Energy Conservation,

Audit and Accounting

Energy is essential to life and the key to human progress. Its conservation is a
essential in the modern industrial societies. The reasons are many. Coal and
other fossil fuels are likely to be depleted soon because once consumed, they
are no longer available to us in the same form. Today, 85% of the primary
energy comes from fossil fuels. Their reserves are finite and will not exist for
future generations as the consumption increases with increasing population.

You will agree that considerable wastage of energy is taking place in our
country. We have to learn to use the energy resources judiciously to avoid
energy death for our future generations. For this, we need to understand what
energy resources are available to us and for how long. How can we make
them last longer? Energy conservation becomes important in this context.
We begin this course by discussing energy conservation in general, and then
with special reference to the electricity sector. We discuss related concerns
and issues such as:
• the impact of energy production and consumption on the environment,
• the importance of improving energy efficiency,
• ensuring energy security for all, and
• exploring sustainable energy options for future.
We present examples and case studies of how people around the world are
grappling with these issues. We begin by exploring the energy resource base
of our planet Earth with special reference to India.

In this section, we address the following questions: What are the energy
resources available to us? How fast are these being used up? How long
will these last at the present rate of consumption?

Let us take them up one by one.

What energy resources are available to us?

Fossil fuels were
formed from the
fossilized remains of
tiny plants and animals
that lived long ago.
These are actually
manifestations of solar
energy.
The Sun is the principal source of energy on our planet. Other common
sources of energy are fossil fuels like coal, oil, natural gas, biomass
(such as wood, agricultural waste, etc.), water, wind and nuclear energy.
Some uncommon energy sources include geo-thermal energy and tidal
energy. These energy resources are usually classified as: Primary and
Secondary Resources, Renewable and Non-renewable Resources,
and Commercial and Non-commercial Resources.
Primary and Secondary Resources

Primary energy resources are those that are found in nature. These are
mostly converted into secondary resources in industrial utilities. For
10
 example, coal, oil and gas (primary energy resources) are converted into Energy
steam and electricity (secondary resources of energy). Conservation

Renewable and Non-renewable Resources

The energy resources such as coal, oil and gas cannot be replenished and
are likely to be depleted with time. These are known as non-renewable
resources of energy. Their supplies are limited and when these supplies
are over, we will not be able to use these resources.

On the other hand, hydro energy, wind energy, biomass energy, solar
energy, tidal and geo-thermal energy are renewable resources of
energy. These can be replenished in a short period of time. So these
resources will not be depleted if they are managed properly.

Commercial and Non-commercial Resources

The energy resources that are available in the market for a definite price
are known as commercial energy resources. These include coal, oil,
natural gas, electricity and refined petroleum products. There are certain Non-commercial
energy resources are
energy resources that are not available in the commercial market for a
often ignored in
price. These are called non-commercial energy resources. For example, energy accounting.
cattle dung, agricultural wastes, solar energy for drying food products,
animal power for transport, threshing, lifting water, etc., are not bought or
sold at a price. These are also called traditional fuels.

You need to understand these terms as we shall be using them very often.
You may like to answer the following question before studying further to
check your understanding.

!" #
Classify the energy resources shown in the pictures in the following table as primary (P)
and secondary (S), renewable (R) and non-renewable (NR), commercial (C) and
non-commercial (NC). Write your answer in the box attached with each picture.

Sun Biomass Oil

Wind

Electricity Animal G
dung A
S
Hydro
Nuclear
Energy

11
Energy Conservation,
Audit and Accounting
As far as the electricity sector is concerned, you know that the major
resources for generating electricity in our country are coal, oil, natural gas and
hydro-power. Nuclear energy and renewable energy resources together
provide only 8% of the total power produced in India (Fig. 1.1). Thus, at the
moment, we shall talk only about the resource base comprising coal, oil and
gas.

Thermal Hydro Renewable Nuclear

Energy resource use for power generation (%)

70
66

60

50

40

30
26

20

10
5 3
0

Fig. 1.1: Electric Power Generation Source-mix in India

Let us now look at the other questions.

How fast are the energy resources being used up? How long will
these last at current rates of consumption?
To answer these questions, we need to understand another term called
Reserve/production the reserve/production (R/P) ratio. It is often used as a quick way of
(R/P) ratio for each indicating how long current reserves will last at current production
type of energy
resource is obtained rates (see Note in the margin).
by dividing its
reserves remaining For the purpose of estimating resource availability, we also classify the
at the end of the year energy resource base into three categories:
by its production in
that year. a) “proven” (found and ready to be produced),
b) “probable” (expected to become proven in due course of time),
The result is the
c) “speculative” (estimated but uneconomical for extraction).
length of time the
remaining reserves
Entrepreneurial drive and development of new technology can turn the
would last if
production were to energy resource base
continue at that
level. • from ‘probable’ into ‘proven’, and
• from ‘speculative’ into ‘probable’ .
In this way, the life of the energy resource base can be extended for many
more years. In fact, we can use an interesting insight from history and be
12 optimistic about our energy future.
 Energy
Conservation

Still we need to use our resources judiciously to make them last longer. How
much longer can we make them last? This will depend on the resources
available to us now and their rate of production and consumption. Let us look
at the findings of the World Energy Council survey 2004 about this issue.
Study the table given below.

Table 1.1: R/P Ratios for Coal, Oil and Natural Gas for the World

Resource Reserves Production Consumption R/PRatio

Base

Coal 909 Gt 4.8 Gt/ year 4.8 Gt/ year 200 years

Oil 148 Gt 3.5 Gt/ year 3.5 Gt/ year 41.2 years

Natural 171 Gt 2.6 tcm/ year 2.6 tcm/ year 59.8 years
Gas
Source: http://www.worldenergy.org/wec-geis/publications/reports.

