Domestic Energy On in Andhra Pradesh - Report 2
Domestic Energy On in Andhra Pradesh - Report 2
Domestic Energy On in Andhra Pradesh - Report 2
30, 2011
V KRISHNAN ANIRUDH 2008A4PS284H CH. SRIRAM KUMAR 2008A4PS263H PUSHKAR KUMAR JAIN 2008A4PS228H SAURABH BHATTACHARYA 2008A4PS248H NIRBHAY KOTHARI 2008A4PS142H Y V MAHESH KUMAR 2008A4PS204H G RAVI KIRAN 2009A4PS239H 1|Page
Executive Summary
To make the readers understand the domestic energy consumption patterns in Andhra Pradesh, this report, which is the second of the three reports, starts off with the Indian Energy Policy, and then gives the various statistics related to the energy consumption patterns and also looks into the power generation and consumption statistics of Andhra Pradesh. This is followed by a short note on Carbon foot prints and the appliance wise carbon emission details. Later, the report also gives the plan of action for the last report.
Contents
1. INTRODUCTION ................................................................................................................................... 1 2. INDIAS ENERGY POLICY ...................................................................................................................... 1 2.1 Planning and Policy ....................................................................................................................... 1 2.2 Power Sector ................................................................................................................................. 3 2.2.1 Structure of Indian power Sector........................................................................................... 4 2.3 Petroleum and Natural Gas........................................................................................................... 5 2.3.1 Structure of Indian Petroleum and Natural Gas Sector ......................................................... 5 2.4 Renewable Energy......................................................................................................................... 6 2.4.1 Structure of Renewable energy in India ................................................................................ 7 2.5 Coal ............................................................................................................................................... 7 2.5.1 Structure of Indian Coal Sector .............................................................................................. 8 2.6 Nuclear Energy .............................................................................................................................. 8 2.6.1 Structure of Nuclear Sector in India....................................................................................... 8 2.7 Summary of Energy Policy............................................................................................................. 8 3. ENERGY CONSUMPTION PATTERN ..................................................................................................... 8 3.1 Industrial Consumers .................................................................................................................... 9 3.2 Domestic Consumers .................................................................................................................. 10 3.3 Agricultural Consumers ............................................................................................................... 11 3.4 Commercial Consumers .............................................................................................................. 11 3.5 Demand Drivers for Electricity .................................................................................................... 12 3.5.1 Latent Demand..................................................................................................................... 12 3.5.2 Manufacturing Sector Growth ............................................................................................. 12 3.5.3 Domestic Sector ................................................................................................................... 12 3.5.4 Prices of Household Appliances ........................................................................................... 12 3.6 Region-wise Consumption Pattern ............................................................................................. 12 3.7 Demand and Supply Scenario ..................................................................................................... 13 3.8 Region-wise Power Demand and Supply Position ...................................................................... 14 3.8.1 Northern Region................................................................................................................... 14 3.8.2 Western region .................................................................................................................... 14 3.8.3 Eastern region ...................................................................................................................... 15 3.8.4 North-Eastern region ........................................................................................................... 16 3.8.5 Southern region ................................................................................................................... 16 3.9 Outlook ....................................................................................................................................... 17
3.10 Index of Industrial Production .................................................................................................. 17 4. POWER GENERATION AND ENERGY CONSUMPTION STATISTICS IN ANDHRA PRADESH ................. 18 4.1 Andhra Pradesh Demographics .................................................................................................. 18 4.2 Monthly Electricity Generation statistics from Thermal Power Stations ................................... 18 4.3 Monthly Electricity Generation statistics from Hydel Power stations ........................................ 20 4.4 Pattern of Electricity consumption in Andhra Pradesh over the years ...................................... 20 4.5 Statistics on the Demand of Power in Andhra Pradesh .............................................................. 22 4.6 Electrification and Consumption in Andhra Pradesh .................................................................. 23 4.7 Solar Energy Production and Consumption patterns in Andhra Pradesh ................................... 23 4.8 Energy production through Bio-Mass ......................................................................................... 27 4.9 LPG, Kerosene and other petroleum products ........................................................................... 29 5. CARBON FOOT PRINT ........................................................................................................................ 30 5.1 KYOTO Protocol........................................................................................................................... 30 5.2 Carbon footprints of various household appliances ................................................................... 31 6. FURTHER PLAN OF ACTION: .............................................................................................................. 32
List of Figures
Figure 1: OP Jindal Plant ......................................................................................................................... 2 Figure 2: Combined cycle plant ............................................................................................................... 2 Figure 3: The Mangala development pipeline and a construction site for nuclear power plant ........... 6 Figure 4: Consumer profile for the financial year of 2007 ...................................................................... 9 Figure 5: Industrial Consumption growth versus electricity sale.......................................................... 10 Figure 6: Household income growth versus electricity sales growth (%) ............................................. 10 Figure 7: Agricultural Composition Growth versus electricity sale (%) ................................................ 11 Figure 8: Commercial consumption growth vs Electricity sale ............................................................. 11 Figure 9: Region-wise share of different customers ............................................................................. 13 Figure 10: Northern Region: Energy and Peak Deficit (FY09) ............................................................... 14 Figure 11: Western Region: Energy and Peak Deficit (FY09) ................................................................ 15 Figure 12: Eastern Region: Energy and Peak Deficit ............................................................................. 15 Figure 13: North-eastern Region: Energy and Peak Deficit .................................................................. 16 Figure 14: Southern Region: Energy and Peak Deficit .......................................................................... 16 Figure 15: Location of Thermal power plants in AP .............................................................................. 18 Figure 16: Statistical figure of electrical energy consumption ............................................................. 21 Figure 17: Statistical Representation of increase in Demand ............................................................... 22 Figure 18: Electricity consumers of APTRANSCO in AP ......................................................................... 23 Figure 19: Solar Irradiation in Andhra Pradesh..................................................................................... 24 Figure 20: Sales of LPG .......................................................................................................................... 29
