Power Scenario In India

A Seminar Report

Submitted by

NAVREET SINGH

in partial fulfillment for the award of the degree

of

B.TECH

IN

ELECTRICAL ENGINEERING

At

CT INSTITUTE OF ENGINEERING, MANAGEMENT AND TECHNOLOGY

JALANDHAR

CT INSTITUTE OF ENGINEERING, MANAGEMENT AND TECHNOLOGY

SHAHPUR – JALANDHAR

CANDIDATE’S DECLARATION

I hereby certify that the work which is being presented in the Seminar entitled “POWER SCENARIO IN INDIA” by “NAVREET SINGH” in partial fulfillment of requirements for the award of degree of B.Tech(Electrical Engineering) submitted in the Department of Electrical Engineering at CTIEMT, Jalandhar is an authentic record of my own work carried out during a period from July 2015 to Aug 2015 under the supervision of Er.Akshay Agnihotri. The matter presented in this Seminar has not been submitted by me in any other University / Institute for the award of B.Tech Degree.

(Navreet Singh)

This is to certify that the above statement made by the candidate is correct to the best of my/our knowledge.

(Er.Akshay Agnihotri)

Supervisor

The B.Tech Viva-voice Examination of NAME has been held on

__________ and is accepted.

Er.Akshay Agnihotri (Supervisor)

Signature of HOD

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ABSTRACT:

India is a country with more than 1.2 billion people accounting for more than 17% of world’s population. It is the seventh largest country in the world with total land area of 3,287,263 sq kilometers. India measures 3214 km from north to south and 2993 km from east to west. It has a land frontier of 15,200 km and coastline of 7,517 km. India has 28 states and 7 union territories. It faces a formidable challenge in providing adequate energy supplies to users at a reasonable cost. It is anticipated that India’s nominal GDP will exceed US $ 2 trillion by March 2012. India’s nominal GDP crossed the US $ 1 trillion mark in 2007-2008 which means that the annual growth rate of nominal GDP during the period is stupendous 18 percent. Thus the energy challenge is of fundamental importance. In the last six decades, India’s energy use has increased 16 times and the installed electricity capacity by 84 times. In 2008, India’s energy use was the fifth highest in the world. Nevertheless, India as a country suffers from significant energy poverty and pervasive electricity deficits. In recent years, India’s energy consumption has been increasing at a relatively fast rate due to population growth and economic development, even though the base rate may be somewhat low. With an economy projected to grow at 8-9% per annum, rapid urbanization and improving standards of living for millions of Indian households, the demand is likely to grow significantly. As per the estimates made in the Integrated Energy Policy Report of Planning Commission of India, 2006, if the country is to progress on the path of this sustained GDP growth rate during the next 25 years, it would imply quadrupling of its energy needs over 2003-04 levels with a six-fold increase in the requirement of electricity and a quadrupling in the requirement of crude oil. The supply challenge is of such magnitude that there are reasonable apprehensions that severe shortages may occur.

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ACKNOWLEDMENT

I would like to express my sincere gratitude to my Supervisors Er.Akashy Agnihotri for their advices, guidance, continuous encouragement and their generous dedication of precious time throughout the work of this thesis.

Furthermore, I would like to thank all of my friends for their help and support. Finally I dedicate the thesis to all the members of my family for their moral support and patience during this research work.

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TABLE OF CONTENTS

Contents Page No.

Candidate’s Declaration i

Abstract ii

Acknowledgement iii

Table of Contents iv

List of Figures v

Abbreviations vii

Chapter 1: INTRODUCTION 2

Chapter 2: LITERATURE REVIEW 3-36

2.1 Power consumption of Electricity In The World

2.2 Present Power Scenario In India 2.3 Demanded Projection And Generation Planning 2.4 Approach To Selection Of Projects For 11th Plan 2.5 Thermal 2.6 Coal And lignite Based Thermal Plants 2.7 Capacity Addition During 11th plan (2007-2012) 2.8 Fuel Requirement 2.9 Initatives During 11th plan 2.10 Captive Power Plants Required 2.11 Capacity Addition During 12th plan (2012-2017) 2.12 Sensitivity Studies For 12th Plan 2.13 Coal Demand And Avaliability During 12th plan 2.14 Capacity Addition Required During 13th Plan 2.15 Summary of Installed Capacity From Renewable Energy Sources 2.16 Requirement of Peaking Power & Reserve Plants 2.17 Base And Peak Demand In India 2.18 Supply Options For Non-Renewable Energy 2.19 Renewable Energy In India 2.20 Impact of Policy And Vision 2022 2.21 Financing of Renewable Energy

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REFERENCES 37

Copy of paper published in International Journal of Electrical Engineering & International Journal of Scientific & Engineering Research.

LIST OF FIGURES

Fig No. Figure Description Page No.

Fig 1.1 Energy Consunption Trends In G20 consumers 8

Fig 1.2 Annual Energy Generation And Growth Rate in 10 years 9

LIST OF TABLES

Table No. Table Description Page No.

Table 1.1 10th Plan Capacity Addition Target Sector-Wise 11

Table 1.2 Actual Power Supply Position 11

Table 1.3 Sector-Wise Breakup of Capacity Addition During 11th plan 12

Table 1.4 Fuel Requirement 17

Table 1.5 power projects Yielding Benefit During The 11th plan 18

Table 1.6 Capacity addition During 12th plan 21

Table 1.7 Sector-Wise Breakup of 12th Plan Capacity 24Table 1.8 Coal Tie up Capacity 26Table 1.9 Location wise Breakup 26Table 1.10 Capacity Addition Requirement During 12th plan With Demand 26Table 1.12 Capacity Addition Requirement During 13th plan 27Table 1.13 13th plan Tentative program 27Table 1.14 Capacity From Renewable Energy Sources 28Table 1.15 Base & Peak Demand Deflict In India 29Table 1.16 Trajectory of Growth of Installed power Capacity In India 30Table 1.17 Share of Different Renewable Sources In India 32

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1. INTRODUCTION TO ELECTRICITY

Electricity has been part of our lives. It has brought many things that surely have made many wonders and life would seem so hard without it. The use of electrical power categorized such as residential sector includes private households and apartment buildings where energy is consumed primarily for space heating, water heating, air conditioning, lighting, refrigeration, cooking, and clothes drying and other appliances. The commercial sector includes nonmanufacturing business establishments such as hotels, motels, restaurants, street and highway lighting, wholesale businesses, retail stores, health, social, religious and educational institutions, and government. The industrial sector includes manufacturing, construction, mining, agriculture, fishing, and forestry establishments. And the last transportation sector which includes railroads and railways where electricity is used for traction, including urban public transportation.

