Assignment for PGPM 24


INTRODUCTION Energy is an essential input for the economic development of a country in improving the quality of life of its people. For meeting the growing energy needs of the society at a reasonable cost, power development in India started at the end of the 19th century. To contribute significantly to the overall energy availability in the country, sustained attention is being given to develop and promote non conventional, alternate and renewable sources of energy as also for the development of nuclear energy. Today the installed power generation capacity in the country has increased from 1,!"" #$ in 19!% to 1,"!,91%.&" #$ at the end of '""1 "' comprising '(,'(1.'' #$ hydro, %!,!').)' #$ thermal *including gas and diesel+, 1,&"%.!( #$ wind and '%'" #$ nuclear. In spite of this increase in installed capacity, the energy shortage in India is of the order of appro,imately 9 per cent. The pea- shortage of power averages almost 1& per cent. The per capita consumption of the power in the country is only .&" units much below the consumption levels in development countries. In order to provide power to all by '"1', additional capacity of 1"",""" #$ will have to be set up in the ne,t decade. /apacity addition plans for !1,11" #$ have been finali0ed 1tate wise and pro2ect wise for the Tenth 3lan period *'""' "%+. In the central sector, 1tate sector and private sector the capacity addition would be '',).' #$, 11,1&% #$ and %,1'1 #$ respectively. For the year '""' "., a capacity addition programme of !1"9.1" #$ has been fi,ed. The power generation during '""1 "' was &1&.'%1 456s comprising !''.""1 456s thermal, %..99' 456s hydro and 19.'%) 456s nuclear. The target of power generation for '""' ". has been fi,ed at &!&.&&' 456s. The plant load factor has shown a steady improvement over the years and has improved from &'.) per cent in 199" 91 to (9.9 percent in '""1 "'. To achieve the target of providing power to all by '"1', the /enter has initiated a number of steps with the help of the 1tates. These include a programme initiated by the power #inistry for accelerated and planned hydro development after an overall assessment and prioriti0ation with a view to
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Assignment for PGPM 24

harness an unharnessed estimated hydro potential of more than 1&",""" #$ and attain the ideal hydro thermal mi, ratio of !"7(" which is presently '&7%". In central sector, various hydro schemes with a capacity of over ')""" #$ are under different stages of development. The outlay for power sector during the 8th 3lan period was enhanced to about 9s. 1!.,""" crore which is appro,imately '1! per cent higher than I8 plan :utlay. For a phased development of ;ational 3ower <rid a number of schemes have been planned such as interconnections lin- to the northern, western, southern and eastern regions in addition to the e,isting interconnections. Today the inter regional power transfer capacity is !,)&" #$. It has been planned to enhance to the level of .",""" #$ by '"1' through various interregional lin-s along with transmission highways. 5nited load dispatch centers are being commissioned for northern and southern regions to help regulate the respective grids. The government is pursuing reform measured e,peditiously. The /entral Electricity 9egulatory /ommission, formed under the previsions of Electricity /ommission =ct, 199) has been made fully functional. The commission has passed orders on availability based tariff and has also notified terms and conditions for determination. 2.0 INDIA’S ENERGY SECTOR Energy has been universally recogni0ed as one of the most important inputs for economic growth and human development. There is a strong two way relationship between economic development and energy consumption. :n one hand, growth of an economy, with its global competitiveness, hinges on the availability of cost effective and environmentally benign energy sources, and on the other hand, the level of economic development has been observed to be reliant on the energy demand. 2.1 An Overview

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Assignment for PGPM 24

The energy intensity of India is over twice that of the matured economies, which are represented by the :E/> *:rgani0ation of Economic /o operation and >evelopment+ member countries. India6s energy intensity is also much higher than the emerging economies?the =sian countries, which include the =1E=; member countries as well as /hina. @owever, since 1999, India6s energy intensity has been decreasing and is e,pected to continue to decrease. The indicator of energyA<>3 *gross domestic product+ elasticity, that is, the ratio of growth rate of energy to the growth rate <>3, captures both the structure of the economy as well as the efficiency. The energyA<>3 elasticity during 19&.A'""1 has been above unity. @owever, the elasticity for primary commercial energy consumption for 1991A'""" was less than unity *3lanning /ommission '""'+. This could be attributed to several factors, some of them being demographic shifts from rural to urban areas, structural economic changes towards lesser energy industry, impressive growth of services, improvement in efficiency of energy use, and inter fuel substitution. The energy sector in India has been receiving high priority in the planning process. The total outlay on energy in the Tenth Five year 3lan has been pro2ected to be !.". trillion rupees at '""1B"' prices, which is '(.%C of the total outlay. =n increase of )!.'C is pro2ected over the ;inth Five year 3lan in terms of the total plan outlay on energy sector. The <overnment of India in the mid term review of the Tenth 3lan recogni0ed the fact that under performance of the energy sector can be a ma2or constraint in delivering a growth rate of )C <>3 during the plan period. It has, therefore, called for acceleration of the reforms process and adoption of an integrated energy policy. In the recent years, the government has rightly recogni0ed the energy security concerns of the nation and more importance is being placed on energy independence. :n the eve of the &9th Independence >ay *on 1! =ugust '""&+, the 3resident of India emphasi0ed that energy independence has to be
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3 Coal Page 4 of 34 . >espite the overall increase in energy demand. This has led to increased reliance on imports to meet the energy demand. 9esource augmentation and growth in energy supply has not -ept pace with increasing demand and. per capita energy consumption in India is still very low compared to other developing countries. other forms of commercial energy of a much higher quality and efficiency are steadily replacing the traditional energy resources being consumed in the rural sector.&C of the world commercial energy demand in the year '"". per cent between 19)1 and '""1 *3lanning /ommission '""'+. @owever. which include fuelwood. India6s energy policy.haustible and renewable energy resources. >espite increasing dependency on commercial fuels. India6s energy consumption has been increasing at one of the fastest rates in the world due to population growth and economic development. and India must be determined to achieve this within the ne. oil.t '& years. @owever. therefore. and natural gas are the three primary commercial energy sources. till the end of the 19)"s. 2.Assignment for PGPM 24 the nation6s first and highest priority. was mainly based on availability of indigenous resources. India is well endowed with both e.. a si0eable quantum of energy requirements *!"C of total energy requirement+. has been changing over a period of time. India ran-s fifth in the world in terms of primary energy consumption. 3rimary commercial energy demand grew at the rate of si. India6s primary energy mi.2 Demand and supply scenario In the recent years. 2. including human and draught animal power. especially in the rural household sector. crop residue. and animal waste. India continues to face serious energy shortages. accounting for about . /oal was by far the largest source of energy. is met by non commercial energy sources. /oal..