List of tables
Table 1: Structure of Power sector in India ............................................................................................ 4 Table 2: Petroleum and Natural Gas sector structure in India ............................................................... 5 Table 3: Structure of Renewable Energy sector in India ......................................................................... 7 Table 4: Structure of coal industry in India ............................................................................................. 7 Table 5: Central Government's influence on Nuclear sector .................................................................. 8 Table 6: Region wise consumption for the financial year 2007 ............................................................ 13 Table 7: IIP case study with base year 1993-94 .................................................................................... 17 Table 8: Energy generated through Thermal power plants in 2010-2011............................................ 19 Table 9: Monthly generation in 2011-2012 .......................................................................................... 19 Table 11: Generation of Electricity in 2011-2012 ................................................................................. 20 Table 10: Monthly electricity generation from Hydro Electric power stations in 2010-2011 .............. 20 Table 12: Electricity Consumption Patterns in AP ................................................................................ 21 Table 13: Change in demand pattern in AP .......................................................................................... 22 Table 14: Electrification carried out by APTRANSCO ............................................................................ 23 Table 15: Solar irradiation data for Andhra Pradesh cities ................................................................... 24 Table 16: Area of solar panels in use in 2008 ....................................................................................... 27 Table 17: Estimated Area to be put into use ........................................................................................ 27 Table 18: Optimistic and Pessimistic demand projections for 2013, 2017 and 2022 ........................... 27 Table 19: LPG Penetration in Domestic Sector ..................................................................................... 29 Table 20: Carbon Emissions of various home appliances ..................................................................... 31 Table 21: Carbon Emissions of various electrical appliances ................................................................ 32
1. INTRODUCTION
Energy has been universally recognized as one of the most important inputs for economic growth and human development. There is a strong two-way relationship between economic development and energy consumption. On one hand, growth of an economy, with its global competitiveness, hinges on the availability of cost-effective and environmentally benign energy sources, and on the other hand, the level of economic development has been observed to be reliant on the energy demand. Energy intensity is an indicator to show how efficiently energy is used in the economy. The energy intensity of India is over twice that of the matured economies, which are represented by the OECD (Organization of Economic Co-operation and Development) member countries. Indias energy intensity is also much higher than the emerging economiesthe Asian countries, which include the ASEAN member countries as well as China. However, since 1999, Indias energy intensity has been decreasing and is expected to continue to decrease. The indicator of energyGDP (gross domestic product) elasticity, that is, the ratio of growth rate of energy to the growth rate GDP, captures both the structure of the economy as well as the efficiency. The energyGDP elasticity during 19532001 has been above unity. However, the elasticity for primary commercial energy consumption for 19912000 was less than unity (Planning Commission 2002). This could be attributed to several factors, some of them being demographic shifts from rural to urban areas, structural economic changes towards lesser energy industry, impressive growth of services, improvement in efficiency of energy use, and inter-fuel substitution. In this regard, the energy sector in India has been receiving high priority in the planning process.
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energy industry, but the private sector is actively capturing market share and even investing in the state-owned companies.
Energy policy and planning are largely controlled by the central government in Indias federal political setup. While the central government alone controls planning and policy related to fossil fuels such as coal, natural gas, and petroleum, the constitution outlines both the state and central governments responsibility for electricity policy and planning. The Planning Commission of the Government of India (GoI) is responsible for planning for power, energy, energy policy, and rural energy within the framework of a succession of national five-year plans. States take responsibility for power delivery.
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The August 2006 Report of the Expert Committee on Integrated Energy Policy (IEP) for the first time analyzed the resource options for Indias energy needs. It comprehensively examined all sources of energy, including renewable. The IEP forecasted energy demand up to 2031-32 and made broad recommendations to optimally meet the surging demand. It concluded that coal, particularly domestic coal, would continue to fuel the power sector in the country. Since then, the possibilities of exploring nuclear energy as well as the discoveries of natural gas have somewhat tilted the balance. The energy sector is overseen by the following GoI ministries: I. II. III. IV. V. Ministry of Power (http://powermin.nic.in/) Ministry of Petroleum and Natural Gas (http://petroleum.nic.in/) Ministry of New and Renewable Energy (http://mnre.gov.in/) Ministry of Coal (http://coal.nic.in/welcome.html) Department of Atomic Energy (http://www.dae.gov.in/)
The Planning Commission is the overall in charge of developing Indias five-year plans across the ministries and sectors. Since the public sector continues to play a dominant role in the energy sector in India, the ministries wield enormous power and influence in the way the sector develops and is managed. The framework for independent regulation has been established for the electricity and downstream petroleum and natural-gas sectors. The Central Electricity Regulatory Commission (CERC) regulates interstate transactions and business, and each state has a State Electricity Regulatory Commission (SERC) for intrastate transactions. Much of the regulation covering electricity generation and transmission stems from the CERC (and is by and large followed by the SERCs), while SERCs have exclusive jurisdiction on electricity distribution in the respective states. The Petroleum and Natural Gas Regulatory Board (PNGRB) regulates downstream activities in the petroleum and natural gas sectors. The upstream activities continue to be regulated by the central government through the Directorate General of Hydrocarbons.
The basic aim of the Electricity Act 2003, which consolidated the provisions of all previous legislation, was to take measures conducive to the growth of the electricity sector in the country, to 3|Page
promote competition, to protect consumers interest, to rationalize tariffs, and to promote efficient and environment-friendly policies. Its main features are: I. II. III. IV. V. VI. VII. De-licensing electricity generation Mandating restructuring of state electricity boards to separate transmission (wires business) and trade Allowing for open access on transmission and distribution networks Facilitating electricity trading Mandating the establishment of SERCs in each state. Liberalizing captive or self-generation Setting up the Appellate Tribunal for Electricity (ATE)
In addition, the focus was widened to upgrade and improve the financial and operational efficiency of the distribution companies. A massive funding scheme of the GoI called the Accelerated Power Development and Reform Program (APDRP) was initiated to provide funds to State Electricity Boards and distribution companies to improve system efficiency and provide incentives for better performance. The National Electricity Policy 2005, which introduced the concept of universal service, mandated that all villages should be electrified by 2007-2008 and all households by 2011-2012. Table 1 given below outlines the structure of the Power sector in India.
