Electricity generation in - In the Aftermath of the Japanese nuclear disaster

Chavva Abhinav Kalyan ETH Zurich Energy Economics and Policy 20th April, 2011

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Table of Contents

Introduction…………………………………………………………………………………...……...3

Electricity generation in India over the years……………………………………………………..3

Role of Nuclear energy in Electrifying India……………………………………………………....5

Dependence on …………………………………………………………………………….….7

Solutions for the short-term…………………………………………………………………..…… .9

Improvement in operational efficiency of the coal companies…………………….……9

Strengthening of logistics in coal distribution…………………………………….…… . 10

Focusing on technology for future…………………………………………………….….10

Long term solutions-………………………………………………………….10

Solar energy………………………………………………………………………………...11

Wind Energy………………………………………………………………………………...11

Biogas………………………………………………………………………………………..11

Conclusion…………………………………………………………………………………………...12

Bibliography………………………………………………………………………………………….13

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Introduction:

Electricity demand in increasing rapidly, and the 830 billion kilowatt hours produced in 2008 was triple the 1990 output, though still represented only some 700 kWh per capita for the year. With huge transmission losses, this resulted in only 591 billion kWh consumption. Coal provides 68% of the electricity at present, but reserves are limited. Gas provides 8%, hydro 14%. The per capita electricity consumption figure is expected to double by 2020, with 6.3% annual growth, and reach 5000-6000 kWh by 2050. Nuclear energy has been thought of as a major source to meet the ever increasing demands of this economy that is expected to grow consistently at 9% GDP over the next two decades. The Indian Government has made great strides in the regard through the US- India Civil Nuclear Agreement signed in 2008. The framework for this agreement was a July 18, 2005 joint statement by Indian Prime Minister and then U.S. President George W. Bush, under which India agreed to separate its civil and military nuclear facilities and place all its civil nuclear facilities under International Atomic Energy Agency (IAEA) safeguards and, in exchange, the United States agreed to work toward full civil nuclear cooperation with India.

However, the recent incidents of nuclear meltdown in Japan has raised serious questions about the spread of Civil Nuclear energy all around the world. Under the wake of these incidents, the Indian Government has put the development of all the current Nuclear power plants on hold. The only other viable source that can replace is thermal power. This paper is intended to analyse the effects of moratorium on Nuclear power on the consumption of coal in the short-run. Also, other viable sources of electricity generation would be discussed.

Electricity Industry in India over the years.

The electricity sector in India has grown rapidly from 1990 onwards. At the end of Oct. 2010, the installed power generation capacity of India stood at 171926.40 MW, while the per capita energy consumption stood at 733.54 KWh(2008-09). The Indian government has set an ambitious target to add approximately 78,000 MW of

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installed generation capacity by 2012. The total demand for electricity in India is expected to cross 950,000 MW by 2030.

According to World Energy Outlook(2009), the Electrification Rate in India is as low as 66.3%, which is one of the lowest in and the estimated population of the country without electricity is 403.7 million.

A KPMG report in 2007 said that India needed to spend US$ 120-150 billion on power infrastructure over the next five years, including transmission and distribution (T&D). It said that T&D losses were some 30-40%, worth more than $6 billion per year. A 2010 estimate shows big differences among states, with some very high,

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and a national average of 27% T&D loss, well above the target 15% set in 2001 when the average figure was 34%.

Due to the fast-paced growth of India's economy, the country's energy demand has grown an average of 3.6% per annum over the past 30 years. In December 2010, the installed power generation capacity of India stood at 165,000 MW and per capita energy consumption stood at 612 kWh. The country's annual energy production increased from about 190 billion kWh in 1986 to more than 680 billion kWh in 2006.

Additionally, India has committed massive amount of funds for the construction of various nuclear reactors which would generate at least 30,000 MW.

Role of Nuclear Energy in Electrifying India

The target since about 2004 has been for nuclear power to provide 20 GWe by 2020. Nuclear power supplied 15.8 billion kWh (2.5%) of India's electricity in 2007 from 3.7 GWe (of 110 GWe total) capacity and after a dip in 2008-09 this will increase steadily as imported uranium becomes available and new plants come on line. In the year to March 2010, 22 billion kWh was forecast, and for the 2010-11 year 24 billion kWh is expected. For 2011-12, 32 billion kWh is now forecast. Some 300 reactor-years of operation had been achieved by mid 2009. India's fuel situation, with shortage of fossil fuels, is driving the nuclear investment for electricity, and 25% nuclear contribution is foreseen by 2050, when 1094 GWe of base-load capacity is expected to be required. Almost as much investment in the grid system as in power plants is necessary.

