National Energy Map for India:

Technology Vision 2030

The Energy and Resources Institute Office of the Principal Scientific Adviser,
Government of India
ISBN 81-7993-099-8

Published by

TERI Press Office of the Principal Scientific Adviser,

The Energy and Resources Institute Government of India
Darbari Seth Block 318, Vigyan Bhavan Annexe
IHC Complex, Lodhi Road Maulana Azad Road
New Delhi 110 003, India New Delhi 110 011, India

Tel. 2468 2100 or 2468 2111 Tel. 2302 2112

Fax 2468 2144 or 2468 2145 Fax 2302 2113
India +91 Delhi (0)11 India +91 Delhi (0)11
E-mail teripress@teri.res.in Web www.psa.gov.in
Web www.teriin.org
Contents

Preface v

Acknowledgements vii

Project team ix

Tables xi

Figures xix

Acronyms and abbreviations xxiii

1 Introduction 1

2 Methodology 9

3 Sectoral demand projections, technological characterization,

and resources availability 29

4 Energy scenarios 139

5 Model results and analyses 149

6 Key observations and recommendations 193

iv Contents

appendices
A1 Description of energy sector models 207

A2 Sectoral reference energy system (RES) 215

A3 Socio-economic drivers of energy demand 221

A4 Region-wise hydrocarbon reserves at the end of 2005 235

A5 Sankey diagrams 241

A6 Balance sheets 249

Bibliography 253
Preface
India has recorded impressive rates of eco-
nomic growth in recent years, which provide
the basis for more ambitious achievements
in the future. However, a healthy rate of eco-
nomic growth equalling or exceeding the
current rate of 8% per annum would require
major provision of infrastructure and en-
hanced supply of inputs such as energy. High
economic growth would create much larger
demand for energy and this would present
the country with a variety of choices in terms
of supply possibilities. Technology would be
an important element of future energy strat-
egy for the country, because related to a
range of future demand and supply scenario
would be issues of technological choices
both on the supply and demand sides, which
need to be understood at this stage, if they
are to become an important part of Indias
energy solution in the future.
The Indian government aims to achieve
an economic growth rate of over 8% in the
next two decades in order to be able to meet
its development objectives. However, rapid
economic growth would also imply the need
for structural changes in the economy as well
as for induced shifts in the patterns of end-
use demands. To meet the needs of the In-
dian populace in the most effective manner,
it is important to map out the energy de-
mand and supply dynamics in the country.
This study estimates alternative trajectories
of energy requirements and examines the
likely fuel mix for the country under various
resource and technological constraints over
a 30-year time frame.
This study has been commissioned and
supported by the office of the PSA (Princi-
pal Scientific Advisor) to the Government of
India. The two-year study has drawn inputs
from several organizations and sectoral
experts across the country to gauge the like-
lihood of technological progress and avail-
ability of energy resources in the future.
The MARKAL model used in this study
is a widely used integrated energy system op-
timization framework that enables policy-
makers and researchers to examine the best
technological options for each stage of en-
ergy processing, conversion, and use. This
modelling framework was used to represent
a detailed technological database for the In-
dian energy sector with regard to energy re-
sources (indigenous extraction, imports, and
conversion) as well as energy use across the
five major end-use sectors (agricultural,
commercial, residential, transport, and in-
dustrial).
vi Preface
The report discusses the data, assump-
tions, and methodological framework used
to estimate useful energy requirements of
the country based on demographic and eco-
nomic drivers. Technological assessments of
resources and energy conversion processes
have been described in the report. Economic
and technological scenarios have been devel-
oped within the integrated modelling frame-
work to assess the best energy mix during the
modelling time frame. Based on the scenario
assessment, the report provides directions to
various stakeholders associated with the In-
dian energy sector including policy-makers,
technologists, and investors.
The report clearly points towards the
countrys increasing import dependence of
all fossil fuels. It also indicates that coal
would continue to play a key role in meeting
the countrys energy requirements. How-
ever, the indigenous availability of coal is
expected to plateau in the next couple of
decades with the current exploitation plans
and technology. The need for energy effi-
ciency in the end-use sectors and radical
policy changes in the transport sector is also
highlighted. The study points towards focus-
sing efforts simultaneously on the demand
and supply sides for the economy to attain
the most efficient utilization of available re-
sources.
(R K Pachauri)
Director-General, T E R I
Acknowledgements
T E R I acknowledges the high-level techni-
cal inputs and guidance provided by various
national experts in the development of the
model. T E R I specially thanks the following
experts: R Chidambaram, Kirit Parikh, A K
Kolar, Kamal Kapoor, Brahma Deo, V K
Sharma, R B Grover, Srinivas Shetty, H S
Kamath, V K Agarwal, L M Das, P K Sen,
Adish Jain, Arun Kumar, Surya P Sethi,
Arvinder S Sachdeva, Prodipto Ghosh, Dilip
Chenoy, Sudhinder Thakur, P K Modi, Alok
Saxena, and S Nand.
T E R I also acknowledges the input
provided by the following organizations:
Department of Atomic Energy, Nuclear
Power Corporation of India Ltd, Bharat
Heavy Electricals Ltd, National Thermal
Power Corporation Ltd, National Hydro
Power Corporation, North Indian Textiles
Manufacturers Association, Indian Rail-
ways, Oil and Natural Gas Corporation Ltd,
Engineers India Ltd, Indian Aluminum
Manufacturers Association, Steel Authority
of India Ltd, Fertilizer Association of India,
Cement Manufacturers Association, Con-
federation of Indian Industry, and Indian
Paper Manufacturers Association.
Thanks are due to Mr Rakesh Kumar
Arora for his invaluable secretarial assis-
tance.
Project team