Table 1: Structure of Power sector in India
2.2.1 Structure of Indian power Sector The GoI Ministry of Power (MoP) is responsible for planning, formulating policies, processing of projects for investment decision and monitoring of the implementation of power projects. The Central Electricity Authority (CEA) is a statutory body constituted by the central government that functions under the Electricity Act 2003. The CEA is responsible for formulating the National Electricity Plan in accordance with the National Electricity Policy, once in five years. The CEA is the main technical adviser to the government and regulatory commissions. It is also required to specify technical standards and safety requirements for the construction, operation, and
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maintenance of electrical lines and setting up of electrical standards. Any generating company intending to set up a hydropower generating station also requires the concurrence of the CEA. The Electricity Act 2003 and the subsequent policies of the government, especially the Ultra Mega Power Projects (UMPPs) under the competitive bidding route, are expected to add substantial thermal capacity. In 2008, the GoI promulgated the Hydro Power Policy to encourage private investments, improve resettlement and rehabilitation and enhance the financial viability of hydropower development. Earlier in 2007, the MoP had issued the approach and guidelines for the development of merchant power plants (MPPs). Two main programs of the GoI are aimed at improving electricity distribution. The APDRP provides loans and grants to augment investments in distribution system upgrades. The Rajiv Gandhi Grameen Vidyutikiran Yojana (RGGVY), launched in 2005, aims at electrifying all villages and providing access to electricity to all rural households over a period of four years.
2.3.1 Structure of Indian Petroleum and Natural Gas Sector India conducted nine rounds of exploration bidding between 1979 and 1995, but they were not successful. The New Exploration and Licensing Policy (NELP) introduced by the government in 199798 brought about major changes in the structure of the Indian oil industry as well as increased the rate of exploration of the sedimentary basin area of the country from 11% to more than 44%. NELP opened Indias oil and gas sector to private-sector participation through international competitive bidding for blocks under a production-sharing contract with the GoI. National Oil Companies (NOCs) continue to account for a major share of crude oil and natural gas production, but there has been a significant increase in private participation. All 10 oil discoveries in 2007-08 were made by private oil companies like Reliance Industries Ltd. (RIL), Cairn and Essar Oil Ltd. (EOL). The GoI is examining the possibility of introducing the Open Acreage Licensing Policy (OALP) to allow year-round bidding for blocks to explore rather than waiting for the government to identify blocks 5|Page
for exploration. Recently, there has been a thrust towards NOCs acquiring hydrocarbon assets abroad to meet the countrys need for energy security and accelerating demand. With the increasing presence of private players and the move towards increasing the extent of gas distribution in the country, the Petroleum and Natural Gas Regulatory Board (PNGRB) was set up under the PNGRB Act 2006. The PNGRB regulates the refining, processing, storage, transportation, distribution, marketing, and sale of crude oil, petroleum products, and natural gas. It also protects the interests of consumers and entities engaged in specified activities in these areas and are responsible to ensure uninterrupted and adequate supply of crude oil, petroleum products, and natural gas to all parts of the country and to promote competitive markets. The PNGRB issued guidelines relating to city gas distribution network and natural gas pipelines in 2007-08 and 2008-09. However the upstream oil and gas business continues to be regulated by the Directorate of Hydrocarbons (DGH). The DGH operates under the Ministry of Petroleum & Natural Gas (MOP&NG) as a regulator to advise the MOP&NG on exploration strategies and production policies. Oil and natural gas exploration and production, refining, and distribution, as well as the marketing, import, export, and conservation of petroleum products and liquefied natural gas fall under the responsibility of the MOP&NG.
Figure 3: The Mangala development pipeline and a construction site for nuclear power plant
The government continues to regulate prices for both petroleum and natural gas through the Petroleum Planning & Analysis Cell (PPAC), attached to the MOP&NG.
2.4.1 Structure of Renewable energy in India The Electricity Act 2003 provides the legislative impetus for the development of renewable energy in part by directing the CERC and SERCs to fix renewable power purchase obligations (RPPOs) for all distribution companies under their jurisdiction. The regulatory commissions can also determine preferential tariffs for renewable power to make it more competitive with conventional sources on cost of electricity. Foreign direct investment up to 100% is allowed under the automatic route and can set up a whollyowned subsidiary. Foreign investors are allowed to set up renewable-energy-based power projects on Build-Own-Operate (BOO) or a Build-Own-Transfer (BOT) basis. Investors are allowed to bring in funds directly, incorporate an Indian company, or allot shares to foreign investors. With the announcement of the National Action Plan on Climate Change (NAPCC), there is a marked shift in policy to diversifying the energy mix to lower carbon intensity. The NAPCC calls for boosting renewable energys share of the national generation from 2% to 5%, with specific emphasis on significantly increasing solar energys share of the total energy mix. It envisions increased use of distributed solar photovoltaic cells, but also, as technology permits, commercial-scale solar-reflector generating stations.
2.5 Coal
The Ministry of Coal is the apex organization responsible for the development of coal and lignite in the country. It has the overall responsibility for determining policies and strategies for exploring and developing coal and lignite reserves, sanctioning important projects of high value and deciding all related issues. The coal sector continues to be dominated by government-owned companies with no significant private-sector presence, and foreign direct investment is restricted. Table 4 given below outlines the framework of Indias coal industry.
Table 4: Structure of coal industry in India
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2.5.1 Structure of Indian Coal Sector In December 2000, the GoI loosened the restrictions on state government companies to allow them to mine coal and lignite reserves anywhere in the country, subject to certain conditions. Since 2004, the GoI has engaged in allocating large areas/blocks to government companies (both central and state). Preference is being given to government power utilities.
2.6.1 Structure of Nuclear Sector in India The signing of the Indo-U.S. nuclear deal in October 2008 has opened up opportunities for the growth of nuclear power in the country. The Nuclear Power Corporation of India Ltd. (NPCIL), the only nuclear power generating company in the country, aims to increase its installed capacity from 4,120 MW to 21,000 MW in the next five years, but GoI policy prohibits foreign direct investment in nuclear power plants.