In 2006 almost US$ 9 billion was committed for power projects, including 9.35 GWe of new generating capacity, taking forward projects to 43.6 GWe and US$ 51 billion. In late 2009 the government said that it was confident that 62 GWe of new capacity would be added in the 11th 5-year plan to March 2012, and best efforts were being made to add 12.5 GWe on top of this, though only 18 GWe had been achieved by the mid point of October 2009, when 152 GWe was on line. The government's 12th 5-year plan for 2012-17 was targeting the addition of 100 GWe over the period.

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including two imported 1000 MWe units at one site and two indigenous 700 MWe units at another.

Existing Nuclear Power Plant operations in India.

Reactor State Capacity (MWe) Commercial Operation Tarapur 1&2 150 1969 Tarapur 3&4 Maharashtra 490 2006 Kaiga 1&2 202 1999-2000 Kaiga 3&4 Karnataka 202 2007 Kakrapar 1&2 202 1993 Madras 1&2 202 1984 Narora 1&2 202 1991 1 Rajasthan 90 1973 Rajasthan 2 Rajasthan 187 1981 Rajasthan 3&4 Rajasthan 202 1999 Rajasthan 5&6 Rajasthan 202 2010 TOTAL INSTALLED CAPACITY 4385 MWe Table 1: Exisiting nuclear plants in India

Nuclear Power Reactors under construction

Reactor Capacity (MWe) Project Control Commercial Operation due Kundankulam 1 1000 NPCIL End 2011 Kundankulam 2 1000 NPCIL 2012 Kalpakkam PFBR 500 Bhavini 2012 Kakrapar 3 700 NPCIL 2015 Kakrapar 4 700 NPCIL 2016 TOTAL 3900 MWe Table 2: Nuclear power reactors under construction

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In addition to the above projects, about 28 new projects have been planned or strongly proposed which would add additional capacity of approx., 45000 MWe from 2016 to 2025.

But in the light of the nuclear meltdown in Japan, and constant opposition from the local public regarding the operation of Nuclear power plants in the country, the is seriously considering its expansion plans that it had proposed.

Dependence on Coal

Thermal Power

Current installed capacity of Thermal Power is 111324.48 MW which is 65.75% of total installed capacity.

 Current installed base of Coal Based Thermal Power is 92418.38 MW which comes to 53.75% of total installed base.

 Current installed base of Gas Based Thermal Power is 17706.35 MW which is 10.3% of total installed base.

 Current installed base of Diesel Based Thermal Power is 1199.75 MW which is 0.69% of total installed base.

As mentioned earlier, India relies on Thermal power for most of their electricity needs. Coal provides 68% of the electricity needs. India has the installed capacity and the infrastructure to produce more Thermal power and this might be a viable solution to meet the energy requirements of the country in the short-run.

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Quantity of electricity (MW) electricity of Quantity

Year (2009-2020)

Fig 1: Graph showing comparison of Thermal Power and Nuclear power

Fig 2: Graph showing the total electricity demand from Thermal, Nuclear power in India

As seen from the graph above, the shortage of Thermal power is increasing consistently, and the with the new moratorium likely to be imposed on Nuclear power, the overall shortage of electricity in India (represented by the green and violet) bars is steadily increasing. This poses a great problem to a country which is already faced with serious problems in infrastructure and power.

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Solutions for the short-term

As a result of exploration carried out up to the depth of 1200m by the GSI and other agencies, a cumulative total of 247.85 Billion tonnes of coal resources have been estimated in India as on January 1, 2005. With an annual consumption of about 430.6 million tonnes of coal, and growing consistently at 6-7% every year, the local coal reserves in India can be a viable short-term solution to supplement the shortage caused by stoppage of Nuclear power reactors.

Key Issues Facing the Coal Sector

The critical issues facing the coal sector are highlighted below:

• in India has been associated with poor employee productivity. The „output per miner per annum‟ in India varies from 150 to 2,650 tonnes compared to an average productivity of around 12,000 tonnes in the U.S. and Australia.

• No comprehensive solution to deal with the fly ash generated at coal power stations has been developed in India. Clean coal technologies (such as Integrated Gasification Combined Cycle where the coal is converted to gas) are available, but these are expensive and they need modification to suit Indian specifications

• There is a lack of an independent regulatory body to govern investments and operations in the sector. Amongst the regulatory body‟s core activities should include coal block allocation, mine approval and introduce competition in price determination.

Given the size of investment requirements and the level of political interference, the task of transforming the coal sector becomes formidable. In view of this, the following efforts can become the cornerstones of reform in the sector.

