Environmental Regulation in

Energy Sector


Dr. Tabrez Ahmad,
Professor of Law
 Sources of Energy
 Energy Market and Technologies in India
 Electricity from Natural Gas and its Impact on Environmental
 Electricity from Coal and its Impact on Environment
 Electricity from Nuclear Energy and its Impact on Environment
 Electricity from Municipal Solid Waste and its Impact on
 Electricity from Hydropower and its Impact on Environment
 Electricity from Non-Hydroelectric Renewable Energy Sources
and its Impact on environment
 World Energy Scenario
 Indian Energy Sector Some facts

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 Indian Energy Sector Vision of Some Eminent Experts
 Energy Potential – Shape of Things to Come
 Power Generation Cost of Electricity
 This environment drives technology development
 Energy technology objectives
 Green technology winning in the market
 Growing Demand for Renewables
 Future of Energy Technology
 Energy demand is growing
 World Energy Scene
 Environment Impact Assessment (EIA)
 Energy, EIA and Sustainable Development
 Environment audit
 Environmental Policy
 Framework for Environmental Legislation
 Energy Policy
 Energy Policy- Strategic areas
 Case Study

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Agenda Cont…
o The energy sector is the totality of all of the industries
involved in the production and sale of energy,
including fuel extraction, manufacturing, refining and
o Energy is fundamental to development hence its
significance in international politics and trade.
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Sources of Energy

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There are five major primary energy sources
in the world
Natural Gas
Source Consumption

Industry comprises:
 Petroleum industry-
 including oil companies, petroleum refiners, fuel transport and end-
user sales at gas stations
 Gas industry-
 including natural gas extraction, and coal gas manufacture, as well
as distribution and sales

Dr. Tabrez Ahmad http://energylex.blogspot.in 6

Sources of Energy

 Electrical power industry-
 including electricity generation, electric power distribution and sales
 Coal industry
 Nuclear power industry, and the
 Renewable energy industry-
 comprising alternative energy and sustainable energy companies,
including those involved in hydroelectric power,
 wind power, and solar power generation, and the manufacture,
distribution and sale of alternative fuels
 Biomass - traditional energy industry based on the collection and
distribution of firewood, commonly used for cooking and heating in
developing countries are all industry players.

Dr. Tabrez Ahmad http://energylex.blogspot.in 7

Energy Sector, what it is what is not? Cont.

 Electricity generation is a significant source of air emissions in the
world today.
 Fossil fuel-fired power plants are responsible for 70 percent of USA
sulfur dioxide emissions, 13 percent of nitrogen oxide emissions, and
40 percent of carbon dioxide emissions from the combustion of fossil
 These emissions can lead to smog, acid rain, and haze.
 In addition, these power plant emissions increase the risk of climate
 Emissions and Generated Resource Integrated Database (eGRID)
provides emissions data on virtually every power plant and company
that generates electricity in the United States.
 The air emissions impacts of electricity generation vary from
technology to technology.

Dr. Tabrez Ahmad http://energylex.blogspot.in 8
 Natural gas is a fossil fuel formed when layers of buried plants and animals
are exposed to intense heat and pressure over thousands of years.
 The energy that the plants and animals originally obtained from the sun is
stored in the form of carbon in natural gas.
 Natural gas is combusted to generate electricity, enabling this stored
energy to be transformed into usable power.
 Natural gas is a nonrenewable resource because it cannot be replenished on
a human time frame.
 The natural gas power production process begins with the extraction of
natural gas, continues with its treatment and transport to the power plants,
and ends with its combustion in boilers and turbines to generate electricity.
 Initially, wells are drilled into the ground to remove the natural gas.
 After the natural gas is extracted, it is treated at gas plants to remove
impurities such as hydrogen sulfide, helium, carbon dioxide, hydrocarbons,
and moisture.
 Pipelines then transport the natural gas from the gas plants to power

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Electricity from Natural Gas
 Power plants use several methods to convert gas to
 One method is to burn the gas in a boiler to produce steam,
which is then used by a steam turbine to generate electricity.
 A more common approach is to burn the gas in a combustion
turbine to generate electricity.
 Another technology, that is growing in popularity is to burn
the natural gas in a combustion turbine and use the hot
combustion turbine exhaust to make steam to drive a steam
 This technology is called "combined cycle" and achieves a
higher efficiency by using the same fuel source twice.
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 Environmental Impacts
 Although power plants are regulated by federal and state laws to protect
human health and the environment, there is a wide variation of
environmental impacts associated with power generation technologies.
 The purpose of the following section is to give you a better idea of the
specific air, water, and solid waste releases associated with natural gas-fired
 Air Emissions
 At the power plant, the burning of natural gas produces nitrogen
oxides and carbon dioxide, but in lower quantities than burning coal or oil.
 Methane, a primary component of natural gas and a greenhouse gas, can
also be emitted into the air when natural gas is not burned completely.
 Similarly, methane can be emitted as the result of leaks and losses during
 Emissions of sulfur dioxide and mercury compounds from burning natural
gas are negligible.
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 The average emissions rates from natural gas-fired generation
 1135 lbs/MWh (pounds per megawatt-hour) of carbon dioxide,
 0.1 lbs/MWh of sulfur dioxide, and
 1.7 lbs/MWh of nitrogen oxides.
 Compared to the average air emissions from coal-fired
generation, natural gas produces half as much carbon dioxide,
less than a third as much nitrogen oxides, and one percent as
much sulfur oxides at the power plant.
 In addition, the process of extraction, treatment, and transport
of the natural gas to the power plant generates additional

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 Water Resource Use
 The burning of natural gas in combustion turbines requires very little water. However,
natural gas-fired boiler and combined cycle systems do require water for cooling
 When power plants remove water from a lake or river, fish and other aquatic life can be
killed, affecting animals and people who depend on these aquatic resources.
Water Discharges
 Combustion turbines do not produce any water discharges.
 However, pollutants and heat build up in the water used in natural gas boilers and
combined cycle systems.
 When these pollutants and heat reach certain levels, the water is often discharged into
lakes or rivers.
 This discharge usually requires a permit and is monitored.
Solid Waste Generation
 The use of natural gas to create electricity does not produce substantial amounts of solid
 Land Resource Use
 The extraction of natural gas and the construction of natural gas power plants can
destroy natural habitat for animals and plants. Possible land resource impacts include
erosion, loss of soil productivity, and landslides.

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 Coal is a fossil fuel formed from the decomposition of organic materials that have been
subjected to geologic heat and pressure over millions of years.
 Coal is considered a nonrenewable resource because it cannot be replenished on a
human time frame.
 The activities involved in generating electricity from coal include mining, transport to
power plants, and burning of the coal in power plants.
 Initially, coal is extracted from surface or underground mines. The coal is often cleaned or
washed at the coal mine to remove impurities before it is transported to the power
plant—usually by train, barge, or truck.
 Finally, at the power plant, coal is commonly burned in a boiler to produce steam.
 The steam is run through a turbine to generate electricity.
Environmental Impacts
 Although power plants are regulated by central and state laws to protect human health
and the environment, there is a wide variation of environmental impacts associated with
power generation technologies.
 The purpose of the following section is to give you a better idea of the specific air, water,
solid waste, and radioactive releases associated with coal-fired generation.
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Electricity from Coal
 Air Emissions
 When coal is burned, carbon dioxide, sulfur dioxide, nitrogen oxides,
and mercury compounds are released.
 For that reason, coal-fired boilers are required to have control
devices to reduce the amount of emissions that are released.
 The average emission rates from coal-fired generation are:
 2,249 lbs/MWh of carbon dioxide,
 13 lbs/MWh of sulfur dioxide, and
 6 lbs/MWh of nitrogen oxides.
 Mining, cleaning, and transporting coal to the power plant generate
additional emissions.
 For example, >methane, a potent greenhouse gas that is trapped in
the coal, is often vented during these processes to increase safety.

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 Water Resource Use
 Large quantities of water are frequently needed to remove impurities from coal
at the mine.
 In addition, coal-fired power plants use large quantities of water for producing
steam and for cooling.
 When coal-fired power plants remove water from a lake or river, fish and other
aquatic life can be affected, as well as animals and people who depend on these
aquatic resources.
 Water Discharges
 Pollutants build up in the water used in the power plant boiler and cooling
 If the water used in the power plant is discharged to a lake or river, the
pollutants in the water can harm fish and plants.
 Further, if rain falls on coal stored in piles outside the power plant, the water
that runs off these piles can flush heavy metals from the coal, such as arsenic
and lead, into nearby bodies of water.
 Coal mining can also contaminate bodies of water with heavy metals when the
water used to clean the coal is discharged back into the environment.
 This discharge usually requires a permit and is monitored.

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 Solid Waste Generation
 The burning of coal creates solid waste, called ash, which is composed
primarily of metal oxides and alkali.

 On average, the ash content of coal is 10 percent.

 Solid waste is also created at coal mines when coal is cleaned and at
power plants when air pollutants are removed from the stack gas.
 Much of this waste is deposited in landfills and abandoned mines,
although some amounts are now being recycled into useful products,
such as cement and building materials.
 Land Resource Use
 Soil at coal-fired power plant sites can become contaminated with
various pollutants from the coal and take a long time to recover, even
after the power plant closes down.
 Coal mining and processing also have environmental impacts on land.
 Surface mining disturbs larger areas than underground mining.

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 Nuclear energy originates from the splitting of uranium atoms in a process called fission.
 Fission releases energy that can be used to make steam, which is used in a turbine to generate
 Nuclear power accounts for approximately 20 percent of the United States' electricity
production and 3 % in India .
 More than 100 nuclear generating units are currently in operation in the United States and
around 16 in India
 Uranium is a nonrenewable resource that cannot be replenished on a human time scale.
 Uranium is extracted from the earth through traditional mining techniques or chemical leaching.
 Once mined, the uranium ore is sent to a processing plant to be concentrated into enriched fuel
(i.e., uranium oxide pellets).
 Enriched fuel is then transported to the nuclear power plant.
 In the plant’s nuclear reactor, neutrons from uranium atoms collide with each other, releasing
heat and neutrons in a chain reaction.
 This heat is used to generate steam, which powers a turbine to generate electricity. Nuclear
power generates a number of radioactive by-products, including tritium, cesium, krypton,
neptunium and forms of iodine.
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Electricity from Nuclear Energy
 Environmental Impacts
 Although power plants are regulated by central and
state laws to protect human health and the
environment, there is a wide variation of
environmental impacts associated with power
generation technologies.
 The purpose of the following section is to give you a
better idea of the specific air, water, land, and
radioactive waste releases associated with nuclear
power electricity generation.