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2.1 POWER CONSUMPTION OF ELECTRICITY IN THE WORLD

Energy is a vital factor in industrial production and the lifeblood of any nation's economic development. In 2010, world total of electricity production and consumption was 21248TWh. 17635TWh (83%) of electric energy was consumed by final users. The difference of 3612TWh (17%) was consumed in the process of generating power and consumed as transmission loss. Following figure shows the electricity consumption in the world. The following figure presents the world power consumption as per August 2010.

Shortage of electric power will not only compromise a social comfort level but also seriously hamper the economic growth of a nation. The relationship between power consumption and national economic development has a great significance. Power consumption statistics are vital indicators for gauging the economic growth. Developing countries, in comparison with developed countries, generally have higher growth rates of population, energy, and electricity. There are currently also striking disparities of total and per capita energy and electricity consumption. To achieve economic development and industrial progress, an increased supply of energy and of electricity is of vital importance. At the world level, electricity consumption was cut down by 1.5% during 2009, for the first time since World War II. Except in Asia and Middle East, consumptions were reduced in all the world regions. In OECD (Organization for Economic Co-operation and Development) countries, accounting for 53% of the total, electricity demand scaled down by more than 4.5 % in both Europe and North America while it shrank by above 7% in Japan. Electricity demand also dropped by more than 4.5% in CIS (Commonwealth of Independent States) countries, driven by a large cut in Russian consumption. Conversely, in

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China and India (22% of the world's consumption), electricity consumption continued to rise at a strong pace (+6-7%) to meet energy.

Fig 1.1

2.2 PRESENT POWER SCENARIO IN INDIA

India is a nation in transition. Considered an "emerging economy," increasing GDP is driving the demand for additional electrical energy, as well as transportation fuels. The electricity sector in India supplies the world's 5th largest energy consumer, accounting for 4.0% of global energy consumption by more than 17% of global population. Rapid economic growth has created a growing need for dependable and reliable supplies of electricity, gas and petroleum products. Due to the fast-paced growth of India's economy, the country's energy demand has grown an average of 3.6% per annum over the past 30 years. In August 2011, the installed power generation capacity of India stood at 181.558 GW and per capita energy consumption stood at

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787kWh. The country's annual energy production increased from about 190 billion kWh in 1986 to more than 837 billion kWh in 2010.

During the year 2010-11, the energy requirement registered a growth of 3.7% during the year against the projected growth of 5.6% (refer following figure) and Peak demand registered a growth of 2.6% against the projected growth of 6.5%, though the total ex-bus energy availability increased by 5.6% over the previous year and the peak met increased by 6.0%, the shortage conditions prevailed in the Country both in terms of energy and peaking availability. Base load requirement was 861,591 (MU) against availability of 788,355 MU which is a shortage is 73,236 MU i.e. 8.5% deficit. During peak load the demand was for 122,287 MW against availability of 110,256 MW which is a shortage of 12,031 MW i.e 9.8%. Electricity losses in India during transmission and distribution are high. Due to shortage of electricity, power cuts are common throughout India and this has

Fig. 1.2

power plants and 10.42% by Renewable Energy Sources.

More than 50% of India's commercial Most of the world's energy resources are from the sun's rays hitting earth. Some of that energy has been preserved as fossil energy; some is directly or indirectly usable; for example, via wind, hydroelectric or wave power. The energy sources have been split into three categories: fossil fuels, renewable sources, and nuclear sources. The fossil fuels covered here are coal, petroleum, and natural gas. The renewable energy sources are solar,

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wind, hydroelectric, biomass, and geothermal power. The nuclear- powered sources are fission and fusion. Figure to right shows energy resources in India.

Oil is the world’s favorite energy source Which comprises 38% to the total energy production closely followed by coal (26%) and gas (23%). Both nuclear and hydro energy sources contribute Equally at 6% each with the remaining 1% coming from solar, wind, wood, wave, tidal, and geothermal sources. About 65.34% of the electricity consumed in India is generated by thermal power plants, 21.53% by hydroelectric power plants, 2.70% by nuclear energy demand is met through the country's vast coal reserves. The country has also invested heavily in recent years in renewable energy utilization, especially wind energy.

2.3 DEMAND PROJECTION AND GENERATION PLANNING

(i) TENTH PLAN REVIEW

The capacity addition target of 41,110 MW comprising 14,393 MW hydro, 25,417 MW thermal and 1,300 MW nuclear was fixed for the 10th Plan. The sector wise, type wise summary of this capacity addition target is given in Table below

Table. 1.1

10TH PLAN CAPACITY ADDITION TARGET-SECTOR WISE

A moderate target was set for state and private sectors keeping in view the preparedness of various state power utilities and IPPs

(ii) Actual Capacity Addition (till 31.12.2006)

A capacity addition of 17,995 MW has been achieved during 10th Plan till 31/12/06. The total installed capacity as on 31/12/2006 was 1,27,753 MW comprising 33,642 MW hydro, 84,020

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MW thermal including gas & diesel, 3,900 MW nuclear power plants and 6,191 MW from renewable energy sources including wind.

(iii) Power supply position in 10th plan

The year-wise actual power supply position during 2002-03, 2003-04, 2004-05 2005-06 and 2006-07(till Dec-06) of 10th plan is given in Table below:-

Table.1.2

ACTUAL POWER SUPPLY POSITION (ALL INDIA BASIS)

The likely achievement of capacity addition during the 10th Plan is expected to be 30,641 MW which includes 2,578 MW capacity of projects which have been included on best effort basis. Any slippage of these best efforts projects from 10th plan would be reckoned as additional capacity in 11th plan over and above being proposed in this document. In 8th & 9th plan, capacity addition of 16,423 MW and 19,119 MW respectively was achieved. Even though the capacity addition target of 10th plan could not be achieved, the actual capacity addition is expected to be much higher than the earlier five year plans. The reasons for the slippages during the 10th plan have been analysed to learn lessons for capacity addition planning for future plans.

