Cement, Energy and Environment

INDIA 'S MISPLACED ENERGY AMB ITIONS The International Energy Agency (lEA) has rightly dubbed India's plan to become energy independent by 2030 as "very ambitious" and "idealistic". Announced with much fanfare last year by oil minister M. Veerappa Moily, the plan has not taken off the drawing board. In an interview, lEA executive director Maria van der Hoeven said that , "Where 300 million Indians are lacking access to electricity and where per-capita electricity consumption is one-fourth of the world's average, this is a very, very ambitious and huge challenge. It is not easy. There is a dependency in India on oil and gas imports and that's something that shouldn't be forgotten either." As India grows and lifts more citizens out of poverty and as income levels increase, the demand for energy will rise further. The demand side of the energy equation is obvious; it is the supply side that is clouded . Under Moily's plan , the target is to reduce crude oi l imports by 50% by 2020, 75% by 2025 and energy independence by 2030. For this to happen, India needs to undertake three difficult steps. First and foremost the country needs to get its energy pri cing right. India has not been able to do this and any steps that are taken occur with fits and starts. For example, in the last 10 years, there has been a marked resistance to increases in diesel and petrol prices. The corrective steps taken in the last 12 months have been due to fiscal considerations and not from the perspective of long-term planning for energy security. Second , India needs to get its energy mix right. At the moment, there is no coherence in its fuel and energy consumption mix. Imported fuels are being used largely in the transport sector (for example, diesel) but they are also used to generate energy (for example, LNG). This mix can be changed by increasing hydropower generation. In the last decade, hardly any effort has been made to increase the latter source . If India goes for hydropower in a big way, the problems associated with thermal power generation-shortage of domestically produced coal and dependence on imported coal- can be alleviated as wel l. This requi res close cooperation between environmental authorities, state governments and the power ministry. In recent years , the relationship between different stakeholders has turned adversarial and increasing India's hydropower generation looks like a distant dream. Finally, if India is to realize zero dependence then domestic production of crude oil has to go up greatly. For this, a host of steps are needed. Quickly speed up the Open Acreage Licensing Policy that will allow bidders to bid for blocks at any time of the year as compared with the current system of periodic bidding under the New Exploration and Licensing Policy (NELP). The NELP has only had moderate success. Further the design and administration of production sharing contracts (PSCs) needs to be revisited. Appropriate tax breaks can further boost the exploration effort. India has a roadmap for all this. The first part of the Vijay Kelkar committee report on "Roadmap for Reduction in Import Dependency in Hydrocarbon Sector by 2030" was released in December. So far, there has been no visible effort to implement the recommendations made by Kelkar. Energy security is a complex process that even organized countries find hard to achieve. The US managed a supply-side solution only after the discovery of large-scale shale hydrocarbon deposits. In Europe, a combination of demand management and alternative clean energy sources has tempered a reduction in foreign energy dependence. India has not tried any of these combinations. Nor probably does it have the political and organizational wherewithal required for the purpose. All it has done is to indulge in rhetorical exercises. The next government should apply its mind to this problem in all earnest. Courtesy: Fimi News Bulletin, 1 June, 2014, Pg. No. 3-4 COAL-FIRED POWER CAPACITY TO SURPASS 2 TW BY 2020 The global coal-fired power capacity is expected to grow to 2072.8 GW by 2020 , according to a new report from Grand View Research. Coal's low cost will drive Asian demand: The availability of and low costs of the fuel in coal-rich Asian countries will stay the key driver for the market, while rising electricity consumption - especially in emerging markets - is also expected to have a positive impact on demand. On the downside, regulatory action in Europe and North America, along with a push for cleaner energy sources, may hinder market growth in these regions over the next six years . Commercial usage dominate coal-fired power demand: In terms o f application, commercial uses dominated coal-fired power demand, accounting for 55.7% of the total market in 2014. Commercial applications are also expected to be the fastest growing application sector with a CAGR of 5% from 2014 to 2020. 22 ) r 4 '