Others
Industrial consumers are the largest consumers of electricity in India. In FY07, industrial consumers accounted for 38% of the total electricity sold by utilities; however, their share in actual consumption was much higher as many industries met their power requirement through captive generation. Domestic and agriculture sectors are the other major consumers who have respective shares of 24% and 22% in total power consumption. While the public services account for 4% of sales, the Railways and other consumers account for a share of 2% each in overall sales.
Over the years there has been a significant shift in the sector-wise consumption patterns, as there has been a decrease in the share of agriculture and industrial sectors and an increase in the share of the domestic and commercial sectors. In FY90, the industrial consumers accounted for 46.0% of total sales by utilities, while the domestic and agriculture sectors accounted for 16.9% and 25.1%, respectively. The industrial segments share in overall consumption has come down due to improved consumption norms after adoption of energy-efficient technologies, and also due to the industrial sectors use of captive power. The domestic segment has overtaken the agriculture sector and has emerged as the second-largest consumer segment of power largely due to increased urbanisation, rise in disposable incomes, and the consequent increase in use of domestic electrical appliances. Consumption of power by commercial establishments has increased with the rise in the service sector in India.
High-tension industries account for almost 79% of the total power consumed by industries, while the low and medium tension industries account for the balance. Cross subsidies, higher tariff, power outages, and inconsistent quality of power supplied by utilities had adversely affected power availability of industries. The power shortages and the favourable 9|Page
policies for captive power made many high tension industrial consumers opt for captive power generation. Likewise, many energy-intensive industries like iron and steel, aluminium, cement, sugar, fertilisers, paper, and chemicals set up their own captive power plants.
The domestic power consumption grew at a CAGR of 9.76% from 3.9 bn kWh in FY71 to 111 bn kWh in FY07. Going forward, the rise in household income is likely to continue to drive the demand for power across consumer classes in India. The electricity demand of household sectors in the urban 10 | P a g e
areas will increase in the future with increasing urbanisation and changing lifestyle due to rise in disposable incomes. Similarly, better access to electricity in rural areas mainly due to the rural electrification programme will increase the domestic sectors electricity consumption in these rural areas. Scheduled power cuts and load shedding has curtailed the domestic consumption of electricity and has forced large residential complexes to opt for diesel-generated energy to meet their power requirements. However, in future, such consumers will also be added to the overall consumer pool, when the availability of power increases, which will increase the domestic power consumption.
The agriculture sectors electricity consumption grew at a CAGR of 9% to 99 bn kWh in FY07. Agricultural subsidies and government initiatives for rural development, which included programmes like free electricity to farmers, emphasis on irrigation through pump sets, contributed to the higher power consumption.
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During FY07, the commercial sector accounted for around 9% of total electricity consumption. During FY71 to FY07, the commercial sectors electricity consumption grew at a CAGR of 7.9% to 40.2 bn kWh. The power consumption in the sector increased due to the rapid growth in the service sector in recent times, the development of recreation and entertainment complexes, and the improvement in healthcare facilities.
the concerned region. Table 6 clearly shows that the industrial sector is the largest consumer segment in all regions, barring the North-Eastern region, where the domestic sector is the largest consumer.
Table 6: Region wise consumption for the financial year 2007
The industrial sectors share in overall power consumption is highest at 53% in the eastern region followed by the Western region, where the industrial sector has a 44% share in total electricity consumption. The industrial sectors power consumption is higher in the East and West because of the presence of large industries (steel) in the eastern region and in Gujarat and Maharashtra (Western region). In the Northern region, the domestic sector and the industrial sectors, each have a 29% share in total electricity consumption. Within the region, the largely-populated Uttar Pradesh, drives the domestic consumption whereas states like Delhi drive the commercial demand. Delhis commercial consumption was the highest in the region at around 4.6 bn kWh. The share of the agriculture sector is the highest in the Southern regions total consumption, especially in Andhra Pradesh, and the main drivers of agriculture consumption are the subsidies and free electricity to farmers.
the period under review. The deficit is largely due to T&D losses, poor transmission, and distribution infrastructure, unaccountability in metering and billing, cross subsidies, etc. The peak demand for electricity increased from 100.7 GW in FY07 to 109.8 GW in FY09 while the peak demand met increased from 87.1 GW in FY07 to 96.7 GW in FY09. The peak shortage was mainly due to unavailability of plants and load shedding during peak hours.
The Northern region has an energy deficit of around 24.3 BU and a peak deficit of around 3.5 GW. The situation varies throughout the year and the worst situation is seen in the summer. Uttar Pradesh is the largest deficit state in the Northern region, and a large part of this deficit can be attributed to the lack of political will and the demographic profile of the consumers. Uttar Pradesh has the highest AT&C losses among all states of the Northern region, which explains the financial sickness of the state electricity boards. A similar situation exists in Punjab and many other states of the region but the intensity in these states is a tad lower whereas in J&K the turmoil has made the situation more critical. Delhi, Rajasthan, and Haryana have largely benefited from the reform process of their respective state governments; as a result, these states losses have also come down, and the power deficit has decreased over the years. The region has states like Himachal Pradesh and Uttarakhand, which have enormous hydro potential, and can be tapped to meet the regions demand for power. 3.8.2 Western region The Western region faces the worst shortage in both percentage terms as well as in units. The state with the highest demand in the region is Maharashtra, which houses the financial capital of the country and is home to a large number of industrial units. The region also witnesses high demand from the agricultural sector. The demographic mix of consumers in the state makes the financial viability of the power sector difficult. Different problems plague other states like Gujarat and Madhya Pradesh; Gujarat has a lack of generating capacity and Madhya Pradesh faces AT&C losses as high as 50%. However, there is a potential for change, and therefore, investment in Madhya Pradesh state, though availability of fuel remains a problem. Maharashtra is getting an UMPP at a coastal location so that it has easy access to imported coal. Rural electrification in Madhya Pradesh 14 | P a g e
and huge capacity expansion and addition plans in Gujarat also make it an attractive investment opportunity.