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 Air Emissions
 Nuclear power plants do not emit carbon dioxide, sulfur dioxide, or nitrogen oxides as
part of the power generation process.
 However, fossil fuel emissions are associated with the uranium mining and uranium
enrichment process as well as the transport of the uranium fuel to and from the nuclear
 Water Resource Use
 Nuclear power plants use large quantities of water for steam production and for cooling.
 Some nuclear power plants remove large quantities of water from a lake or river, which
could affect fish and other aquatic life.
 Water Discharges
 Heavy metals and salts build up in the water used in all power plant systems, including
nuclear ones.
 These water pollutants, as well as the higher temperature of the water discharged from
the power plant, can negatively affect water quality and aquatic life.
 Nuclear power plants sometimes discharge small amounts of tritium and other radioactive
elements as allowed by their individual wastewater permits.
 Waste generated from uranium mining operations and rainwater runoff can contaminate
groundwater and surface water resources with heavy metals and traces of radioactive

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 Spent Fuel
 Every 18 to 24 months, nuclear power plants must shut down to
remove and replace the "spent" uranium fuel.

 This spent fuel has released most of its energy as a result of the
fission process and has become radioactive waste.
 Currently, the spent fuel is stored at the nuclear plants at which
it is generated, either in steel-lined, concrete vaults filled with
water or in above-ground steel or steel-reinforced concrete
containers with steel inner canisters.
 In 2012, in USA the President’s Blue Ribbon Commission on
America’s Nuclear Future issued a report (PDF) (180 pp.,
4.3M, About PDF)recommending the timely development of one
or more permanent deep geological facilities for the safe
disposal of spent fuel.

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 Radioactive Waste Generation
 Enrichment of uranium ore into fuel and the operation of nuclear
power plants generate wastes that contain low-levels of
 These wastes are shipped to a few specially designed and licensed
disposal sites.
 When a nuclear power plant is closed, some equipment and
structural materials become radioactive wastes.
 This type of radioactive waste is currently being stored at the
closed plants until an appropriate disposal site is opened.
 Management, packaging, transport, and disposal of waste are
strictly regulated and carefully controlled by the U.S. Nuclear
Regulatory Commission and the U.S. Department of

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 Municipal solid waste (MSW) refers to the stream of garbage collected through
community sanitation services.
 Medical wastes from hospitals and items that can be recycled are generally excluded
from MSW used to generate electricity.
 Paper and yard wastes account for the largest share of the municipal waste stream, and
much of this can be recycled directly or composted.
 Currently, over 30 percent of MSW generated in the United States is recycled annually.
 While not producing this waste in the first place is the preferred management strategy
for this material, recycling is preferred over any method of disposal.
 The majority of MSW that is not recycled is typically sent to landfills after it is collected.
 As an alternative, MSW can be directly combusted in waste-to-energy facilities to
generate electricity.
 Because no new fuel sources are used other than the waste that would otherwise be sent
to landfills,
 MSW is often considered a renewable power source.
 Although MSW consists mainly of renewable resources such as food, paper, and wood
products, it also includes nonrenewable materials derived from fossil fuels, such as tires
and plastics.
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Electricity from Municipal Solid Waste
 At the power plant, MSW is unloaded from collection trucks and shredded
or processed to ease handling.
 Recyclable materials are separated out, and the remaining waste is fed into
a combustion chamber to be burned.
 The heat released from burning the MSW is used to produce steam, which
turns a steam turbine to generate electricity.
 The United States has about 87

operational MSW-fired power generation
plants, generating approximately 2,500 megawatts, or about 0.3 percent of
total national power generation.
 However, because construction costs of new plants have increased,
economic factors have limited new construction.
 Environmental Impacts
 Although power plants are regulated by both central and state laws to
protect human health and the environment, there is a wide variation of
environmental impacts associated with power generation technologies.
 The purpose of the following section is to give you a better idea of the
specific air, water, land, and solid waste impacts associated with MSW-fired
electricity generation.
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 Air Emissions Impacts
 Burning MSW produces nitrogen oxides and sulfur dioxide as well as trace
amounts of toxic pollutants, such as mercury compounds and dioxins.
 Although MSW power plants do emit carbon dioxide, the primary
greenhouse gas, the biomass-derived portion is considered to be part of the
Earth's natural carbon cycle.
 The plants and trees that make up the paper, food, and other biogenic waste
remove carbon dioxide from the air while they are growing, which is
returned to the air when this material is burned.
 In contrast, when fossil fuels (or products derived from them such as
plastics) are burned, they release carbon dioxide that has not been part of
the Earth's atmosphere for a very long time (i.e., within a human time scale).
 The average air emission rates in the United States from municipal solid
waste-fired generation are:
 3685 lbs/MWh of carbon dioxide, (it is estimated that the fossil fuel-derived
portion of carbon dioxide emissions represent approximately one-half of the
total carbon emissions)
 1.2 lbs/MWh of sulfur dioxide, and
 6.7 lbs/MWh of nitrogen oxides.

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 The variation in the composition of MSW affects the emissions impact.
 For example, if MSW containing batteries and tires are burned, toxic
materials can be released into the air.
 A variety of air pollution control technologies are used to reduce toxic air
pollutants from MSW power plants.
 There can be significant greenhouse gas reduction benefits from recycling
and source reduction when compared to other management options.
 Note also that over 1.6 million ton of ferrous and non-ferrous metals,
plastics, glass and combustion ash are recycled annually.
 Water Resource Use
 Power plants that burn MSW are normally smaller than fossil fuel power
plants but typically require a similar amount of water per unit of electricity
 When water is removed from a lake or river, fish and other aquatic life can
be killed, affecting those animals and people who depend on these

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 Water Discharges
 Similar to fossil fuel power plants, MSW power plants discharge used water.
Pollutants build up in the water used in the power plant boiler and cooling
system. In addition, the cooling water is considerably warmer when it is
discharged than when it was taken. These water pollutants and the higher
temperature of the discharged water can upon its release negatively affect
water quality and aquatic life. This discharge usually requires a permit and is

 Solid Waste Generation
 The combustion of MSW reduces MSW waste streams, reducing the creation of
new landfills. MSW combustion creates a solid waste called ash, which can
contain any of the elements that were originally present in the waste. MSW
power plants reduce the need for landfill capacity because disposal of MSW ash
requires less land area than does unprocessed MSW. However, because ash and
other residues from MSW operations may contain toxic materials, the power
plant wastes must be tested regularly to assure that the wastes are safely
disposed to prevent toxic substances from migrating into ground-water
supplies. Under current regulations, MSW ash must be sampled and analyzed
regularly to determine whether it is hazardous or not.

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 Hazardous ash must be managed and disposed of as
hazardous waste. Depending on state and local
restrictions, non-hazardous ash may be disposed of in a
MSW landfill or recycled for use in roads, parking lots, or
daily covering for sanitary landfills.
 Land Resource Use
 MSW power plants, much like fossil fuel power plants,
require land for equipment and fuel storage. The non-
hazardous ash residue from the burning of MSW is typically
deposited in landfills.
 Hydropower is considered a renewable energy resource
because it uses the Earth's water cycle to generate
electricity. Water evaporates from the Earth's surface,
forms clouds, precipitates back to earth, and flows toward
the ocean.

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 The movement of water as it flows downstream creates kinetic energy
that can be converted into electricity. A hydroelectric power plant
converts this energy into electricity by forcing water, often held at a dam,
through a hydraulic turbine that is connected to a generator. The water
exits the turbine and is returned to a stream or riverbed below the dam.
 Hydropower is mostly dependent upon precipitation and elevation
changes; high precipitation levels and large elevation changes are
necessary to generate significant quantities of electricity. Therefore, an
area such as the mountainous Pacific Northwest has more productive
hydropower plants than an area such as the Gulf Coast, which might have
large amounts of precipitation but is comparatively flat.
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Electricity from Hydropower
 Environmental Impacts
 Although hydropower has no air quality impacts, construction and
operation of hydropower dams can significantly affect natural river
systems as well as fish and wildlife populations. Assessment of the
environmental impacts of a specific hydropower facility requires
case-by-case review.
 Although power plants are regulated by federal and state laws to
protect human health and the environment, there is a wide
variation of environmental impacts associated with power
generation technologies.
 The purpose of the following section is to give consumers a better
idea of the specific ecological impacts associated with hydropower.

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 Air Emissions
 Hydropower's air emissions are negligible because no fuels are burned.
However, if a large amount of vegetation is growing along the riverbed
when a dam is built, it can decay in the lake that is created, causing the
buildup and release of >methane, a potent greenhouse gas.
 Water Resource Use
 Hydropower often requires the use of dams, which can greatly affect the
flow of rivers, altering ecosystems and affecting the wildlife and people
who depend on those waters.
 Often, water at the bottom of the lake created by a dam is inhospitable to
fish because it is much colder and oxygen-poor compared with water at the
top. When this colder, oxygen-poor water is released into the river, it can kill
fish living downstream that are accustomed to warmer, oxygen-rich water.
 In addition, some dams withhold water and then release it all at once,
causing the river downstream to suddenly flood. This action can disrupt
plant and wildlife habitats and affect drinking water supplies.
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 Water Discharges
 Hydroelectric power plants release water back into rivers after it
passes through turbines. This water is not polluted by the process of
creating electricity.
 Solid Waste Generation
 The use of water to create electricity does not produce a substantial
amount of solid waste.
 Land Resource Use
 The construction of hydropower plants can alter sizable portions of
land when dams are constructed and lakes are created, flooding
land that may have once served as wildlife habitat, farmland, and
scenic retreats.
 Hydroelectric dams can cause erosion along the riverbed upstream
and downstream, which can further disturb wildlife ecosystems and
fish populations.
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 Hydroelectric power plants affect various fish populations in
different ways. Most notably, certain salmon populations in the
Northwest depend on rivers for their life cycles.
 These populations have been dramatically reduced by the network
of large dams in the Columbia River Basin.
 When young salmon travel downstream toward the ocean, they
may be killed by turbine blades at hydropower plants. When adult
salmon attempt to swim upstream to reproduce, they may not be
able to get past the dams.
 For this reason, some hydroelectric dams now have special side
channels or structures to help the fish continue upstream.

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 Non-hydroelectric renewable energy refers to electricity
supplied from the following renewable sources of power: solar,
geothermal, biomass, landfill gas, and wind. Although
installation of these renewable energy resources is growing,
non-hydro renewable energy is currently responsible for less
than two percent of the electricity generation in the United
Air emissions associated with generating electricity from solar,
geothermal, and wind technologies are negligible because no
fuels are combusted in these processes. The average air
emissions rates in the United States from non-hydro renewable
energy generation are 1.22lbs/MWh of sulfur dioxide and 0.06
lbs/MWh of nitrogen oxides.
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Electricity from Non-Hydroelectric Renewable
Energy Sources
 The sources discussed below are considered to be
renewable because they are continuously being
replenished. They are also considered to be sustainable
because nature will replenish these sources into the future
and faster than they can be used.
 Solar
 Geothermal
 Biomass
 Landfill gas
 Wind

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 About This Technology
 Solar energy is a renewable resource because it is continuously supplied to the
earth by the sun. There are two common ways to convert solar energy into
electricity: photovoltaic and solar-thermal technologies. Photovoltaic systems
consist of wafers made of silicon or other conductive materials.
 When sunlight hits the wafers, a chemical reaction occurs, resulting in the
release of electricity. Solar-thermal technologies concentrate the sun's rays
with mirrors or other reflective devices to heat a liquid to create steam, which is
then used to turn a generator and create electricity.
 Reserves
 Solar resources are available everywhere in the United States, although some
areas receive less sunlight than others, depending on the climate and seasons.
 The greatest solar resources are located in the Southwestern states, where
sufficient solar energy falls on an area of 100 miles by 100 miles to provide all of
the nation's electricity requirements.