During the first year of 10th plan itself it became clear that a number of projects totalling to 3,009 MW in public and private sectors could not be taken up due to various reasons which included non availability of escrow cover by State Government to IPP projects and fund constraints. There was also delay in super critical technology tie-up by BHEL for six units of 660 MW to be taken up by NTPC which resulted in delay in tendering. Additional projects totalling to 5,008 MW capacity were identified for execution during 10th plan to make up for the projects which could not take off.

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(iv) Growth in Generation During 10th PlanThe growth in generation has been 3.2%, 5.1%, 5.2% and 5.2% during 2002-03, 03-04, 04-05 and 05-06 respectively. In the year 2006-07 (upto Dec-2006) a growth rate of 7.5 % has been recorded. The Compounded Annual Growth Rate (CAGR) of generation during the 10th Plan period is expected to be about5.1%. However, higher growth could have been achieved if adequate gas would have been available for the existing and new gas based plants commissionedduring 10th plan.

(v) Growth in Generation during 11th Plan

As per the Integrated Energy Policy (IEP), issued by the Planning Commission , GDP growth rates of 8%-9% have been projected during the 11th Plan. Assuming a higher growth rate of 9% and assuming the higher elasticity projected by the IEP of around 1.0, electrical energy generation would be required to grow at 9% p.a. during the 11th plan period. Also generation has to be collectively met by utilities, captive plants and Non-conventional energy sources. No reliable plans about captive power capacity expansion are available but based on indicationsavailable from the manufacturers for addition in captive capacity and present utilization of available capacity, the generation from captive plants is expected to increase from 78 BU to 131 BU per annum. Since the load factor of nonconventional energy sources is very low (about 20% on an average), even though the capacity projected by MNRE from these sources is about 23,500 MW by the end of 11th Plan, the expected generation would be only around 41 BU. The generation from these renewables however has not been taken into account for planning purposes. Based on these assumptions following scenario emerges:

(i) Likely energy Generation by utilities in 2006-07 663 BU(ii) Likely Energy Generation by captive plants in 2006-07 78 BU(iii) Total Likely Generation in 2006-07 741 BU(iv) Compounded Annual Growth Rate 9%(v) Required Energy Generation by 2011-12 @ 9% growth rate over 741 BU1140 BU(vi) Less Estimated Energy Generation by captive plants in 2011-12 131 BU(vii) Total Estimated Generation Requirement from Utilities by 2011- 1008 BU

However to meet the objectives of NEP to increase the per capita consumption to1000 units by the year 2011-12, the requirement of generation works out to 1210BU, assuming a population of 121 crores in 2011-12 as per projections of Census 2001. After excluding the generation from captive plants (131 BU) and that from renewables (41 BU), the requirement of generation from utilities works out to 1038 BU. This would require a generation growth rate of 9.5% p.a(CAGR) for utilities.

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2.4 APPROACH TO SELECTION OF PROJECTS FOR 11TH PLAN

Keeping in view the lessons learnt from 10th plan while planning for capacity addition during 11th Plan, cautious approach have been adopted while choosing projects for commissioning in the 11th plan. It has been the endeavour to include only such projects as have high degree of certainty of implementation during 11th Plan.

The approach adopted for selection of Hydro, Thermal and Nuclear projects have been as follows:

(i) Hydro

India is duly concerned about climate change and efforts are on to promote benign sources of energy. Hydro Power is one such source and is to be accorded priority also from the consideration of energy security. Irrespective of size and nature of hydro projects, whether ROR or Storage projects, these are all renewable technologies. However, execution of hydro projects requires thorough Survey and Investigation, preparation of DPR, development of infrastructure, EI Anand other preparatory works, which are time consuming and require two to three years for their preparation. It would take about 5 years to execute a hydro project after the work is awarded for construction. Thus in order to achieve completion of a hydro project during 11th plan, the project should either be already under construction or execution should start at the beginning of the plan. The broad criteria adopted for selection of hydro projects for 11th plan are as under :-

Those hydro projects whose concurrence has been issued by CEA and order for main civil works is likely to be placed by March 2007.

Apart from the above, a few hydro projects of smaller capacity which are ROR type having surface power houses and where gestation period is expected to be less than 5 years have also been included. These projects would need to be rigorously followed up for completion during the 11th plan.

(ii) Nuclear

Nuclear is environmentally benign source of energy and over a period of time, its proportion in total capacity should increase. Keeping in view the availability of fuel, a moderate capacity addition of 3,160 MW nuclear plants has been programmed during the 11th Plan by the Nuclear Power Corporation. All projects are presently under construction. However, in view of the recentdevelopments in the Nuclear Sector, capacity addition in nuclear plants during 12 th Plan is expected to be much higher.

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2.5 Thermal

(i) Gas

Although gas is relatively a clean fuel, at present there is uncertainty about the availability, period of availability and price of gas. Only 2,114 MW gas based capacity has been planned for 11th Plan where gas supply has already been tied up. This does not include NTPC’s gas based projects at Kawas and Gandhar, totalling to 2,600 MW, for which NTPC says that it has the gas supply contract but the matter is sub-judice. However more gas based projects could be taken up for construction as and when there is more clarity about availability and price of gas.

2.6 Coal & Lignite based Thermal plants

Coal is expected to be main stay of power generation in the years to come. The following criteria have been adopted for identifying the coal and lignite based projects for inclusion in the 11th plan.

• Such projects as have already been taken up for execution in the 10th Plan period itself and are due for commissioning in the 11th Plan period.

Those thermal projects whose LOA has already been placed by the State and Central Public Sector Corporations, other inputs also being in place Those thermal projects whose LOA has already been placed and the financial closure

achieved by private developers.

