The Hindu Business Line : Powering the growth engine

It is important to focus on curbing wastage in the transport, industrial and residential sectors, even as efforts to operationalise other energy options continue.

Captive power plants running on naphtha are producing electricity at Rs 7 a unit, their costs having doubled over three years. Their installed capacity, at 22,500 MW, is about 15 per cent of India’s total power generation capacity; of this, 40 per cent runs on diesel or furnace oil. These facts reflect poorly not just on India’s electricity infrastructure, but also point to the limits to using petroleum fuels. The Eleventh Plan factors in an addition of 78,000 MW, of which 14,000 MW will be in renewables, but even if this target is met, India’s energy woes will not disappear, thanks to acombination of three factors — the rate of growth of the economy, rising fossil fuel prices and, what is generally ignored, inefficiencies in energy production and use.

On the supply side, there are no readymade alternatives in sight, renewable or otherwise, to the ever costlier fossil fuels. Each promising energy option comes with constraints — be it hydel, wind, solar, bio-fuels or nuclear energy — to which there are no simple solutions. Besides, technologies to extract ‘synthetic’ oil from sand, methane from coal and other forms of clean coal are yet to be used on a large scale. In this scenario, it is important to focus on curbing wastage in the transport, industrial and residential sectors, even as efforts to operationalise other energy options continue. According to the US Department of Energy, India’s energy demand grew at an average compounded annual rate of 6 per cent between 1980 and 2000, against the world average of 1.75 per cent. With the economy now growing at over 8 per cent, the country’s appetite for energy is set to grow at a higher rate at the current levels of energy efficiency. This will drive up the petroleum import bill, which touched $64 billion in 2007-08 as oil consumption surged by 8 per cent. However, there is no indication that the Government is exercised about demand management.

The Centre and the States could learn a thing or two from the Maharashtra State Electricity Board, which has entered into an arrangement with the Lawrence Berkeley National Laboratory, University of California, to learn from California’s experience in demand management after the blackouts of 2001. While the SEBs work on cutting wastages in agriculture, industry and households on the basis of informed inputs, the transport sector needs special attention. India’s transport sector, which accounts for over a fourth of the country’s total energy consumption, is set to account for most of the increase in petroleum demand between 2004 and 2030. Besides pursuing technologies such as hybrid cars, mass transport systems should be promoted. If India cannot reduce its energy intensity in the short run, its growth plans will run aground.

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