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 Environmental Impacts
Air Emissions
 Emissions associated with generating electricity from solar
technologies are negligible because no fuels are
 Water Resource Use
 Photovoltaic systems do not require the use of any water
to create electricity.
 Solar-thermal technologies may tap local water resources
if the liquid that is being heated to create steam is water.
 In this case, the water can be re-used after it has been
condensed from steam back into water.

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 Water Discharges
 Solar technologies do not discharge any water while creating electricity.
 Solid Waste Generation
 Solar-thermal technologies do not produce any substantial amount of solid
waste while creating electricity.
 The production of photovoltaic wafers creates very small amounts of
hazardous materials that must be handled properly to avert risk to the
environment or to people.
 Land Resource Use
 Photovoltaic systems require a negligible amount of land area because they
are typically placed on existing structures.
 In contrast, solar-thermal technologies may require a significant amount of
land, depending upon the specific solar-thermal technology used.
 Solar energy installations do not usually damage the land they occupy, but
they prevent it from being used for other purposes.
 In addition, photovoltaic systems can negatively affect wildlife habitat
because of the amount of land area the technology requires.

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 About This Technology
 Geothermal energy is continuously created beneath the Earth's surface from the extreme
heat contained in liquid rock (called magma) within the Earth's core.
 When this heat naturally creates hot water or steam, it can be piped to the surface and
then used to turn a steam turbine to generate electricity.
 Geothermal energy can also be obtained by piping water underground to extract heat
from hot, dry rocks.
 Heat is then returned to the surface to turn a steam turbine and generate electricity.
 Reserves
 Although geothermal energy exists everywhere in the United States, it is not easy to
extract unless it is close to the surface.
 Some areas of the United States with the greatest potential for generating electricity
from geothermal energy include portions of Nevada, California, Oregon, Idaho, Utah,
Washington, Alaska, Montana, Arizona, and Hawaii. In 2003, geothermal capacity was
2,300 MW.
 Currently identified resources could provide more than 20,000 MW of power in the United
States, and undiscovered resources might provide five times that amount.
 Environmental Impacts
 Air Emissions
 Emissions associated with generating electricity from geothermal technologies are
negligible because no fuels are combusted.
Dr. Tabrez Ahmad http://energylex.blogspot.in 39
 Water Resource Use
 Geothermal power plants usually re-inject the hot water that they remove from
the ground back into wells.
 However, a small amount of water used by geothermal plants in the process of
creating electricity may evaporate and therefore not be returned to the ground.
 Also, for those geothermal plants that rely on hot, dry rocks for energy, water
from local resources is needed to extract the energy from the dry rocks.
 Water Discharges
 Geothermal power plants can possibly cause groundwater contamination when
drilling wells and extracting hot water or steam.
 However, this type of contamination can be prevented with proper
management techniques.
 In addition, geothermal power plants often re-inject used water back into the
ground (through separate wells) instead of discharging the used water into
surface waters.
 This prevents underground minerals or pollutants from being introduced into
surface waters.

Dr. Tabrez Ahmad http://energylex.blogspot.in 40
 About This Technology
 The term "biomass" can describe many different fuel types from such
sources as trees; construction, wood, and agricultural wastes; fuel
crops; sewage sludge; and manure. Agricultural wastes include
materials such as corn husks, rice hulls, peanut shells, grass clippings,
and leaves. Trees and fuel crops (i.e., crops specifically grown for
electricity production) can be replaced on a short time scale.
 Agricultural wastes, sewage sludge, and manure are organic wastes
that will continue to be produced by society. For these reasons,
biomass is considered a renewable resource.
 Biomass obtains its energy from the sun while plants are growing.
Plants convert solar energy into chemical energy during the process
of photosynthesis. This energy is released as heat energy when the
plant material is burned. Biomass power plants burn biomass fuel in
boilers. The heat released from this process is used to heat water
into steam to turn a steam turbine to create electricity.
Dr. Tabrez Ahmad http://energylex.blogspot.in 41
 Biomass is sometimes burned in combination with coal in boilers at power
 This process, called co-firing, is typically used to reduce air emissions and
other environmental impacts from burning coal.
 Co-firing biomass with coal may require a coal boiler to be modified
somewhat so it can combust coal.
 When co-fired with coal, only a small amount of biomass is typically added
(no more than 15 percent of the total amount of fuel going into the boiler) to
maintain the boiler's efficiency.

 The paper Biodiesel Production from Municipal Sewage Sludges (PDF) (4 pp.,
663K, About PDF) provides detailed information about biodiesel as a fuel
derived from renewable biomass.
 Reserves
 Of the estimated U.S. biomass resource of 590 million net tons, only 14
million dry tons, or enough to supply about 3,000 MW of capacity, is
currently available.

Dr. Tabrez Ahmad http://energylex.blogspot.in 42

 Environmental Impacts
 Air Emissions
 Biomass power plants emit nitrogen oxides and a small amount
of sulfur dioxide.
 The amounts emitted depend on the type of biomass that is
burned and the type of generator used.
 Although the burning of biomass also produces carbon dioxide,
the primary greenhouse gas, it is considered to be part of the
natural carbon cycle of the earth.
 The plants take up carbon dioxide from the air while they are
growing and then return it to the air when they are burned,
thereby causing no net increase.

Dr. Tabrez Ahmad http://energylex.blogspot.in 43
 Biomass contains much less sulfur and nitrogen than coal;

when biomass is co-fired with coal, sulfur dioxide and nitrogen oxides
emissions are lower than when coal is burned alone.

 When the role of renewable biomass in the carbon cycle is considered, the
carbon dioxide emissions that result from co-firing biomass with coal are
lower than those from burning coal alone.
 Water Resource Use
 Biomass power plants require the use of water, because the boilers
burning the biomass need water for steam production and for cooling.
 If this water is used over and over again, the amount of water needed is
 Whenever any type of power plant removes water from a lake or river, fish
and other aquatic life can be killed, which then affects those animals and
people that depend on these aquatic resources.

Dr. Tabrez Ahmad http://energylex.blogspot.in 44
 Water Discharges
 As is the case with fossil fuel power plants, biomass power plants have
pollutant build-up in the water used in the boiler and cooling system.
 The water used for cooling is much warmer when it is returned to the lake or
river than when it was removed.
 Pollutants in the water and the higher temperature of the water can harm fish
and plants in the lake or river where the power plant water is discharged.
 This discharge usually requires a permit and is monitored.
 In general, crops grown for biomass fuel require fewer pesticides and fertilizers
than crops grown for food, which means that less pesticide and fertilizer runoff
will reach local streams and ponds than if food crops are grown.
 Solid Waste Generation
 The burning of biomass in boilers creates a solid waste called ash that must be
disposed of properly. However, the ash from biomass normally contains
extremely low levels of hazardous elements.

Dr. Tabrez Ahmad http://energylex.blogspot.in 45
 Land Resource Use
 Generating electricity from biomass can affect land resources in
different ways. Biomass power plants, much like fossil fuel power
plants, require large areas of land for equipment and fuel storage.
 If these biomass plants burn a waste source such as construction
wood waste or agricultural waste, they can provide a benefit by
freeing areas of land that might otherwise have been used for
landfills or waste piles.
 Biomass grown for fuel purposes requires large areas of land and,
over time, can deplete the soil of nutrients.
 Fuel crops must be managed so that they stabilize the soil, reduce
erosion, provide wildlife habitat, and serve recreational purposes.

Dr. Tabrez Ahmad http://energylex.blogspot.in 46
 About This Technology
 Landfill gas is created when microorganisms cause organic waste,
such as food wastes and paper, to decompose in landfills.
 Landfill gas is composed of about fifty percent methane.
 Carbon dioxide and volatile organic compounds (VOCs) make up the
 Landfill gas escapes into the air unless it is collected and burned. In
landfill gas energy projects, landfill gas is burned in boilers,
reciprocating engines, and combustion turbines to produce
 The landfill size and age, quantity of organic waste, and the local
climate help determine how much gas a landfill can produce.
 EPA requires large landfills to collect and burn landfill gas with flares
to destroy the VOCs.
Dr. Tabrez Ahmad http://energylex.blogspot.in 47
Landfill gas
 Reserves
 While some landfills simply burn landfill gas with a flare, more than 380 projects at
365 U.S. landfills are collecting and using landfill gas to produce energy.

 Thirty additional projects are currently under construction. EPA estimates that more
than 600 additional landfills could support landfill gas energy projects cost-

 Landfill gas continues to be produced for twenty years or more after a landfill is
closed. Therefore, as long as landfills continue to be built, landfill gas will continue to
be a resource for producing electricity.
 Environmental Impacts
 Air Emissions
 Burning landfill gas produces nitrogen oxides emissions as well as trace amounts of
toxic materials. The amount of these emissions can vary widely, depending on the
waste from which the landfill gas was created.
 The carbon dioxide released from burning landfill gas is considered to be a part of
the natural carbon cycle of the earth.
 Producing electricity from landfill gas avoids the need to use non-renewable
resources to produce the same amount of electricity. In addition, burning landfill gas
prevents the release of >methane, a potent greenhouse gas, into the atmosphere.

Dr. Tabrez Ahmad http://energylex.blogspot.in 48
 Water Resource Use
 Engines or combustion turbines that burn landfill gas to produce energy
typically require negligible amounts of water.
 Water Discharges
 Engines and combustion turbines burning landfill gas have very little or no
water discharges.
 The collection of landfill gas involves drilling wells into landfills, which does
not affect local bodies of water.
 Solid Waste Generation
 Landfill gas technologies do not produce any substantial amount of solid
waste while creating electricity.
 Land Resource Use
 Burning landfill gas to produce electricity has little impact on land resources.
 While the equipment used to burn the landfill gas and generate electricity
does require space, it can be located on land already occupied by the existing
landfill, thus avoiding any additional use of land.

Dr. Tabrez Ahmad http://energylex.blogspot.in 49
 About This Technology
 Wind is created because the sun heats the Earth unevenly, due to the
seasons and cloud cover.
 This uneven heating, in addition to the Earth's rotation, causes
warmer air to move toward cooler air.
 This movement of air is wind.
 Wind turbines use two or three long blades to collect the energy in
the wind and convert it to electricity.
 The blades spin when the wind blows over them.
 The energy of motion contained in the wind is then converted into
electricity as the spinning turbine blades turn a generator.
 To create enough electricity for a town or city, several wind turbine
towers need to be placed together in groups or rows to create a
"wind farm."
Dr. Tabrez Ahmad http://energylex.blogspot.in 50
 Reserves
 The availability of wind power varies across the United States.
 Areas with the best wind availability include portions of the following states: North
Dakota, Texas, Kansas, South Dakota, Montana, Nebraska, Wyoming, Oklahoma,
Minnesota, Iowa, Colorado, New Mexico, California, Wisconsin, and Oregon.
 In general, wind is consistent and strong enough in the Great Plains states and mountain
passes in the various mountain ranges throughout the United States to generate
electricity using wind turbines.
 The Rocky Mountain and Great Plains states have sufficient wind resources to meet 10 to
25 percent of the electric power requirements of these states.