What does the data in this table tell us? For example, the current world coal
reserves are about 909 Gt (giga tons). Dividing this number by the current
production rate of about 4.8 Gt per year, we obtain an R/P ratio of about 200
years. This is the origin of the statement “we have about 200 years of coal
left”. What is the situation for oil and natural gas? The information is summed
up below for the entire world:

Oil > 40 years

Natural Gas > 60 years
Coal > 200 years

The R/P ratio has limitations as an indicator of how long a reserve will last
since it neglects the effects of growth in demand due to increase in population,
and consumption. But it also neglects the effect of growth in reserves. Growth
in reserves occurs as previously uneconomical deposits can be harnessed by 13
Energy Conservation, improved technology. Still, it is a useful concept for reducing a large number
Audit and Accounting (of a resource reserve) to an understandable scale. Don’t you think that this
statement is easier to understand: “We have 200 years of coal left at
current mining rates” than this one: “We have 200 billion short tons of
coal reserves”. In that sense, the R/P ratio is a useful tool. In Table 1.2, we
have given similar data for India. Study the table and answer SAQ 2.

Table 1.2: R/P Ratios for Coal, Oil and Natural Gas for India

Resource Base Reserves Production R/P Ratio

(Proved, (2002)
Recoverable)

Coal 92 445 Mt* 358.9 Mt / year ………..years

(including Lignite)

Oil 740 Mt 36.7 Mt/ year ………..years

Natural Gas 751 bcm$ 25.0 bcm/ year 27.7 years

$
*Mt stands for million tonnes; bcm stands for billion cubic metres.
Source: http://www.worldenergy.org/wec-geis/publications/reports/ser04/countries.asp

$ % ! &'

Fill in the R/P ratio for coal and oil in the blank spaces in Table 1.2.

Although India has huge coal reserves, it cannot use them as they tend to
have high ash content and low calorific value (Fig. 1.2). Due to the low
quality of much (73%) of its coal, India has to import sizeable quantities of coal
for power generation.

12%
Fossil fuels continue to 15%
dominate energy use
worldwide. Due to high
oil and natural gas
Inferior
prices, coal
consumption continues
Coking
to exceed oil and Superior
natural gas
consumption in the
world. The largest 73%
increases in coal use
are projected for
Fig. 1.2: Quality of Coal Available in India
China and India, at
70% of the total world
increase in coal Data in Table1.2 tells us that the oil and gas reserves of India are not going to
demand. last very long at current rates of consumption. As it is, we rely on substantial
imports of oil and gas. Keeping in view the price rise, the volatility and the
instability of the oil and gas markets, we must focus our efforts on energy
conservation with renewed vigour.

You have learnt that energy conservation is needed for conserving energy
14 resources and making them last longer. It is also necessary because the
energy technologies and consumption of energy are taking a heavy toll on the Energy
environment. You can play an important role in this respect and should study Conservation
about the need for energy conservation in this context.

( )

As the population in our country grows and the pace of urbanization increases,
energy use is bound to increase. Moreover as our wealth grows, energy use
per capita will also increase. At present, India is the fifth largest consumer
of energy in the world. However, our per capita energy consumption is
very low.

In order to increase the available supply of energy, we need to reduce the

total demand for energy as well as slow the growth in energy
consumption. At the same time, we need to ensure energy security for all.

In this context, we can say that

Energy conservation is a practice for

♦ ensuring judicial usage of energy, and

♦ decreasing the quantity of energy consumed
while achieving a similar outcome of end use.

The motivations for energy conservation could be different for individual,

commercial and industrial users. Direct consumers of energy such as
individuals or organisations may want to conserve energy to reduce energy
costs and protect the environment. Increase in efficiency and maximizing
profits could be the motivation for industrial and commercial users to save
energy.

Energy conservation can be a result of several processes or developments,

such as increase in productivity, technological progress resulting in more
energy efficient technologies and most importantly a positive attitude
towards efficient energy usage. For example, suppose the energy end-use is
to keep a room cool in summers. Energy conservation efforts would look at

♦ better technology options (such as sensors to switch off the devices,

films on windows, better insulation or solar passive building, etc.),

♦ reducing wasteful use of energy and increasing energy efficiency of

WHAT IS YOUR
the appliances being used, and
MOTIVATION
♦ increasing consumer awareness for reducing energy consumption. FOR ENERGY
CONSERVATION?
Energy conservation is cheaper and more environmentally benign compared
to increased energy production. We need to encourage it amongst all 15
Energy Conservation, categories of consumers. You will appreciate this point better, once you study
Audit and Accounting about the impact of energy production and use on the environment.

1.3.1 Energy and Environment

Many major environmental problems we face today are linked with the energy
sector. To a large extent, the energy production technologies and energy use
are responsible for greenhouse gas emissions, global warming, and the
consequent climate change. Environmental pollution, particularly in urban
areas, is a major concern today. Environmental degradation due to
deforestation is one of the major consequences of developmental activities
and the quest for cheaper sources of energy in the developing world. We now
discuss these issues briefly.

Global Warming and Climate Change

This is a major global environmental concern today, with profound

implications for the way the world produces and consumes energy. It is
now an accepted reality that global warming is taking place due to the
enhanced Greenhouse Effect (Fig. 1.3).

