An IEA blueprint for a lower-carbon India

30 July 2014

Construction of a hydropower plant in Uttarakhand, India. Large-scale hydropower provides 12% of the country's power, and the IEA in Energy Technology Perspectives 2014 urges India to expand use of the abundant resource.

Twin challenges are testing India as it strives to transform its energy sector: to maintain strong economic growth, while seeking to provide electricity to the 300 million citizens still without access. India is pursuing a low-carbon growth strategy, but how will the country develop its energy sources? What emissions trajectory will India find itself on as it builds new infrastructure and tackles the efficient distribution of electricity and continued investment in more effective, more environmentally benign operations and equipment?

In a focus section on India, the IEA publication Energy Technology Perspectives 2014, (ETP-2014) offers both analysis and guidance aimed at helping the country meet its goals under a long-view scenario.

Access to electricity is crucial to India’s economic growth and development. A first priority for the country is raising per capita consumption and providing modern energy to the nearly one-quarter of the population who currently lack it. In 2011, per capita electricity consumption was 673 kilowatt hours, less than one-quarter the global average, even as generation capacity grew by a factor of five in the two decades to 2011. To satisfy increasing demand, ETP-2014 recommends that India substantially expand its power generation capacity using all available options, not only the country’s extensive coal and moderate natural gas reserves, but also its waterways, with their high potential for hydropower, and its abundant other opportunities for renewable energy based on wind, solar, geothermal and biomass.

However, India faces significant challenges in expanding power generation capacity. For starters, its energy resources are unevenly dispersed geographically and they are often located far from consumption centres. Large-scale hydropower is a significant resource in some parts of the country, but nationally in 2011 it provided only 12% of electricity, with all other renewable sources contributing 5%. Coal was and remains the mainstay of generation, at 68%, and is a large part of the reason India emits 1.9 gigatonnes per year of carbon dioxide, 5.6% of the world’s total.

Two scenarios for a lower-carbon energy sector

India’s current 12th Five Year Plan, which runs through March 2017, calls for generation from renewables to more than double, from 25 gigawatts (GW) to 55 GW. Recent experience suggests that achieving five-year targets is challenging, but progress is promising, and new policies implemented in India are beginning to have a positive impact.

In its ETP series, the IEA undertakes analyses of cost-effective, low-carbon strategies that set the world on paths towards temperature increases of 2 degrees (the 2 Degree Scenario, or 2DS) and 4 degrees Celsius (4DS). In ETP-2014, the IEA refined its modelling of India to offer possible scenarios that not only meet Indian policy objectives but are also consistent with low-cost decarbonisation on a global scale. The 2DS sets an ambitious target for India, with generation increasing four-fold by 2050 even as the contribution from fossil fuels falls from 80% today to 25%. Renewables are projected to generate 40% of electricity, while the share from coal plummets to less than 20%. Conversely, while the 4DS also projects a four-fold increase in generation to 2050, the contribution from fossil fuels – at around 65% – remains high.

How India can achieve either scenario

Renewables are the key to achieving either scenario. For instance, wind power has exceeded recent Five Year Plan targets, and this rate of growth would need to be sustained to meet the 2DS or even the 4DS. While industry analysts say it is achievable under a combination of favourable conditions, including enhanced policy design and the implementation and acceleration of grid development, ETP-2014 warns that increased growth for wind hinges on a stable policy environment, commensurate grid capacity expansion and interconnection, and progressive reduction of financing costs.

Solar programmes will be central to achieving low-carbon growth in the Indian power sector as well as universal access to energy. The central government actively encourages rooftop solar, and states are developing net-metering frameworks. Concentrated solar power (CSP) is a promising technology for India, and despite some setbacks and challenges, the IEA expects India to deploy around 600 megawatts of CSP before 2018, which would represent significant growth on the global scale.

Biomass is relatively uniformly available in India. Substantial biomass power remains untapped but the short supply of land for tree-based farming or energy crops, coupled with India’s land allocation policies, limits its potential. Tree-based farming on the peripheries of farms or off-season cultivation of short-cycle energy crops could provide opportunities.

Finally, expanding nuclear capacity is essential for India to achieve either scenario. From 3% in 2011, the 2DS projects nuclear power to rise to 5% of the total by 2025 and 15% by 2050.

Improving the quality of coal-fired power

Overall, India’s coal-fired power plants are less efficient than those in China. India’s coal quality is poorer and average ambient temperatures in the country are higher, which can diminish efficiency.  Washing coal to remove ash and other impurities would help reduce emissions arising from combustion. And transporting less energy dense coal would reduce costs.

India’s new plants are still relatively inefficient and account for more than 60% of subcritical units under construction around the world. However, policies in place to phase out the construction of subcritical units by April 2017 and to encourage construction of more efficient technology will help bring the average efficiency of the coal-fired fleet more in line with international standards.

The route forward to a low-carbon India by 2050

ETP-2014 concludes that to continue its current trajectory of economic growth, to provide electricity to all and to support increased per capita energy consumption and access to energy services, India must continue to expand all aspects of its power infrastructure: from fuel supply through generation to transmission and distribution. The book points to several opportunities for policy action, including:

  • Reviewing the practice of providing free or heavily subsidised electricity, which can lead to wasteful use of energy.
  • Setting electricity tariffs at levels that prompt utilities to improve the performance of power plants while also allowing for reasonable profits on generation.
  • Implementing co-generation technologies to further improve efficiency while making use of waste heat in industrial sectors.

To learn more, order Energy Technology Perspectives 2014 by clicking here

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