• Those thermal projects whose LOA is expected to be placed by 30th Sept, 2008 and commissioning is expected during the 11th Plan keeping in view the normal gestation period, the size of the plant & the type(green field/expansion).

After discussion with the various State Government and Central Generating Companies, thermal projects with total capacity of 46,635 MW of coal based and 1375 MW lignite based capacity have been identified for capacity addition during 11th plan.

2.7 CAPACITY ADDITION DURING 11TH PLAN (2007-12)

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Based on the preparedness of the projects, it was envisaged that a capacity of about 68,869 MW is feasible for addition during 11th plan period. The sector wise break-up of feasible capacity addition during 11th plan is given in Table below : Table.1.3

In addition to above, thermal projects totalling to 11,545 MW have been identified as best effort projects. These projects would normally be commissioned in then beginning of 12th Plan but in case of any constraints in taking up of any of the projects included in 11th plan, some of these projects would be tried for commissioning during 11th Plan.

Further, a capacity of 13,500 MW has been planned under renewable as per information given by MNRE.

As can be seen from the above profile of capacity addition plan, central sector will play a lead role with capacity addition of more than half of the capacity addition target. There has been a good response from states on the need for capacity addition to meet their growing demand and the states with IPPs, have been given target for achieving the balance capacity. The State owned capacity projected for the 11th Plan is 33.4 % of the total plan as compared to 27% likely during 10th Plan.Out of feasible capacity addition of 68,869 MW, projects totalling to 31,345 MW are already under construction and the balance projects totalling to 37,524 MW have been committed for implementation by the concerned generating companies during the 11th Plan. Details are furnished in the Table below:

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2.8 FUEL REQUIREMENT

The requirement of various fuels for the thermal plants during the terminal year of the 11th Plan (2011-12) at normative generation parameters (PLFs and specific fuel consumption is summarised in the table below. This is based on a thermal capacity addition of 20,387MW and 50,124MW during the 10th and 11th Plan respectively. Table.1.4

Fuel Requirement (Tentative) during 2011-12

* From domestic sources, total coal availability is expected to be 482 MT per annum by 2011-12. Accordingly, imported coal of the order of 40MT, equivalent to 63 MT of Indian coal, may have to be organised. This quantity may reduce provided production of domestic coal is increased.

** 89 MMSCMD of gas requirement at 90% PLF has been projected in 2011- 12. At present, the availability of gas is of the order of 40 MMSCMD and therefore not sufficient to meet the requirement of even existing plants.

2.9 INITIATIVES DURING 11TH PLAN

(i) High Hydro Development

50,000 MW Hydro Initiative was launched in 2003 and Preliminary Feasibility Report (PFRS) of 162 projects totalling to 48,000 MW were prepared. Out of this 77 projects with total capacity of about 37000 MW for which first year tariff is expected to be less than Rs.2.50/unit were selected for execution. Hydro projects have longer gestation period and therefore there is a need to

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formulate a10 year plan for hydro projects. In 11th plan a capacity addition of over 15,500 MW has been targeted keeping in view the present preparedness of these projects. Projects totalling to a capacity of 30,000 MW have been identified for 12th Plan on which necessary preparations have to be made from now onwards to ensure their commissioning during 12th Plan. Thus the effect of 50,000 MW initiative would be visible in 12th Plan period. Preparation of DPR and various clearances and approval etc for these projects are to be obtained during the first two years of 11th Plan. It is recommended that CEA should closely monitor the progress of preparedness of DPR of these projects and their further execution.

(ii) Initiatives in Thermal Power Development:

Efforts were made to bring in highly efficient super critical technology in the country for thermal power plants and execution of six super critical units of 660 MW capacity each was taken up during the 10th Plan period. The first unit of 660 MW based on super critical technology is likely to be commissioned during the first year of 11th Plan i.e. 2007-08. The 11th Plan feasible capacity addition of coal based plants includes 12 units based on super critical technology with acapacity of 8060 MW which is about 18% of total coal capacity planned for 11th Plan. More and more power projects based on super critical technology are under planning stage and they would yield benefit during the 12th Plan period. It is envisaged that more than 50-60% of capacity addition of thermal plants during 12th plan period would be based on super critical units. This would also help in reducing the Carbon dioxide emission from new coal fired capacity.

(iii) Ultra Mega Power Projects (UMPP):

Ministry of Power in the year 2006 has launched an initiative of development of coal based ultra mega projects with a capacity of 4,000 MW each on tariff based competitive bidding. Ultra Mega Power projects are either pit head based projects having captive mine block or coastal projects based on imported coal. Sasan UMPP, a pithead plant in Chattisgarh based on domestic fuel and Mundra UMPP in Gujrat based on imported coal have already been awarded forexecution to the respective developers. According to the bids submitted by these developers only one unit of 660 MW is expected to be commissioned during the 11th Plan and the remaining unit during 12th Plan. Other projects where considerable progress has been made are coastal projects in Andhra Pradesh and Tamil Nadu and a pit head based project in Jharkhand. Further the projects under consideration include pit head projects in Orissa and Chatissgarh and coastal projects in Maharashtra and Karnataka.

(iv) Nuclear Power Development:

11th Plan power programme includes 3160 MW of nuclear power plants all of which are under construction. Recently, agreement has been signed with USA in respect of nuclear co-operation

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which is expected to improve the supply of nuclear fuel for nuclear power plants. It is also expected that execution of nuclear projects will also be opened up to enable participation by other PSUs and private sector. The effect of this is likely to be visible in 12th Plan period. Nuclear Power Corporation of India has indicated a capacity addition of about 11,000 MWduring 12th plan. In addition, NTPC have also expressed their intention to enter into the nuclear power arena and have proposed an addition of 2,000 MW during 12th plan period.

(v) Merchant Power Plants:

A merchant power plant does not have long term PPA for sale of its power and is generally developed on the balance sheet of developers. Government of India has reserved coal block with reserves of 3.2 Billion Tons of coal for allotment by Screening Committee of Ministry of coal for merchant and captive plants. About 10,000 MW capacity is expected to be developed through this initiative. This capacity has not been taken into account while working out the capacity required in the 9.5% growth in generation scenario. Capacity addition through this routewould further contribute to better economic growth, better reliability of power, more spinning reserve and above all would promote creation of competition in the electricity market.