 Environmental Impacts
 Air Emissions
 Emissions associated with generating electricity from wind technology are negligible
because no fuels are combusted.
 Water Resource Use
 Wind turbines in areas with little rainfall may require the use of a small amount of water.
 If rainfall is not sufficient to keep the turbine blades clean, water is used to clean dirt and
insects off the blades so that turbine performance is not reduced.

Dr. Tabrez Ahmad http://energylex.blogspot.in 51
 Water Discharges
 Wind turbines do not discharge any water while creating electricity.
 Solid Waste Generation
 Wind technologies do not produce any substantial amount of solid waste while creating
 Land Resource Use
 Wind turbines generally require the use of land, although they may also be sited offshore.
 Land around wind turbines can be used for other purposes, such as the grazing of cattle
or farming.
 When wind turbines are removed from land, there are no solid wastes or fuel residues left
 However, large wind farms pose aesthetic concerns and wind turbines that are improperly
installed or landscaped may create soil erosion problems.
 Wind farms can also have noise impacts, depending on the number of wind turbines on
the farm.
 New blade designs are being used to reduce the amount of noise.
 Bird and bat mortality has been an issue at some wind farms.
 Improvements to wind turbine technologies and turbine siting have helped mitigate bird
mortality. Research on impacts to bats is now underway.

Dr. Tabrez Ahmad http://energylex.blogspot.in 52
 World primary energy demand grows by 1.6% per year
on average between 2006 and 2030 – an increase of
45% .
 The world’s energy needs would be well over 50%
higher in 2030 than today.
 China and India together account for 45% of the
increase in global primary energy demand in this
scenario. - World Energy Outlook ( www.iea.org )

World Energy Scenario
Dr. Tabrez Ahmad http://energylex.blogspot.in 53

 Indian Energy Sector Some facts… India - one of the fastest growing
economies in the world.
 It is poised to grow at around 7 percent on moderate term.
 India’s Energy Consumption is 12.6 million btu (british thermal unit)
 India energy intensity is higher compared to Japan, USA and Asia as
a whole by 3.7, 1.55 and 1.47 times respectively (energy consumption
compared to GDP).
 This indicates inefficient use of energy but also substantial scope of
energy savings.
 Long term energy plan for India therefore should aim at – Projecting
the energy demand Projecting the energy mix Exploring the
possibilities for alternative sources and Suggesting measures for
energy efficient uses

Indian Energy Sector Some facts…:
Dr. Tabrez Ahmad http://energylex.blogspot.in 54

 Indian Energy Sector Vision of Some Eminent Experts..
 “ The energy scene in the 21st century is going to see a major shift. Very
soon, oil and gas will see its finiteness. It is high time that we realize this
factor and work towards the fuel of the future. - Dr. A P J Abdul Kalam,
Former President of India, Address at Energy Technology Conclave
“Technology for Sustainability”
 If we expect our economy to keep growing at 9-10% p.a., we need a
commensurate growth in power supply. The power sector has made good
progress over the past few years. It has also seen very significant changes.
 However we have not been able to make a decisive breakthrough in
ensuring high and sustainable rates of growth of this sector and improving
its financial health. - Hon’ble Ex-Prime Minister Dr. Manmohan Singh

Indian Energy Sector Vision of Some Eminent
Dr. Tabrez Ahmad http://energylex.blogspot.in 55

 India's energy potential is rated the third largest in the world,
with annual installations of 875 mega watts (MW), only after
Europe and the United States, exceeding forecasts of 500 MW
- BTM Consult.
 A recent study by the World Resources Institute (WRI)- India’s
energy demand is expected to more than double by 2030. The
country is consequently in need of a huge amount of new
power generation capacity. Considering the figures of the
WRI, the cheapest generating capacity for India will no doubt
be energy savings
Energy Potential – Shape of Things to Come
Dr. Tabrez Ahmad http://energylex.blogspot.in 56
 Primary Commercial Energy Mix
 (%) World V/S India :
 Primary Commercial Energy Mix (%) World V/S India Resources
 World-India
 Oil 37.4-33.22
 Natural Gas 24.3-9.34
 Coal 25.5-53.54
 Nuclear 6.5-1.04
 Hydel 6.3-2.63

 Source : www. planningcommission.gov.in

Dr. Tabrez Ahmad http://energylex.blogspot.in 57
 India – Potential for various Renewable Energy Technologies
by 2020:
 India – Potential for various Renewable Energy Technologies
by 2020 Sources/System Approximate Potential Biogas plants
(in millions)
 12 Improved woodstoves in millions)
 120 Biogas (MW)
 17000 Solar Energy (MW/KM2 )
 20 Wind Energy (MW)
 20000 Small Hydropower (MW)
 10000 Ocean Energy (MW) 50000

Source: India 2020 – A Vision for the New Millennium by Dr. A P J
Abdul Kalam & Y S Rajan, Page No. 254

Dr. Tabrez Ahmad http://energylex.blogspot.in 58
 ENERGY for the future - Some Options…:
 ENERGY for the future - Some Options… Clean Coal Technologies Usage of
renewable energy resource Modernization of power transmission &
distribution system Alternative fuels for surface transportation- bio-fuels,
electric vehicles, hydrogen and fuel cell vehicles. Hydrogen has significant
potential as a clean energy source

 Energy India 2020 – a shape of things to come on Indian energy sector:
 Energy India 2020 – a shape of things to come on Indian energy sector
 Global Perspectives of Energy Sector
 Perspectives of Energy Sector in India
 Non-conventional energy – Development so far & potential sources Profile of
major players of energy sector
 Energy efficiency & energy audit
 Energy statistics Energy directory

Dr. Tabrez Ahmad http://energylex.blogspot.in 59
Power Generation Cost of Electricity
Simple Cycle
Gas Turbine
Cycle Gas
Cleaner Coal Nuclear Wind
$10 Gas
$8 Gas
$6 Gas
$4 Gas

g/kWh: 650 450 1000 900* 0 0
*Near zero with sequestration
Market Adopting Portfolio Approach
Dr. Tabrez Ahmad http://energylex.blogspot.in 60
This environment drives technology
•High fuel prices …
require higher efficiency
•Energy security …
requires more diverse
•More stringent
environmental standards …
require lower emissions,
increased use of renewables
and nuclear
Dr. Tabrez Ahmad http://energylex.blogspot.in 61
Portfolio of affordable, reliable &
environmentally responsible technologies
Energy technology objectives
Driving cost of electricity down



Efficient Diverse
Dr. Tabrez Ahmad http://energylex.blogspot.in 62
Green technology winning in the market
Next-gen blades
Advanced drive trains
Innovative controls
'02 ‘06
$200 MM
$3B +
Dr. Tabrez Ahmad http://energylex.blogspot.in 63
Advanced Cooling
GEVO 12 Engine
Reduced fuel consumption AND
reduced emissions
•Reduces emissions by 40% compared to
existing locomotives
•Increased fuel efficiency by 3% - Saves 9,000
gallons of fuel per locomotive per year*
Common Control
*Assumes average of 300,000 gallons of fuel consumption per year
Green technology winning in the market
Dr. Tabrez Ahmad http://energylex.blogspot.in 64
Sulfur Removal
Future CO

Gas Turbine
Transmission & Distribution
Steam Turbine
Cleaner coal
• Converts coal to synthesis gas … cleaned prior to burning
• Produces useful by-products
• Driving down cost and emissions
– CAPEX approaching pulverized coal
– Criteria emissions approaching natural gas

IGCC (Integrated Gasification Combined Cycle)
Dr. Tabrez Ahmad http://energylex.blogspot.in 65
• Simplified design, increased output, smaller footprint …
will reduce CAPEX and OPEX, and shorten construction schedule
• Part of the US Department of Energy 2010 Program, design certification
submitted to NRC, selected by NuStart, Entergy & Dominion
• On plan for 2007 Combined
Operation License applications
Improved safety
& security
Modular &
passive design
Advanced new nuclear … ESBWR (The Economic Simplified Boiling Water Reactor)
Dr. Tabrez Ahmad http://energylex.blogspot.in 66
'04 '05
• 3% of Electricity Production
• Significant Growth … ~25% CAGR (’95 – ’13)
• ~40% Global Power Capital Spending
Global Renewable
Installed Capacity (GWs)
Growing Demand for Renewables …
World Requiring Renewable
Energy Solutions
Wind 12GW
>50% of
US … 20 % Wind ‘20
UK … 20% Renewables ‘20
Germany … 20% Renewables ‘15
EU … 12% Renewables ‘10
China … 30 GW Wind ‘20
Spain … 20 GW Wind ‘11
India … 12 GW Wind ‘12
‘05 ‘04
Small Hydro
Aggressive Global Targets
Source: REN21 2006 update
Dr. Tabrez Ahmad http://energylex.blogspot.in 67
Renewables … Wind
Complete range of products
 Arklow demonstration
project … 7 x 3.6s
 Largest commercial
1.5 MW platform
• Full power
• Simplified servicing
• Larger farms with
easier grid integration
Future: 2.5/100 MW
• Capacity factor
• High reliability
• Advanced controls
Future: 5 - 7 MW
• Leading cost of
• Utilize GE technology
• Among the most proven
and utilized technology
• Over 4,700 units
• 97%+ availability
2.5 MW platform
3.6 MW offshore
Dr. Tabrez Ahmad http://energylex.blogspot.in 68
Breakthrough technology
– Nano
– Concentrators
– Other …
Integrated systems
– Reduced material
– Increase efficiency
– Mfg processes
COE 30 ¢/kWh
And Beyond
COE 18 ¢/kWh
COE 10 ¢/kWh
Renewables … Solar
Driving cost down
Dr. Tabrez Ahmad http://energylex.blogspot.in 69
Longer-term Best Bets
Enabling technology to deal with environmental challenges
Waste to energy
Liquid fuels
GE Company Proprietary
Dr. Tabrez Ahmad http://energylex.blogspot.in 70
Future of Energy Technology

• Socio-economic trends demanding technology
• Government, academia, industry all have a role
• No silver bullet – a portfolio approach to technologies
Dr. Tabrez Ahmad http://energylex.blogspot.in 71
Green is green: energy technology that is…
 Good for our customers

 Good for the environment

 Good for our shareholders

Dr. Tabrez Ahmad http://energylex.blogspot.in 72

Energy demand is growing
Dr. Tabrez Ahmad http://energylex.blogspot.in 73
 Global energy demand rising
 2003 - 123 million GWh
 2030
 211 million GWh (+71%)
 Driven by rapidly growing economies
– China, India etc

 Oil / Gas / Coal share remains the
 Renewables unable to deliver at
this scale in time
 CO
problem continues to grow