Energy related human activities are leading to excessive concentration

of greenhouse gases (GHGs) such as carbon dioxide, methane, water
vapour, nitrous oxide, ozone, chlorofluorocarbons (CFC), halons and
Peroxyacetylnitrate (PAN) in the Earth’s atmosphere. These gases trap
the heat reflected from the Earth’s surface and do not allow it to
escape into space. This increases the temperature of the atmosphere. In
trace amounts, gases like CO2 make the Earth warm enough to sustain
life. This is the natural greenhouse effect. In excessive amounts, these
gases can be very harmful as you will learn in this section (Fig. 1.3).

1 ' * #’ % +
* #!* * *, - +*

2 . / / %/" * *,
# %0 -
- % %/"
3 * * %* - +*
% % - % -
4 * *, #
- * % %
5 + * #!* * - +* 1
- / /% % 2 - %
% /"! *# !
- # * 3 . * *,
# %* 0 - +*
3 .
3
. '

16 Fig. 1.3: The Greenhouse Effect (Explained in the Box)

 The Greenhouse Effect is enhanced due to human habitations and various Energy
Conservation
human activities particularly in the industrialised countries. More than
two- thirds of the world GHG emissions originate from the energy sector in
processes like energy production and energy end-use in various sectors
such as industry, transport, agriculture, power sector, etc. (Fig. 1.4). Other
sources include activities in residential and commercial areas.

17% Industrial
Power stations 22% processes

Waste disposal
and treatment 3% 14% Transportation
fuels
Land use and
biomass combustion 10%

13% Agricultural
Residential, commercial 10% by-products
and other sources 11%
Fossil fuel retrieval,
processing and distribution

Fig. 1.4: Human Activity Related Annual GHG Emissions (sector-wise) in

2000 AD

Energy production technologies like thermal power plants and the

combustion of fuels in various activities like cooking, heating, transport,
industries, etc., add greenhouse gases to the environment. It is now well
established that the increasing greenhouse gases will cause the Earth to
warm so fast that we may not be able to adapt to the resulting changes.
It is estimated that the global temperature will increase by another 1.5 to
4.5°C sometime in this century if we do not take drastic measures. Some
scientists have started referring to global warming as global heating −
this is meant to be a wake up call for the world!

Fig. 1.5: World CO2 Emissions by Fuel (in million tonnes) from1971 to 2003 17
Energy Conservation, Can you imagine what can happen due to this kind of heating up of
Audit and Accounting the atmosphere? It is predicted that polar icecaps will melt and glaciers
will retreat. Low lying lands and coastal areas will be submerged in water.
Extreme weather events such as droughts, floods, hurricanes, tornados,
It is predicted that a heat waves would increase. And all this could happen within our lifetime.
few islands in the
South Pacific Ocean Since less energy use leads to less energy production, energy
are likely to cease to conservation indirectly restricts the production of greenhouse gases and
exist in the next 10-20
therein lies its importance. We can all reduce wasteful use of energy and
years. The same could
be true for Male in the prevent global warming by reducing greenhouse gas emissions due to our
Indian Ocean in about activities. Otherwise, we could face severe deterioration of civilization.
50 years of time.
Environmental Pollution
Every stage of energy usage from extraction of an energy resource to its
transportation and end-use leads to environmental pollution. For example,
extraction of coal degrades the local habitat through dust in the air,
ground water degradation, and solid waste generation. Similarly, the local
environment is polluted highly due to oil extraction and controlled venting
is required to manage the production. We now briefly discuss the air,
water and land pollution due to various energy activities.
Air Pollution
Several hazardous air pollutants apart from GHGs are emitted in energy-
related activities. Fossil fuel combustion produces smoke and noxious
gases such as sulphur dioxide, nitrous oxide and carbon monoxide, as
well as particulates like fly ash and soot. These are the major atmospheric
pollutants. Other air pollutants and their sources in the energy sector are
shown in Fig. 1.6. You may like to record the contribution of energy
production and its use to air pollution. Try SAQ 3.

( !" % + #

Write down the causes of air pollution stemming from energy production
and its end-use. List the pollutants also. For example, thermal power
plants add fly ash to the environment.

Air pollutants cause many health problems, particularly amongst children,

the elderly people, and those with respiratory diseases. These can even
be fatal as reported in several studies. Ingestion of heavy metal pollutants,
including lead, arsenic, and mercury from the burning of coal and oil can
even cause cancer. These effects can be mitigated by

• limiting people’s exposure to the pollutants;

• appropriate siting of the power producing plants as well as large
energy consuming facilities like industrial plants;
• installation of pollution control devices on polluting industries and
vehicles; and
• enforcement of stringent emission regulations and air quality norms.
18
 Energy
Noxious Gases, Mercury, Chlorinated
Conservation
Dioxin, Furan
Fly Ash, Soot, Smoke

♦$ # ♦ .# + 0
-/#

Hydrocarbons and Dioxins Arsenic, mercury, beryllium

♦ -/# + % ♦ -/# %
% * 5" # +0
♦ %! 4 1 % + % %#

♦ ' ! %# /

Fig. 1.6: Air Pollutants and Their Sources in the Energy Sector

We now know that approximately two-thirds of the deaths due to fine

particle pollution from power plants could be avoided by reducing their
sulphur dioxide and nitrogen oxide emissions by 75% below the 1997
emission levels. However, some of the polluting by-products can be put to
good use. For example, fly ash is being used to make construction
materials like bricks, tiles, etc.