(vi) Decentralised Distributed Generation (DDG):

In some of the remote areas, it is not techno-economically feasible to extend the grid supply. For meeting the demand of such remote areas, it is proposed to set up some power plants based on local energy sources available. These are small hydro and non-conventional sources such as Bio-Mass, Wind, DG sets etc wherein other sources are not available. During the XI plan period a capacity addition of about 5,000 MW of capacity under DDG is envisaged.

2.10 CAPTIVE POWER PLANTS

The generation from captive power plants at the end of X plan (2006-07) is likely to be about 78 billion units. It is envisaged that during the XI plan period about 12,000 MW capacity power plants would be added to the system which will take care of the demand of the industry and also supply surplus power to the grid under Open Access arrangements which has been allowed as per the Electricity Supply Act, 2003.

It is envisaged that the generation from non utility captive power plants by the year 2011-12 may be of the order of 131 billion units which results into a CAGR of 10.5% p.a in captive generation.

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Table.1.5

2.11 Capacity Addition required during 12th Plan

Base Case Scenario:

The capacity addition requirement during 12th Plan corresponding to demand as per 9% GDP growth and elasticity of 0.9 during 12th Plan works out to 75,715 MW. In accordance with the Low Carbon Growth Strategy, priority has been accorded to renewable energy sources, hydro and nuclear generation capacity. Accordingly, a feasible hydro capacity addition of 9,204 MW and nuclear capacity addition of 2,800 MW has been taken as must run during12th Plan while assessing generation capacity addition requirement. Gas based capacity of 1,086 MW only has been considered while carrying out studies, as gas for these projects is assured since it is tied up from local sources. Besides 1200 MW import from Bhutan has also been considered. Based on Studies, balance capacity addition to meet the demand would be from coal based capacity which is 62, 625 MW. However, against this requirement of 62,625MW, projects totalling to, 62,695 MW have been identified as most likely projects to yieldbenefits during 12th Plan.

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The capacity addition planned during the 12th Plan is detailed below:-

(i) CAPACITY ADDITION PLANNED DURING 12th PLAN (Figures in MW)

Table.1.6The above capacity addition requirement during 12th Plan is based on the likely capacity addition of 62,374 MW during 11th plan.

In addition, a grid interactive renewable capacity addition of about 18,500 MW during12th Plan comprising of 11,000 MW wind, 1,600 MW small hydro, 2,100 MW Biomass power,Bagasse Cogen and waste to energy put together and 3,800 MW Solar has been considered for the generation planning studies.

Generation planning has been carried out considering 5% capacity as spinning reserve as stipulated by the National Electricity Policy.The gestation period of hydro and nuclear projects is about 6-7 years. Hence, only those hydro and nuclear projects which are under construction at present are expected to yield benefits during 12th Plan period. In view of uncertainty of gas availability for12th Plan projects, only those projects totalling to 1086 MW have been considered which have tied up gas linkage from local sources. This comprises of 826 MW in central Sector, and 260 MW in State Sector. It may also be mentioned that presently and additional gas based capacity of about 13,000 MW is under construction in the country and this capacity can be commissioned during 11th Plan/12th Plan, if gas is made available for testing /commissioning and commercial operation of these projects.

Projects totalling to 62,695 MW coal based capacity have been identified as most likelyprojects yielding benefits during 12th Plan. The coal based capacity of 62,695 MW is expected to have 10,600 MW in Central sector and 12,080 MW in State Sector and 40,015 MW in private sector. The sector wise breakup of under construction hydro projects of 9,204 MW is 5,632 in Central sector, 1,456 MW in State Sector and 2,116 MW in private sector and nuclear capacity addition of 2,800 MW is in Central sector. Thus the tentative sector-wise breakup of the 75,785

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MW capacity addition required during 12th Plan would be 19,858 MW in Central Sector, 13,796 MW in State Sector and 42,131 MW in Private Sector.

Out of the most likely coal based projects totalling to 62,695 MW; 23,940 MW is based on supercritical technology and 38,755 MW is based on sub-critical technology. Also out of 62,695 MW coal based capacity, 38,548 MW capacity is based on coal linkage, 17,825 MW is coal block based, 6,292 MW is imported coal based and capacity totalling to 30 MW requires coal linkage on account of change in capacity of some of the projects. 25,955 MW of this capacity is located at Pithead, 25,160 MW at load centre and 11,540 MW in Coastal belt.

Sector-wise Summary of the capacity addition is given in Table below:-

(ii) Sector-wise Break-up of 12th plan capacity (Figures in MW)

Table.1.7

(iii) Likely status of coal tie up of the capacity totalling to 62,695 MW is as follows:

Table.1.8

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Table.1.9

A capacity of about 4000 MW is from coastal plants based on imported coal.

2.12 Sensitivity Studies for 12th Plan

Sensitivity studies for 12th Plan have also been carried out based on demand projections with 9% GDP growth rate and an Elasticity of 1 and the capacity addition in various scenarios worked out. For sensitivity analysis two additional scenarios in capacity addition have been worked out as follows:

High Gas Scenario- Additional 12,000 MW gas based capacity under construction has been considered over and above 1086 MW already taken in the Report .

High Gas + High Renewable Scenario - As per revised programme of MNRE, totalrenewable capacity addition of 30,000 MW during 12th Plan has been taken insteadof 18,500 MW considered earlier.

2.13 Coal demand and availability during 12th plan

Availability of coal for the coal based thermal power stations is a matter of serious concern. Although thrust is being accorded to maximize generation from other conventional and nonconventional sources, coal based generation is likely to be the main stay of electricity generation for 12th and 13th Plan to support the targeted GDP growth envisaged by the Government. The coal based capacity addition programme is worked out after taking into account the electricity generation availability from other sources i.e. Hydro, Nuclear, Gas, Lignite and renewable sources. Studies show that the likely system energy requirement that is to be met by coal based plants during the year 2016-17 would be 1095 Billion Units. Further,

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assuming that the estimated generation available from hydro stations to be 30% less than their design energy, the total generation, to be met by coal based plants works out to be 1155 Billons Units.