the e. Through sustained increase in investment.C and pea. The country e.%C during '"".epal. and cement sector *#o/ '""&+. In absolute terms. The country has made significant progress towards the augmentation of its power infrastructure. 4hutan. and .demand increased from (1 <$ *gigawatts+ to )) <$ over the same time period.ceeds the supply. =bout %&C of the coal in the country is consumed in the power sector *#o/ '""&+.1 >ecember 19&" to 11) !19 #$ as on #arch '""& */E= '""&+.B"! */E= '""&+.. and cement are dependent on coal.ports insignificant quantity of coal to the neighbouring countries.)' #T in '""!B"&. it continues to be one of the most important sources for meeting the domestic energy needs. the installed power capacity has increased from only 1%1. >espite this increase in production.perienced energy shortage of %. #$ *megawatts+ as on . e. was &1"% <$h *gigawatt hours+ in 19&" and increased to &(& 1"' <$h in '"".9" 4-$h *billion -ilowatt hours+ during 199&B9( to &91 4-$h *energy+ by the year '""!B"&. Though.9( #T.isting demand e. It accounts for &&C of the country6s total energy supplies. The all India gross electricity generation. steel. 2. 4eing the most abundant fossil fuel in India till date. The development of core infrastructure sectors li-e power. Energy requirement increased from . the growth inelectricity consumption over the past Page 5 of 34 . This shortage is li-ely to be met through imports mainly by steel.Assignment for PGPM 24 India now ran-s third amongst the coal producing countries in the world.cluding that from the captive generating plants.4 ower =ccess to affordable and reliable electricity is critical to a country6s growth and prosperity. India e. India currently faces coal shortage of '. #ost of the coal production in India comes from open pit mines contributing to over )1C of the total production while underground mining accounts for rest of the national output *#o/ '""&+. power. and pea.shortage of 11. production of coal increased from about %" #T *million tonnes+ *#o/ '""&+ in early 19%"s to .B"!. The traditional buyers of Indian coal are 4angladesh..

B"!.9( 4/# during the same period.B"! *#o3.< terminals have been planned in the country. imports of other petroleum products increased from 1 #T to %. it is a matter of concern that per capita consumption of electricity is among the lowest in the world. India6s natural gas consumption has been met entirely through domestic production in the past.9% #T3= *million tonnes per annum+. mainly required for the core sectors of the economy.(( #T during 19%"B%1 to )1 #T by '"". as on 1 =pril '""!. #T during the same period. Industries such as power generation. apart from encouraging domestic production. 4esides.atural gas demand has been growing at the rate of about (.B"!. @owever..ports of petroleum products went up from around ".! 4/# *billion cubic metres+ to .( -$h *-ilowatt hours+ in 19&" to &9' -$h in '"". The e.& #T during 19%"B%1 to 1! #T by '"". this increase could be due to high growth of the service sector and efficient use of electricity..) #T in '"". The production of crude oil in the country has increased from (.% #T during 19%"B%1 to 11" #T in '"". India6s consumption of natural gas has risen faster than any other fuel in the recent years. fertili0er.pected gas shortages. and petrochemical production are shifting towards natural gas. was 1'&. 3er capita electricity consumption rose from merely 1&. The production of natural gas increased from 1.< '""!b+. the import of D. The quantity of crude oil imported increased from 11. 2. poor quality of power supply and frequent power cuts and shortages impose a heavy burden on India6s fast growing trade and industry. #oreover. The production of petroleum products increased from &..B"!.!C of the world6s proven reserves of crude oil. To bridge this gap.< terminals have already been Page 6 of 34 ..Assignment for PGPM 24 decade has been slower than the <>36s growth.B"! */E= '""&+.)' #T in 19%"B%1 to . 1everal D. in the last !B& years. .< *liquefied natural gas+ is being considered as one of the possible solutions for India6s e.5 Oil and Na!ural Gas The latest estimates indicate that India has around ". @owever.&C during the last 1" years. The refining capacity. Two D. there has been a huge unmet demand of natural gas in the country.1.

Page 7 of 34 .B"!. India is the world6s fifth largest producer of wind power after >enmar-. Installed combined electricity generation capacity of hydro and wind has increased from 19 19! #$ in 1991B9' to . <reater reliance on renewable energy sources offers enormous economic. small hydro. including solar photovoltaic. e.'C. Today. 1pain.< Terminal of & #T3= *million tonnes per annum+ at >ahe2.pected to about !1' #T:E *million tonnes oil equivalent+ and &&! #T:E in the terminal years of the Tenth and Eleventh 3lans. There is a significant potential in India for generation of power from renewable energy sources?. is currently assessed at 19 &"" #$ including . biomass. and solar energy. using technologies for distributed power generation. social.. $ith a targeted <>3 growth rate of )C during the Tenth Five year 3lan. :ther renewable energy technologies. <ermany. and a quest for improved quality of life.pected to grow at &. >riven by the rising population. an in principle agreement has been reached with Iran for import of & #T3= of D. the energy demand is e. The potential for power production from captive and field based biomass resources. In addition. the total primary energy consumption is e.Assignment for PGPM 24 commissioned7 *1+ 3etronet D. and the 51=. small hydro.panding economy.1 99& #$ in '"". 2. solar thermal.<. and *'+ D. and biomass power are also spreading.6 Renewa"le Ener#y Sources 9enewable energy sources offer viable option to address the energy security concerns of a country.&C during this period *#oF '""&+. 2. respectively *3lanning /ommission 1999+. and environmental benefits.&"" #$ of e.7 $u!ure scenario Increasing pressure of population and increasing use of energy in different sectors of the economy is an area of concern for India.< import terminal at @a0ira. with a compound growth rate of !. The country has an estimated 1@3 *small hydro power+ potential of about 1& """ #$.E1 '""&+.portable surplus power from bagasse based cogeneration in sugar mills *#. India has one of the highest potentials for the effective use of renewable energy.

thus requiring an additional &9 """ #$ of coal fired capacity. India6s gas consumption to grow at an average annual rate of &. There is.pected to increase by '.1 Genera!ion India has the fifth largest generation capacity in the world with an installed capacity of 1&' <$ as on . thereby reaching '.0 O%E SECTOR & RESENT SCENARIO 3. 3.)"" -$h+.&C per annum during the same time. The world average stands at '. The Indian government has set ambitious goals in the 11th plan for power sector owing to which the power sector is poised for significant e. which is about ! percent of global power generation." 1eptember '""9. @owever. The top four countries.. it has been estimated that need based capacity Page 8 of 34 .. this is fairly low when compared to that of some of the developed and emerging nations such 51 *F1&. 51.'""& *EI= '""&b+ pro2ects.pected to increase by .) trillion cubic feet by '"'& with the share of electric power sector being of %1C by that time. Eapan.1C. an urgent need to conserve energy and reduce energy requirements by demand side management and by adopting more efficient technologies in all sectors. :il demand in India is e. vi0.'C per annum during '""'A'&.1& #T over the forecast period. The use of coal for electricity generation in India is e. The average per capita consumption of electricity in India is estimated to be %"! -$h during '"") "9."" -$h. /oal consumption is e.pansion. In order to provide availability of over 1""" units of per capita electricity by year '"1'. /hinaand 9ussia together consume about !9 percent of the total power generated globally.Assignment for PGPM 24 The International Energy :utloo. therefore. In India. It is quite apparent that coal will continue to be the predominant form of energy in future. imports of petroleum and gas would continue to increase substantially in absolute terms. slightly less than ("C of the pro2ected growth in coal consumption is attributed to the increased demand of coal in the electricity sector while the industrial sector accounts for most of the remaining increase. @owever.""" -$h+ and /hina *F1. involving a large energy import bill.pected to increase to ..