Principal investigator Leena Srivastava

Core team Ritu Mathur, Pradeep K Dadhich, Atul Kumar,

Sakshi Marwah, Pooja Goel

Sector experts in TERI Amit Kumar, Shirish S Garud, Mahesh Vipradas,

V V N Kishore, Pradeep Kumar, Alok Adholeya,
Girish Sethi, N Vasudevan, Shashank Jain, Abhishek Nath,
Upasna Gaur, Ananya Sengupta, Parimita Mohanty,
K Rajeshwari, Ranjan K Bose, Sudip Mitra, R C Pal

Advisors R K Pachauri, R K Batra, Y P Abbi, S K Chand,

K Ramanathan, Preety M Bhandari

Project review monitoring S P Sukhatme, S K Sikka, E A S Sarma, Y S R Prasad,

committee R P Gupta, Chandan Roy, R K Saigal

Editorial and production Ambika Shankar, Archana Singh, Gopalakrishnan,

team Jaya Kapur, K P Eashwar, Richa Sharma, R K Joshi,
R Ajith Kumar, Subrat K Sahu, T Radhakrishnan
Tables

Table 1.1 Production of primary energy sources of conventional energy in India 2

Table 1.2 Estimated energy demand 6

Table 2.1 Demographic trends in India 15

Table 2.2 Assumptions for population projections 17
Table 2.3 Population projections (in million) 18
Table 2.4 Ruralurban distribution (%) as per the UNPD 18
Table 2.5 Ruralurban distribution (%) as per the Census of India 18
Table 2.6 Projected population and number of households in rural and
urban areas (million) 19
Table 2.7 Number of rural households (in million) in various expenditure
categories for 6.7% GDP growth 20
Table 2.8 Number of urban households (in million) in various expenditure
categories for 6.7% GDP growth 20
Table 2.9 Number of rural households (in million) in various expenditure
categories for 8% GDP growth rate 21
Table 2.10 Number of urban households (in million) in various expenditure
categories for 8% GDP growth rate 21
Table 2.11 Number of rural households (in million) in various expenditure
categories for 10% GDP growth rate 22
Table 2.12 Number of urban households (in million) in various expenditure
categories for 10% GDP growth rate 22
Table 2.13 Projections of GDP at factor cost at 1993/94 prices (in crore rupees)
under various GDP growth rate scenarios 23
Table 2.14 Sectoral composition of GDP (%) 25
Table 2.15 Sectoral GDP at factor cost (in crore rupees) under 6.7% GDP
growth rate scenario 26
xii Tables