Gas 24%
Oil 38%
Other 8%
Nuclear 6%
Coal 24%
Gas 26%
Oil 33%
Other 9%
Nuclear 5%
Coal 27%
Source – International Energy Agency 2007
World Energy Scene (I)
 1) The world uses a lot of energy
 Average power consumption = 13.6 TWs, or 2.2 kWs per person
 [world energy [electricity] market ~ $3 trillion [$1 trillion] pa]
 - very unevenly (OECD 6.2kWs/person; Bangladesh 0.20

 2) World energy use is expected to grow
 - growth necessary to lift billions of people out of poverty

 3) 80% is generated by burning fossil fuels
  climate change & debilitating pollution
 - which won’t last for ever
 Need major new (clean) energy sources - requires new
Dr. Tabrez Ahmad http://energylex.blogspot.in 74
World Energy Scene (II)
4) Use of primary energy
 - In USA: 34% residential & commercial; 37% industrial; 26%
transport (~30% domestic)

~1/3 of primary energy => electricity (@ ~ 35% efficiency =>
12.4% of world’s energy use))
- Fraction → electricity ~ development (14.3% USA; 6.0% Bangladesh)
and is likely to grow

- Fuel  electricity very country dependent
e.g. coal = 35% in UK*, 54% in USA, 76% in China

* falling as EU emission directives => closure of coal power stations;
without new nuclear build the UK likely to be 70% reliant on
(mainly imported) gas by 2020

Dr. Tabrez Ahmad http://energylex.blogspot.in 75
Future Energy Use
 The International Energy Agency (IEA) expects the world’s
energy use to increase 60% by 2030 (while population
expected to grow from 6.2B to 8.1B) - driven largely by
growth of energy use and population in India (current use =
0.7 kWs/person, vs. OECD average of 6.2 kWs/person) and
China (current use = 1.3 kWs/person)

 Strong link between energy use and the Human
Development Index (HDI ~ life expectancy at birth + adult
literacy and school enrolment + gross national product per
capita at purchasing power parity) – need increased energy
use to lift millions out of poverty
Dr. Tabrez Ahmad http://energylex.blogspot.in 76
Carbon dioxide levels over the last 60,000 years - we are
provoking the atmosphere!
Source University of Berne and National Oceanic, and Atmospheric Administration
Dr. Tabrez Ahmad http://energylex.blogspot.in 77
There is widespread evidence of climate change
e.g. Thames Barrier Now Closed Frequently to Counteract
Increasing Flood Risk (=> potential damage ~ £30bn)
Dr. Tabrez Ahmad http://energylex.blogspot.in 78
Meeting the Energy Challenge Will Need
■ Fiscal measures to change the behaviour of consumers, and provide
incentives to expand use of low carbon technologies
■ Actions to improve efficiency (domestic, transport,…, grid)
■ Use of renewables where appropriate (although individually not hugely
significant globally)
 BUT only four sources capable in principle of meeting a large fraction of
the world’s energy needs:

• Burning fossil fuels (currently 80%) - develop & deploy CO2 capture
and storage
• Solar - seek breakthroughs in production and storage
• Nuclear fission - hard to avoid if we are serious about reducing fossil
fuel burning (at least until fusion available)
• Fusion - with so few options, we must develop fusion as fast as
possible, even if success is not 100% certain

Dr. Tabrez Ahmad http://energylex.blogspot.in 79
What is the cost target for a new energy source?
coe (p/kWh)
World industrial
prices (taxes
excluded) in

[1p = 1 penny

Objectives of European Power Plant
Conceptual Study

 1. Compared to earlier European studies:
• Ensure the designs satisfy economic objectives
• Update the plasma physics basis
 (For both reasons, the parameters of the
designs differ substantially from those of the
earlier studies)

 2. Confirm the excellent safety and environmental
features of fusion power

Dr. Tabrez Ahmad http://energylex.blogspot.in 81
World Energy Spending
 World energy (electricity) market ~ $3 tr ($1 tr) pa
 Publicly funded energy R&D down 50% globally since 1980 in
real terms: currently ~ 0.3% of market. Private funding down
also, e.g. - 67% in USA 1985-97

 Increased energy R&D needed across the board
 Fusion spend is small on the scale of the energy market and
the challenge

 What about relative spending on fusion and (e.g.)
 Most government support for renewables consist of
subsidies to bring relatively mature technologies to the
market, e.g in Europe:
• Energy market: €700 billion

• Energy subsidies: €28 billion

(€5.4 billion to renewables)

• Energy R&D: € 2 billion (€500 million to fusion)

Dr. Tabrez Ahmad http://energylex.blogspot.in 82
Oil and gas
EU energy subsidy and R&D
~ 30 Billion Euro (per year)
Source : EEA, Energy subsidies in the
European Union: A brief overview,
Fusion and fission are displayed
separately using the IEA government-
R&D data base and EURATOM 6th
framework programme data
Dr. Tabrez Ahmad http://energylex.blogspot.in 83
EPA applies Strategic Environmental Assessments(SEAs) to predict and
evaluate the environmental implications of a plan in order to identify
areas of concern and establish best environmental practices.
Different forms of assessments includes:

 Ecological impact assessment
 Environmental health impact assessment
 Hazard and risk impact assessment
 Noise impact assessment
 Social impact assessment
 Water quality impact assessment
 Air quality impact assessment

Dr. Tabrez Ahmad http://energylex.blogspot.in 84
Environmental Impact Assessment for the Energy Sector
 Introduction •
 „Environmental Impact Assessment‟ (EIA) can be
defined as the systematic identification and
evaluation of the potential impacts (effects) of
proposed projects, plans, program or legislative
action of the physical, chemical, biological, cultural,
and socioeconomic components of the total

Dr. Tabrez Ahmad, http://energylex.blogspot.in 85
„Environmental Impact Assessment‟

 NEPA Process (National Environmental Policy Act)
 Introduction
 • The primary purpose of the EIA process, also called NEPA
Process (National Environmental Policy Act) is to
encourage the consideration of the environment in
planning and decision making so as to ultimately arrive at
actions which are environment friendly.
 • EIA is a planning tool which helps planners in predicting
future impacts of different development activities.
 • EIA provides information about adverse environment
effects, predicts, the overall risks arising from any activity,
helps in identifying areas where risks can possibly be

Dr. Tabrez Ahmad, http://energylex.blogspot.in 86
 Need of EIA
 Need of EIA • Environment is composed of Biotic &
Abiotic components. There is a dynamic equilibrium
between these components. When a project is
undertaken it tends to disturb these components. To
maintain the quality of environment it is essential that
the perspective impacts of the project on natural
environment are studied on time and remedial
measures be taken so as to promote sustainable and
holistic development of the project. This is done
through EIA.

Dr. Tabrez Ahmad, http://energylex.blogspot.in 87
 Need of EIA • For Example, a forest ecosystem is a
complete ecosystem which provides food, shelter to
a wide variety of species. It provides firewood, resins,
timber, medicinal herbs, etc.. to us. Therefore forests
are our lifeline. Whenever a project is undertaken
which demands clearing of the forest like
construction of road or a dam, then EIA helps us to
access the impact of that activity on this life line. It
also suggests alternate project sites and alternate
process technologies.

Dr. Tabrez Ahmad, http://energylex.blogspot.in 88
 Need of EIA
 Ideal EIA System An Ideal EIA system Would be
 • Apply to all project that are expected to have a
significant environmental effects and address all
impacts that are expected to occur due to that
 • Compare alternatives to a proposed project,
management techniques and mitigation measures.
 • Result in a clear EIS (Environmental Impact
Statement) which conveys the importance of the
likely and their specific characteristics to non experts
in the field.

Dr. Tabrez Ahmad, http://energylex.blogspot.in 89
 Ideal EIA System
 Ideal EIA System
 • Include broad public participation and stringent administrative
review procedures.
 • Be timed so as to provide information for decision making.
 • Be enforceable.
 • Include monitoring and feedback procedures.
 • Therefore, the purpose of EIA is to help design projects which
enhance the quality of the environment by examining alternative
and remedial measures throughout the entire course of planning
and designing of the development projects

Dr. Tabrez Ahmad, http://energylex.blogspot.in 90
 Goals of Environment Impact Assessment The major aims of EIA are:
 • Resources Conservation
 • Waste minimization
 • Recovery of by-product.
 • Efficient use of equipment
 • Sustainable Development
 Methodology of Environment Impact Assessment
 • Human activities of urbanization and industrialization have many
undesirable environmental side effects. Environmental Impact
Assessment is a procedure which ensures that developmental
activities cause minimal environmental side effects without reducing
the productivity of natural systems and without destroying the
ecological balance.
 • EIA helps to identify the major areas of environmental damage due
to developmental activities in a systematic and comprehensive
manner and also suggests remedial measures to minimize these
negative impacts.

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 Methodology of Environment Impact Assessment
 • The EIA methodology consists of four phases, namely:
 • Organizing the Job
 • Performing the assessment
 • Writing the Environmental Impact Statement (EIS)
 • Review of the EIS.
 Organizing the Job
 • In this step an inter disciplinary (ID) team is constituted to
conduct analysis of the various impacts of the proposed
programme on the environment. An ID team can be defined as a
team which has been organised to address a common problem. It
consists of a group of two or three persons trained in different
fields with the knowledge of concepts, methods, data and terms
related to that subject.

Dr. Tabrez Ahmad, http://energylex.blogspot.in 92
 Inter Disciplinary Team In Conducting EIA analysis
 Organizing the Job
 • Thus the team includes geologists, agronomists, chemists,
agriculturists, ecologists, hydrologists, meteorologists, engineers,
scientists, biologists, anthropologists, etc..
 • The time schedule for the conduct of analysis is fixed. The experts
should have a knowledge of the rules, regulations, and limitations on
the part of the government. Finally a format is prepared containing all
the particular about the projects, its sponsors, participants of the ID
team, time schedule, cost, specific responsibilities. Etc. This format is
distributed to all the members of ID Team

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 Performance of the Assessment This Phase of EIA consists of
the following steps.
 • (a) Site Visit: The members of the interdisciplinary team
visit the site to determine the possible environmental
impacts of the proposed project and record of the
description of the environment as it exists prior to the
implementation of the proposed project.
 • (b) Identification and Evaluation: The adverse and
beneficial effects of the proposed projects on the
environment are evaluated.
 • (c) Discussion of Alternatives: Various possible alternatives
are discussed i.e.

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 Performance of the Assessment (d) Preparation of Checklist: A
checklist is prepared to ensure complete coverage of all the
possible consequences of the proposed project, so that it can
be determined as to what administrative actions should be
taken. (e) Measurement of Environment Impact, due to the
project: For Identifying the impact of the project on the
environment, a checklist of the environmental attributes
reflects the impact on the environment resulting from a
particular action.
 Criteria for Selecting EIA Methodology
 • A large number of models and methodologies are being
practiced in EIA studies. Generally the specialists on EIA make
their own methodologies for individual projects.

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 Preparation of EIS
 Preparation of EIS
 • EIS is the conclusion of EIA. It is a written statement which serves
as a device to ensure that the policies and goals defined by NEPA
(National Environment policy Act) are infused into the ongoing
programmed. It must contain the following items.
 • Description of the site of the project or environment where the
proposed project is to take place.
 • Description of the proposed project, purpose of action, its goals
and objectives, area, extent, equipments, manpower and material
 • The environmental impact of the proposed project.
 • The unavoidable adverse effects resulting from the activity.