Water and Land Pollution

The main sources of water pollution from the energy sector include

• waste and chemical deposition from the outcome of energy

production/conversion process;
• hot water discharge from thermal power plants (known as thermal
pollution);
• runoffs from mining sites;
Which of your
• acid rain; and activities
• leakage during transportation of oil through water, which can destroy contribute to
environmental
the local marine life.
pollution? How
can you mitigate
Thermal pollution can affect the natural balance of ecosystems in the their effect?
water body. Water at temperatures higher than 35°C does not contain
enough oxygen for aquatic life. New thermal power plants are built with
permanent cooling towers, which use evaporation to cool water. All or
part of the hot water can be pumped through cooling towers to lower the
temperature before it is released into the water body.

Acid rain is caused when the burning of fossil fuels emits sulphur dioxide
into the atmosphere. The sulphur dioxide reacts with the water in the
atmosphere, creating rainfall which contains sulphuric acid (Fig. 1.7). As
acid rain falls into lakes, streams and ponds, it can lower the overall pH of
19
Energy Conservation,
Audit and Accounting
these water bodies, killing vital plant life in them. This affects the entire
food chain. Less vegetation leads to further oxygen imbalance in the
atmosphere. This vicious circle adversely affects life on our planet. Acid
rain can also leach heavy metals from the soil into the water, killing fish
and other aquatic organisms.

Emissions Deposition Effects

n
NH4
Hg
NO3

SO2 H
NOx SO4
Particulates
NH3

Fig. 1.7: Formation of Acid Rain and Its Effects on Animals, Plants and Stone

Land and soil pollution problems due to the energy sector arise mainly
from siting and waste disposal. All energy-related activities have some
sort of siting impact. In this context, mining sites and hydroelectric
reservoirs have attracted maximum attention. Fuel refining and other
electric power plants too involve large facilities or complex industrial
processes. Water and soil can become contaminated with toxic materials
from energy-related industries, mine sites and abandoned hazardous
waste sites. This can of course be taken care of by following stringent
norms for waste disposal at suitably chosen sites, especially
hazardous waste disposal of radioactive waste containing long-lived
Fig. 1.8: The Effect of radio-nuclides, in particular.
Acid Rain
on Animals Siting problems also occur for installing transmission lines and electric
and Plants substations. The effects of electromagnetic fields associated with
transmission voltages up to 800 kV on humans and animals are under
investigation. Nuclear energy is being projected as a clean source of
energy but even this energy option has its problems, such as radioactive
waste disposal, threat to health from nuclear radiations and the fearsome
possibility of nuclear accidents, and the stockpiling and proliferation of
nuclear weapons. These problems can be tackled to a large extent if we
enforce strictly the laws for preventing environmental pollution.

You may like to consolidate these ideas about the impact of energy sector
on environmental pollution by attempting the following SAQ.
20
 Energy
Conservation

Write down the causes (stemming from the energy sector) of water and
land pollution in the form of a table as shown below. List the pollutants in
each case.

Land pollution Water pollution

Causes Pollutants Causes Pollutants

You may like to check how environment-friendly your own energy usage is.

6 0 5 - %" " # !"# 7

We have listed below some activities that would be a part of your daily routine and involve direct and
indirect use of energy. Against each activity, tick the option that applies to you and find out how
environment friendly your energy usage is.

a. Which fuel is used for cooking in your home? 1.Wood 2.Kerosene 3.LPG
b. How do you travel to work? 1. In own car 2. By public transport 3. Walk/cycle
c. What do you use to cool your home in summer? 1. AC 2. Cooler 3. Fan
d. What do you use to heat your home in winter? 1. Heater 2. Coal fire 3. Sunlight
e. What do you use to light your homes? 1. Bulbs 2. Fluorescent tubes 3. CFLs
f. Are all the appliances in your home energy efficient? 1. None 2. Only some 3. All
g. Do you switch off lights, fans, TV, etc. when not in use? 1. Never 2. Sometimes 3. Always
h. Do you turn down your refrigerator thermostat in winters?
1. Never 2. When I remember 3. Always
i. What do you use for heating water in your home?
1. Wood/coal 2. Instant water heater/ geyser 3. Solar water heater
j. Do you reduce waste in your office? 1. Never 2. Sometimes 3. Always
k. Do you reduce waste in your home? 1. Never 2. Sometimes 3. Always
l. Do you reuse/recycle things in your office? 1. Never 2. Sometimes 3. Always
m. Do you reuse/recycle things in your home? 1. Never 2. Sometimes 3. Always
n. What do you use in your home when power supply fails?
1. Generator 2. Inverter 3. Solar lantern
o. What do you use in your office when power supply fails?
1. Generator 2. Emergency lights 3. Solar panels
Your score: To get your score, add 3 points for each option 3, 2 for option 2 and 1 for option 1. You
can extend this list and test how environment-friendly your overall energy use is.

REMEMBER: Whenever you save energy, you not only save money, but also reduce the
demand for such fossil fuels as coal, oil, and natural gas. Less burning of fossil fuels also means
lower emissions of carbon dioxide, the primary contributor to global warming, and other pollutants.

21
Energy Conservation, So far, you have studied about energy resource availability and the impact of
Audit and Accounting energy production and end-use on the environment. Are you not convinced by
now that we need to promote all possible measures for energy conservation?

The next logical question is: How can we do it? We can adopt the following
strategies for environmental management to contain the negative impact of
power sector on the environment.

