Make in India to remove the energy constraint on India’s development

To increase our level of development, India needs to increase its level energy use per capita. This requires a massive increase in energy supply. The energy constraint is about how to increase energy supply without causing environmental pollution and global warming.

How much energy do we need?

As per the IEA (http://www.iea.org/statistics/), the annual per-capita energy consumption for India and the USA is as follows:

Energy Consumption, Annual (IEA, 2014)	India	USA
Total Energy Consumption, MWh/capita	7.4	80.7
Electric Energy Consumption, MWh/capita	0.8	13.0

Electric energy is only 11% of the Indian consumption. What constitutes the rest of it?

1. Petroleum products (such as diesel, petrol, etc.) and natural gas
2. Wood, dung-cake, and agricultural waste used for fuel
3. Coal and lignite

We should set our development target in 2030 to be at the level of USA today. For this, we will need to scale up energy by 11 times. With the momentum we'll gain, we can build up from there. These are the proposed energy targets for India:

Energy Metric		2017	2030	2050
Total	Population (billions)	1.3	1.5	1.9
	Total Energy, TWh	9,676	121,068	306,706
	Oil & Gas, TWh	3,193	No fossil fuel	No fossil fuel
	Electric Power, TWh	1,040	118,068	303,706
	Coal and Lignite, TWh	2,443	No fossil fuel	No fossil fuel
	Bio-waste, TWh	3,000	3,000 biofuel	3,000 biofuel
Per capita	Total Energy, MWh	7.4	80.7	161.4
	Oil & Gas, MWh	2.5	-	-
	Bio-waste, MWh	2.3	2.0	1.6

We must also have these constraints on our energy supply plan:

1. Phase out fossil fuels (petroleum, natural gas, coal, and lignite) to avoid pollution
2. Produce carbon-neutral biofuels to replace the diesel, petrol, kerosene, ATF, CNG, LPG, etc. Bio-wastes (wood, dung-cake, and agricultural waste) are renewable and carbon-rich, and serve as the feedstock for biofuels. To avoid ecological disaster, we must keep the biofuels at current level of 3,000 TWh/year.
3. Use non-polluting energy sources (wind, solar, and nuclear) to fill the gap.

To meet this plan, we need to produce 121,068 TWh of energy by 2030, of which only 3,000 TWh is from bio-waste. Electric power generation must increase from 1,040 to 118,068 TWh, which is 114 times the current level.

Energy Metric		2017	2030	2050
Total	Total Energy, TWh	9,676	121,068	306,706
	Electric Power, TWh	1,040	118,068	303,706
	Bio-waste, TWh	3,000	3,000	3,000
Growth	Electric Power	Baseline	114	292
	Bio-waste	Baseline	1	1

This kind of 100x catch-up has happened earlier: our tele-density shot up from 5 million in 1991 to 700 million in 2012 and over 1 billion in 2016.

How much generating capacity will we need? At 90% plant load factor, we need 15,000 GW. How can we build it? Ref http://powermin.nic.in/en/content/power-sector-glance-all-india, we have 315 GW of generating capacity at present, with 43% of it in the private sector. We have a better base to scale up private sector in energy than we had for the telecom sector.

Installed Capacity	2017	2030
State Sector, GW	103	103
Central Sector, GW	77	77
Private Sector, GW	135	15,000
Total, GW	315	15,180

To ramp up electric power generation to 15,000 GW, these are the methods:

1. Solar: India’s solar potential is estimated at 750 GW
2. Wind: India’s potential could be higher than 1,000 GW
3. Nuclear: power can supply the balance of 13,250 GW.

The targets we currently pursue are sadly unambitious, even in the long-term. Ref http://niti.gov.in/writereaddata/files/document_publication/Energy_Efficiency.pdf, our NITI Aayog planners report only 762 TWh of energy use (probably just the electric power generated by State & Central plants), as against the 9,676 TWh estimated by the IEA. Then they intend to scale it to just 2,239 TWh in 2030, which is only 1.5 MWh/capita as compared to 7.4 MWh/capita of total energy consumption today and a developmental need for 11 times more than that. This plan will keep us firmly in the undeveloped and energy-poor category even in 2047.

The same lack of imagination and planning is what we see when we bemoan the bankrupt and money-losing Discoms. When we plan for 100x growth, these will become a remnant of a past era like the BSNL of telecom, instead of a dead weight crushing all attempts at scaling. 

Make in India

 

We need to set ourselves the challenge of establishing a power-plant industry that would power India up to any desired standard. The industry size will be huge: at $1.5 million per MW, it will be US$22.5 trillion of capex for 15,000 GW. We can afford it in the same way as we afforded the mobile telecom investments: funded by the people who pay for improved infrastructure because they see it improving their own lives and productivity.

We can make it transformative by “Make in India”, to create the manufacturing entities that will build the power plants for use in India and abroad. China already dominates the solar photovoltaic supply chain. The wind turbine space is hotly contested, but not by Indian companies. Scalable biofuel and nuclear plant technology is in startup stage, and can be a “Make in India” success story if we choose.

What will it take?

1. Incubate and pilot world-class biofuel and nuclear plant technology in India
2. Deploy and use the technology in India, with facilitative regulatory approach
3. Build a track record of cheap and safe operations that will enable scaling globally.

What do you think? Please leave a comment.