Table 2.16 Sectoral GDP at factor cost (in crore rupees) under 8%
GDP growth rate scenario 26
Table 2.17 Sectoral GDP at factor cost (in crore rupees) under 10%
GDP growth rate scenario 26

Table 3.1 Projected cropping intensity and gross cropped area 32

Table 3.2 Demand for land preparation at various GDP (gross domestic
product) growth rates (in million hectares) 33
Table 3.3 GIA GCA under irrigation under various growth scenarios 34
Table 3.4 GIA under groundwater irrigation at various GDP growth rate scenarios 35
Table 3.5 Crop-wise GCA and water consumption 36
Table 3.6 Technology characterization of pump sets 38
Table 3.7 Comparison of transport sector demand estimates by various
agencies for the year 1999 41
Table 3.8 Comparison of transport sector demand estimates by various
agencies for the year 2000 41
Table 3.9 Assumptions on occupancy rate and utilization rate for cars 43
Table 3.10 Assumptions on occupancy rate and utilization rate for two-wheelers 46
Table 3.11 Assumptions on occupancy rate and utilization rate for buses 47
Table 3.12 Mode-wise road passenger travel demand (in billion passenger
kilometres) under 6.7% GDP (gross domestic product) growth scenario 47
Table 3.13 Mode-wise road passenger travel demand (in billion passenger
kilometres) under 8% GDP (gross domestic product) growth scenario 48
Table 3.14 Mode-wise road passenger travel demand (in billion passenger kilometres)
under 10% GDP (gross domestic product) growth scenario 48
Table 3.15 Mode-wise freight travel demand (in billion tonne kilometres); 6.
7% GDP (gross domestic product) growth scenario 49
Table 3.16 Mode-wise freight travel demand (in billion tonne kilometres);
8% GDP (gross domestic product) growth scenario 50
Table 3.17 Mode-wise freight travel demand (in billion tonne kilometres);
10% GDP (gross domestic product) growth scenario 50
Table 3.18 Rail passenger transport demand (in billion passenger kilometres)
under alternative GDP (gross domestic product) growth scenarios 51
Table 3.19 Rail freight transport demand (in billion tonne kilometres)
under alternative GDP (gross domestic product) growth rates 51
Table 3.20 Technological characterization of two-stroke two-wheelers 53
 Tables xiii

Table 3.21 Technological characterization of four-stroke two-wheelers 53

Table 3.22 Technological characterization of three-wheelers 54
Table 3.23 Percentage of cars sold by various manufacturers 55
Table 3.24 Technological characterization of cars 55
Table 3.25 Technological characterization of buses 56
Table 3.26 Technological characterization of goods vehicles 56
Table 3.27 Technological characterization of locomotives (freight) 56
Table 3.28 Technological characterization of locomotives (passenger) 57
Table 3.29 Estimates of bio-diesel production 57
Table 3.30 Assumptions in various transport scenarios 58
Table 3.31 Demand projection of caustic soda in India 60
Table 3.32 Projected demand of soda ash in India 60
Table 3.33 Demand projections of aluminium 61
Table 3.34 Demand projections for finished steel in India 62
Table 3.35 Cement demand projections 63
Table 3.36 Cotton cloth demand projection 64
Table 3.37 Demand projection for fertilizer 65
Table 3.38 Projected demand for paper and paper board in India 65
Table 3.39 Energy demand projection for other industries 66
Table 3.40 Production of caustic soda through different processes:
1998/99 to 2003/04 67
Table 3.41 Technological characterization of caustic soda industry 67
Table 3.42 Details of Indian soda ash plants 68
Table 3.43 Technological characterization of soda ash industry 68
Table 3.44 Technological characterization of the aluminium industry 70
Table 3.45 Production and technological details of Indian steel industry
during the year 2001/02 71
Table 3.46 Efficiency improvement measures for integrated steel plants 72
Table 3.47 Efficiency improvement measures for EAF-based steel plants 73
Table 3.48 Level of share of BFBOF and Scrap-EAF steel plants 74
Table 3.49 Percentage distribution of cement production in the year 2002/03 74
Table 3.50 Percentage distribution of input material requirement for different
varieties of cement production in India 75
Table 3.51 Technological details of process-wise cement production in India 76
xiv Tables