Transmission and >istribution units and privati0ation of power distribution has been initiated either through the outright privati0ation or the franchisee routeH results of these initiatives have been somewhat mi.%.Assignment for PGPM 24 addition of more than 1"".ational 3ower <rid in the country by '"1' with close to '"".ed. this is indeed an ambitious ob2ective for the country.%"" #$ of inter regional power transfer capacity.3 Dis!ri"u!ion $hile some progress has been made at reducing the Transmission and >istribution *TG>+ losses. at appro.pected to augment.2 Transmission The current installed transmission capacity is only 1.0 GRO%T' O$ O%ER SECTOR Page 9 of 34 . 4.t ) 1" years.%&" #$. /onsidering that the current inter regional power transfer capacity of '". the corresponding investments in the transmission sector is also e.""" #$ would be required. percent. In order to address some of the issues in this segment. The #inistry of 3ower plans to establish an integrated . $ith focus on increasing generation capacity over the ne. percent of the total installed generation capacity. reforms have been underta-en through unbundling the 1tate Electricity 4oards into separate <eneration.. 3. the current loss levels still pose a significant challenge for distribution companies going forward.imately . $hile there has been a slow and gradual improvement in metering.""" #$ generation capacities and . billing and collection efficiency. these still remain substantially higher than the global benchmar-s. This has resulted in massive addition plans being proposed in the sub sectors of <eneration Transmission and >istribution 3.

In >ecember 19&" about (. =bout )&C of the villages have been electrified e. 19!). country has made a tremendous progress.. which is about '. In the field of 9ural Electrification and pump set energisation. In the /onstitution of India IElectricityI is a sub2ect that falls within the concurrent 2urisdiction of the /entre and the 1tates. The concept of operating power systems on a regional basis crossing the political boundaries of states was introduced in the early si. which was introduced.C of the installed capacity in the 5tilities was in the private sector and about . the electricity generation increased from about &.uclear power development is at slower pace.ties.Assignment for PGPM 24 The power sector has registered significant progress since the process of planned development of the economy began in 19&". The Industrial 3olicy 9esolution of 19&( envisaged the generation.clusively in the public sector. the power supply industry has been under constant pressure to bridge the gap between supply and demand. where it is difficult to e.orth Eastern states. :ver the years *since 19&"+ the installed capacity of 3ower 3lants *5tilities+ has increased to )9"9" #$ *. 3ower development is the -ey to the economic development. #$ in 19&". =s a result of this 9esolution and facilitated by the Electricity *1upply+ =ct. @ydro power and coal based thermal power have been the main sources of generating electricity.ties..cept far flung areas in .1.9)+ from meagre 1%1.tend the grid supply. the electricity industry developed rapidly in the 1tate 1ector.) -$h in 199% 9).tensive use of electricity in all the sectors of economy in the successive five years plans. In spite of the overall development that has ta-en place. The power 1ector has been receiving adequate priority ever since the process of planned development began in 19&".1 billion units to !'" 4illion units A )' fold increase. The per capita consumption of electricity in the country also increased from 1& -$h in 19&" to about . 1imilarly. 9emar-able growth and progress have led to e. transmission and distribution of power almost e. registering a &'d fold increase in !) years.%C was in the public sector. in late si. .. The 3ower 1ector has been getting 1) '"C of the total 3ublic 1ector outlay in initial plan periods. times. The Elec!rici!y (Supply) Page 10 of 34 .

the <overnment of India got itself involved in a big way in the generation and bul. The Na!ional !0ermal ower Corpora!ion (NT C) and Na!ional 'ydro1elec!ric ower Corpora!ion (N' C) were set ower Corpora!ion up for these purposes in 19%&.transmission of power to supplement the efforts at the 1tate level and too. In addition the Electricity *1upply+ =ct also allowed from the beginning the private licensees to distribute andBor generate electricity in the specified areas designated by the concerned 1tate <overnmentB1E4. Transmission Corpora!ion (N TC) was set up in 19)9. 19%! %9.and financing norms of the performance of the electricity industry in the country.. the Fifth 3lan onwards i. the various 1tates played a predominant role in the power development. provides an elaborate institutional frame wor. #ost of the 1tates have established 1tate Electricity 4oards. The =ct also provided for creation of central generation companies for setting up and operating generating facilities in the /entral 1ector.e.-. 1ubsequently two more power generation corporations were set up in 19)) vi0. The corporation was Page 11 of 34 . From. In some of these 1tates separate corporations have also been established to install and operate generation facilities. >uring the post independence period. Te0ri 'ydro Developmen! Corpora!ion (T'DC) andNa!0pa 20a3ri ower Corpora!ion (N2 C).upon itself the responsibility of setting up large power pro2ects to develop the coal and hydroelectric resources in the country as a supplementary effort in meeting the country6s power requirements.orth East. To construct. In the rest of the smaller 1tates and 5Ts the power systems are managed and operated by the respective electricity departments. TheCen!ral Elec!rici!y Au!0ori!y constituted under the =ct is responsible for power planning at the national level. In a few 1tates private licencees are also operating in certain urban areas. Nor!01Eas!ern Elec!ric (NEE CO) was set up in 19%( to implement the regional power pro2ects in the . The =ct envisaged creation of S!a!e Elec!rici!y /oards (SE/s) for planning and implementing the power development programmes in their respective 1tates. operate and maintain the ower inter 1tate and interregional transmission systems the Na!ional renamed as O%ER GRID in 199'.Assignment for PGPM 24 Ac!* +.

/onsiderable emphasis has been placed on attracting private investment and the ma2or policy changes have been announced by the <overnment in this regard which are enumerated below7 The Electricity *1upply+ =ct. 19!) was amended in 1991 to provide for creation of priva!e #enera!in# companies for setting up power generating facilities and selling the power in bul.capacity addition so as to avert a severe power crisis.Assignment for PGPM 24 The policy of liberalisation the <overnment of India announced in 1991 and consequent amendments in Electricity *1upply+ =ct have opened new vistas to involve private efforts and investments in electricity industry. the policy for 9e#a power pro:ec!s of capacity 1""" #$ or more and supplying power to more than one state introduced. 3olicy guidelines for private sector participation in the renova!ion 8 modernisa!ion of power plants issued in 199&. The #ega pro2ects to be set up in the regions having coal and hydel potential or in the coastal regions based on imported fuel. Diquid fuel lin-ages *. Page 12 of 34 .aphtha+ were approved for about 1'""" #$ 3ower plant capacity. The non traditional fuels li-e condensate and orimulsion have also been permitted for power the grid or other persons. In 199&. In 199& <:I came out with li7uid 6uel policy permitting liquid fuel based power plants to achieve the quic. 5p to 0undred percen! (+445) 6orei#n e7ui!y participation can be permitted for pro2ects set up by foreign private investors in the Indian Electricity 1ector. Financial Environment for private sector units modified to allow liberal capital structuring and an attractive return on investment. The #ega policy has since been refined and ower Tradin# Corpora!ion ( TC) incorporated recently to promote and monitor the #ega 3ower 3ro2ects. 3T/ would purchase power from the #ega 3rivate 3ro2ects and sell it to the identified 1E4s. =dministrative G Degal environment modified to simplify the procedures for clearances of the pro2ects.