In order to meet this generation requirement, coal requirement (at SPCC 0.73 Kcal/ Kg)works out to around 842 MT. Against the requirement of 842 MT, 54 MT coal is to be imported by Thermal Power Stations designed on imported coal. SCCL has confirmed a coal availability of 35 MT and around 100 MT coal is expected to be available from captive coal blocks. Thus, 653 MT coal needs to be made available by CIL.

2.14 Capacity addition required during 13th Plan

The peak demand and energy requirement during the terminal year of 13th Plan (2021-22) is expected to be 2,89667 MW and 1993 BU respectively. The capacity addition requirement during 13th Plan corresponding to this demand works out to 93,400 MW (assuming a capacity addition of 374 MW in 11th Plan & 75,785 MW in 12th Plan from conventional sources) as detailed below:

Table.1.12Feasible hydro capacity addition of 12,000 MW and nuclear capacity addition of 18,000 MW has been considered as must run during 13th Plan while assessing generation capacity addition. In addition, MNRE has projected a grid interactive renewable capacity addition of about 30,500 MW during 13th Plan, comprising of 11,000 MW Wind, 1,500 MW from Small Hydro, 2,000 MW Biomass power, Bagasse Cogen and waste to energy put together and 16,000 MW Solar.

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Table.1.13

2.15 SUMMARY OF INSTALLED CAPACITY FROM RENEWABLE ENERGY SOURCES (likely by the end of 12th Plan)

Considering the 11th Plan and tentative 12th Plan capacity addition as detailed above,Summary of Installed Capacity is furnished below:

Table.1.14Extension programmes of the MNRE are largely implemented through the State Renewable Energy Development Agencies. These agencies, in turn, mobilize participation of the State levelmachinery, local institutions, Non- Governmental Organizations (NGOs) and village level organizations for implementation of these programmes. MNRE has set up a Solar Energy Centre near Delhi with the state-of-art facilities for testing of solar thermal and solar photovoltaic materials, devices and systems which will soon become an apex Centre of Excellence. A Centre for Wind Energy Technology has been set up in Chennai for providing technical support to the

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Ministry in the implementation of its wind energy programmes.Research and Development programmes are sponsored in research institutions, nationallaboratories and in industries, both public and private sectors. For market development and financing of renewable energy projects, a separate financing institution called the Indian Renewable Energy Development Agency (IREDA) has been set up as a public sector undertaking.

2.16 REQUIREMENT OF PEAKING POWER AND RESERVE PLANTS

The generation system must be designed to meet the base-load as well as the peak load of the power system with the characteristics to respond dynamically or efficiently to the variation in demand within a short time. Apart from variation in demand, there is expected to be wide variation in generation as well, when the installed base of renewable energy plants increases as a result of pressure on DISCOMs to source their requirement from renewable energy sources (to meet Renewable Purchase Obligation- RPO). Since system stability requires matching of generation with the demand at all instances of time, a certain degree of flexibility and ability of the generators to respond rapidly to the changing demand/availability for renewable energy sources must be introduced into the system through appropriate generation plants

Since our system has vide variations in demand during peak and off peak period due to our typical load duration curve, there is need for peaking support with very high ramping rate. Peaking power can ideally be provided by pondage / reservoir based hydro plants. However, hydro capacity alone may not be able to meet the peaking demand. Fast response during peak hours could be provided by other suitable generation options such as the gas based generation, in particular engine based technology, because of excellent peaking support capability.

2.17 Base and Peak Demand Deficit in India.

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Table.1.15

2.18 Supply Options for Non Renewable Energy

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Strategies to meet India’s energy requirement are constrained by country’s energy resources and import possibilities. Unfortunately, India is not well endowed with natural energy resources. Reserves of oil, gas and Uranium are meager though India has large reserves of thorium. While coal is abundant, it is regionally concentrated and is of low calorie and high ash content, though it has the advantage of low sulphur content. The extractable reserves, based on current extraction technology, remain limited. Hydro potential is significant, but small compared to India’s needs and its contribution in terms of energy is likely to remain small. Further, the need to mitigateenvironmental and social impacts of storage schemes often delays hydro development thereby causing huge cost overruns.

(i) Coal: It is the most important and abundant fossil fuel in India. It accounts for 55% of the country's energy need. The country's industrial heritage has been built upon indigenous coal. Commercial primary energy consumption in India has grown by about 700% in the last four decades. Considering the limited reserve potentiality of petroleum & natural gas, eco-conservation restriction on hydro projects and geo-political perception of nuclear power, coal will continue to occupy centre-stage of India's energy [production??] [10]. With hard coal reserves around 246 billion tonnes, of which 92 billion tonnes are proven, Indian coal offers a unique eco friendly fuel source for the domestic energy market for the next century and beyond. Hard coal deposits, spread over 27 major coalfields, are mainly confined to eastern and south central parts of India. Lignite reserves stand at around 36 billion tonnes, of which 90% occur in the southern State of Tamil Nadu. Out of a total of 171926 MW of electricity generated, coal powered thermal power plants accounted for 92418 MW as of February, 2011 indicatingthat most of India’s electricity needs are dependent on coal. It has been estimated that at current levels of consumption the proven reserves of coal will last for 80 years and if all the inferred reserves also materialize it can last for over 140 years at the current rate of extraction. However, the coal consumption will increase as India tries to meet its energy requirements and thus the reserves will last for fewer years. If domestic coal production continues to increase at a rate of 5% the extractable reserve will run out in around 45 years. Further, it is difficult to predict the long term demand for coal owing to rapid changes in the prices and relative availability of other fuels as well as the technological advancements and new policies in the end use sector. Further, the coal deposits in India are concentrated in the Eastern regions. The setting up of a coal fired power plant in Western or North-west India, entails transporting coal over distances exceeding 1000 Km. and at such distances the economics of coal power become unfavorable.