Table 3.52 Variety-wise percentage distribution of cement production in

2001 and 2036 76
Table 3.53 Technological characterization of cotton textile industry 79
Table 3.54 Installed capacity according to sources of feedstock (percentage)
used for nitrogenous fertilizer production 80
Table 3.55 Specific energy consumption for urea production in India 80
Table 3.56 Technological characteristics of paper mills 82
Table 3.57 Energy conservation options for Indian paper mills 83
Table 3.58 Income categories based on MPCE in rural and urban areas 88
Table 3.59 Number of lighting points per household in various income
classes in rural and urban areas 88
Table 3.60 Demand for lighting (trillion lux hours) 89
Table 3.61 Useful energy demand for cooking (petajoules) 90
Table 3.62 Usage norms for electrical appliances 91
Table 3.63 Useful energy demand for various end uses at 6.7% GDP growth scenario 92
Table 3.64 Useful energy demand for various end uses (petajoules) at 6.7%
GDP growth rate 92
Table 3.65 Useful energy demand for various end uses (petajoules) at 10%
GDP growth rate 92
Table 3.66 Percentage distribution of households in various income groups
using sources other than geyser for heating water 93
Table 3.67 Useful energy demand for heating water (petajoules) at the three
GDP growth rates 94
Table 3.68 Techno-economic parameters for various lighting devices 95
Table 3.69 Techno-economic parameters for kerosene-based lighting devices 95
Table 3.70 Techno-economic parameters of various cooking devices 96
Table 3.71 Characterization of refrigerators 97
Table 3.72 Technological characterization of fans 97
Table 3.73 Technological characterization of air conditioners 98
Table 3.74 Characterization of washing machines, televisions, VCRs/ VCPs,
and music systems 98
Table 3.75 Technological options for cooking in the commercial sector 100
Table 3.76 Energy demand for cooking in commercial sector (in Mtoe) 101
Table 3.77 Technologies for lighting in the commercial sector 102
 Tables xv

Table 3.78 Electricity demand for lighting in the commercial sector (in GWh) 102
Table 3.79 Technologies for space conditioning in the commercial sector 102
Table 3.80 Electricity demand for space conditioning in the commercial
sector (in GWh) 103
Table 3.81 Electricity demand for refrigeration in the commercial sector (in GWh) 103
Table 3.82 Electricity demand projections for other services (in GWh) 104
Table 3.83 Maximum values of domestic coal availability 105
Table 3.84 Coal-bed methane production potential in India 108
Table 3.85 Company-wise crude oil production (MT) 110
Table 3.86 Company-wise production of natural gas (MCM) 110
Table 3.87 Progress during NELP rounds 112
Table 3.88 Oil refinery capacity in India (2005) 114
Table 3.89 Refining capacity, actual crude throughput, and capacity
utilization during the past five years 119
Table 3.90 New refineries planned in the Eleventh Five Year Plan 119
Table 3.91 Natural gas availability 120
Table 3.92 Prices of different types of coal in three different scenarios 121
Table 3.93 Price of crude and other petroleum products 122
Table 3.94 Prices of natural gas 122
Table 3.95 Power generation steam cycles with different unit ratings 123
Table 3.96 Contemporary gas turbines using natural gas as fuel
performance at ISO conditions 124
Table 3.97 Advance class gas turbinesperformance at ISO conditions 126
Table 3.98 Integrated gasification combined cycle experience in the world 128
Table 3.99 Cost comparison of different IGCC technologies (1989 pricing) 129
Table 3.100 Upper bound on installed capacity of large hydro-based power
generation (in GW) 131
Table 3.101 Installed capacity of nuclear energy based power generation 133
Table 3.102 Renewable energy source potential 134
Table 3.103 Techno-economic parameters of power generating technologies 137