passed with a view to ma-e transmission as a separate activity for inviting greater participation in investment from public and private sectors. for setting up of Independent 9egulatory bodies both at the /entral level and at the 1tate level (Amendmen!) Ac!* +. to determine the tariff payable for use by the transmission facilities to regulate power purchase and procurement process of transmission utilities and distribution utilities.199). the /T5B1T5 would recommend to the /E9/B1E9/ for issue of transmission licence to the private company. to regulate the tariff of generating companies.Assignment for PGPM 24 <:I has promulgated Elec!rici!y Re#ula!ory Commission Ac!* +. The /E9/ has been constituted on '!.%. other regulatory functions would also be assigned to 1E9/s. other than those owned or controlled by the /entral <overnment. The main function of the /E9/ are to regulate the tariff of generating companies owned or controlled by the /entral <overnment.. :n selection of the private company. The Cen!ral Elec!rici!y Re#ula!ory Commission (CERC) and the S!a!e Elec!rici!y Re#ula!ory Commission (SERCs) at the /entral and the 1tate levels of power and to aid G advise the /entral <overnment in formulation of tariff policy. to regulate inter state bul. as and when each 1tate <overnment notifies. Page 13 of 34 . to promote competition.. The main functions of the 1E9/ would be to determine the tariff for electricity wholesale bul-.. grid or retail. if such generating companies enter into or otherwise have a composite scheme for generation and sale of electricity in more than one 1tate to regulate the inter state transmission of energy including tariff of the transmission utilities. The Elec!rici!y . The participation by private sector in the area of transmission is proposed to be limited to construction and maintenance of transmission lines for operation under the supervision and control of /entral Transmission 5tility */T5+B1tate Transmission 5tility *1T5+. efficiency and economy in the activities of the electricity industries etc.. 1ubsequently.

/oal continues to be the main source of for thermal generation.0 IN<EST9ENT IN O%ER SECTOR 5. generating companies etc. • $ith the identification of new gas sources and availability in international mar-et. The ma2or thrust in thermal generation could be fructified through significant 2ump in unit si0e and steam parameters resulting in higher efficiencies and better economics.1 • • • Inves!men! Oppor!uni!ies in T0ermal ower Developmen! %"C of the countryJs total installed capacity and more than )"C of the total electricity generation is contributed by thermal power. The function of the S!a!e Transmission U!ili!y shall be to underta-e transmission of energy through intra state transmission system and discharge all functions of planning and coordination relating to intra state transmission system with /entral Transmission 5tility. The pro2ected future unit si0e is )"" 1""" #$ with still higher super critical parameters which will have low cost of generation. there is renewed thrust in gas based combined cycle plants. 5. generating companies etc. /entral <overnment. 1uch //<T plants are increasingly becoming techno economical viable with advancements in efficient gas turbine technologies and their environmental benefits. 199) provides for creation of /entral and 1tate Transmission utilities.Assignment for PGPM 24 The Electricity Daws *=mendment+ =ct. The largest unit si0e in the country at present is &"" #$ and ("" #$ super critical units are in the pipeline. 3ower <rid /orporation of India Dimited will be /entral Transmission 5tility. 1tate <overnments. 1tate <overnments. higher efficiency and are environment friendly. The function of the Cen!ral Transmission U!ili!y shall be to underta-e transmission of energy through inter state transmission system and discharge all functions of planning and coordination relating to inter state transmission system with 1tate Transmission 5tilities. Page 14 of 34 .

scenario provides for the opportunity for any generating company to establish.3 Inves!men! Oppor!uni!ies in Transmission Sc0emes Page 15 of 34 . • Thrust to 9G# B life e.1"""" crores. has initiated advance action for ta-ing up new hydro pro2ects. low cost indigenous fuel. all the /E= cleared pro2ects and ta-e steps to up date and obtain clearance for pending >391.Assignment for PGPM 24 • The post Electricity =ct '"". #$ from hydel pro2ects in the total capacity addition of !111".tension activities with large investment potential for improving the performance of old thermal power stations. 3romoting small and mini hydel pro2ects by simple design of turbines. availability of s-illed manpower.ecution. thus providing a free hand in setting up of a thermal generating plant.9. The <ovt. >39s for about .".""" #$ are under preparation for eventual implementation through both public G private sector agencies. The 1" 3lan *'""' "%+ is targeted towards &% units *1!'%" #$+ for 9G# wor-s and 1"( units *1"!1. 5. • 1trong supportive factors conducive to investment opportunity such a vibrant strong and stable economy.""" hydro initiative has been launched and pre feasibility reports for 1(' pro2ects prepared. • • • • <ovt. presence of independent power producers and power sector reforms initiatives as confidence building measures for prospective investors. generators and the civil wor-s and in a shorter period. #$+ with anticipated total cost of more than 9s. would ta-e up for e. operate and maintain a thermal generating station without the need of a license. In the second phase of this programme. 9estart and activate the pending hydro pro2ects for want of fundsBinter state issues. 1urvey and investigations for new green field sites.2 • • Inves!men! Oppor!uni!ies in 'ydro ower Developmen! The 1" 3lan program envisages capacity addition of 1!. = &". 5. indigenous power plant manufacturing capability.

The requirement of funds for transmission and distribution system in the country corresponding to the programme of 1.bone of the . !". strengthening of the regional system for meeting the increased transmission needs on account of increased inter regional transactions as well as for evacuation.""" #$ of generation addition in the ne. =nd 2<C rou!e provides formulation of a Eoint Kenture /ompany *EK/+ with /T5B1T5 by selecting a private investor as 2oint venture partner.""" 9".""" !".in 199) by amending the then e.. • In the newly enacted Electricity =ct '"".""" +*>4*444 =II lan 9".%".4 • !".up7 = lan . • <overnment of India envisages two routes for private sector participation in transmission ventures. transmission and dispersal of power from generation resources within the regions would have to be continued and the transmission and distribution system in the 1tate sector would also need to be strengthened.""" '".ational <rid 1ystem including Inter 9egional and 9egional Transmission 1ystem 1tate6s Transmission 1ystem 1ub transmission and >istribution 1ystem To!al 5.""" ?*44*444 Inves!men! Oppor!uni!ies in riva!e Sec!or ar!icipa!ion in Transmission Sc0emes The <overnment made enabling provision for private sector participation in transmission sector way bac."". I TC rou!e A provides 1""C fund mobili0ation by private entrepreneurs as I n d e p e n d e n t 3 r i v a t e Transmission /ompany.""" +*-4*444 =I lan &".Assignment for PGPM 24 The high capacity inter regional transmission lin-s."". forming the bac.ational 3ower <rid would require an investment of the order of 9s.isting Electricity =ct 19!).license from the =ppropriate /ommission to carry out business in transmission of electricity..t ten years has been estimated to be of the order of 9s..""" crores of which about &"C would be needed during the Tenth 3lan period and the balance during the Eleventh 3lan period. Page 16 of 34 . any private player can see.""" 1. 1imultaneously.""" /rores as per the following brea.""" '". <eneration of electricity was opened for private sector in 1991.""" )".