In the Eastern region, the growth of installed capacity has been around 1.5% in the past 5 years; however, industrial development and consumer demand have been gradually increasing in the region. The region imports power from Bhutan to meet its power requirement. There are many projects proposed in the area, which are expected to increase the demand for power. The capacity expansion plans by various industries in the sector as well as regular growth in demand translates into a healthy potential for investment. However, there are concerns that need to be addressed at first, the least of which are monetary in nature. Besides, the area has had problems in acquiring environmental clearances for its ambitious capacity expansion plans as well.
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The North-Eastern region has huge potential in terms of fuel availability (coal for thermal and water systems for hydro power), as well as potential demand, as the region has the lowest per capita power consumption. The major reasons for this are the terrain and climatic conditions that are not suitable for power projects. The region also has abundant supply of gas that is as good as fuel for thermal power generation as is coal, and is cleaner too. In terms of potential, the region is very attractive. It has proven reserves of fuel, it has potential for growth in demand from residential and small users; however, the demand and potential need to be assessed by keeping the geographical constraints in mind. 3.8.5 Southern region
In the past many reforms have been undertaken in this region, such as the implementation of SERCs (State Electricity Regulatory Commissions) and the rationalisation of tariff structures, which have made capacity addition an easier task. The results of these reforms are visible from the peak load deficit (that has come down) as well as the requirement and availability in the region. However, the demand in the Southern region has been increasing as both Karnataka and Andhra are adding huge capacities. Tamil Nadu too has signed MOUs with the Indian government for various projects to 16 | P a g e
increase the transmission and distribution capacities. The demand from both industrial units as well as residential consumers is driving the capacity addition potential in this region. Moreover, the real estate expansion plans in the region will not only require an increase in the generation capacity but also in the capacity to provide continuous supply of power at a reasonable voltage, which makes the opportunity to invest in the region more attractive.
3.9 Outlook
In the domestic sector, the overall slowdown could affect the incremental demand for power from the urban domestic sector, as consumers are likely to postpone their consumer electronics purchases. Demand from the rural sector is expected to rise following waiver of farm loans, modest agricultural income in FY09, and access to electricity for more villages under the governments rural electrification programmes. Growth in the industrial sector remained subdued in the first half of FY10. As the Indian economy is expected to revive in the second half of FY10, industrial activity will also see an improvement. The service sector, on the other hand, is expected to see healthy growth, which will keep the demand for power robust. Railways, public services are expected to report higher demand for power, while in the commercial sector, entertainment complexes and the hospitality sector are likely to report marginal decline in demand for power.
Year
1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Mining
111.2 116.8 125.4 131.9 123.8 162.7 185.8 228.1 278 293.5 312.9 353.2 705.8 772.1 571.4 613.9 690.8
Manufacturing
108.3 114.4 124.5 124.4 123 129.8 135.1 138.2 145.9 154.8 163.2 178 196.4 213.2 214.5 226.9 248.5
Electricity
107.4 109.9 121.5 135.5 142.8 159.8 164.4 161.4 171.6 179 193.7 198.8 218.6 228.4 240.6 273.5 283.9
General Index
108.3 114 124.2 126 124.3 134.7 140.7 145.1 155.1 164.2 173.8 188.7 223.6 242 234.7 250.7 273.8
The index is computed using the weighted arithmetic mean of quantity relatives with weights being allotted to various items in proportion to value added by manufacture in the base year by using Laspeyre's formula: =
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Where i is the index, Ri is the production relative of the ith item for the month in question and Wi is the weight allotted to it. From the above study, we can clearly see that the mining industry has developed 6 fold times when compared to that to 1993-94.
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Andhra Pradesh has been vastly dependent on coal reserves to generate electricity through Thermal power plants. The statistics for 2010-2011 of the same are presented in table 8 given here.
Table 8: Energy generated through Thermal power plants in 2010-2011
Station Capacity Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Gen (MU) PLF (%) (MW) Dr.NTTPS Unit 1 210 138.96 138.04 125.33 44.04 142.56 122.46 144.46 138.65 146.05 143.07 128.28 147.08 1558.98 84.7 Vijayawada Unit 2 210 147.24 143.57 138.46 129.69 63.4 128.46 149.9 133.24 144.04 152.22 140.57 153.4 1624.19 88.3 Unit 3 210 147.54 153.18 147.32 150.54 146.29 136.37 151.38 140.19 146.79 146.74 140.77 153.42 1760.53 95.7 Unit 4 210 148.93 138.41 146.45 149.75 151.46 133.24 151.44 59.43 141.57 92.33 119.15 157.16 1589.32 86.4 Unit 5 210 151.91 152.76 142.69 142.85 145.55 64.14 153.27 140.07 149.14 156.72 143.55 159.18 1701.83 92.5 Unit 6 210 132.48 134.56 155.66 422.7 23 Unit 7 500 306.91 362.82 322.54 309.71 324.86 214.11 150.84 323.04 354.27 372.74 336.56 372.19 3750.59 85.6 Station 1760 1041.49 1088.78 1022.79 926.58 974.12 798.78 901.29 934.62 1081.86 1196.3 1143.44 1298.09 12408.14 80.5 Rayalaseema Unit 1 210 148.24 136.77 135.67 124.14 132.74 125.97 144.06 121.41 70.74 148.51 138.13 152.5 1578.88 85.8 Unit 2 210 147.06 141.23 136.88 121.97 95.62 31.42 