Table 4.1 Installed capacity of nuclear-energy-based power generation 144

Table 4.2 Installed capacity of small hydro-based power generation 144
xvi Tables

Table 4.3 Installed capacity of wind-based power generation 144

Table 4.4 Installed capacity of SPV- and biomass-based power generation
in aggressive renewable energy scenario 145
Table 4.5 Availability of bio-diesel for transportation 146
Table 4.6 Description of energy-efficient scenarios for the transport sector 147

Table 5.1 Commercial energy requirements in the BAU (Mtoe) 150

Table 5.2 Annual production, import, and import dependency of coal 152
Table 5.3 Production, import, and import dependency of non-coking coal in the
business-as-usual scenario 153
Table 5.4 Production, import, and import dependency of coking coal in the
business-as-usual scenario 153
Table 5.5 Sector-wise commercial energy consumption in the business-as-usual
scenario (in million tonnes of oil equivalent) 155
Table 5.6 Trends in sectoral shares in commercial energy consumption
(in percentage) 155
Table 5.7 Supply and consumption of coal (million tonnes) in the
business-as-usual scenario 157
Table 5.8 Supply and consumption of petroleum products (million tonnes)
in the business-as-usual scenario 157
Table 5.9 Supply and consumption of natural gas (billion cubic metres) in the
business-as-usual scenario 159
Table 5.10 Trend in the sectoral electricity consumption in the business-as-usual
scenario (in terrawatt hours) 160
Table 5.11 Variations in commercial energy consumption across various scenarios
(in Mtoe) 161
Table 5.12 Comparison of technology deployment for centralized and
decentralized power generation in the BAU and EFF scenarios for
2021 and 2031 (in GW) 166
Table 5.13 Production, import, and import dependency of petroleum products
across various scenarios in 2011 171
Table 5.14 Production, import, and import dependency of petroleum
products across various scenarios in 2031 172
Table 5.15 Comparison of commercial energy consumption across various
scenarios (in Mtoe) 176
 Tables xvii

Table 5.16 Technology deployment (including decentralized) during 2021 and

2031 in the business-as-usual and high growth and their respective
hybrid scenarios (in GW) 178
Table 5.17 Coal consumption in various end-use sectors in 2011 (in Mtoe) 179
Table 5.18 Coal consumption in various end-use sectors in 2021 (in Mtoe) 179
Table 5.19 Coal consumption in various end-use sectors in 2031 (in Mtoe) 180
Table 5.20 Domestic production, net import, and import dependency of
petroleum products in 2021 181
Table 5.21 Domestic production, net import, and import dependency of
petroleum products in 2031 181
Table 5.22 Energy intensity (kgoe/Rs of GDP) for various scenarios 185
Table 5.23 Total commercial energy consumption in transport sector
(in Mtoe) across various scenarios 187
Table 5.24 Projected fuel mix in transport sector (in Mtoe) across scenarios
for 2011 187
Table 5.25 Projected fuel mix in transport sector (in Mtoe) for various
scenarios for 2021 188
Table 5.26 Projected fuel mix in transport sector (in Mtoe) for various
scenarios for 2031 188
Table 5.27 Cumulative carbon dioxide emissions for different scenarios
(from 2001 to 2036) 193

Table 6.1 Suggested technology deployment programme 201

Table 6.2 Suggested technology deployment pathway for power generation 202
Table 6.3 Suggested technology deployment pathway for end-use sectors 203
Figures

Figure 2.1 Schematic representation of methodological framework 10

Figure 2.2 Energy sector models 11
Figure 2.3 MARKAL building blocks 13
Figure 2.4 Share of sectoral GDP in aggregate GDP (%) 24