Strategies for Environmental Management in the Power Sector

♦ Since hydropower is a cleaner source of power, there should be a greater

thrust on its development in the short, medium and long terms.
Hydropower would reduce carbon dioxide and other GHG emissions.
♦ For thermal power generation, the cleanest fuel economically available
should be chosen. (Natural gas is preferable to coal subject to its
availability and price.) Clean-coal technologies could be promoted in the
short term; especially coal beneficiation could be undertaken in the short
term, to achieve immediate benefits. Other clean technologies like
supercritical boilers, and integrated gasification combined cycle, etc.,
could be promoted in the long term. Preference needs to be given to
high-heat-content low-ash; low-sulphur coal and beneficiation should be
considered for high-ash coal.
♦ Fly-ash management and utilization through suitable market-based
instruments should be facilitated; the fly-ash should be priced
appropriately. Public acceptance of fly-ash based products could be
improved through awareness and demonstration. Movement of ash
through the rail network should be facilitated.
♦ Exploitation of coal-bed methane as a clean alternative source of energy
could be adopted.
♦ There should be a greater thrust on renewable resources of energy and
these should be developed as decentralized sources of energy.

The thrust of the discussion so far is

You could coin your own slogans conveying this message.

Another way of conserving energy resources is to reduce the energy intensity

of our economy by improving the energy efficiency in the power sector.

1.3.2 Improving Energy Efficiency

All countries with growing economies can dramatically reduce growth in

energy use by reducing energy intensity and improving energy efficiency.
They can bring about reductions in emissions of polluting gases, including
greenhouse gases, particularly by shifting to cleaner sources of energy, such
as natural gas and renewable energy resources. Let us begin by
22 understanding the concept of energy intensity.
 Energy Intensity Energy
Conservation
Energy intensity is defined as the ratio of energy consumption to the Gross
Domestic Product (GDP). It is calculated as units of energy per unit of GDP.
Energy intensity is a measure of the energy efficiency of a nation’s economy.
High energy intensities indicate a high price or cost of converting energy into
GDP. Low energy intensity indicates a lower price or cost of converting energy
into GDP. Below a certain level of development, growth results in increase in
energy intensity. With further growth in economy, the energy intensity starts
declining.
In 2001, India’s energy intensity (energy consumption per dollar of GDP) figured
in the highest bracket in Asia, surpassed only by Pakistan and China. However,
in terms of Purchasing Power Parity, the energy intensity of India is lower than
that of USA and the world average as the Table below indicates.

Energy Intensity TPES/GDP (kgoe/2000PPP’$)

World Average 0.21

OECD 0.19

USA 0.22

Australia 0.20

India 0.19

China 0.23

Source: Key World Energy Statistics-IEA-2005, Data for year 2003

Many factors such as the general standards of living and weather conditions
influence an economy's overall energy intensity. For example, a nation with
extreme weather conditions requiring heating and cooling, long commutes, and
extensive use of generally poor fuel economy vehicles will have high energy
intensity. In comparison, a nation that has mild and temperate weather,
demographic patterns of work places close to home, uses fuel efficient vehicles,
supports carpools, mass transportation or walks or rides bicycles, will have low
energy intensity.

Note: WTO and increasing global trade will wipe out Indian goods if the
energy intensity is not lowered to a level that competes well with both
developed and developing countries.

We now discuss how improving energy efficiency helps in the goals of

reducing energy intensity and conserving energy.
Power system energy efficiency significantly depends on making optimum
choices about fuels, technology, scale of operations, energy pricing, design of
buildings, habitats and transportation systems and the standards for energy
end-use applications. Thus, we can say that energy efficiency in the power
sector has two dimensions: supply side efficiency in energy conversion to its 23
Energy Conservation, cleanest form (conversion to electricity) and demand side efficiency in end
Audit and Accounting usage.

Note that electricity generation involves conversion of mechanical, chemical or

nuclear energy into electrical energy (refer to Unit 2). Conversion of
mechanical energy to electrical energy occurs at a higher efficiency. Maximum
loss occurs during the conversion of chemical energy to thermal energy.

We now briefly discuss the aspects of supply side efficiency and demand
side efficiency.

Supply Side Efficiency

Increasing efficiency in energy conversion to electricity has to be

carried out at the levels of Generation, Transmission and Distribution.

In India, the overall efficiency for the coal based power plants ranges from
28% to 35% depending upon the size, operational practices and capacity
utilization. After generation at the plant, electricity is transmitted and
distributed over a wide network. The primary function of transmission and
distribution equipment is to transfer power economically and efficiently
from one location to another. Conductors in the form of wires and cables
strung on towers and poles carry the high voltage and current (Fig. 1.9).
Energy loss in transmission lines occurs in the form of heat losses.
Fig. 1.9: Transmission The power transmission and distribution system has many other
Lines
components like capacitors, switches, relays, circuit breakers and fuses.
Transformers are placed at strategic locations throughout the system to
minimize power losses in the T&D system. They are used to change the
voltage level from low to high in step-up transformers and high to low in
step-down units (Fig. 1.10).

You may like to know what the energy efficiency is as electricity is

transmitted from the power source to the end user. It is 87%. Thus, the
technical losses are of the order of only 13%. In India, the standard
technical losses are around 17%, which implies an efficiency of 83%.
However, in the case of industrial users the overall energy efficiency is
50%. This is because at the user’s premises, there is a network of
transformers, motors, sub-stations, pumps, flow control valves/throttling
etc. which further reduce the energy efficiency. Hence,
Fig. 1.10: A Transformer

Fig. 1.11 shows the change in efficiency at each stage of power transmission
from a thermal plant to the user. The efficiency of the T&D system from the
output of the power plant to the end use is the product of all efficiencies
24 (except the generation efficiency) given in the figure.
 " ! 89 (6: 0 * + * ; Energy
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/# 5 ! % " ?6:

%# " -! %# /#
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Fig. 1.11: Energy Efficiency from Generation to End User

25
Energy Conservation, If you want to go into the technical aspects of supply side energy efficiency,
Audit and Accounting you may like to read the information given in the box below. You may skip it if
you are not technically inclined.