5 • Inves!men! Oppor!uni!ies in Dis!ri"u!ion Sc0emes Accelera!ed ower Developmen! Re6orm ro#ramme& The >istribution 1ector could not grow with the required pace due to paucity of funds and therefore.Assignment for PGPM 24 • To start with. • An!i1T0e6! 9easures& 1everal 1tates vi0. 1E4B5tility level. >istribution /ircle level. • =s a first pro2ect to be underta-en under the I3T/ route. Feeder level and the consumer level. • :pportunity of massive investment in Transmission e. 5ttar 3radesh. /entral Electricity 9egulatory /ommission granted transmission license on 1.agda >ehgam !""-K >ouble /ircuit transmission line of about %"" L# route length to be ta-en up for private sector participation. This Eoint Kenture *EK+ pro2ect is first of its -ind in India and is being promoted by <overnment of India as a pilot pro2ect under its policy of encouraging private sector participation in transmission of electricity. the <overnment has already identified the 4ina . to #Bs 3owerlin-s Transmission Dimited.>istribution 9eforms were initiated by the <overnment. • Si@ . =ndhra 3radesh. Lerala and <u2arat have ta-en number Page 17 of 34 .evel In!erven!ion S!ra!e#y& In order to achieve commercial viability #inistry of 3ower has formulated si. $est 4engal.""" crores can be invested by the private sector by the end of 8th Five Mear 3lan. 11 '"". level intervention strategy that encompasses initiatives at .ational level. Larnata-a. a 2oint venture company of the 3ower <rid /orporation of India Dimited and Tata 3ower.ists and it is envisaged that upto 9s. 1tate level. #o5s and #o=s were signed with the 1tates for lin-ing the support of <overnment of India through =3>93 which is ambitious plan for upgradation and strengthening of sub transmission and distribution system with the ob2ective of reducing the =TG/ losses to around1&C. 5. 9. #adhya 3radesh. #aharashtra.

!(. =s on .-K C3! 3m !(9!% .Assignment for PGPM 24 of initiative to curb the theft of power which have shown improvement in collection of revenue by the 1E4sB5tilities. • +445 9e!erin# ro#ramme& = programme of 1""C metering has been ta-en up by 1tates subsequent to 3ower #inistersB/hief #inisters conference held on '(. • Consumer Care Cen!re& To address consumer grievances various 1tates have ta-en initiatives by setting up consumer care centres and these centers are effectively operating at @yderabad. 4angalore. The Electricity =ct.6 $u!ure Inves!men! Re7uiremen! Even after investment made by the 5nion <overnment through =3>93 in 1TG> system. provides a legal framewor.& of the Electricity =ct.tend to three years or with fine or with both. whoever dishonestly taps lines or cables or service wires. the distribution sector needs further investment considering the growth rates of various segments of the distribution system the pro2ections by the end of '""( "% are as follows7 . 9&C and )%C metering have been achieved in respect of 11 -K feeders and consumer feeders respectively. Faridabad. damages or destroys meters etc.."th 1eptember.. 5nder 1ection 1. shall be punishable with imprisonment for a term which may e. '""!.( Page 18 of 34 . '"". Kadodara.for ma-ing theft of electricity a cogni0able offence.ine ((-K . tampers. '"". >elhi and almost all 1tates are ta-ing steps for implementing the consumer care centres for large towns of the 1tates 5.'..'""".

@owever the same has gone to 9s. Leeping this ob2ective in view /entral Electricity =uthority */E=+ has started monitoring of reliability inde. '"". Karious 1tate Electricity 9egulatory /ommissions *1E9/s+ are also in the process of ma-ing regulations for standard of performance in compliance to various provisions of the Electricity =ct. '"". This will facilitate in bench mar-ing various indices for the annual frequency and duration of tripping. • Researc0 And Developmen! (R8D) And New Tec0nolo#ies& =ccording to the . the emphasis has been given on providing quality and interruption free supply to customers.ational 3erspective 3lan on 9G> in Indian 3ower 1ector up to '"1&. This will facilitate in Page 19 of 34 ."""B crore as on today for the entire 1"th 3lan period *'""' "%+..&% crores was assessed by the $or-ing <roup on 3ower at the beginning of the Tenth 3lan. The identified areas are7       • @igh voltage distribution system *@K>1+ >emand side management /ustom power devices /ompact transformation devices >istribution automation #etering Auali!y o6 ower Supply and Cus!omer Sa!is6ac!ion& $ith the enactment of the Electricity =ct. average tripping per month in respect of 11 -K feeders in respect of towns having population of more than ) la-hs. • Re#ula!ion on Ins!alla!ion and Opera!ion o6 9e!ers& In compliance to provision of 1ection && of the Electricity =ct. 1. )(... '"".Assignment for PGPM 24 11-K DK ''%"9)! !!)(1%( =n investment of 9s. distribution sector was identified as the -ey area for ta-ing up the 9esearch and >evelopment *9G>+ in this sector."". /E= is ma-ing regulation on installation and operation of meters.

/laiming that despite odds.eyveli Dignite /orporation and Tamil . The Finance #inister of India 1h. @e said at a function to lay the foundation stone for the 1.Assignment for PGPM 24 uniformity of approach for location of meters."".C during pea.1 . The government should ma-e efforts to generate power through various sources by fi.pected to touch ).D/ Tamilnadu 3ower Dtd. 6. new investment opportunities. where the energy shortage is '&C. the power sector in the country had made a turnaround.O he said. the energy shortage in the country was estimated at 1"C and it touches 1. $e should ensure the power shortage is the story of the past and the people got quality power at a competitive price. he added.'. =t present. There are states.0 CURRENT RO/.""" #$ Tuticorin power pro2ect of .""" crore."".""" #$ by '". he said NIt is time we move ahead and improve our performance by 2oining together. '""9 mentioned that 7 $ith the country6s power requirement e.adu Electricity 4oard. 3ranab #u-her2ee in an article on march "1. selecting type of meters and their specification. This investment is possible only by attracting foreign direct investment and public private participation in the power sector. NThis is a serious impediment in the way of industrial development and economic process. India would need an investment of 9s(.E9 IN O%ER SECTOR Page 20 of 34 . 1o we need a crash pro2ect for capacity building and eliminate power shortage by '"1'.ing targets.seasons. a 2oint venture of the .O he said.

