With oil prices
shooting through the roof and Indias growing dependence on imported
oil, it is high time we look for viable solutions for our energy needs
beyond oil and coal. Nandhini Sundar explains why we should explore
many non-conventional sources for our daily energy needs.
The possibility of international oil prices touching $200 a barrel is
no longer an academic exercise, it is a stark reality faced by all
countries in the world. Though the international oil price has now
dropped to around $116 a barrel, only about three weeks ago it
was hovering around $145 a barrel, double compared to July last year.
But what is the solution to this? The world is presently unable to
contain its growing need for energy. The future will only see an
increase in consumption and not a fall. As for alternate sources that
are sustainable, while significant steps have been taken to explore
options, it has not reached the level where it can feed a major part of
the energy requirement that is currently oil centric.
Apart from alternate sources such as wind, solar and biomass, options
like conversion of coal to liquid fuels (CTL) have been explored but
these come with their own inherent flaws. For instance, CTL makes
commercial sense only under high oil prices and low coal prices. The
volatile nature of oil prices and the various techno-economic and
environmental issues associated with CTL makes its promotion
questionable.
Low but growing
In the Indian scenario, for quite some time now, biomass based fuels
have been actively encouraged as an alternate source of energy. Wind
and solar have their presence in specific places though it is not
significant enough to make an impact on the energy scene.
Currently, more than half our electricity generation is thermal based.
Our country’s extractable coal reserve stands at 50-71 billion tonnes
out of a world reserve of 250 billion tonnes. At the current rate of
extraction, this would be depleted by 2050, which means our electricity
generation would soon have to switch to alternate sources.
Presently, India’s total annual energy consumption is estimated at 572
Mtoe (million tonnes oil equivalent) and per capita energy consumption
at 531 Kgoe (kilograms oil equivalent), which is very low compared to
world standards. But with a GDP growth rate of seven to eight per cent,
our energy requirements are likely to grow at 5.6 to 6.4 per cent per
annum in the coming years, indicating a four fold increase over the
next 25 years.
The energy matrix
This calls for significant growth in our primary sources of energy
which can be challenging given their exhaustible nature. While the
extractable quantum of our coal reserves could run dry in 40 years, our
domestic oil and natural gas reserves are insufficient to meet even
present day requirements. In short, the only way out is to develop
alternate sources of energy. As these sources should be sustainable,
the pointers are towards renewable energy.
While our primary sources of energy are coal accounting for 51 per cent
of the total, power from hydro and nuclear sources are two per cent
each, oil accounts for 36 per cent and gas about eight per cent. The
grid interactive power installed capacity from renewable energy (RE) is
an insignificant 10,250 MW, of which wind energy constitutes 70 per
cent.
India has significant potential in wind energy, solar, small hydro and
biomass. But only a small percentage of the existing potential has so
far been tapped. For example, the installed capacity in wind energy is
only 8748 MW out of a potential of 45,000 MW.
Similar is the case with small hydro (up to 25 MW) with only 2045 MW
installed against an existing potential of 15,000 MW. Biomass
power/cogeneration is equally bad with the existing installed capacity
at 1324 MW against a potential of 21,000 MW. As for solar photo voltaic
power, the level of exploitation is pathetically low at 30 MW against a
potential of 50,000 MW (20 MW/sq km).
Terrific potential
India ranks fourth in the world in wind energy potential. As for solar
energy, with 300 clear sunny days per year in most parts of the country
and technological development lowering future cost of photovoltaic
cells to more commercially viable rates, India should be able to tap
huge amount of energy from the sun. Equally significant is biomass
based power generation, thanks to our vast agricultural base.
Besides the above sources of RE, options like tidal energy too hold
great potential for the future especially in a country like India with
a vast coastline which extends over 7,517 km.
Currently, tax holidays and incentives are extended to companies
involved in generating power using renewable energy source. A company
is exempt from paying tax for 10 consecutive years on the revenue
generated from the sale of power. It also enjoys accelerated
depreciation of up to 80 per cent. Carbon credit and a ‘Green’ tag are
added benefits for companies operating in the global market.
Yet, the irony is, RE continues to be a low tapped potential. So, what
is the reason for RE to remain unattractive even in the light of high
and volatile oil prices?
To begin with, many are unaware of the existing potential as well as
its commercial viability. RE is commonly viewed more as one that caters
to individual requirements than one to be tapped for sale.
Low awareness
Says Ramakumar Purushotham, Associate Vice President Energy Upstream,
Enzen Global Solutions, “Not many consider tapping RE for commercial
purpose. There is also a lack of multiple players in the field to
facilitate such an enterprise on a small scale, locally.”
According to him, individual players, even when aware of the potential
at their disposal as in biomass or wind energy, lack access to
facilitators to commission the project. Besides, the facility to enable
smaller individual players to hook on to the local grid for sale of
power thus generated, needs fine tuning.
Price differential between conventional and non-conventional sources of
energy too acts as a deterrent, preventing exploitation of RE to its
full potential. This is especially the case in the use of RE for
individual consumption.
Some limitations
For instance, average capital cost of generation of power through
thermal, hydro and nuclear is Rs 5.2 crs/MW. As against this, cost of
wind energy amounts to Rs 6.5 crs/MW, biomass at Rs 6-6.5 crs/MW, solar
at Rs 23-25 crs/MW and small hydro at Rs 4.7-5 crs/MW.
Each of the re sources too comes with its own inherent disadvantages.
Both wind and small hydro are seasonal. As for biomass, there is need
for logistics and efficient supply side management as otherwise the
unit can run into problems. However, the advantages are far greater
than the disadvantages. While both wind and solar have the advantage of
scalability, cost of raw material in RE is typically either
non-existent or insignificant. An added advantage is the fact that RE
can be decentralised, catering to specific local needs. Based on
specific local conditions, the relevant source of RE can be tapped. As
for long term commercial viability, RE projects have a pay back period
of five to seven years.
National policy
According to Ramakumar, these inherent advantages combined with tax
benefits drives down long term average cost of RE much below the
conventional sources. Again, given the localised nature of the
resource, in case of power, the transmission loss which is significant,
can be minimised to a large extent as it could be hooked on to the
nearest substation.
While the local options are aplenty and can meet the energy crisis to a
significant extent, there is a need for national policy that is more
detailed and accurate in gauging as well as utilising existing RE
potential.
While the estimated gross potential for wind energy for the country is
45,000 MW, the technical potential is only 18,000 MW. Here again, some
states have more potential while some have none.
While the current price differential between conventional sources and
RE can act as a deterrent, the fact remains that conventional sources
are fast depleting and their costs escalating. Unless RE is used to
supplement it to a significant extent, the present economics facing
conventional sources will soon become non-existent. Let us start
exploring renewable sources now, before India plunges into a energy
crisis.
The writer can be contacted on Email: nandy6488@yahoo.com
http://www.deccanherald.com/CONTENT/Aug112008/eb2008081083849.asp