109.38 135.53 147.73 137.74 150.59 1355.15 73.7 Unit 3 210 145.97 145.09 134.23 134.52 53.42 121.64 152.88 119.56 83.78 148.53 139.27 154.58 1533.47 83.4 Unit 4 210 149.34 137.88 142.98 134.59 129.25 126.45 135.13 62.4 131.29 140.54 137.8 155.5 1583.14 86.1 Unit 5 210 0.13 2.44 13.81 106.77 81.54 204.68 64.4 Station 1050 590.61 560.97 549.76 515.215 411.03 374.06 463.5 412.88 423.77 599.11 659.72 694.71 6255.32 81.6 Kothagudem Unit 1 60 39.49 40.99 34.04 38.41 39.3 36.82 39.81 37.18 40.85 42.5 37.75 39.1 466.23 88.7 ABC Unit 2 60 36.3 36.96 32.94 14.04 39.04 35.52 38.22 36.82 39.15 41.67 37.61 4.94 393.21 74.8 Unit 3 60 37.41 39.6 35.76 37.04 37.8 17.79 40.33 36.88 39.82 39.69 35.72 40.54 438.38 83.4 Unit 4 60 38.26 37.01 36.38 32.22 21.24 37.55 39.63 35.36 35.05 40.95 36.78 38.91 429.35 81.7 Unit 5 120 67.98 72.46 69.02 17.09 76.45 76.65 79.46 74.32 77.53 82.38 74.27 80.63 848.25 80.7 Unit 6 120 74.35 72.47 67.34 71.63 72.12 69.18 35.69 67.9 75.4 81.45 68.58 78.11 834.21 79.4 Unit 7 120 74.71 73.67 67.12 72.13 71.93 27.85 81.61 75.63 79.46 81.6 70.9 71.47 848.08 80.7 Unit 8 120 72.25 71.61 63.97 65.91 28.15 68.32 75.96 68.56 75.05 73.21 66.97 69.46 799.39 76 Station 720 440.75 444.78 406.56 348.47 386.03 369.67 430.72 432.65 462.3 483.45 428.58 423.15 5057.09 80.2 Kothagudem V Unit 9 250 168.42 182.84 168.03 177.07 165.24 176.84 168.44 168.72 170.58 184.12 168.66 180.5 2079.46 95 Unit 10 250 174.31 176.6 31.8 116.76 154.96 153.48 178.96 167.84 183.8 1338.51 61.1 Station 500 342.73 359.44 199.83 177.07 165.24 176.84 285.2 323.68 324.06 363.08 336.5 364.3 3417.97 78 Kakatiya I 500 30.23 24.34 100.32 73.87 121.95 156.61 233.92 264.21 289.96 265.44 277.65 1838.51 65.1 Ramagundam B 62.5 22.61 26.03 41.8 40.74 43.58 40.42 44.78 40.97 40.16 45.82 39.72 43.28 469.91 85.8 APGENCO 4592.5 2438.19 2510.22 2245.08 2108.39 2053.87 1881.72 2282.09 2378.72 2596.36 2977.72 2873.4 3101.19 29447 79.46 Thermal Unit
Rayalaseema
Kothagudem ABC
Kothagudem V & VI
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100
90 80
70 60 50 40 30 20
10 0
Domestic
1960-61 1961-62 1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1980-81 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2K 2000-01 2001-02 2002-03 2003-04 2004-05
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1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
8000
7000
5000
4000
Ser 3000
2000
1000
1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005
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1 2 3 4 5 6 7 8 9
2nd Plan 3rd Plan 4th Plan 5th Plan 6th Plan 7th Plan 8th Plan 9th Plan 10th Plan 2002-03 2003-04
10
2004-05
Electricity Consumers in AP
18000000
16000000
Consumers
4000000 2000000 0 1961 1966 1968 1974 1978 1980 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005
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Solar Policy - Andhra Pradesh solar policy is expected to take shape within the next few months. The new policy will concentrate on both solar photovoltaic and solar thermal energy. Rooftop PV & small solar power generation programme (RPSSGP) - Under the Rooftop PV & small solar power generation programme, the project developer will be paid tariff as fixed by the A.P Electricity Regulatory Commission (APERC) and a Generation Based Incentive (GBI). The GBI shall be equal to the difference between the tariff determined by Central Electricity Regulatory Commission and the tariff decided by the APERC. As per the proposed arrangement under the scheme, the GBI portion will be reimbursed to the DISCOMs by Indian Renewable Energy Development Agency (IREDA). The tariff will be paid for a period of 25 years. The APERC has issued tariff orders for Rooftop and Small Solar Power Plants on 06.07.2010. The tariff applicable for SPV power projects is Rs. 17.91 per KWh and the tariff is applicable for a period of 25 years.
Solar irradiation data for Andhra Pradesh cities month wise is given in table 15:
Table 15: Solar irradiation data for Andhra Pradesh cities
City Anantapur Gajuwaka Guntur Hyderabad Kakinada Karimnagar Kukatpally LalBahadur Nellore Nizamabad Quthbullapur Rajahmundry Warangal Visakhapatnam Vijayawada Tirupati
Jan 5.22 4.85 4.66 5.02 4.91 4.83 5.02 5.02 4.78 4.94 5.02 4.77 4.83 4.85 4.66 4.9
Feb 6.05 5.64 5.49 5.77 5.69 5.62 5.77 5.77 5.71 5.73 5.77 5.53 5.62 5.64 5.49 5.79
Mar 6.5 6.3 6.2 6.3 6.4 6.3 6.3 6.3 6.5 6.3 6.3 6.1 6.3 6.3 6.2 6.3
Apr 6.44 6.57 6.42 6.4 6.6 6.53 6.4 6.4 6.61 6.54 6.4 6.41 6.53 6.57 6.42 6.35
May 6.07 6.03 5.92 6.14 6.04 6.23 6.14 6.14 6.11 6.39 6.14 5.97 6.23 6.03 5.92 5.82
Jun 5.02 4.62 4.78 4.81 4.62 4.77 4.81 4.81 5.11 4.81 4.81 4.5 4.77 4.62 4.78 4.99
July 4.57 4.18 4.07 4.24 4.23 4.08 4.24 4.24 4.74 4.17 4.24 3.79 4.08 4.18 4.07 4.49
Aug 4.62 4.11 4.19 4.1 4.26 3.89 4.1 4.1 4.81 3.97 4.1 3.7 3.89 4.11 4.19 4.64
Sep 4.93 4.32 4.47 4.46 4.38 4.53 4.46 4.46 4.97 4.6 4.46 4.23 4.53 4.32 4.47 4.82
Oct 4.6 4.6 4.3 4.7 4.5 4.9 4.7 4.7 4.3 5 4.7 4.5 4.9 4.6 4.3 4.3
Nov 4.56 4.45 4.49 4.81 4.42 4.86 4.81 4.81 4.07 4.87 4.81 4.68 4.86 4.45 4.49 4.02
Dec 4.71 4.55 4.44 4.7 4.53 4.68 4.7 4.7 4.19 4.68 4.7 4.57 4.68 4.55 4.44 4.2
Avg 5.27 5.01 4.95 5.12 5.04 5.1 5.12 5.12 5.15 5.16 5.12 4.89 5.1 5.01 4.95 4.69
Andhra Pradesh is one of the few states blessed with more number of sunny days. The estimated potential is 5-7 KWh/m2 per day which remains un-tapped for various applications like heating, lighting, power generation etc. Under solar energy programmes the following are being implemented: 24 | P a g e
Solar Thermal Systems 1. Solar Water Heating Systems 2. Solar Cookers 3. Solar Dryers Solar Photovoltaic Systems 1. SPV Lighting Systems viz. portable lanterns, home-lighting and street lighting systems 2. SPV pump-sets 3. Mini Power Plants for village Electrification 4. SPV Grid interactive Power Plants