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Demand Side Efficiency

Demand side efficiency can be managed with energy efficient end usage.
Around two-thirds of the energy is lost while converting primary,
secondary and final energy into useful energy services. Improving the
energy efficiency of end-use applications would further help in energy
conservation. Although we will discuss this issue in detail in Units 4 and 5
of this block, we would like to set the tone of the discussion right here.
The Indian consumer market is extremely price sensitive; consumers
prefer lower initial capital outlay to optimization of lifecycle costs.

A case in point is the lower efficiency of rewound motors, which

constitute nearly 50% of the capital stock in the low and medium capacity
26
range. This is where the implementation of compulsory energy Energy
efficiency standards can promote energy efficient options. Minimum Conservation
energy efficiency standards need to be formulated and rigorously
implemented for moving the users and the market in the direction of
efficient energy use. The development of compulsory energy efficiency
standards for end-use applications by the Bureau of Energy Efficiency
should be able to bring this about.
Industries require heating/ cooling, rotating machines, shop floor
lighting, etc. Necessary measures can be taken to minimize heat loss,
use energy efficient rotating machines and lamps. These will not reduce
the effectiveness of the processes but will definitely reduce energy
consumption. Liberalization and competition, as in the cement industry,
coupled with proactive and focused schemes for upgrading technology
and development, as in the sugar industry, have worked well in improving
This case study is
the energy efficiency of the Indian industry. taken from the report
In fact, industries today are going in for retrofitting energy efficient on Industrial
Technologies Program:
equipments to reduce the cost of extra energy consumption. Right from Energy Efficiency and
using energy efficient lamps to energy efficient motors, to getting energy Renewable Energy,
audits done, many industries are successfully saving on their energy bills. U.S. Department of
Energy, Washington,
You can go through the case study given below to appreciate what can be DC.
done by an industry to improve energy efficiency.

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27
Energy Conservation, Little thought has been given to the planning and layout of urban
Audit and Accounting habitations in India with a view to reduce the energy demand made by civic
amenities and the transportation sector. We need to maximize public
transportation facilities as opposed to private transportation. Although car
manufacturers are developing more and more energy efficient vehicles to
minimize the resource usage, stress should be laid on minimising fuel usage
or making it more efficient. Similarly, higher levels of electrification in the
railways can increase their energy efficiency. These, however, are system-
wide changes that can be implemented only if the concept of energy efficiency
is integrated into town planning and architecture.

While technology is trying to cope up with the growth rate of population and
demand for energy, it is the individual consumer’s behavioural pattern that can
drastically reduce energy consumption. For example, we can save energy by
taking simple steps such as car pools to travel to office or CFLs (Box 1.1) to
light our homes. We shall talk about these aspects in Unit 5 in detail.

Box 1.1: Characteristics of Compact Fluorescent Lights (CFLs)

CFLS are
Efficient: CFLs are four times more efficient and last up to
10 times longer than incandescent bulbs. A 22 watt CFL
has about the same light output as a 100 watt incandescent
bulb. CFLs use 50-80% less energy than incandescent
bulbs.
Less Expensive: Although initially more expensive, you
save money in the long run because CFLs use 1/3rd the
electricity and last up to 10 times as long as the
incandescent bulbs.
Reduce Air and Water Pollution: A single incandescent
bulb replaced with a CFL will keep half a tonne of carbon
dioxide out of the atmosphere over its life-time.

The benefits of improved energy efficiency are explained in the chart below:

$$ $
INDUSTRY NATION WORLD

• Reduced energy bills • Reduced energy imports • Reduced GHG and

• Increased • Avoided costs can be other emissions
competitiveness used for poverty • Maintenance of
• Increased productivity reduction sustainable
• Improved quality • Conservation of limited environment
• Increased profits resources
• Improved energy security
28
 Energy
B -+ 5 ! !"# " Conservation

a) List the measures your distribution utility should take to improve its
own energy efficiency.

b) How will you create awareness amongst the end users for improving
the demand-side efficiency?

Non-commercial energy resources continue to be the dominant fuel used by

the urban poor and in rural areas and this accounts for around 42% of the
energy losses. Improvement in energy efficiency in this area has significant
equity considerations. The energy efficiency of non-commercial energy
resources in traditional applications is less than 10%. This can be doubled by
gasification and by imposed end-use applications. Technology to extract these
efficiencies is being developed. However, implementation is slow.

Non-commercial energy resources can be commercialized into decentralized

energy systems that are accessible to the local people, are technologically
relatively unsophisticated, and can be locally managed. However, we would
need to improve the efficiency with which locally available natural resources
are used to provide energy to rural users.

Energy is the lifeline of modern societies. Today, India has 17% of the world’s
population, but its per capita energy consumption is one of the lowest. In fact,
the energy distribution between developed and developing countries is highly
skewed in favour of the former. We would like you to understand this gap to be
able to envision the future mission of the power sector.

Energy Distribution between Developed and Developing Countries

Although 80% of the world’s population lives in the developing countries (a

four-fold population increase in the past 25 years), their energy consumption
amounts to only 40% of the world total energy consumption (Fig. 1.12).

20% 60%

Developed
Countries

Developing
Countries

80% 40%

Fig. 1.12: A Comparison of Populations and Energy Consumption of Developing

and Developed Nations (2000 A. D.): World Population > 6 billion;
World Energy Consumption − 14 Billion Tonnes of Oil Equivalent
29
Energy Conservation, The world average energy consumption per person is equivalent to
Audit and Accounting 2.2 tonnes of coal. In industrialized countries, people use four to five times
more than the world average and nine times more than the average for the
developing countries. An American citizen uses 32 times more commercial
energy than an Indian citizen.