Figure 3.1 Area under cultivation in India (million hectares) 30

Figure 3.2 Food grain production in India (million tonnes) 30
Figure 3.3 Trends in composition of fleet of registered passenger vehicles 39
Figure 3.4 Trends in passengers and freight carried by railways 40
Figure 3.5 Category-wise sales of two-wheelers 52
Figure 3.6 Primary aluminium production 69
Figure 3.7 Time trend of specific energy consumption of SAIL steel plants 71
Figure 3.8 Time trend of process profile of cement industry 74
Figure 3.9 Time trend of percentage distribution of different variety of
cement in India 75
Figure 3.10 Time trend of fuel and electricity consumption in the residential sector 85
Figure 3.11 Percentage distribution of households by source of cooking in rural India 86
Figure 3.12 Percentage distribution of households by source of cooking in urban India 86
Figure 3.13 Number of households per 1000 in highest income class possessing
specified durable goods (rural) 90
Figure 3.14 Number of households per 1000 in highest income class possessing
specified durable goods (urban) 91
Figure 3.15 Trend of electricity consumption in the commercial sector (19802003) 101
Figure 3.16 Trend of electricity consumption in other electricity consuming
sectors (19802003) 104
Figure 3.17 Production and import of crude oil over the years 111
xx Figures

Figure 3.18 Improvement in heat rates with steam parameters 125

Figure 3.19 Economic impact of Integrated gasification combined cycle
design study improvements 129

Figure 5.1 Commercial energy use in the business-as-usual 150

Figure 5.2 Percentage share of fuel mix (business-as-usual scenario) 151
Figure 5.3 Variation in percentage share of traditional fuels in total primary
energy supply 151
Figure 5.4 Production, import, and import dependency of non-coking coal in the
business-as-usual scenario 152
Figure 5.5 Production, import, and import dependency of coking coal in the
business-as-usual scenario 153
Figure 5.6 Production, import, and import dependency of natural gas
in the business-as-usual scenario 154
Figure 5.7 Production, import, and import dependency of petroleum in the
business-as-usual scenario 154
Figure 5.8 Sector-wise commercial energy consumption in the business-as-usual
scenario 155
Figure 5.9 Trends in sectoral shares in commercial energy consumption 156
Figure 5.10 Sectoral consumption of petroleum products in the business-as-usual
scenario 158
Figure 5.11 Trend in the sectoral electricity consumption in the business-as-usual
scenario 159
Figure 5.12 Trends in percentage distribution of electricity consumption in the
business-as-usual scenario 160
Figure 5.13 Total commercial energy consumption across scenarios 162
Figure 5.14 Average annual fuel cost across various scenarios 162
Figure 5.15 Comparison of electricity consumption across various scenarios 163
Figure 5.16 Comparison of power generation capacity mix (including
decentralized) across various scenarios 164
Figure 5.17 Average annualized investment cost in the centralized power
generation across various scenarios 165
Figure 5.18 Comparison of fuel-wise technology deployment in the
business-as-usual and high-efficiency scenarios in the power sector 167
Figure 5.19 Sector-wise coal consumption across different scenarios for 2011,
2021, and 2031 168
 Figures xxi

Figure 5.20 Comparison of import dependency of coking coal across various

scenarios 169
Figure 5.21 Import dependency of non-coking coal across various scenarios 169
Figure 5.22 Comparison of average annual cost of coal across various scenarios 170
Figure 5.23 Production, import, and import dependency of petroleum products across
various scenarios in 2011 170
Figure 5.24 Production, import, and import dependency of petroleum products across
various scenarios in 2031 171
Figure 5.25 Average annual cost of oil and oil products across various scenarios 172
Figure 5.26 Comparison of petroleum product consumption across various
scenarios in the end-use sectors 173
Figure 5.27 Refinery capacity across various scenarios 174
Figure 5.28 Refinery investment cost across various scenarios 174
Figure 5.29 Import of natural gas across various scenarios 175
Figure 5.30 Average annual cost of natural gas across various scenarios 175
Figure 5.31 Commercial energy supply in 2011, 2021, and 2031 177
Figure 5.32 Generation capacity mix for 2011, 2021, and 2031 (centralized and
decentralized) 177
Figure 5.33 Comparison of fuel-wise technology deployment for power
generation across various scenarios for 2021 178
Figure 5.34 Comparison of fuel-wise technology deployment for power
generation across various scenarios for 2031 179
Figure 5.35 Sectoral electricity consumption for 2011, 2021, and 2031 180
Figure 5.36 Import dependency of coking coal across various scenarios for
2011 and 2031 181
Figure 5.37 Import dependency of non-coking coal across various scenarios in
2011 and 2031 182
Figure 5.38 Domestic production, net import, and import dependency of
petroleum products for 2021 182
Figure 5.39 Domestic production, net import, and import dependency of
petroleum products for 2031 183
Figure 5.40 Import of natural gas across various scenarios for 2011, 2021, and 2031 183
Figure 5.41 Sectoral consumption of petroleum products in 2011, 2021, and 2031 184
Figure 5.42 Trends in energy intensity across various scenarios from 2001 to 2031 185
Figure 5.43 Comparison of energy consumption in transport sector across various
scenarios 186
xxii Figures