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 Preparation of EIS
 • Alternatives of the activity.
 • Relationship of the proposed activities to the existing land use plans.
 • Relationship between local short term uses and long term productivity of
the resources involved.
 • Identifying the measures that can be taken in order to minimize the
adverse effects.
 • Incorporating the modifications in the proposed projects.
 • Finally the EIS, written in a clear and comprehensive manner is presented
to the public, competent authorities and independent experts. It is reviewed
carefully before any decision is taken in favor or against the proposed
 Review of EIS
 • After the completion of EIS report, the law requires that the public must
be informed and consulted on the proposed project. The proposed project is
made available to the public through Press. Anyone likely to be affected by
the project is entitled to have access to the executive summary of the EIA.

Dr. Tabrez Ahmad, http://energylex.blogspot.in 97
 Review of EIS
 Review of EIS The affected person may include.
 • Bonafide Local Residents
 • Local Associations
 • Environment Groups active in the area.
 • Any other person located at the project site/ sites of
 • They are to be given an opportunity to make oral/ written
 • At least one month period is given for public inspection and
submission of comments on the EIS
 • After the final review of beneficial and adverse environmental
impacts and cost benefit analysis etc.., a decision is ultimately
taken to either approve or reject the proposed project.

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 Limitations of EIA EIA suffers from following limitations
 • EIA should be undertaken at the policy and planning
level rather than at the project level.
 • Range of Possible alternatives in the project EIA is often
 • There is no criteria to decide what type of project are to
undergo EIA. A lot of unnecessary expense and delay in
project clearance could be avoided as there are many
projects that do not require an in-depth EIA.
 • Lack of comprehensive environment information base,
limitation of time, manpower and financial resources
make EIA very complicated and time consuming.

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 Limitations of EIA
 • More research and development of improved
methodologies is required to overcome limitations relating to
the uncertainties in data.
 • EIA, reports are too academic, bureaucratic and lengthy
containing too many tables of collected data without any data
analysis, interpretation and environmental implications.
 • In actual practice EIA ends immediately after project
clearance, no follow up action is taken.
 • It does not incorporate the strategies of preventing
environmental intervention. The issue of resource
conservation, waste minimization, by product recovery and
improvement in efficiency of equipment, need to be pursued
as the explicit goal in EIA
Dr. Tabrez Ahmad, http://energylex.blogspot.in 100

 • Sustainable development is essential for the overall socio-
economic development. Sustainable development must meet
the need of the present generation without compromising the
ability of the future generations to meet their own needs and
 Role of EIA in Sustainable Development
 • It is possible to have development without destroying the
environment. This requires a gradual shift from uncontrolled
exploitation to efficient management of natural resources. To
ensure sustainable development the depletion of renewable
resources should not take place at a rate faster than their rate
of generation.
 • Only those technological developments with minimum
environmental hazards should be adopted in order to sustain
the environment for future generations.
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Role of EIA in Sustainable Development
 Role of EIA in Sustainable Development
 Role of EIA in Sustainable Development
 • Sustainable development is closely linked to the
carrying Capacity of an ecosystem as the latter
determines the limits to economic development.
Carrying capacity of a specific ecosystem is the
maximum rate of resource consumption that can be
sustained definitely in that specific area and
overexploitation of natural resources above this
maximum will lead to depletion and ecological

Dr. Tabrez Ahmad, http://energylex.blogspot.in 102
 Role of EIA in Sustainable Development
 • Carrying capacity based planning ensures
sustainable development, Environment Impact
Assessment (EIA) could form a major instrument in
decision making and for measurement of
sustainability in the context of regional carrying
capacity, provided the conceptual framework is
extended to cumulative assessment of
developmental policies, plans and projects on a
regional basis.

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 Role of EIA in Sustainable Development
 Guidelines for Project Proponents
 • The MOEF has prepared environmental guidelines,
to help the project proponents to work out an EIA,
Guidelines have been prepared to bring out specific
information required for environmental clearance.
 • These guidelines basically consists of aspect
regarding planning and implementation of
development projects. The majority of projects in
India which requires EIA, are large developmental
projects like nuclear power, river valley, thermal
power plants, etc.. Where government play an
important role.

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 Guidelines for Project Proponents
 • The critical Issues guidelines are: focused in these
 • Can the local environment cope with the additional waste and pollution
that the project will produce?
 • Will the project location conflict with the nearby land use or preclude later
developments in surrounding areas?
 • Can the project operate safely without serious risk of accidents or long
term health hazards?
 Guidelines for Project Proponents
 • How will the project affect economic activities that are based on natural
 • Is there sufficient infrastructure to support the project?
 • How much the resources will the project consume and are adequate
supplies of these resources available?
 • What kind of human resources will it require or replace and what will be
its social impacts in the short/long run?
 • What damages will it inadvertently cause to the national/ regional assets
such as natural resources, tourists areas or historic or cultural sites etc.?

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 • Environmental Audits are intended to quantify
environmental performance and environmental position
of an industry/ organization. In this way they perform a
function similar to financial audits.
 • An environmental audit report ideally contains a
statement of environmental performance and
environmental position, and may also aim to define what
needs to be done to sustain or improve on indicators. Of
such performance and position. It can as one of the tool
for achieving the goal of sustainable development.

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Environmental Audits
 Environmental Audits
 • Environmental auditing is mandatory only in cases stipulated
by law.
 • The aim of the audit is to facilitate management control of
environmental practices and to enable the company to assess
compliance with it‟s policies including meeting regulatory
 Definition of Environmental Audit
 • According to United States Environmental Protection
Agency (USEPA), Environmental Audit (EA) is a systematic
documented, periodic and objective review by a regulated
entity of facility operations and practices related to meeting
environmental requirements .

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 Definition of Environmental Audit
 • The concept of environmental auditing in industrial units in
India was formally introduced in March 1992 with an over all
objective of minimizing consumption of resources and
promoting use of clean technologies in industrial production
to minimize generation of wastes. India was the first country
in the world to make environmental audits compulsory.
 Definition of Environmental Audit
 • The government of India, by its gazette notification [No.
GSR 329 (E) ] of March 13, 1992 made it mandatory for all the
industries to provide annual environmental audit reports of
their operations, beginning with 1992-93. This required
industries to provide details of water, raw material and energy
resources used, and the products and waste generated by
them. These audit reports has to be submitted to the
concerned state pollution control boards on or before 30th
September every year.

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 Environmental Audits should provide answer to the following
 • What are we doing ? In particular, are we in compliance with
government regulations, guidelines, codes of practices, permit
 • Can we do it better? In particular, are there nonregulated
areas where operations can be improved to minimize the impact
on the environment?
 • Can we do it more cheaply? What more should we do ?
 Components of Environmental Audit Assessment
 • An assessment provides expert judgment/ opinion on hazards,
associated risks and management and control measures. It also
identifies knowable hazards and estimates the significance of
risks. The process assesses current practices and capabilities and
provide the basis for recommendations to improve the
organization‟s management system and environmental

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 Assessment
 Components of Environmental Audit Verification
 • Verification determines and documents
performance by evaluating the application of, and
adherence to, policies and procedures. It certifies the
validity of data and reports and evaluates the
effectiveness of management systems. It also ensures
that regulations and policies are being adhered to and
assists in identifying gaps in organizational policies
and standards.

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 Verification
 Environmental Audit
 Basic Steps in the Typical Audit Process
 • Pre-audit activities: These comprise scheduling; team
selection; logistical arrangement; gathering background
information and developing the audit plan.
 • Selection of the Team for the Environmental Audit:
 • Although environmental audit is similar to other form of
audit, the selection of the audit team requires careful
consideration. The following attributes are expected of
environmental auditors:
 • Adequate knowledge in all aspects of EIA
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 Basic Steps in the Typical Audit Process
 • Comprehensive Knowledge of Environmental and
climate change issues.
 • Adequate knowledge of environmental auditing
acquired through training followed by practical
 • An independent and unbiased approach, with aptitude
for research.
 • Being an emerging and expanding field of audit,
inclination to develop and apply new techniques and
methodologies to assess the environmental related
performance of the entity, by drawing experience from
 • Good human relations and communication skills.

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 Audit Process •
 The key activities include understanding management
system; assessing the strengths and weakness; gathering
audit evidences, evaluating audit finding and reporting
audit finding to management.
 Post Audit Activities:
 • Post audit activities are to ensure the audit results are
clearly communicated to the appropriate level of
management and to evaluate effectiveness of audit and
provide suggestions for improving future audit; share
lessons learned during the audit. It also includes
preparation of a draft report; issue a final report to legal
counsel and develop a develop action plans and follow up.

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 Types of Environmental Audits • • • • • • • • Compliance
Audits Environmental Management Audit Liability Definition or
due Diligence Audits.
 Supplier Audits.
 Programme Audits Single Issue Audits.
 Risk Definition or Hazard Identification Where international
audits need to be carried out by a central team, there can be
good reasons for covering more than one area while onsite to
minimize costs.
 Types of Environmental Audits
 Compliance Audits
 Environmental Management Audit
 Liability Definition or due Diligence Audits
 Supplier Audits.

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 The Benefits of Auditing
 • While environmental audits are designed to identify
environmental problems, there may be widely
differing reasons for undertaking them: Compliance
with legislation, pressure from suppliers and
customers, requirements from insurers or for capital
projects, or to demonstrate environmental activities
to the public.
 The benefits of environmental audit include:
 • Ensuring compliance, not only with laws,
regulations and standards, but also with laws,
regulation and standards, but also with company

Dr. Tabrez Ahmad, http://energylex.blogspot.in 115
 The Benefits of Auditing
 • Enabling environmental problems and risks to be
anticipated and responses planned.
 • To demonstrate that an organization is aware of its
impact upon the environment through providing
 • Increases management and employee awareness of
environmental issues.
 • More efficient resources use and finance savings.
 • Promotes “Good Practices”
 • Providing better private and Public Image and
“Security” to Top Management.

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 The Benefits of Auditing
 ISO 14000 and Environmental Management System
 • The International environmental Standards are
intended to provide organizations with the elements
of an effective environmental management system,
which can be integrated of an effective environment
management system, which can be integrated with
other management requirements to assist
organizations to achieve environmental and financial

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 ISO 14000 and Environmental Management System
 • The Current International Standards Environmental Management System
cover following major areas:
 • Environment Management System
 • Environmental Auditing
 • Environmental Labeling
 • Environmental Performance Evaluation
 • Life Cycle Assessment and terms of definition on the
 ISO 14000 and Environmental Management System
 • ISO 14000 builds a single global management System that allows effective
management of environmental responsibilities, liabilities, costs, document
commitment to government, and promotes concern for the society.
 ISO 14000 and Environmental Management System
 • ISO 14000 is a way of empowering businesses to take control of
environmental responsibility and encouraging government departments to
approach the challenges with far greater flexibility.