=lthough measures have been defined by the policyma-ers and sta-eholders in a sense of complacency that the issues will indeed be resolved and India will plug the supply deficit of power to resolve the same but loo-ing at the past record. Kariance with the target has been as high as &" percent in the past. key challenges lie ahead which also resulted the historical underperformance. The shortage of equipment by 4@ED has been identified as a ma2or cause of delay in the timely completion of the power generation pro2ects. The various proposals in generation and transmission are currently under different implementation stages.record is the inability to meet targets on the power generation capacity additions. at %). For e. percent of the installed capacity+. @owever. for the current installed capacity of around 1&' <$. The biggest indicator of a poor trac. the power sector in India has been plagued with a set of problems for meeting the planned targets. >BD $uel Availa"ili!y Page 21 of 34 . The target for the current 11th 3lan is ambitious. They range from inadequate preparedness of pro2ects. but the first ' years have already seen a slippage. For the 1"th Five year plan various reasons have been identified for slippage. the inter regional transmission capacity is only about '" <$ *1. the power sector continues to be affected by the shortfall both on generation as well as transmission side. shortage of equipment to the delay in financial closure. it can be estimated that the resolution measures may not be implemented.ample. >B+ ro:ec! E@ecu!ion C Needs !o "e e@pedi!ed India has historically failed to meet its power sector targets by a significant margin and with tremendous opportunities ahead.%"" #$.Assignment for PGPM 24 As the Indian power sector is embarking on increasing the generation and transmission capacities.

perience in coalmine development. /oal is the mainstay of the power production in India and is e. as only '! bloc-s have become operational out of the total '1".ample. In many cases this is li-ely to involve self development of relevant supply infrastructure which poses additional pro2ect Page 22 of 34 . In both cases India currently faces capacity shortage. @ence. developing and operating coal mines in international geographies. $hile this is e. unambiguous contracting and strict monitoring among others. =dditional power generation is li-ely to require incremental amount of coal transportation by Indian 9ailways within the country and increasing unloading at ports in India for imported coal.pected to remain so in the future.Assignment for PGPM 24 $hile additional gas supply from L< 4asin has eased shortage to a limited e.pected to secure coal supplies it has again thrown upon further challenges.pected to continue going forward. For e. E. a pro2ect developer has to account for and manage its logistics chain in a manner that minimi0es disruption to its fuel supply.of supply disruption by different options li-e A diversification of supply. poses significant political and legal ris-s in the form of changing regulatory framewor. the main international mar-et for coal supply to India A Indonesia. The failure to achieve the planned target from the captive coal bloc-s presents itself as a ma2or challenge to the power sector.towards foreign companies. coal evacuation from mines in 1outh =frica is constrained by their limited railway capacity and the capacity at ports is controlled by a group of e.perts believe that the non operational status of ma2ority of these bloc-s is attributed to land acquisition *9G9+ issues. /onsequently. permit delays and infrastructure problems1".of e. the developers who have been given the charge of captive bloc-s are not putting diligent efforts to e. 1imilarly. supply constraints for domestic coal remain and are e. This has led to some Indian entities to ta-e upon the tas.isting users ma-ing it difficult for a new entrant to ensure reliable evacuation9.tend. In addition. In this case it is essential to manage the ris. public and private sector entities have embar-ed upon imported coal as a means to bridge the deficit. due diligence on suppliers.pedite the mining operations due to their lac.of purchasing.

Assignment for PGPM 24 e. For instance. Power plants and utilities face major Land Acquisition poses an increasingly significant challenge in the Indian constraints and delays regarding the availability of land and obtaining the requisite environment and other clearances for the projects. it may be a challenge for new pro2ect owners to select a reliable supplier. Turbines and <enerators.ecution comple.of adequate supply of 4alance of 3lant *4:3+ equipment as well.ecution s-ills in the port sector.ity for the developer. To alleviate supply shortage of equipment two measures are being adopted A enhancement of domestic equipment manufacturing capability by establishing EKs between Indian and foreign suppliers and second measure is procuring equipment directly from international mar-ets. >B? E7uipmen! S0or!a#e Equipment shortages have been a significant reason for India missing its capacity addition targets for the 1"th five year plan. ashhandling plants. the timelines for availability of additional domestic equipment supply has not been clearly defined. some imported coal based power plants are also forced to set up an unloading 2etty for coal carrying shipping vessels. This has to be ensured before the commissioning of a power plant which requires an alternate set of pro2ect e. =lso. =part from these.and Ac7uisi!ion and Environmen! Clearance Power sector.ample. The $or-ing <roup on 3ower for 11th 3lan has outlined the requirement for construction equipment for @ydro and Thermal power plants. there is shortage of construction equipment as well. These include coal handling. 6. there has been lac. $hile the shortage has been primarily in the core components of 4oilers. he new !ill relating to land acquisition has continued to face political opposition. In both cases equipment sourcing needs to be managed effectively throughout the procurement cycle.4 . "hile it provides for acquisition by project Page 23 of 34 . monitor its performance and ensure the quality of supply on a sustained basis. For e. etc.

In addition.45.%%% )rore. The education system is often not delivering the required number of specialists across pro2ect management. considering the high financial stake involved through private investments. estimating.takeholders or other land owners may collectively object of the project e#ecution. The flow of talent into construction and power sector has been gradually drying up as candidates have sought an alternative A and often more lucrative A career options. has also not done enough to address this challenge. In such cases. In addition.ltra /ega Power Projects *. 2urthermore./PP+ is a significant challenge as India has not witnessed an e#ecution of such a large scale power project before. with each . 1owever. engineering. it has been reported that in some cases. the project was not completed for several years due to other delays.Assignment for PGPM 24 development agencies to the e#tent of $% percent of the land required for a project. it is essential to proactively manage the environment and stakeholders( e#pectations. the e#ecution of the . financing such a large project is a critical constraint for any developer. >B> 9anpower S0or!a#e There is a general consensus that shortage of talent in the construction sector is a long term problem and is li-ely to continue to push up pro2ect costs and ris-s. which is the biggest buyer of the capital pro2ects.ltra /ega Power Projects *. with the balance to be obtained by the &overnment./PPs+ each of which is 0%%% /". a fact that eroded the credibility of both the industry and the government./PP costing above I3. )onsequently there is a significant mismatch of e#pectations from the Project Affected Persons *PAP+. >BE $inancial -apid build up of the generation capacity is being aided by setting up of . even after land owners were asked to sell and handover their land in 'Public Interest(. The <overnment. surveying and contract Page 24 of 34 . . delay in payments may put severe pressure on developers6suppliers to meet the performance commitments.

Investment in e.Assignment for PGPM 24 management.t. the 1tate <overnments have constantly interfered in tariff setting without subsidi0ing 1E4s for the losses arising out of 1tate <overnments desire to provide power at concessional rates to certain sectors. Facing a desperate game of catch up.ecution. the criticality of implementing transmission pro2ects cannot be ignored. In this conte. contractors and governments to attract more school leavers and graduates. From the perspective of power generation pro2ects. The most important cause of the problems being faced in the power sector is the irrational and unremunerative tariff structure.ed and reali0ed by 1E4s. it is imperative to establish sound pro2ect management principles to the sector to help ensure timely completion of pro2ects. /ompanies should also see. The Page 25 of 34 . 1i--im and 4hutan.orth Eastern region. the industry needs a genuine collaboration between pro2ect owners. @ence. with a greater focus on training and higher salaries where possible. = significant portion of this enhancement is li-ely to be in the .ines 1ignificant enhancement in construction activity is li-ely to be required to meet the 11th plan target of additional transmission capacity. =lthough the tariff is fi.isting employees is also crucial in order to offer better defined career stay in touch with changing employee aspirations. which have difficult terrain reducing the margin of error for pro2ect e. 3ower 1upply to agriculture and domestic consumers is heavily subsidi0ed. This is essential to meet the target of P3ower for all6. =dditional transmission capacity is required to evacuate power from surplus regions to supply to deficit regions and to enable electricity trading. it is critical for pro2ect specific transmission pro2ects to be set up before the commissioning of the plant to enable timely evacuation of power. especially agriculture.ibility in wor-ing hours. 4y encouraging diversity in its employment practices and by offering greater fle. This adds another scheduling constraint for the pro2ect. 6. :nly a part of this subsidy is recovered by 1E4s through cross subsidi0ation of tariff from commercial and industrial consumers. the sector can reach out to a wider potential audience that perhaps would not previously have considered such a career.7 Sc0edule Dependency on Transmission .

