India's power sector
profile is predominantly characterized by coal based thermal power generation.
Even in next 20-25 years, continuing dominant role of coal for power generation
cannot be ruled out, though its overall proportion, which is close 60% of the
total capacity, may marginally go down. It is in this context that the debates
all over the world on the recent report of IPCC become highly relevant for
India. We are, and we shall continue to be, under pressures, technically,
professionally and above all diplomatically to keep a watch on our expansions
based on fossil fuels. On the 4th of May 2007 the Inter-governmental Panel on
Climate Change (IPCC), an organization set up by the United Nations published
the third installment of its fourth report. This body was set up under the aegis
the United Nations to generate consensus on issues concerning global warming and
climate change. It has been making studies, organizing discussions and
submitting reports. What is different in this latest report is that it clearly
articulates that climate change may threaten the mankind, but there is a good
chance of averting the crisis if appropriate actions are put in place.
As soon as this report
came out, it got spread like a wild fire all over the world. In India, a leading
daily, the Times of India covered it on the first page as the front line lead
"Now or Never: just eight years to fight global warming" and highlighted the
drastic steps which were needed to check climate change by both developing and
developed countries. The Indian Parliament, which was in session, decided to
hold a full day debate on this issue on May 8. The Economic Times of May 5, 2007
emphasized with headlines "World has eight years left to save climate, says UN
report". The paper emphasized that the report had focused on the economic
implications and technological options for tackling global warming and stressed
that emissions must start declining by 2015 to prevent the global temperature to
rise more than 2 degrees Celsius over pre industrialized temperatures. In last
six weeks, series of news items, analytical reports and articles have appeared
in important dailies and magazines in India and abroad. Some of the headlines
are indicative of the gravity of concerns that are being perceived and
projected. The Times of India May 6, 2007 put a heading "Melting Glaciers could
lead to a flood of troubles". It reported that unless we acted right now most
Himalayan Glaciers would melt by 2030. Till 2030 there would be a steep rise in
water levels of glacier fed rivers, which would cause major floods. Agriculture
in the Indo-Gangetic plains would be badly hit. Apart from water shortage, soil
quality may also deteriorate. Hydro electric projects, being served by Himalayan
Rivers, may be a big causality. While these reports highlight the major ill
effects that may lead to the problems of the types mentioned, it also appears a
consensus all over that if appropriate remedial actions are put in place, the
problems, to a great extent, could be tackled.
A few internationally
reputed journals have also adequately covered the IPCC report and have tried to
present the critical analysis. The Economist of May 18, 2007 has carried two
important write ups. The one captioned "Global warming in Africa, drying up and
flooding out" has underlined that "Rich countries may be largely to blame for
adding climate change to Africa's problems..." and the report has quoted the
statement of Uganda's President, who declared "Climate change an act of
aggregation by the rich world against the poor one and demanded compensation".
He went on to the extent to suggest "the moral arguments on climate change are
even murkier than arguments about other wrongs done to Africa, such as slavery".
The other write up in the Economists brings out "subsidies for clean energy are
rising. George Bush, uncomfortable with anything that looks like a carbon tax
and happy to pass round the pork, has been throwing money at companies investing
in clean energy, some European countries, such as Germany, have outdone him in
their hurry to give tax payer's money to renewable. Economist are uncomfortable
with such measures, because history suggests that governments are bad at picking
winning technologies..." Indeed there is considerable weight in the argument that
government subsidies seldom fructify into any stabilized situation of effective
technology development. A good financing plan could prove better.
Carbon Tax has been
suggested as a strategy for reducing and controlling Co2 emission. There are two
schools of thought: one says that technologies, which will reduce Co2 emission,
are costly and if these technologies have to be brought to the market then cost
of generating power from fossil fuels has to increase. This can be done by
taxing fossil fuel generation and putting that money to subsidize the
technologies which are costly. Another school of thought has an opposite view.
It says that the countries like India, which are far behind in respect of power
generation and consumption, are in dire need of substantially increasing their
power generation at lesser cost. Any carbon tax or such other cess is likely to
only increase the cost of power further. This would put the developing economies
at a disadvantage and would impede the process of growth in manufacturing, and
affect overall employment potential. One of the requirements of manufacturing to
be competitive is availability of cost effective electricity. Even the Economist
(12th July 07) has noted "whether America would accept a price on the level IPCC
envisages remains far from clear. Another big uncertainty is how the developing
world, wary of anything that would limit its entitlement to grow, could be
persuaded to buy into this idea". A major argument that is being advanced - and
there is considerable weight in this - is that countries like India will have to
depend on its local resource viz coal. All that this tax will do is to increase
the cost of power, it will do little to reduce the use of coal.
One thing is very clear.