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 ISO 14000 and Environmental Management System
 • ISO 14000 does not only relate entirely to massive global
companies. The standard states that” It has been written to
applicable to all types and sizes of organization and to
accommodate diverse geographical, cultural and social
 • ISO 14001 Certification is an initiative to bring about
uniformity in environmental compliance standard to reduce
impediment to trade among countries.
 To Whom does the Standard Apply?
 • The Standards apply to all type and sizes of organizations
and the design to encompass diverse, Cultural and Social
Conditions. For ISO 14001, except for committing to continual
improvement and compliance with applicable legislation and
regulations, the standard does not establish absolute
requirement for environmental performance.

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 To Whom does the Standard Apply?
 • ISO 14000 is a group of standards encompassing
the following areas:
 • Environmental Management Systems (14001, 14002,
 • Environmental Auditing (14010, 14011, 14012)
 • Evaluation of Environmental Performance (14031)
 • Environmental Labeling (14020, 14021, 14022, 14023,
 • Life Cycle Assessment

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Environmental policy is any course of action deliberately taken
[or not taken] to manage human activities with a view to
prevent, reduce, or mitigate harmful effects on nature and
natural resources, and ensuring that man-made changes to the
environment do not have harmful effects on humans.

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Environmental Policy

 The OSPAR Convention 1992 - is the convention for the Protection
of Maritime Environment of the North East Atlantic. This is an
international treaty in respect of preventing and eliminating
 Oil Pollution, Prevention and Control OPPC Regulations 2005 (UK)

- Early Treaties
 Oslo Convention 1972 – Convention for the Prevention of
Maritime pollution by dumping from ships and aircrafts.
 Paris Convention 1974 – Convention on the prevention of
maritime pollution from land based sources.

Dr. Tabrez Ahmad http://energylex.blogspot.in 122
Framework for Environmental Legislation
Various Environmental legislations covers all aspects of
offshore oil and gas regulations;
Decommissioning and
These legislations are enforced through:
 Licensing – Application process - Model Clauses
 The Energy related Ministries and the government
departments responsible for licensing and exploration
enforcement and regulating developments of India’s oil and
gas resources.
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Enforcement of Environmental Legislation Cont.
 Environmental Protection Agency (EPA) collaborate with Ministry
of Energy to regulate environmental issues relating to the oil and
gas industry.

 Environmental Legislation
The Environmental Protection Act 1986 establishes the Authority,
Responsibility, Structure and Funding of the EPA.

The Act defines the requirements and responsibilities of the
Environmental Protection Inspectors and empowers the EPA to
request that an EIA process be undertaken.
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Enforcement of Environmental Legislation

Energy policy is the manner in which a given entity (often
governmental) has decided to address issues of energy
development including energy production, distribution and
The attributes of energy policy may include legislation,
international treaties, incentives to investment, guidelines for
energy conservation, taxation and other public policy

Dr. Tabrez Ahmad http://energylex.blogspot.in 125

Energy Policy

 To provide direction and a framework for management and
decision making
 To provide some clarity on the industry
 To provide other stakeholders a framework
 Provides a mechanism to coordinate and monitor activities
of a sector
 Facilitate constructive dialogue
 To provide clients/partners with information on areas of
business opportunities

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Rational for a policy
• This National Energy Policy outlines the energy sector goals,
challenges and actions.
• The Policy covers a gamut of issues and challenges relating to
the following areas:
I. Power Sub-sector;
II. Petroleum Sub-sector;
III. Renewable Energy Sub-sector;
IV. Waste-to-Energy;

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India’s energy policy –key highlights
V. Energy Efficiency and Conservation;
VI. Energy and Environment;
VII. Energy and Gender; and
VIII. Managing the future of the sector.

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India’s energy policy –key highlights Cont.

 The Power-Subsector
 The goals of the Power sub-sector includes increasing
installed power generation capacity from about 2,000 MW
today to 5,000 megawatts (MW) by 2015, and increase
electricity access from the current level of 66% to universal
access by 2020.
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India’s energy policy –key highlights
 Petroleum Sub-sector
 The goals of the Petroleum sub-sector includes ensuring
sustainable exploration, development and production of
the country’s oil and gas endowment;
 Judicious management of the oil and gas revenue for the
overall benefit and welfare of all Indian; and
 Indigenisation of related knowledge, expertise and

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India’s energy policy –key highlights

 Renewable Energy Sub-sector
 The Renewable Energy sub-sector covers biomass, mini
hydro, solar and wind resources.
 The goals of the Renewable Energy sub-sector includes
increasing the proportion of renewable energy in the
total national energy mix and ensure its efficient
production and use.

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India’s energy policy –key highlights
(i) inadequate infrastructure requiring huge
(ii) inadequate access to energy services;

(iii) high cost of fuel for electricity generation;

(iv) inadequate regulatory capacity and enforcement;

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Challenges in the Policy Implementation

(v) operational and management difficulties in utility companies

(vi) vulnerability to climate change and environmental impacts

(vii) inefficiency in the production, transportation and use of

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Challenges in the Policy Implementation Cont.
 1. Create a new ministry of energy by integrating the ministries of petroleum & natural gas,
power, new and renewable energy, coal and the Nuclear Power Corporation
 2 Every unit of fuel and every unit of energy should command a market price: subsidise the
poor through direct cash transfers
 3 End Coal India’s monopoly over the mining of coal; Allow domestic and foreign investors
to mine coal and sell in the open market
 4 Give complete autonomy to energy PSUs like ONGC, IOC, NTPC; Begin the process of
privatization via a National Shareholding Trust accountable to Parliament
 5 Set strict time limits for environment clearances for mining and energy projects
 6 Corporatise and merge state electricity discoms into a single national entity
 7 Create a cross-border energy grid: tap the hydro-power potential of neighbouring
 8 Create ready-to-dig opportunities for exploration companies
 9 Upgrade the Solar Energy Mission: target 30,000 MW instead of current 20,000 MW
capacity in ten years; Encourage wind-based power
 10 Address the demand side to encourage energy efficiency: make the GRIHA system of
rating buildings mandatory; Impose higher taxes on energy inefficient household
appliances and motor vehicles

Energy Policy- Strategic areas
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 Strengths and Opportunities: It will allow the government to frame a
coherent energy policy that cuts across different sub sectors.
 It will end the coordination problems and turf wars between existing
ministries which often work at cross purposes.
 Weaknesses and Threats: It will mean that the jobs of four cabinet ministers
will be reduced to one.
 It will be resisted by the bureaucracies in each of the ministries.
 How to get it done: An executive order announcing the merger of the 4
ministries (plus one PSU) as soon as the PM is sworn is, before the cabinet
portfolio allocation is made.
 A minister of state must be appointed for each sub-sector who can be
responsible for the execution of projects in that sub-sector even as the
cabinet minister frames overall policy and ensures coordination.
 Case Studies: In Germany, the Federal Ministry for Economic Affairs and
Energy has the lead responsibility for the formulation and implementation of
Energy policy.
 The US and UK have unified ministries of energy.
1. Create a new ministry of energy by integrating the ministries
of petroleum & natural gas, power, new and renewable
energy, coal and the Nuclear Power Corporation

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 Strengths and Opportunities: It will help contain the government’s fiscal deficit.
 It will help the rational use of energy resources as people moderate their
consumption according to market prices.
 Weaknesses and Threats: It will be viewed as an anti-poor, anti-middle class
 It will be near impossible to forge a broad political consensus on it.
 How to get it done: Announce an immediate and complete deregulation of
diesel prices. To make this politically acceptable, the current scheme of 50 paise
adjustment per month should be considerably accelerated, perhaps to Rs 1-2 per
 Government should end the practice of dictating the prices of petrol and diesel
to oil PSUs.
 Announce an in-principle end to subsidies for LPG and kerosense with the
assurance that these will be phased out only when a direct cash transfer subsidy
scheme for the poor is implemented. Announce a tight time-table along with the
launch of several closely monitored and scalable pilot projects.
 Use Aadhar to fast track the implementation of cash subsidy scheme for the
2 Every unit of fuel and every unit of energy should command
a market price: subsidise the poor through direct cash

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 Case Studies: Russia announced plans to raise
regulated natural gas tariffs on the domestic market
by 15 percent for all users from July 2013. China
announced that oil product prices would be adjusted
every 10 working days to better reflect international
prices from March 2013.
 Subsidies to coal producers, for example, have been
phased out or reduced sharply in recent years in
several OECD countries.

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 Strengths and Opportunities: As a monopoly that makes super-profits, Coal India
has no incentive to ramp up production to the levels India’s energy sector needs.
 India’s power sector is predominantly dependent on coal. Captive mining by
private sector is not a substitute for open competition in coal mining.
 India’s balance of payments has suffered because of excessive imports of coal
despite sufficient domestic reserves.
 Weaknesses and Threats: Coal India will resist and try and protect its
monopoly status.
 Domestic interest groups will resist opening coal mining to foreign investors.
 How to get it done: By creating a unified ministry of energy, the Coal Ministry’s
resistance to opening their prized PSU to competition will be reduced.
 Offer Coal India full managerial autonomy in return for putting them on a level
playing field.
 Case Study: Australian Federal Treasurer Joe Hockey removed foreign
investment conditions on the ownership of Yancoal Australia Limited in 2013. The
riders were earlier placed on Yanzhou Coal Mining Company, a Chinese state-
owned enterprise, in 2009, including reducing its ownership in Yancoal, which
operates mines in NSW and Queensland, from 100% to less than 70%.
3 End Coal India’s monopoly over the mining of coal; Allow
domestic and foreign investors to mine coal and sell in the
open market

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 Strengths and Opportunities: The problem is not ownership per se.
The problem is the consequence of ownership. Government
ownership inducts both sloth and corruption into the management of
public sector units; Government is still a major player in energy.
 The cohabitation of government ownership in sectors opened to
private investment has only enhanced renting – as is evident in the civil
aviation sector - and arbitrage opportunities – in coal and power, for
instance -- thanks to inefficiencies embedded through ownership.
 Public ownership in its truest sense will enhance accountability,
investment and efficiency through competitive practices.
 Weaknesses and Threats: Ministers will resist an erosion of their turf
of patronage.
 There will be a political storm over privatizing profitable PSUs, even
though these profits are because of protection not competitiveness.

4. Give complete autonomy to energy PSUs like ONGC, IOC,
NTPC; Begin the process of privatization via a National
Shareholding Trust accountable to Parliament

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 How to get it done: The government could transfer its holdings in the PSUs to a trust –
something like the National Shareholding Trust suggested to the NDA regime by the
Disinvestment Commission.
 The PSUs would be out of ministerial stranglehold, under professional managers and the
Trust could be brought under Parliamentary oversight. The trust would in phases offload
government’s holding from current to 51 percent and to the critical 26 percent – to
employees, mutual funds, insurance companies and even a strategic investor to induct
 At a later stage, consider strategic sales of particular PSUs.
 Case Studies: During the Margret Thatcher years, more than 50 companies in UK were
sold or privatised including power and water industries, raising more than £50bn for the
 The Central Electricity Generating Board and 12 regional boards in England and Wales were
renamed Regional Electricity Companies and privatised in December 1990. CEGB’s non-
nuclear generation was carved up between National Power and PowerGen and privatized
the following year.
 Peru's Congress approved the privatisation of up to 49% of state energy firm Petroperú on
December 12th, 2013 as part of a government plan to expand refining capacity. Petroperú
will also be restructured to gain access to capital markets.