It is estimated that the coal deficit in India will increase to 400 million tonnes in Financial Year (FY) 2017 from around 50 million tonnes in FY11, according to a Credit Suisse report. Further, as per the Planning Commission report it is expected that demand for coal will rise to around 937 million tonnes by 2021-22 and to more than 1415 million tonnes by 2031-32. This will compel power generation companies to look at offshore coal, either through mine acquisitions or buying coal from international markets. Also the experts say offshore coal is not an easy alternative for

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power companies to meet their requirements. "Technically, the dependence on imported coal is not viable as old power stations cannot take the heat generated from more than 10-12% international coal blending"

(ii)Petroleum/Oil: India has total reserves (proved and indicated) of 1201 million metric tonnes of crude oil. Crude oil production during 2009-10 at 33.69 million metric tonnes was 0.55% higher than the 33.51 million metric tonnes produced during 2008-09. The consumption of petroleum products during 2009-10 was 138.196 million metric tonnes (including sales through private imports) which is 3.60% higher than the sales of 133.400 million metric tonnes during 2008-09 [12]. Long-term growth in demand of petroleum products depends upon a number of factors such as economic growth (GDP), elasticity of demand for petroleum products with respect to GDP growth, relative price levels of substitute products particularly LNG/CNG, saturation of LPG demand, and the impact of energy conservation measures. The demand for petrol and diesel is dependent on the growth of road infrastructure, the price of oil, the future efficiency of vehicles, the growth of alternate modes of transport and the emergence ofsubstitutes like bio-fuels and/or technologies such as hybrids. Naphtha demand is dependent on the growth plans for fertilizer and petro-chemicals and its price relative to the price and availability of natural gas. The production of automobiles has greatly increased in the last decade in India It passed the 1 million mark during 2003-2004 and has more than doubled since then. Due to rapid growth of [the number of] automobiles the demand for petroleum products will witness a growth in demand and it is expected to rise to more than 240 million metric tonnes by 2021-22 which will further increase to around 465 million metric tonnes by 2031-32 considering a high output growth.

(iii)Nuclear Energy: Nuclear power is the fourth-largest source of electricity in India after thermal, hydroelectric and renewable sources of electricity. As of 2010, India has 20 nuclear reactors in operation in six nuclear power plants, generating 4,780 MW while 5 other plants are under construction and are expected to generate an additional 2,720 MW. India's nuclear power industry is undergoing rapid expansion with plans to increase nuclear power output to 64,000 MW by 2032 [16]. The country is involved in the development of nuclear fusion reactors through its participation in the ITER project and is a global leader in the development of thorium-based fast breeder reactors (FBR). India is poorly endowed with Uranium. Available Uranium supply can only fuel 10,000 MW of the Pressurized Heavy Water Reactors (PHWR). FBR technology is critical to developing stage two of India’s nuclear power program. Without developing the wide-scale use of FBR technology, India will find it difficult to go beyond 10,000 MW of nuclear capacity based on known indigenous Uranium resources. India aims to supply 25% of electricity from nuclear power by 2050. Because India is outside the Nuclear Non-Proliferation Treaty due to its weapons program, it was for 34 years largely excluded from trade in nuclear plant or materials, which hampered its development of civil nuclear energy [production] until 2009. Due to these trade bans and lack of indigenous uranium, India has uniquely been developing a nuclear

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fuel cycle to exploit its reserves of thorium. Although the trade ban stopped India importing uranium it helped it to develop indigenous technology and trained a large manpower in the nuclear field. With the signing of a nuclear cooperation agreement it is anticipated that foreign technology and fuel will boost India's nuclear power plans considerably, however, the initial euphoria has somewhat ebbed as India failed to sign the Nuclear liability bill.

2.19 Renewable Energy in India

India has been making continuous progress in conventional as well as renewable power generation. The trajectory of growth of installed capacity since 2002 (start of the 10th five year Plan), 2007 (start of 11th Plan), and as of 30 November 2010

Large hydro projects are also facing problems – largely related to environmental issues and some to project execution in difficult areas along with attendant issues of building long transmission lines. Natural gas difficulties and its competitive usages also do not create optimism. Nuclear power capacity building continues to face its own problems, especially with the huge targets proposed. In the above backdrop, therefore, it could reasonably be expected that there could be substantial and worrisome slippages in creating conventional power capacities over the next two decades and even in the long term. It is almost inevitable that this would lead to more consumption of diesel, furnace oil and kerosene. In a situation where India is currently importing more than 80% of the country’s fuel needs, and with internal reserves unlikely to improve this percentage, serious problems of energy security would arise. Moreover, these may entail rising financial burdens of import and internal financial burdens of subsidies, which are already controversial. It is, therefore, imperative that substantive measures be taken to reduce their consumption for energy purposes and also reducing consumption drastically in personalized urban and long-distance freight transport. If energy shortages persist it is difficult to expect much improvement in energy access. India has an ambitious program of rural electrification (RGGVY). However, even though this may provide grid connectivity to many uncovered areas (still leaving substantial numbers unconnected), actual supply of electricity through the grid would remain both constrained and unpredictable. Providing energy access and energy security for the poor would, therefore, continue to be a issue and problem. Solutions to this simply have to be found but which no longer appear possible from conventional sources. It is clear thatIndia’s need for secure, affordable, and environmentally sustainable energy has become one of the principal economic and development challenges for the country.

(i) Wind Power

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The wind power program is the fastest growing renewable energy program [in India] and is almost entirely coming through private sector investments. India has a potential of around 48,500 MW. With a capacity addition of 12,800 MW, it contributes to around 75% of the grid-connected renewable energy power installed capacity. The major wind power capacity is in the states of Tamil Nadu, Gujarat, Maharashtra, Karnataka and Rajasthan. Wind electric generators of unit sizes between 225 kW and 2.10 MW have been deployed across the country. Wind Electric Generators of unit capacity up to 2.10 MW are being manufactured India. An ambitious target of 9,000 MW was set for 11th Plan, of which 5,715 MW had already been achieved by September, 2010. This has been possible because of the multidimensional approach of central and state governments. The main driving force for development of wind sector has been theprovision of accelerated depreciation of 80%, an incentive also available to many other sectors. This provision has enabled large profit making companies, small investors and captive users to participate in the sector. However, independent power producers (IPPs) and foreign direct investment (FDI) were not able to benefit from the accelerated depreciation provision. In order to increase the investor base, the government has launched a scheme for Generation Based Incentives through which additional incentives of 50paise per unit [generated will be provided to the developers that do not receive accelerated depreciation benefits. The effort is to do 2000 MW or more annually.