No country in the world has set out any definite plan of action. A few European
countries have done comparatively better. There is considerable confusion about
the strategy and action almost everywhere. The latest Economist of June 16, 2007
has again brought out analytical piece on climate change with the caption
"Despite the President's change of heart, the carbon policy remains
contentious". It goes on to say "Ask Washington Pundits about America's future
policy on global warming, and most of them will tell you that things are
changing too quickly to make firm predictions".. The whole world is looking at
relative contribution of different countries to this problem and also at the
relative obligations toward both preventive and curative actions. For the first
time, way back in 1997, the whole world discussed and agreed on what is now
famous as Kyoto Protocol. This Protocol established the principle of
differentiated responsibilities. It set the target for reduction of green house
gases by countries which are now called ANNEX-I countries. During the first
commitment period of 2008 - 2012, the targeted reduction was a total of 5.2%
below their aggregate 1990 emissions. India is one of the Non-Annex-I countries
and therefore, it did not have any obligation or commitment for Co2 reduction.
The principle of differentiated obligation was accepted because developing
countries like India have been far behind in the matter of levels of energy
consumption. These countries needed to step up their energy production. There
has been some talk in India also about carbon tax. In fact, there is a case for
"carbon revenue" rather than "carbon tax". We should motivate power generating
organizations to slowly resort to more energy efficient technologies and if the
level of emission is less than at present they should be incentivised. This will
have a dual advantage - a clear shift toward efficient technologies and
efficient operation, and at the same time incentive to them could reduce the
price of power. A study has been conducted which brings out that within certain
range, the extent of co2 reduction is practically insensitive to the increase in
carbon taxation. Even a 50% change in carbon tax leads to only 1.5 to 2.5%
reduction in Co2 emission. A detailed article in the Economic & Political Weekly
(June 16, 2007) provides full data on this conclusion.
Two large countries namely
India and China have to inevitably depend on massive use of fossil fuels, mainly
coal. Development of China in last 25 years to a very large capacity base of
more than 4,00, 000 MW, most of these based on coal, has taken care of their
requirement by and large. India, though needed similar expansion, could not do
so because of variety of reasons. But the fact remains that India has to catch
up and effect the expansion of power generation base on similar lines. This
should take its capacity from 135 GW to 800 GW in next 25 years.
Recently, the climate change issue was an important agenda in the G-8 Summit in
Germany. India's position in the summit, as very well articulated by the Prime
Minister Dr. Manmohan Singh, was on predicted lines. The thrust of India's
argument can be summarized as (a) Priority on poverty eradication requires
growth and development; India does give due importance to environment, but
development needs to be encouraged, (b) India's per capita emission is about 20%
of world average, (c) Several measures of energy efficiency have been taken and
further they are being intensified, (d) Renewable Energy systems are being
encouraged in a big way, (e) Developed countries, which have contributed to this
problem over the years should transfer clean energy technologies to others.
These are valid and strong
arguments. While we need to pursue this line of approach, perhaps our response
to this major global concern could be structured on following lines to
appropriately reflect our commitment toward environment and climate.
approach on mini / micro hydel projects through both - by public sector and
Full exploitation of
Hydro electric potential in next 15-20 years.
Bio- mass technology,
using the economy of scale, nay be supported by government to make it cost
Distribution generation system for rural areas.
More efficient thermal
power generation technologies e.g. supercritical system - all future power
plants of 1000 MW or more should deploy this technology. Mega Project benefit
could be linked to this. A "carbon revenue" scheme, as discussed in this paper,
could also be considered.
Clean coal Technology
Mission to focus on this with specific targets and action plans.
of new technologies in old plant.
A large Research Fund
may be set up for solar system to be made a more cost effective technology for
its deployment extensively.
A few factories to
produce CFL systems for large market penetration will lead to visible reduction
in lighting power requirements.
LED has significant
potential and relevance - A pilot plant followed by a large manufacturing
facility may be facilitated.
With the above, power
generation capacity profile could present a mix on which in next 25 years, non
conventional should be at least 10-12%, hydroelectric (which is also renewable)
at least 35% inclusive of hydropower from Bhutan and Nepal and nuclear at least
6-7%. On efficiency in consumption a target of 15% could be achievable. These
together would present a solid and convincing response of India on this issue.
Over the years,
India's laws, rules and regulations have been strengthened. With several
agencies for their enforcement, which have been put in place, compliance has
also improved. This process needs to be encouraged. If there are loop holes we
need to address them. In a comprehensive paper, published in the leading daily
the Hindustan Times (July 2, 2007) several critical comments have been made on
India's position on climate change as also India's track record on environment.
While many of the points made in this article can and should be questioned on
the basis of facts, I do support that industry must take all possible steps to
not only comply with laws and rules on environment, but should go beyond toward
environmental protection and ecological balance.