With over 100 countries contributing to the promotion of solar energy, Andhra Pradesh is poised to emerge as a solar capital. Though the companies in the sector are still researching on bringing down the cost to step up the deployment of solar photo voltaic systems for power generation, the current adoption supported by the center's policy measures is said to be providing the required impetus to the growth. The state government initially started its efforts to attract several global players for setting up their operations to manufacture semiconductor chips. A mega project called Fab City too was readied on the outskirts of Hyderabad. However, owing to a variety of market reasons, the semiconductor fabs took more time than expected to set up their units at Fab City. This gestation was used positively by the government and entrepreneurs to set up solar PV units at the Fab City. Solar energy projects in Andhra Pradesh: With over 35 medium and large solar companies, Hyderabad is now emerging as a hub for several global solar technology majors. The Ministry had sanctioned a project to Non-conventional Energy Development Corporation of Andhra Pradesh Ltd., Hyderabad for installation of 50 solar dryers to individual users in rural areas with a view to promote the technology and show its potential in income generation and leading to development of entrepreneurship. The dryers were developed by Society for Energy, Environment and Development (SEED), Hyderabad. For now, several companies including Lanco, Solar Semiconductor, Sujana Energy and Surana Ventures in addition to public sector majors like BHEL have kicked off their operations based on the centre's national solar energy mission. While the solar PV companies in the state are already witnessing a strong order pipeline from the companies that have bagged orders for setting up of solar plants in various parts of the country, the companies are also making efforts to innovate to take solar energy off the grid. According to industry players, the off grid application of solar energy has already begun though in a small way. The usage of solar PV modules to power traffic lights or recharge lanterns in rural areas has already started showing the benefits to the masses. With the state governments getting a goahead from the centre for setting up of 20 MW units in the states to begin with, several states have sought bids from the solar companies for the setting up and operation of the projects. The cost of the solar energy units is still considered to be a major roadblock for expanding the solar footprint. In addition to the direct cost of the technology and modules, the companies also face hurdles in the form of availability of land for setting up of solar energy units. Typically, a megawatt of solar power costs about Rs 14 crore in capital as against about Rs 6-7 crore in thermal power units. Similarly, the solar units also need at least an acre for setting up of solar unit to generate one 25 | P a g e
megawatt. The upfront cost of a solar unit is also making the power generated from these units expensive for the utilities as compared to the power generated in units using other forms of fuel including coal and gas. But, sources in the industry say that the costs would come down as the volumes in the sector pick up pace. Interestingly, the veterans in the solar energy sector see a major leapfrogging effect coming in the form of roof-top solar units. With abundant sunlight availability in the country, setting up of solar PV modules on the rooftops of houses is expected to generate power required for most parts of the country. However, with some regulatory issues still to be ironed out and the issues related to making the power generated through these modules suitable for the grid being worked out, the rooftop power generation using solar units would take few more years. For now, the government is sorting out the issues related to commercial scale solar PV units. With a target to achieve 20 GW solar power by 2022 and achieve grid parity by 2030, the state government finds great promise in its Mission Solar. Tata BP Solar commissioned its first plant in Andhra Pradesh under the National Solar Mission. The project is owned and developed by Ramakrishna Industries at Shadnagar in Andhra. The project uses 4,400 crystalline silicon modules of 230 watts. The solar plant will generate 1.54 million units first year. Ramakrishna Industries has signed a PPA with the Andhra Electricity Board for 25 years to supply this power to them. Solar PV initiatives by Andhra Pradesh Government: Andhra Pradesh government is encouraging solar power projects by approving the recommended tariff of the Central Electricity Regulatory Commission (CERC), government of India. It has also recommended for 0.25 percent solar energy power purchase obligation. Besides, the Andhra Pradesh Electricity Regulatory Commission (APERC) has also issued a tariff order. At the inaugural Solarcon India 2009, the AP government unveiled the logo of the upcoming SolarCity at Anantapur, and also awarded allotment letters to four companies in FabCity SunborneInc, Lanco Solar, AES Solar, and Titan Energy. The AP government is aggressively encouraging the setting up of manufacturing plants at Fabcity in Hyderabad. 21 units are coming up at FabCity - at an investment of Rs, 20,000 crores. Once up and running, these projects will have the capacity to provide employment to 25,000 people. AP state government has selected 22 companies under the rooftop and other small solar power projects schemes in the state for total capacity of 20 megawatts. Kadiri area in Anantapur district is known as solar city of Andhra Pradesh. Ten companies will be investing nearly Rs. 10,000 crore to produce more than 50 mega watts of solar power. The solar power projects will be held in 2,000 acres. SunborneInc, Lanco solar, AES solar and Titan Energy have signed MoU with the State government for setting up units in Kadiri. Andhra Pradesh Industrial Infrastructure Corporation has allotted 2,000 acres of land in Kadiri for setting up solar units.
