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Challenges of Urban Energy Supply, Shri R V Shahi, Former Secretary, Ministry of Power

Supply of energy is not only an issue in the context of Indian towns and cities, or for rural India; in fact, it has become, in a highly pronounced way, a global issue. As it is, emerging economies like India has a comparatively much smaller share of energy consumption. In the wake of rapid urbanization in Asian economies, the problems of cities are going to multiply. "It is a migration that is unstoppable throughout Asia, including India, the wave of people moving to cities will swell as years go by. Some 1.1 billion people in Asia will move to cities in next 20 years............ By 2030 half of the population of the continent will live in cities" - Business World (July 14-21, 2008) has quoted, as above, the President of the Asian Development Bank. Of various problems and issues in this regard, energy will, perhaps, rank very high. I had the privilege of chairing the Session on "Challenges of Urban Energy Supply" in a Conference held in Delhi on last Friday, the 11th July, 2008. Before presentations were made by an eminent panel of experts, I outlined the issues through following observations:

  • Though it is important and appropriate to focus on issues concerning urban energy supplies and management, we must remember that energy supply to rural India has remained a much bigger challenge. Even with a lot of efforts in the last five to six years, since the 2001 census brought out that as much as 56% of rural India did not have even access to electricity, even now more than 50% of rural households remain unconnected from electricity connectivity. However, this is a different subject and can be dealt with separately. Focus on urban energy supply will continue to be a challenge for all concerned.

  • Obviously when we talk of managing urban energy supply, the task goes much beyond issues concerning electricity supply. No doubt, this gets maximum attention because it affects every household very directly and intensely. Issues like energy supply for transportation and supply of gas and other fuels for cooking are equally important, and each of these continues to evade any permanent solutions. The subject of urban energy supply will, therefore, encompass electricity, petroleum fuel for transport sector and cooking gas etc.

  • The subject of energy supply has, of late, assumed another major dimension. This issue was always relevant but its impact is being debated globally in a much wider and stronger context. Climate change has close linkage with energy production and consumption. Therefore any debate on energy supply in urban setting, also in rural setting, though with much diluted impact, has to reckon with the implications and consequences from the point of view of global warming. Future strategies for managing energy supply and demand will need to be appropriately influenced by climate change considerations. No doubt, we have been able to put together a convincing set of arguments and have properly articulated India's position in global fora that the per capita CO2 emission in India is far too less (approximately one fourth) than the global average. As a responsible global citizen, however, we shall have to be responsive and appropriately sensitive to the challenges posed by increasing trend of consumption of fossil fuels.

  • In the last 15 years our dependence on import of crude oil has increased from less than 50% of our total consumption to more than 77% now. We were importing about 30 million tonnes of crude in 1991 and our annual domestic production then was somewhat higher than we were importing. Today, our domestic production, in the entire period of 15 years, has remained almost stagnated between 32 to 34 million tonnes, whereas import has shot up to more than 110 million tonnes per year.

  • Ever increasing demand for petroleum fuel necessitating massive import coupled with many fold rise in prices of crude (from 12 $ a barrel to 140 $ a barrel in a period of about 10 years) has destabilized our financial projections and has entailed excessive subsidies in respect of fertilizer, kerosene oil, cooking gas and indeed all petroleum fuels. While talking of management of energy supply, how we manage our urban transport systems, therefore, assumes great importance.

  • The next important issue is about supply of cooking fuel. The City Gas Distribution through Pipelines was introduced almost ten years back. It has raised expectations in several towns but more importantly among the households which have not been extended this facility in towns where the piped gas supply has already been introduced. Even in the capital city of Delhi the coverage is rather marginal leaving larger portion of urban households uncovered. Against these expectations, we are confronted with severe inadequacies in availability of gas. Every sector is starved. Highly capital intensive power plants have almost one third of their capacities stranded for want of gas, fertilizer reels under excessively costly naphtha and city gas distribution including CNG supply for transport are inadequately provided on account of overall shortage of gas.

  • Electricity is a commodity whose availability creates more and more demand. Experiences all over the world have shown that provision of electricity leads to newer and newer types of life styles leading to more and more demand for electricity. In almost all cases, whether the per capita consumption is as low as 600 Kwhr like in India, or 2,000 Kwhr like in China or even more than 5,000 Kwhr in many of the developed countries, each one of them is confronted with the situation of power shortage though it may be in varying degrees. Urban India is really urbanizing in a modern way only now. If we look at last five years, we find new types of modern housing complexes trying to be at par with similar townships elsewhere in the world, large shopping malls, multiplexes and networks of metro railway infrastructure have all started happening. They were not there five years back, they are not complete even now, it will take next five to ten years for large Indian metros to have these at reasonable levels of completion, satisfaction and perfection. For other towns in India, most of which are also aspiring to create and possess such facilities it will take may more years, perhaps decades to have them. All these will need more and more of electricity.