""" crore. This strongly necessitates employing a comprehensive pro2ect management structure to address the ma2or challenges of the power sector pro2ects and to be able to deliver them as per the planned targets.t. the overall intent of this paper is to highlight the opportunities and challenges of the power sector.pro2ect management structure which does not assess all the -ey pro2ect aspects. =s India has not witnessed such a large scale of implementation before. If the 1E4s were to continue to operate on the same lines. @istorical records also indicate the presence of a wea.inth 3lan and thereafter. The table below summari0es the -ey implementation challenges and drivers for successfully achieving the implementation of power generation plans. Page 26 of 34 . This raises serious doubts about the ability of the 1tates to contribute their share to capacity addition during the . This highlights the importance of initiating power sector reforms at the earliest and the need for tariff rationali0ation.Assignment for PGPM 24 1E4s. 7. being of the order of 9s.Y GA It is evident that the deficit in power availability in India is a significant impediment to the smooth development of the economy. large pro2ects are being underta-en in different segments of the sectorH <eneration. and the pro2ect management drivers that are required to address these challenges. In this conte.t ten years will be negative. have been incurring heavy losses. there is a need to review and enhance pro2ect e.* + %%.ecution capabilities to help ensure targets are met. in the process. =s discussed initially.0 DE9AND SU . their internal resources generation during the ne. Transmission and >istribution. bridging the gap in demand and supply has become critical and consequently.

#anagement strategy and planning 9is.H /Y A.haustible solar energy which is captured by plants through photosynthesis. herbaceous plants. they are not Page 27 of 34 .pectations from pro2ect affected person Environment and sta-eholders management Enhance training 9esource planning and management through effective contracting. supply diversification. A 3olitical ris-s 5ncertainties in logistics operation 3lant equipment shortage 3rocurement from abroad Kendor reliability 1etting up of new supply units Dand acquisition and environment clearances #anpower shortage 1peeding up processes E. It includes both terrestrial as well as aquatic matter such as wood. cow operating in different geographies. The ultimate source of this renewable biomass is the ine. vendor monitoring 3ro2ect scheduling 9is.ecution timelines Inadequate communication with sta-eholders resulting in mismatch of e.TERNATE SOURCES O$ ENERGY /iomass as a Source o6 Ener#y The term biomass refers to all organic matter generated through photosynthesis and other biological processes. aquatic plants and residues.Increase manifold Ensuring fuel availability and quality 3urchase and development of coal mines abroad 9is. etc /ontrol over supply infrastructure 9obust procurement management.ecute such large pro2ects Drivers 6or de!erminin# success 3ro2ect e. industrial refuse etc.0 (i) STRATEGIES TO AC'IE<E G O%ER $OR A. wood shavings and other wastes li-e disposable garbage. night soil. In spite of all these biomass resources available in India.Assignment for PGPM 24 Fey C0allen#es =ddition of significant generation capacity 9easures "ein# adop!ed 5#33 Resul!in# Issues Technical and financial capability to e. hus-s. saw dust. algae. Eg. li-e straw. sewage solids. corncobs.ecution /ost B /ash flow management 9is.

gasification.and cultivation of commercial forestry. the collected wastes can be converted into solid. 1. solid fuels *charcoal. water pumping.+. /ollection of agricultural and forest residues to produce fuels. The technologies include thermal. are obtained. biomass should be converted to energy which can meet a si0eable percentage of the countryJs demands for fuel as well as energy. <rowth of some specific energy plants for use as energy feed stoc. >epending on the nature and availability of these wastes and organic residues they can be utili0ed in different manners as described here. /ollection of urban and industrial wastes as fuel in boilers and as a feedstoc. electricity+. These can be used for different purposes li-e coo-ing. $uel "iomass 4y some processes and procedures. In order to utilise these resources properly. organic manures and chemical feed stoc-. methane. 4y a number of processes. 2. a large amount of it is disposed off by burning in open fields causing serious air pollution. 3. 1. Three main approaches can be adopted for generation and proper utili0ation.Assignment for PGPM 24 being properly utili0ed. The main products of conversion technologies are energy *thermal. In fact. hydrogen gas etc. liquefaction etc. alcoholic fermentation. heating. which are given here Page 28 of 34 . pyrolysis. liquid and gaseous fuels. The actual processes in these technologies are combustion. liquid fuels. steam. lighting. gaseous fuels etc.for producing methane and some liquid fuels. biomass products li-e fuel gas. aquatic and marine plants for different products. electricity generation and as industrial and transport fuels. combustibles+ and synthetic fuels *methanol. thermo chemical and bio chemical conversions.

al-aliBalcohol to ma-e their use as a fuel.traction of to. some of them with high percentage of lignin or non digestible constituents need certain treatments such as soa-ing in water. which is popular in rural areas is produced by anaerobic fermentation from farm wastes. • 4y the process of gasification. 4. 3. #unicipal and sewage wastes. gas is evolved which can be used as a fuel for engines. 2.can be profitably converted to fuel gas by thermal decomposition */ombustion+ • Ethanol. Or#anic 6er!iliIer "iomass >ry fermented slurry can be used as a direct organic fertili0er for crop land. Page 29 of 34 . tobacco etc. industrial wastes and agricultural wastes are converted to energy which can meet the demand for energy in rural sector. @owever. charcoal is the resultant product which can be used as a fuel more advantageously than wood. $eed "iomass /onventionally.Assignment for PGPM 24 • 4iomass from plants or animal origin are directly burnt for coo-ing and other purposes. • $hen wood and agricultural residues are heated in the absence of air *pyrolysis+. The oil ca-es of various crop seed li-e cotton. $i"re "iomass The fibrous agricultural wastes and residues are being profitably utilised for ma-ing pulp for cheap grade paper. can also be used as a feed after e.ic materials. • 3addy straw and rice hus. • 4iogas. crop residues are used as cattle feed. which is used as a liquid fuel can be produced from carbohydrates by alcoholic fermentation. rubber.