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Titan Energy Systems has formed a special purpose vehicle in collaboration with Enfinity of Belgium for setting up 1,000 MW of photovoltaic installations on 3,000 acres of land in the district over a period of five years. The APIIC has allocated the land to the firm on a long lease. Statistics of the area of solar panels in use till Dec 2009 are given in table 16.
Table 16: Area of solar panels in use in 2008
Estimated area (in million m2) of solar panels to be put into use over the next few years is given in table 17.
Table 17: Estimated Area to be put into use
The demand projections (in million m2) in optimistic and pessimistic conditions are mentioned in table 18.
Table 18: Optimistic and Pessimistic demand projections for 2013, 2017 and 2022
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As part of the rural energy programmes in Andhra Pradesh, bio-gas plants would be supplied extending subsidy to all sections. As against Rs.6,400 total cost of the biogas plant, a subsidy of Rs. 2,800 would be extended to the SC's and ST's and Rs.2,300 to other sections. The National Bio-gas Manure Management Programme (NBMMP) was aimed at providing cooking energy to the rural population by providing incentives in the form of subsidies and to reduce dependence on fossil fuels like coal, oil and thereby reduce the deforestation and develop greenery. So far 2.54 lakh biogas plants were installed all over the State. Even for deployment of solar water heaters in domestic and commercial sectors, incentives were being extended through the Indian Renewable Energy Development Agency (IREDA) and Banks in form of soft loans. The NEDCAP could construct 1530 biogas plants in last financial year ending March last. Some 1746 plants were constructed in 20042005, 1233 in 2005-2006 and 2790 in 2006-2007. VSPCA Andhra Pradesh This bio-gas plant holds 85-cubic meters. A minimum of 200 cows giving fresh cow dung is needed to run it. The dung is put into a tank, mixed with water and pushed inside the plant, which has two major chambers. We do in this every evening so that by the next morning the gas is formed, ready to be used for the day accordingly. For cooking, we can use it directly, but to run or convert to electricity from the gas, we need to pass through a generator. Presently, 10% diesel and 90% biogas can be used. The finished bio-gas product can supply electricity or cooking gas to 50 average families or 500 individual members. National Project on Biogas Development Based on the studies conducted and on the success of the plants already installed in Andhra Pradesh, there is huge demand/potential for the establishment of Biogas Plants in Andhra Pradesh. The estimated potential of family size biogas plants is 10.90 lakhs. So far 2.84 lakh family-size biogas plants have been installed in the state. Bagasse-based Cogeneration These projects are mainly established in the sugar mills of private, public and co-operative sector. The developers have established these projects by utilizing the available infrastructure and machinery so that the power can be utilized for the sugar industry and excess power can be exported to the state grid. This has created employment, improved the financial position of the sugar mills besides exporting of power. It is estimated that there is a potential of 350 MW out of which 130.50 MW projects have been commissioned by 13 sugar mills. Municipal and industrial wastes These projects utilize the municipal and industrial wastes which has problem for their disposal. The cleanliness of urban and industrial areas is achieved by utilizing these wastes as raw material to generate power. It is estimated that there is a potential of 40 MW from municipal solid waste of Hyderabad, Vijayawada, Visakhapatnam, Guntur etc. Two projects aggregating to a capacity of 12.6 MW are under implementation at Hyderabad and Vijayawada. It is estimated that there is a potential of 135 MW from industrial wastes including poultry, distilleries and others. Out of which, 1.50 MW projects have been commissioned.
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The commercial and Industrial segment has been growing at 27% CAGR for the last 5 years as many of them are converting from traditional fuels to LPG as LPG is a cleaner fuel. Similarly sales of AutoLPG have increased by 30% CAGR between 2005-06 and 2009-10. Nearly, half a million vehicles are running on Auto GAS in India with a per vehicle consumption of 451kg per annum against the world average of 1428kg per annum.
Mandatory market mechanisms: To reach the goals defined in the Kyoto Protocol, with the least economical costs, the following flexible mechanisms were introduced for the mandatory market: Clean Development Mechanism (CDM) Joint Implementation (JI) Emissions trading
The CDM and JI mechanism requirements, for projects which create a supply of emission reduction instruments, while Emissions Trading allows those instruments to be sold on international markets Projects which are compliant with the requirements of the CDM mechanism generate Certified Emissions Reductions (CERs). Projects which are compliant with the requirements of the JI mechanism generate Emissions Reduction Units (ERUs). The CERs and ERUs can then be sold through Emissions Trading. The demand for the CERs and ERUs being traded is driven by: Shortfalls in national emission reduction obligations under the Kyoto Protocol. 30 | P a g e
Nations which have failed to deliver their Kyoto emissions reductions obligations can enter Emissions Trading to purchase CERS and ERUs to cover their treaty shortfalls. Nations and groups of nations can also create local emission reduction schemes which place mandatory carbon dioxide emission targets on entities within their national boundaries. If the rules of a scheme allow, the obligated entities may be able to cover all or some of any reduction shortfalls by purchasing CERs and ERUs through Emissions Trading. While local emissions reduction schemes have no status under the Kyoto Protocol itself, they play a prominent role in creating the demand for CERs and ERUs, stimulating Emissions Trading and setting a market price for emissions. A well-known mandatory local emission trading scheme is the EU Emissions Trading Scheme. New changes are being made to the trading schemes. The EU Emissions Trading Scheme is set to make some new changes within the next year. The new changes will target the emissions produced by flight travel in and out of the European Union. Other nations are scheduled to start participating in Emissions Trading Schemes within the next few years. These nations include China, India and the United States.
On Power 211.1 W 6.5 hours a day Standby 17.5 hours a day 1.8 W
On Power 263.9 W 6.5 hours a day Standby 17.5 hours a day 3.6 W
On Power 192.3 W 6.5 hours a day Standby 17.5 hours a day On Power 6.5 hours a day Standby 17.5 hours a day On Power 6.5 hours a day 2.0 W 7.1W 6.4 W 17.6 W
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