  • India's Integrated Energy Policy takes us, in next 25 years to, 800 GW of capacity as compared to 145 GW today. Delhi requires 4500 MW today, if we want uninterrupted power supply: it will need 10,000 MW in next five years. Quite often, in spite of sourcing supplies from various quarters, Delhi gets confronted with shortage of 500 to 800 MW. It might accentuate if sufficient supplies are not arranged. Except for a few cities, almost all have the problem of shortage of power supply. Mumbai used to have comparatively more reliable power supply, almost uninterrupted, but even this business capital of the country, quite often gets into the constraint of unavailability of power to meet the full requirement.

  • The second tier cities of the country including a number of State capital cities have much bigger challenges. Most of them have to live with load shedding in several areas ranging between 2 hours to 6 hours. Third tier towns, i.e. towns other than the capital towns face more severe power shortage situations.

  • While talking of power supply in towns, the issue is not only limited to availability of power or lack of it. There are instances when availability of power may not be the constraint, yet power supply, in a reliable way, could be affected on account of poor distribution infrastructure, mismanaged maintenance or lack of consumer friendly approach. These issues, in fact, are as relevant to electricity supply as in the context of other energy segments such as petroleum fuel including cooking gas.

  • Thus, challenges of energy supply, in brief, cover (a) severe mismatch between demand and supply, (b) likely continuing mismatches between demand and supply over a long period of time in view of emerging economic development activities, economy's growth projections and modern life styles, (c) existing and, most likely, continuing constraints on account of fuel supplies, (d) several deficient areas in the manner supply of energy is managed, and (e) whole range of Demand Side Management (DSM) issues. These challenges, therefore, have to be properly responded and addressed. Each has a potential to lend itself to have appropriate strategy to get partly, if not fully, resolved. We will, however, need to recognize that while we continue to concentrate on supply side management and try to catch up with ever increasing demands, we should equally, but perhaps more strongly, focus on efficient consumption which should include efficient technologies and efficient consumption habits.

These observations were followed by presentations by the panel of four eminent experts. They focused on (a) town planning and electricity consumption, (b) petroleum fuel, (c) coal sector issues and (d) demand side management. Some of the important conclusions arising out of presentations and deliberations could be summarized as given below:

  1. Investment in energy infrastructure must be stepped up. Even though we succeed in bringing about visible improvements through various energy efficiency measures, it is unlikely that in the wake of increasing demands we will ever catch up and be able to eliminate the mismatch between demand and supply. Therefore, through public sector organizations and through public private partnerships, capacity expansions in each energy segment must not only continue but should be enhanced.

  2. Electricity supply in cities can be made reliable only if atleast about 50 to 60% of its requirement is through load centered generation. I recall, when we were planning for meeting the requirement of Delhi especially for the Common Wealth Games in 2010, in the Ministry of Power, we evolved an approach and came to the conclusion that in important metros and for strategic locations, it would be essential that substantial portion of their requirements are met locally. Pit head power stations, as a concept are unexceptional, yet for reliable power supply to the city, the local generation can enable islanding of the local grid in times of crises. It is precisely for these reasons that it was decided that the needs of the capital city could be met through expansions of NTPC's Dadri Power Station, Badarpur Power Station, Power Station to be set up at Jhajhar in Haryana and a few other power stations to be developed on gas in the capital city itself. Similar approach is needed for other large cities to ensure better reliability of power supply. About 60% of requirements, when met through local generation, will take care of essential needs in times of grid disturbances.

  3. While it is important to create additional capacities, it is more important to ensure that existing capacities deliver at their optimum level. There are many power stations which do not perform at the level which they are expected to. Better maintenance and improved operational practices should lead to better availability of plant and machinery leading to higher power generation and capacity utilization.

  4. While generating power, efficiency of generation is important. More efficient technologies and better operational practices will lead to lower inputs of energy ingredients like coal, oil, gas etc. There are a large number of power stations which perform very poorly in respect of these parameters. In case of Delhi as also many other cities, these situations are very common. There is considerable scope for improvement.

  5. While on the one hand our cities and other areas are faced with the problem of extreme shortages, we also have our transmission and distribution systems with very high incidence of technical and commercial losses. These need to be minimized. There are cities in the world which have succeeded in reducing their distribution losses to almost 5% or lower. In Delhi, six years back, we used to have distribution losses in the range of 50 to 60%. After privatization, though significant improvements have taken place, even now losses are still in the range of 20 to 35% in various companies and zones. Theft of electricity continues to be a cause of concern.

  6. Rampant inefficiencies in consumption of electricity pose serious problems. Price of power could be a crucial factor to determine the behaviour of consumers in so far as wasteful consumption of electricity is concerned. Highly subsidized systems of supplies could lead to carelessness and callousness in consumption. Appropriate regulatory interventions with full Governmental support could address this issue.

