emissions. Coal contributed to about 62% of India's total CO2 emissions of 817 Tg in 1994, with energy transformation (electricity generation and petroleum refining) contributing 43% [28]. Contribution of solid fuels (coal) to total fossil fuel-based emissions is now about 70%. Given coal power's rate of growth, it will continue to be the major contributor to carbon emissions from the country [2].

Renewable Energy Eco Friendly

Renewable Energy Eco Friendly

Renewable energy is energy that is generated from sunlight, rain, tides, geothermal heat and wind. These sources are naturally and constantly replenished, which is why they are deemed as renewable.

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