(ii) Solar power

Among the various renewable energy resources, India possesses a very large solar energy potential; most parts of the country are blessed with good amounts of sunshine. There are about 300 clear sunny days in a year in most parts of country. The averge solar radiation incident over India varies from 4 kWh/day - 7 kWh/day. The solar radiation received over the Indian land area is estimated to be about 5,000 trillion kWh/year. In June, 2008, a National Action Plan on Climate Change was announced, which included eight major national missions with the one on solar energy being the centre piece. This mission envisages a major step up in the utilization of solar energy for power generation and other purposes. The Jawaharlal Nehru National Solar Mission (JNNSM) was launched by the Prime Minister of India in January 2010, with a target of 20,000 MW grid solar power (based on solar thermal power generating systems and solar photovoltaic (SPV) technologies), 2000 MW of Off grid capacity including 20 million solar lighting systems and 20 million sq.m. solar thermal collector area by 2022. The Mission will be implemented in three phases. The first phase will be of three years (up to March, 2013), the second up to March 2017and the third phase will continue until March, 2022.

Trajectory of Growth of Installed Power Capacity in India.

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Table.1.16

Share of Different Renewable Sources in India.

Table.1.17

2.20 Impact of Policy and Vision 2022

During the last many years the share of renewable energy has steadily increased due to the initiative taken by Government of India and as indicated in Table 5. The share of various types of renewable energy is indicated in Table 6. All figures are in MW. It is estimated that total share of renewable energy will be 15.9% by 2022. In the larger perspective of grid power an innovative scheme is being tried in India called as tail-end grid. So far the emphasis has been on large plants whether they are wind, solar, hydro or biomass. Locations for wind and hydro are fixed. However, for biomass the difficulties of ensuring collection and transportation of fuel are leading towards smaller plants. For solar PV, a total of 100 MW capacity is being set up with smaller plants of 100 KW to 2 MW, which are connected to grid through 11 kV feeders. It is expected that small plants would reduce the transmission losses by 5-7% with respect to large capacity plants of 50 - 100 MW size and improve both voltage and frequency at the tail end. The same approach is being planned for biomass based power plants of up to 2 MW capacity as the logistics of fuel management would become much more manageable and more environmentally friendly. It is envisaged that hundreds of such plants will be built in the

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next few years thus improving the transmission infrastructure.

2.21 Financing of Renewable Energy

Renewable power generation capacity in India has been set up largely through private sector investments and has been possible due mainly to a conducive, strong and clear policy framework and investor friendly environment. New investment is the most potent indicator of growth of the sector. It is estimated that, in 2009 the total financial investment in clean energy in India was at US $ 3.2 billion out of which more than US $ 1 billion is in the form of FDI. Ernst and Young ranked India the fourth most attractive country for renewable energy investment in the world, only behind the United States, China, and Germany. Although the government provides support in the form of easy finance, institutional mechanisms still need to be strengthened. Further, renewable energy is central to climate change mitigation efforts. Broad estimates indicate that mitigation from the existing renewable energy portfolio is equivalent to around 4-5% of total energy related emissions in the country. Further, the vast market potential and well developed industrial, financing and business infrastructure, has made India a favourable destination for Clean Development Mechanism (CDM) projects,with renewable energy projects having the major share. National renewable energy plans offer ample opportunity for CDM projects and technological innovations. An analysis of CDM pipeline highlights the fact that there is not enough participation from private households, small enterprises, and rural areas and funds from CDM needs to be tapped more vigorously. The Government of India has also created a “Clean Energy Fund” by imposing a surcharge of INR 50 (US $1.11) on the sale of every tonne of coal to finance clean energy projects.

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Conclusion:-

Energy is vital for development and this means that if India is to move to a higher growth trajectory than is now feasible, it must ensure the reliable availability of energy. The present energy scenario in India is not satisfactory. The power supply position prevailing in the country is characterized by persistent shortages and unreliability and also high prices for industrial consumers. There is also concern about the position regarding petroleum products. India depends to the extent of 70-80 percent on imported oil, and this naturally raises issues about energy security. These concerns have been exacerbated by recent movements in international oil prices. Electricity is produced domestically but its supply depends upon the availability of coal, exploitation of hydro power sources and the scope for expanding nuclear power, and there are constraints affecting each source. A vibrant functioning society needs energy as its lifeline and the quantum of its use indicates the quality of life being experienced by its members. There is a great disparity in the energy use amongst different regions of the world and even for countries like India where the rural areas are bereft of the benefits of energy and where obtaining food and shelter is a daily challenge [20]. India needs to bridge this divide as soon as possible and this is of paramount importance for any growth which should include all sections of society.

India needs to step up its effort in the direction of coal gasification, carbon sequestration and undertaking projects for bio fuels. As per my analysis it is not possible for India to achieve energy security by concentrating on non renewable sources like coal and oil as the world does not have enough of such resources to meet demands which are continually increasing. India needs to look increasingly towards renewable energy for attaining energy security by 2050 andIndia’s target of getting around 15.9% of total energy need from renewable sources by 2022 is too modest. India needs to realize the vast potential of renewable energy and need to step up effort for attaining the goal of “2020 20” by 2020 i.e. 20% reduction in GHG, 11% reduction inconsumption of energy by bringing about attitudinal changes, 20% share of renewable energy and 20% conservation of energy from the year 2011 till 2020. These targets are attainable and not only provide cleaner energy but also open a new field for providing employment opportunities to millions of people who are unemployed or disguised employment. This momentum then needs to be maintained so that India attains a target of having 70% renewable energy use by 2050.

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References:-

[1] www.cea.nic.in/reports/ planning / power _ scenario .pdf .

[2] planningcommission.gov.in/aboutus/committee/.../wg_power1904.pdf.

[3] www.jseejournal.com/.../7.Energy%20 scenarios %20pp.%207-17.pdf .

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