Energy consumption is integrally linked with the quality of life and per capita
energy consumption is regarded as an indicator for human development
today. The high standards of living in the developed countries can be
attributed to their high-energy consumption levels. The rapid population
growth in the developing countries may be regarded as one reason for low per
capita energy consumption. However, we must ensure good quality energy
supply to all our citizens, at affordable costs at all times. Ensuring energy
security for all is a very important goal for our country and the power sector
has tremendous responsibility on its shoulders in attaining it. Let us try to
understand its implications and the options before our country.

1.3.3 Ensuring Energy Security for All

The basic aim of energy security for a nation is to provide sufficient energy for
all while reducing its dependence on the imported energy sources for its
economic growth.

Energy security rests on two principles:

• To secure access to all sources of energy including coal, oil and gas
supplies within the country and worldwide, till the end of the fossil fuel era,
which is fast approaching. Simultaneously we should access technologies
to provide a diverse supply of reliable, affordable and environmentally
sustainable energy.
• To use the least amount of energy to provide services and cut down
energy losses.

We need to be energy secure in terms of energy resource, i.e., where it comes

from, control of the flow and distribution of the resource, and should have
alternatives in place to allow us to withstand the highs and lows associated
with any commodity. As far as the energy security of India is concerned, you
should know that our country has just 0.8% of the world' s known oil and
natural gas resources. Since 1985, our country has been a net importer of
coal. It has been unable to raise oil production substantially in the past few
decades. Rising oil demand of close to 10% per year has led to sizeable oil
import bills. The dependence of energy imports is projected to increase in the
future. This energy import dependence implies vulnerability to external price
shocks and supply fluctuations, which threaten the energy security of the
country.

Increasing dependence on oil imports means reliance on imports from the

Middle-East, a region susceptible to disturbances and consequent disruptions
of oil supplies. This calls for diversification of sources of oil imports. The need
to deal with oil price fluctuations also necessitates measures to be taken to
30
reduce the oil dependence of the economy, possibly through fiscal measures Energy
to reduce demand, and by developing alternatives to oil, such as natural gas Conservation
and renewable energy.

India will continue to experience an energy supply shortfall in the foreseeable

future unless adequate measures are taken forthwith. Energy security can
only be ensured by a shift in the structure of energy sources. We would need
to minimize fossil fuel imports and assure secure access to energy resources.

Some of the strategies that can be used to meet the future challenges related
to our energy security are:

• building stockpiles;
• diversification of energy fuel sources;
• increased capacity of fuel switching;
• demand restraint;
• development of renewable energy sources;
• improving energy efficiency; and
• sustainable development.

Although all these options are feasible, their implementation will take time.
Also, for countries like India, reliance on stockpiles would tend to be slow
because of resource constraints. Besides, the market is not sophisticated
enough or the monitoring agencies experienced enough to predict the supply
situation in time to take necessary action. Insufficient storage capacity is
another cause for worry and needs to be augmented, if India has to
increase its energy stockpile.

We should tap the hydro and nuclear power potential to the maximum.
Further, targets for power generated through renewable energy technologies
may be raised to 20 or 25% against the present 5%. Distributed Generation
(DG) Technology is the latest concept for meeting local requirement with local
resources at the remotest location with clean form of energy. Micro-hydro,
biomass, solar energy, are some of the resources used for DG.

These measures would also lead to sustainable energy use in future.

As we near the end of this unit, you may like to know: What are the future
energy options available to us for ensuring energy security and sustainable
use of energy? We have two main options for the delivery of sustainable
energy to the consumer:

♦ The favoured and more convenient option is to maintain the chemical

energy base. This would mean replacing fossil fuels by synthetic
hydrogen and continuing the energy business as usual. In this scenario, oil
companies would become hydrogen suppliers, roadside fuelling stations
would pump hydrogen instead of gasoline, and cars would be powered by
hydrogen and fuel cells. This option, termed “hydrogen economy”, can
certainly be realized. The necessary technology is available or can be
developed in time.
31
Energy Conservation, ♦ The second option is a controlled transition from the chemical energy base
Audit and Accounting to an electrical energy base. Renewable energy can be brought to the
people in the form of electricity. The necessary technology is also available
or can be developed rapidly. This option, termed an “electron economy”,
can certainly be realized.

Both these options deliver renewable electricity to the people, but through
different energy carriers and require additional research and development.
New storage technologies are needed for hydrogen as well as for electrons.
But a hydrogen infrastructure must be built from scratch. In simple terms, a
“hydrogen economy” has to compete with an “electron economy”. The option
with the lower energy losses between energy source and energy services
would be preferred. This situation is illustrated in Fig. 1.13. The competition
between hydrogen and electricity will be determined by the respective overall
energy efficiency between renewable source and end-use.

Renewable Electricity to the User

[Taken from ‘On the Electricity from
Way to a Sustainable Renewable Sources
Energy Future’ by
Dr. Ulf Bossel of e− e−
European Fuel Cell Electrolysis
Forum, presented at
the International H2
Conference
“Intelec '
05” at Berlin Hydrogen Economy
Electron Economy
(September 18-22,
2005)]
H2
Fuel Cells

e− e−
? Electricity
to the User ?
Fig. 1.13: Energy Distribution Options in a Sustainable Energy Future

However, of all these options, the simplest and the most easily attainable is
reducing demand through persistent energy conservation efforts (Fig. 1.14).