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 Strengths and Opportunities: The Union Ministry of Environment has
emerged as the biggest roadblock to mining and energy projects in
recent years.
 While environment issues are important, delays over clearances are
 Investors want certainty.
 Weaknesses and Threats: Environment ministry will resist any
encroachment on its turf.
 Environment NGOs could launch a campaign against this decision.
 How to get it done: Appoint an environment minister who
appreciates the need to balance the needs of fast growth and
protection of the environment.
 Tie in time limits for environment clearances with the agenda of
broader reform of the bureaucracy. That way environment ministry
bureaucrats won’t feel singled out.
 Impose financial penalties on officials responsible for delays.
5 Set strict time limits for environment clearances for mining
and energy projects

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 Case Studies: Brazilian mining firm Vale has cleared a major
hurdle in its plans to build a railway to serve the new Carajas
Serra Sul (S11D) mine in the state of Para after the project was
granted environmental approval by the federal government.
 Spain altered environmental policies to speed approvals on
industrial projects from pig farms to oil rigs and will regulate
shale drilling. Explorers including BNK Petroleum Inc.
(BKX) of Canada and San Leon have set up Spanish offices to
explore shale resources, which have revolutionized natural-gas
production in the United States.

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 Strengths and Opportunities: Generation must be ramped up to 800,000
MW by 2030 to sustain 8 plus per cent GDP growth.
 This cannot be achieved if SEB’s are persistently bankrupted by state
 Accumulated losses of SEBs are over Rs 190,000 crore -- of which 50 per
cent are subsidies not paid for by the states (whereas Section 65 of
Electricity Act 2003 specifies subsidy must be paid by states to utilities in
advance) and the rest is a mix of commercial losses and theft. National
average for T&D losses is 25 per cent (35 % in nine states). This is clearly is
 Weaknesses and Threats: States will resist ceding control and letting go
of the attendant freebies.
 How to get it done: HIVE off the Distribution arms of SEBs, corporatize
and merge them into one national entity and list them, insulating them
from political profligacy.

6 Corporatise and merge state electricity discoms into a single
national entity

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 INSURE receivables by inducting a clause for direct deduction from centre-
state transfers endorsed by Finance Commission.
 The new grid will continue to distribute power and sign PPAs. Its size will
enable better financial engineering.
 Give a strong ‘opt-in’ option to states. The Centre will buy out the state
discom (based on a reasonable valuation) which will result in transfer of
resources to the state in lieu of the energy asset.
 Case Study: The electricity industry operates a single wholesale market
across Ireland known as the Single Electricity Market or SEM. Electricity
across the island is bought and sold through a single pool, which has
augmented competition, efficiency and security of supply. The operation of
this market is facilitated by the Single Electricity Market Operator
(SEMO). SEMO is a contractual joint venture between the two system
operators - SONI in NI and EirGrid Plc their counterparts in the Republic of

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 Strengths and Opportunities: The Himalayan region has an immense potential for hydro power if
harnessed intelligently. India could harness as much as 70,000 MW of hydro power in partnership
with Nepal and Bhutan as also with Bangladesh.
 There is also the potential of bringing power-starved Pakistan into the grid if it can land gas from
 This will enable India to lessen dependence on fossil fuel imports, deliver a better mix in terms of
costs and reduce carbon footprint.
 It will deliver energy and income to the neighbours.
 Weaknesses and Threats: India’s diplomatic relations with neighbours, particularly Nepal,
Bangaladesh and Pakistan have deteriorated in recent years. There is a trust deficit.
 India will have to finance whatever additional infrastructure is necessary to complete the
transmission grid.
 How to get it done: Existing collaboration with Bhutan and Nepal illustrates the potential of
generating power in neighbouring countries, sharing equity power and carting it on the Indian grid.
 There is merit in creating an international power company (and an independent sub-continental grid)
with Nepal, Bhutan, Bangladesh, Pakistan, Sri Lanka and even Myanmar. The equity could be a hybrid
of cash and resources and power carted onto the grid could be priced appropriately and shared.
 Case Studies: The proposed Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline is
expected to be completed by 2017. The pipeline will transport Caspian Sea natural gas from
Turkmenistan through Afghanistan to Pakistan and India.

7 Create a cross-border energy grid: tap the hydro-power
potential of neighbouring countries

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 ASEAN (Association of Southeast Asean Nations) has an energy cooperation
plan, with its first phase running from 2010-15 to build gas pipelines (Trans-
Asean Gas Pipeline) (TAGP) and power grids connecting member countries
for the purpose of trade as well as enhancing energy security.
 The Trans-Thailand-Malaysia Gas Pipeline was commissioned in 2005, which
allows Malaysia to transport natural gas from the Malaysia-Thailand Joint
Development Area to its domestic pipeline system.
 China received Kazakh and Russian oil from a pipeline originating in
Kazakhstan when its transnational oil pipeline was inaugurated in May 2006.
The 200,000 bbl/d pipeline spans 620 miles, connecting Atasu in northern
Kazakhstan with Alashankou on the Chinese border in Xinjiang. China has also
revived its plans to construct an oil import pipeline from Myanmar through an
agreement signed in March 2009.
 Russian state-owned oil giant Transneft began construction in April 2006 of a
pipeline that will extend 3,000 miles, from the Russian city of Taishet to the
Pacific Coast. Known as the Eastern Siberia-Pacific Ocean Pipeline (ESPO), the
project will be completed in two stages.

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 Strengths and Opportunities: India needs to desperately ramp up production of
fuels. Availability and affordability lead to productivity.
 India’s economy cannot afford the dependency it currently operates under. It
imports nearly 80 per cent of its petroleum needs and over 100 million tonnes of
coal besides gas and uranium. This dependency is not sustainable -- in terms of
the geopolitics and economics.
 Investor interest is always seasonal given the plethora of competing
opportunities. Time take from interest to returns is critical. Most importantly,
India can neither afford to go through the Jurassic process and wait for
exploration to deliver nor can it afford the cost vagaries that come with
 The investment regime is pocked with irrationality. Pricing, marketing, end-use
are all determined by the government.
 Weaknesses and Threats: There will be accusations of favourtism to private
 Bureaucracy will try and out hurdles in the process.
8 Create ready-to-dig opportunities for exploration companies

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 How to get it done: Ready-to-dig-explore investment opportunities incubated by either
a PSU in the domain or an inter-ministerial group headed by the Prime Minister – with all
clearances should be offered via an auction to investors.
 There should be an escrow of guarantees and the unit could charge a fee from the
 Pricing should be market determined.
 Case Studies: As per IEA’s World Energy Outlook 2013 Factsheet, Brazil’s oil production
will rise from 2.2 mb/d in 2012 to 4.1 mb/d in 2020 and to 6 mb/d in 2035, making it the
world’s sixth-largest oil producer in 2035 due to its highly complex and capital-intensive
deepwater developments. Brazil is set to strengthen its position as the global leader
accounting for almost 60% of global deepwater production in 2035.
 The U.S. Congress has passed legislation to open the way for the shale gas boom.
Groundswell of project interest emerged as the government embraced Repsol SA (REP)’s
request to explore off Spain’s Canary Islands and backs the development of untapped
shale areas. About 70 permits are in effect for prospecting in Spain, 80 percent higher
than five years ago, according to trade groups.

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 Strengths and Opportunities: India’s energy consumption is as yet low. Per capita energy
consumption is 585 kg of oil equivalent compared to world average of 1802 kg, 1575 kg of
China or 7000-plus kg of US. Per capita electricity consumption is barely 778 kwhr
compared to 2471 in China or 13647 in the US. It has the opportunity to go green.
 With 300 days of sunshine and average temperatures of 26 degrees, solar power has huge
 The potential of wind power – onshore and offshore is huge as is the possibility of
harnessing tidal power on the 7500 km coastline.
 Weaknesses and Threats: Financial viability of SEBs and political ability to champion the
cause of renewables.
 How to get it done: The first policy change required is flexibility in grid management.
Second is digitization or investment in smart grids. Third is the facility of metering and
reverse metering. Fourth, is the need to rewrite the incentives model – step away from
pure subsidies to participative compensation.

 Housing societies could be incentivized - extra FSI/FAR for instance -- to put up roof-top
panels and upload power to the grid. The SEB/Discom could either compensate directly or
adjust power received from power consumed through reverse metering.
9 Upgrade the Solar Energy Mission: target 30,000 MW
instead of current 20,000 MW capacity in ten years; Encourage
wind-based power

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 Availability of space is an issue for solar projects. The Gujarat canal-top solar generation
illustrates possibilities. India has 28 major irrigation projects and thousands of km of
canals – just the main feeders of top five canals add up to 2000 km.

 Indian Railways consumes over 9000 million kwhr of power and 2 billion litres of diesel to
haul its trains and over 2000 million kwhr and 33 million litres of diesel for stationary
power. While a pilot project is looking at solar powered Duranto/Rajdhani, the bigger
potential is solar power generation using the vast real estate – 6800-plus railway stations
-- under its command.
 The possibilities are endless – from getting Panchayats to invite investors/government
agencies to set up solar projects that will deliver in-situ power to NHAI examining the
potential for wind power along national highways.
 Case Study: In 2013, China set a record by adding at least 12 gigawatts of solar
capacity — 50 percent more than any country has ever built in a single year. Chinese solar
manufacturers that are focused on silicon technologies such as Trina and Yingli or newer
thin-film entrants like Hanergy can considerably upgrade their existing technology
through imports of innovative and advanced technology from Western countries.

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 Strengths and Opportunities: A mix of regulation and taxation
can easily achieve more efficient energy use.
 In an energy-scarce country like India, conservation has to be
part of a sustainable energy strategy.
 Construction, household appliances and motor vehicles are
where energy is wasted because of wrong incentives and can be
 Weaknesses and threats: There are inherent dangers in
government using regulation and taxation as policy instruments.
They can be misused or over extended.
 How to get it done: Regulation should set certain minimum
standards of energy conservation. Like the GRIHA ratings do in

10 Address the demand side to encourage energy efficiency:
make the GRIHA system of rating buildings mandatory;
Impose higher taxes on energy inefficient household
appliances and motor vehicles

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 There is a case for taxing more heavily gas guzzling SUVs/large cars to
dissuade use.
 Invest heaving in public transport systems so that dependence on private
vehicles comes down.
 Case Studies: On 1 October 2012, the Greenhouse and Energy Minimum
Standards (GEMS) legislation came into effect, creating a national
framework for appliance and equipment energy efficiency in Australia.
 The EU has set policy objectives in the areas of energy and climate change
and has committed to achieve targets with respect to energy savings,
reductions of greenhouse gas emissions (GHG) and deployment of
renewable energy sources by 2020. The EU has progressively preferred
economic or market-based instruments (“MBI”) – such as indirect taxation,
targeted subsidies or tradable emission rights – for such policy purposes.

Dr. Tabrez Ahmad http://energylex.blogspot.in 152
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