$indmills may have been around for almost 1&"" years. corn cobs. In other words.! million barrels of oil and avoid 1. 4y the year '"'". silicate products and solar grade silicon.ide emissions that cause smog and acid rain. Imore wind power means less smog. =nd within that area. In fact.(% million tons of carbon emissions. cotton seed hulls. people are reali0ing that wind power Iis one of the most promising new energy sourcesI that can serve as an alternative to fossil fuel generated electricity. less than &C of the land would be occupied by wind equipment the remaining 9&C could continue to be used for farming or ranching. billion -$h of electricity produced by =mericaJs wind machines annually displace the energy equivalent of (.Assignment for PGPM 24 5. fla. oat hulls etc.and rice straw can be converted into useful chemicals li-e morphous silicon. Indeed it has. preventing 1"" million metric tons of /:' emissions every year. Dessening our dependence on fossil fuels is critical to the health of all living things. but it was not imagined that wind power would become affordable enough to compete with fossil fuels. acid rain. 1" million average =merican homes may be supplied by wind power. which is used as a solvent for some petroleum products. wind energy could provide '"C of =mericaJs electricity *or about the amount nuclear power provides+ with turbines installed on less than 1C of its land area. fibres. and wind energy can do 2ust that. The . Furfural an another chemical can be produced from biogases.. C0emical "iomass @ighly siliconous agricultural residues li-e rice hus. many utility services around the world offer Page 30 of 34 . (ii) %ind as a source o6 Ener#y Today. $ith todayJs technology. as well as sulfur and nitrogen o. and greenhouse gas emissionsI.

) to &. =s of 1999. This will be the ne.& cents per -$h for nuclear power. /ompare this to !. wind energy could provide '"C of =merica Js electricity *or about the amount nuclear power provides+ with turbines installed on less than 1C of its land area.& cents per -$h for coal or 11.I The success of this energy is in part due to the fact that its costs have gone Idown by more than )"C since the early 19)"s. as Iindustry analysts see the cost dropping by an additional '" percent to !" percent by '""&I. :ffshore wind has the potential to deliver substantial quantities of energy at a price that is cheaper than most of the other renewable energies.pected. Five #iamis may not seem significant. #a2or offshore developments are li-ely in northern European waters in the early part of the ne. but if we ma-e the predicted strides in the near future.I 4y the year '"1". less than &C of the land would be occupied by wind equipment the remaining 9&C could continue to be used for farming or ranching. cents per -$h.t century. $ind power is now the worldJs fastest growing energy source and has also become one of the most rapidly e.1 to 1!. according to the =merican $ind Energy =ssociation. $ind energy is therefore Icheaper than any other new electric generation e. global wind energy capacity topped 1".t ma2or step for this technology and will result in a dramatic increase in decentrali0ed electricity generation.I Even lower prices are e.panding industries. ThatJs enough to serve over & cities the si0e of #iami. which is appro. If a household used wind power for '&C of its needs.Assignment for PGPM 24 wind generated electricity at a premium of ' to . 1" Page 31 of 34 .cept natural gas. wind power could be one of our main sources of electricity. =nd within that area. with sales of roughly Q. as wind speeds are generally higher offshore than on land.imately 1( billion -ilowatt hours of electricity. billion in '"").RwhichS emits one pound of greenhouse gases for every -ilowatt hour of electricity it generates. I$ith todayJs technology. it would spend only Q! or Q& dollars per month for it and the price is still dropping.""" megawatts.

and high temperature process heat for industrial purposes.I In other words. selecting materials with favorable thermal Page 32 of 34 . solar coo-ing. (iv) Solar power 1olar energy is the energy derived from the sun through the form of solar radiation. $ater is a renewable resource. and wind energy can do 2ust Earth as rain or the ocean.Assignment for PGPM 24 million average =merican homes may be supplied by wind power. and drains into rivers and streams that flow bac. The water then falls bac. 1olar powered electrical generation relies on photo voltaics and heat engines.ide emissions that cause smog and acid rain. billion -$h of electricity produced by =mericaJs wind machines annually displace the energy equivalent of (.(% million tons of carbon emissions. 1olar technologies are broadly characteri0ed as either passive solar or active solar depending on the way they capture.! million barrels of oil and avoid 1. 3assive solar techniques include orienting a building to the 1un. . li-e those housed at many dams around the world. convert and distribute solar energy. IThe . Imore wind power means less smog.essenin# our dependence on 6ossil 6uels is critical to the health of all living things. as well as sulfur and nitrogen o. = partial list of other solar applications includes space heating and cooling through solar architecture. solar hot water. constantly recharged by the global cycle of evaporation and precipitation. =ctive solar techniques include the use of photovoltaic panels and solar thermal collectors to harness the energy. =nd captured by turbines and generators. preventing 1"" million metric tons of /: ' emissions every year. and greenhouse gas emissions. The heat of the sun causes water in la-es and oceans to evaporate and form clouds. acid rain. Flowing water can be used to power water wheels that drive mechanical processes. the energy of flowing water can be used to generate electricity.I (iii) 9ini and micro 0ydroelec!ric pro:ec!sB $ater flowing downstream is a powerful force. daylighting.

and designing spaces that naturally circulate air. There is not a lot of waste material created by nuclear fission although.:. .pect. for the simple fact of the immense power that it can generate. the volume of this waste gas generated by the nuclear power plants is small in comparison to the volume of . Page 33 of 34 . $hereas the radiation is certainly the more deadly by far of the two waste products. .Assignment for PGPM 24 mass or light dispersing properties. it should not be a difficult thing at all for storage and disposal solutions for the long term to be formulated as technology advances. due to the fact that there is no such thing as producing energy without also creating some measure of waste. The radiation from these gases lasts for an e. (v) Nuclear power #any researchers consider that harnessing the energy of the atom in fission reactions is the most important alternative energy resource that we have.uclear power plants are especially Iclean burningI and their efficiency is quite staggering.tremely long time. nuclear power is actually environmentally friendly alternative power. the radiation is also by far the simpler of the two to contain and store. there is some. meaning that the energy created by the fission reactions is almost equal to the energy put into producing the fission reactions to begin with. @owever.uclear power is produced at )"C efficiency. The apprehensions of people such as environmentalists regarding using nuclear power as an alternative energy source are based on this waste. $ith a relatively low volume of waste material created. so it can never be let out once contained and stored. and the ris. air pollution+ that is attributable to one dayJs worth of rush hour commuter traffic in Dos =ngeles. In spite of the concerns of the environmentalists.of the enclosed radiation getting out is actually lower than you would e.ide that is. which are radioactive gases that must be contained. *nitrous o.

3resently. there would be little question of their up-eep being maintained. There is hardly any chance of an atomic power plant e. Indeed. and the media are not filled with grim horror stories of the power plants regularly having difficulties.of a ImeltdownI is very low. =tomic power plants control the fission reactions so that they donJt lead to the devastating e. if nuclear energy could become a more broadly accepted form of alternative energy.plosions that are generated by atomic and hydrogen bombs. as the speciali0ed conditions and the pure 3lutonium utili0ed to unleash an atomic bombJs vicious force 2ust simply donJt e. =lthough this latter event has changed a couple of times. nations around the world. and the events a-in to that which have ta-en place were the fault of outdated materials which should have been properly maintained. these are rare incidents. when one considers that there are over !.. inside a nuclear power plant. states in =merica generate more than half of all their electrical energy needs by way of nuclear power. Page 34 of 34 . The ris." nuclear reactors spread out across .Assignment for PGPM 24 The splitting of an atom produces energy in the forms of both heat and light.ploding similar to a nuclear bomb. and that nuclear reactors have been used since the early 19&"s.