  7. When Indian cities are transforming into greater degree of modernization characterized by large self contained modern housing complexes, multi storey commercial buildings, large malls and multiplexes, if proper attention is not given at the time of planning and designing these buildings, energy could be the most obvious casualty. Development, so far, in Delhi and in other big cities do give us disturbing thoughts that we have been casual and careless in planning these developments. Many other aspects are, no doubt, being taken care of. But, it is doubtful whether proper and adequate attention is being paid by Designers and Architects from the point of view of energy efficiency in these buildings. Another aspect which is also lacking is one relating to sanctions and clearances for these buildings. Whether our Municipal Authorities have laid down any such requirements and whether this issue is being checked at the time of sanction is also doubtful. Energy efficient buildings with proper layout, design, material specifications, lighting systems and fixtures, heating/cooling arrangements and gadgets should be the accountability of Architects and no sanction should be given unless the designs meet these requirements.

  8. The Ministry of Power and Bureau of Energy Efficiency have recently notified Building Codes. These Codes require that such buildings, as require loads of 500 KW or more will need to comply with various desired specifications so that they consume optimum amounts of energy and electricity. These Codes are today not mandatory. Over a period of time they would become mandatory. In the intervening period it would be essential that our building Designers, Architects and Developers not only become conversant with these requirements but also they change their mindsets and get committed to comply with these requirements. Unless there is mass support to such important initiatives, reliable energy supply to cities could be a far cry. Even for buildings requiring lesser than 500 KW of load, it is equally important to adopt electricity conservation measures.

  9. Several State Governments have come out with Solar Heating Schemes with substantial support by way of financial incentives. If this is adopted by consumers in large numbers, it has good potential of making a significant dent in mitigating our energy demand - supply mismatch. If we could take a modest target of meeting, say 10 to 15% of our needs through solar system, it would create a major impact.

  10. Another initiative of Ministry of Power and Bureau of Energy Efficiency is the labeling programme, which aims at making the consumers aware about the energy efficient gadgets such as refrigerators, air conditioners, tube lights etc. A five star product/brand is supposed to be most efficient and a three star product least efficient, though cheaper in cost to start with. Unless we succeed in convincing our consumers at large that their purchase decision should not be guided only by the initial cost of purchase but also by the recurring expenditure that they will need to incur by way of electricity consumption and that an apparently costly product to start with may be cheaper for them if the electricity consumption is low, the communication on energy conservation will not be complete. Our success will lie in large number of our consumers asking about these facts and then taking an informed decision on their purchases. The silver lining is that it has started happening.

  11. Similarly, many State Governments, including Delhi, have come out with innovative schemes to motivate households and other consumers to switch over, from conventional lighting, to CFL systems. Not all of us know that CFL requires less than one fourth of electricity for the same light. This knowledge must percolate and permeate across the entire cross section of consumers. At present, not more than 5 to 10% of consumers have shifted to CFL. LED lighting is the future technology. It will require less than 10% of electricity as compared to conventional lighting but will cost more. In this case Governmental initiatives are required to enlarge the areas of operations, encourage manufacturing facilities, so that prices of LED come down and in next 5 to 10 years LED is adopted in our lighting sector in a big way.

  12. Energy supply in the transport sector has become a serious cause of concern, and the problem can get even worse in coming years. As mentioned earlier, we have deteriorated in our performance so much so that our dependence on import is almost 80%. A twin strategy could work - (a) enhanced domestic production as best as possible. So far our performance on this score has been far from being satisfactory, (b) demand side management has to receive much greater attention because on supply side no major and radical improvement is likely in short and medium terms.

  13. Our transport strategy has to have a greater shift from private transport to public transport. Large scale sale of cars needs to be disincentivised in favour of larger, better and more comfortable public transport systems, such as metros and buses including a fleet of luxury coaches. Low priced Nano could cause major problems when they come on roads in large numbers, both in respect of fuel shortage as also traffic problems.

  14. Even if we have to continue with the private transport system, which perhaps we may need to, there has to be a definite strategy for encouraging more fuel efficient vehicles. Disincentivising SUV's could definitely be a strategy worth considering. For the existing vehicles, what changes need to be made so that they also become more fuel efficient will also need to form a part of our transport strategy.

  15. Long term research and development should aim at alternate fuels leading to lesser dependence on import for operating and managing our transport system.

As per UN Human Development Report 2005, UNFPA, as reported by ADB, "By 2010, fourteen of world's twenty five mega cities (with population over 10 million) will be in Asia, and by 2020, Delhi, Mumbai and Kolkata's populations are projected to grow to 25.83 million, 25.97 million and 18.54 million respectively". Challenges for urban energy supply are enormous and daunting. Existing Indian cities have to go a long way. Urbanisation will lead to creation of new towns, and it is necessary. Not increasing energy supply and consumption is not a solution. Because, that will put a brake on growth, that will deprive India to have modern cities and modern living. Therefore, the challenge lies in modernizing our cities, increasing energy supply and consumption needed for enhancing the standards of our cities, and improving the quality of life of our people. But, at the same time, greater challenge lies in how we do all these in an efficient fashion. Supply side management poses its own problems, issues, constraints and challenges, but they are not insurmountable. If other countries have done, we can also do. But perhaps bigger problem for us is how to make our society responsive to the need of energy efficient decisions, habits and actions. It is here where the skill of all those entrusted with the responsibility of managing energy lies.