Improvement in operational efficiency of the coal companies

The public sector company, Limited (CIL), is in need of an organizational transformation inorder to gradually align its operating costs to international standards. Mining costs of CIL are at least 35 percent higher than those of leading coal-exporting countries such as Australia, Indonesia, and

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South Africa. To match international productivity levels, Coal India will need to invest in new technologies, improve processes for planning and execution of projects, and institutionalize a comprehensive risk management framework12.

Strengthening of logistics in coal distribution

The logistics infrastructure of India, such as ports and railways are congested. Inorder to increase freight capacity from the coal-producing regions to the demand centers in the northern and central parts of the country, it is necessary that the augments capacity. At present delays are created and inefficiency promoted because freight trains get a lower priority than passenger trains. Special freight corridors are required to raise speeds, cut costs, and increase the system's reliability. The Dedicated Freight Corridor ( DFC), linking the ports to the hinterland costing about INR 220 Billion, is the single largest project in this direction.

Focusing on technology for future

Even though India's numerous technology research institutes are working on energy-related R&D, there is a possibility that they are operating in a fragmented fashion. The Government may get improved recoveries on its investment by concentrating on only a few important technology areas. To start with, focus may be applied towards tighter emission standards and development of inexpensive clean-coal technologies - viz. extraction of methane from coal deposits.

Other alternative sources of Energy-Renewable energy

According to a research report published by Citigroup Global Markets, India is expected to add up to 113 GW of installed capacity by 2017. Further, renewable capacity might increase from 15.5 GW to 36.0 GW.

In July 2009, India unveiled a $19 billion plan to produce 20,000 MW of by 2020. In 2010, India's installed wind generated electric capacity was 13,064 MW.

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Solar energy:

India is both densely populated and has high solar insulation, providing an ideal combination for . India is already a leader in-wind power generation. In solar energy sector, some large projects have been proposed, and a 35,000 km² area of the Thar Desert has been set aside for solar power projects, sufficient to generate 700 to 2,100 gigawatts. In July 2009, India unveiled a $19 billion plan, to produce 20 GW of solar power by 2020.Under the plan, solar-powered equipment and applications would be mandatory in all government buildings including hospitals and hotels. On November 18, 2009, it was reported that India was ready to launch its under the National Action Plan on Climate Change, with plans to generate 1,000 MW of power by 2013.

Wind Energy:

The development of began in the 1990s, and has significantly increased in the last few years. Although a relative newcomer to the wind industry compared with Denmark or the US, India has the fifth largest installed wind power capacity in the world with an installed capacity of 11806.69 MW by the end of 2010. The Ministry of New and Renewable Energy (MNRE) has fixed a target of 10,500 MW between 2007–12, but an additional generation capacity of only about 6,000 MW might be available for commercial use by 2012.

Biogas:

Indian climatic conditions offer an ideal environment for biomass production. Bio- energy has remained critical to India‟s energy mix. The current potential of surplus agro and forest residues to energy is estimated at 16,881 MW along with an additional “waste-to-energy” potential of 2,700 MW. With the setting up of new sugar mills and the modernization of existing ones, the potential of Biogas is estimated at 5,000 MW. The cumulative installed capacity, of grid-interactive biomass and Bagasse cogeneration power was 2313.33

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MW only, as on 30.10.2010. In India, biomass-based power generation has attracted investments worth USD 120 million and generated more than 5,000 million units of electricity, besides providing an employment to more than 10 million man-days in rural areas. India ranks second in the world in biogas utilisation. The availability of biomass in India is estimated at about 540 million tones per year covering residues from agriculture, forestry, and plantations. By using these surplus agriculture residues, more than 16,000 MW of grid quality power can be generated. In addition, about 5,000 MW of power can be produced from sugar mills residues. Thus the estimated biomass power potential is about 21,000 MW.

Conclusion

In the light of the recent incidents of nuclear meltdown in Japan, India, like many of the countries around the world is seriously considering its existing plans of nuclear expansion to meet its growing electricity needs to support economic growth. In the short-run, India can look at Coal as a viable alternative by making use of its huge coal reserves. However, to achieve this, it needs to improve the efficiency and infrastructure of the domestic coal industry. This surge in coal production would not be environmentally sustainable and thus India should make considerable effort to reduce its dependence on Coal. Investing in Renewable energy would be a way forward as India does have a large potential in renewable energy and it would also be environment friendly and this might be a good long-term solution.

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Bibliography:

 Wikipedia: Electricity sector in India, http://en.wikipedia.org/wiki/Electricity_sector_in_India  Wikipedia: Renewable , http://en.wikipedia.org/wiki/Renewable_energy_in_India  Indian Power sector.com  Nuclear Power in India: http://www.world-nuclear.org/info/inf53.html  KPMG: India energy outlook, 2007  International Energy Agency: Electricity in India, 2002

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