32 Fig. 1.14: What can You do for Energy Conservation?

In the light of the discussion so far, we can outline an energy strategy for the Energy
future with immediate, medium-term and long-term goals. Conservation

1.3.4 Energy Strategy for the Future

We list below the various elements of the immediate, medium-term and long-
term energy strategy.

Immediate Strategy

Rationalizing the tariff structure of various energy products.

Optimum utilization of existing assets.
Efficiency in production systems and reduction in distribution losses,
including those in traditional energy sources.
Promoting R&D, transfer and use of technologies and practices for
environmentally sound energy systems, including new and renewable
energy sources.

Medium-term Strategy

Demand management through greater conservation of energy, optimum

fuel mix, structural changes in the economy, an appropriate model mix in
the transport sector, i.e., greater dependence on rail than on road for the
movement of goods and passenger and a shift away from private modes to
public modes for passenger transport, rail-road coordination; changes in
design of different products to reduce the material intensity of those
products, recycling, etc.

A shift to less energy-intensive modes of transport. This would include

measures to improve the transport infrastructure, viz., roads, better design
of vehicles, use of compressed natural gas (CNG) and synthetic fuel, etc.
Similarly, better urban planning would also reduce the demand for
energy use in the transport sector.

A shift away from non-renewable towards renewable energy sources

viz. solar, wind, small-hydro, biomass energy, etc.

Long-term Strategy
Efficient generation of energy resources
• Efficient production of coal, oil and natural gas.
• Reduction of natural gas flaring.
• Clean coal technology.
Improving energy infrastructure
• Building new refineries.
• Creation of urban gas transmission and distribution network.
• Maximizing efficiency of rail transport of coal.
• Building new coal and gas fired power stations.
33
Energy Conservation, Enhancing energy efficiency
Audit and Accounting
• Improving energy efficiency in accordance with national, socio-
economic, and environmental priorities.
• Promotion of energy efficiency and emission standards.
• Labelling programmes for products and adoption of energy efficient
technologies in large industries.

Deregulation and privatization of energy sector

• Reducing cross-subsidies on oil products and electricity tariffs.

• Decontrolling coal prices and making natural gas prices competitive.
• Privatization of oil, coal and power sectors for improved efficiency.

Investment legislation to attract foreign investments

• Streamlining the approval process for attracting private sector

participation in power generation, transmission and distribution.

At this point, we would like to end the discussion and summarise what you
have studied in the unit.

< ..

The main concepts covered in this unit are as follows:

• The Earth’s energy resource base comprises the Sun’s energy as the
principal source of energy on our planet, fossil fuels like coal, oil, natural
gas, biomass (such as wood, agricultural waste, etc.), and water, wind,
nuclear energy, geo-thermal energy and tidal energy. Of these, coal, oil,
natural gas and hydro-power are the major resources for generating
electricity in our country. These resources can be classified as primary
and secondary, renewable and non-renewable, and commercial and
non-commercial.
• The reserve/production (R/P) ratio for each type of energy resource is
obtained by dividing its reserves remaining at the end of the year by its
production in that year. It tells us how long these resources would last
at the present rates of production and consumption. For India, the
coal, oil and natural gas reserves are expected to last for over
250 years, 20 years and 28 years, respectively.
• In view of the depleting energy resources and the adverse impact of
energy production and usage on the environment, energy conservation
is advocated as a practice for ensuring judicial usage of energy, and
decreasing the quantity of energy consumed while achieving a
similar outcome of end-use.
• Some of the adverse environmental effects of energy related activities
include global warming and climate change due to the increase in
34 greenhouse gases in the environment, and air, water and land pollution.
 Energy
• Improving energy efficiency in both supply and demand sides is a key to
Conservation
energy conservation without compromising the quality of life in a society
which has energy as its lifeline. This coupled with the use of environment-
friendly energy options forms the cornerstone of a sustainable energy
future.
• Ensuring energy security for all is a very important goal for our country.
The basic aim of energy security for a nation is to provide sufficient energy
for all while reducing its dependence on the imported energy sources for
its economic growth. For this, we need to secure access to all sources of
energy as well as access technologies to provide a diverse supply of
reliable, affordable and environmentally sustainable energy. We also need
to use the least amount of energy to provide services and cut down energy
losses.
• Our energy strategy should have immediate, medium-term and long-term
goals to meet our energy needs at affordable costs both economic and
environmental. Energy conservation efforts would form the cornerstone of
the energy strategy.

6 . E

1. List 5 steps each that you can take immediately to a) reduce your
contribution to global warming; b) curtail air, water and land pollution due
to your energy usage; c) improve energy efficiency at home and at work;
and d) use energy in a sustainable manner.
2. Draw a plan for educating the public, the town planners and your fellow
workers about energy conservation.
3. What is the energy resource base of the power plants that supply
electricity to your utility?
4. Explain the natural and enhanced greenhouse effect.
5. What is global warming? How is our energy usage influencing it?
6. Analyse the impact of activities related to energy generation and energy
end-use on environmental pollution.
7. Discuss the options available for ensuring energy security in the area
catered to by your utility.
8. Assess the suitability for adopting renewable energy resources as an
option for attaining energy security.
9. What immediate, medium and long-term strategies can be adopted for
meeting the goal of clean energy for all?
10. Write an essay on “Energy Conservation: Issues and Concerns” with
reference to your own context. In your essay, you should cover the
aspects presented in this unit highlighting the energy needs, available
energy resources, the reasons for conserving energy and the future
directions. 35