Figure 5.44 Comparison of fuel mix in transport sector across scenarios for
2011, 2021, and 2031 189
Figure 5.45 Comparison of net import and import dependency of petroleum
products across various scenarios for 2011, 2021, and 2031 191
Figure 5.46 Expenditure incurred on import of petroleum products 192
Figure 5.47 Cumulative carbon dioxide emissions across various scenarios (200136) 193
Acronyms and abbreviations

AC Air conditioner
ADB Asian Development Bank
AHP Analytic Hierarchy Process
AIM AsiaPacific Integrated Model
AMAI Alkali Manufacturers Association of India
ARIMA Auto regressive integrated moving average
ATF Aviation turbine fuel

BALCO Bharat Aluminium Company Ltd

BAU Business-as-usual
Bbl Barrel
BCM Billion cubic metres
BCPP Biomass consumption based power project
BEE Bureau of Energy Efficiency
BFBOF Blast furnacebasic oxygen furnace
BHEL Bharat Heavy Electricals Ltd
BHH BayerHallHeroult
BIODSL Bio-diesel
bkWh Billion kilowatt-hours
BOF Basic oxygen furnace
BPCL Bharat Petroleum Corporation Ltd
bpkm Billion passenger kilometres
BPL Below poverty line
BRPL Bongaigaon Refinery and Petrochemicals Ltd
BRUS Brundtland Scenario Model
BT Billion tonnes
btkm Billion tonne kilometres
Btu British thermal unit
CAGR Compounded annual growth rate
CBM Coal bed methane
CCGT Combined cycle gas turbine
CCPP Combined cycle power plant
xxiv Acronyms and abbreviations

CDH Crude distillation unit

CDU Crude Distillation Unit
CEA Central Electricity Authority
CFL Compact fluorescent lamp
CFRI Central Fuel Research Institute
CGE Computable general equilibrium
CHP Combined heat and power
CI Cropping intensity
cif Cost, insurance and freight
CII Confederation of Indian Industry
CIMS Canadian Integrated Modelling System
CMA Cement Manufacturers Association
CMIE Centre for Monitoring Indian Economy
CMPDIL Central Mine Planning and Design Institute Ltd
CNG Compressed natural gas
CPCL Chennai Petroleum Corporation Ltd
CPPRI Central Pulp and Paper Research Institute
CSE Centre for Science and Environment
DC Direct current
DGH Directorate-General of Hydrocarbons
DMT Di-methyl terephthalate
DRIEAF Direct reduction ironelectric arc furnace
DTC Delhi Transport Corporation
EAF Electric arc furnace
EFF High efficiency
EFOM-ENV Energy Flow Optimization Model-ENVironment
EIA Energy Information Administration
ENPEP Energy and Power Evaluation Program
FAI Fertilizer Association of India
FAO Food and Agricultural Organization
FBR Fast breeder reactor
FGD Flue gas desulphurization
FICCI Federation of Indian Chambers of Commerce and Industry
fob free on board
FYP Five Year Plan
GCA Gross cropped area
GDP Gross domestic product
GDPA Gross domestic product from agriculture
GEF Global Environment Facility
GHGs Greenhouse gases
GIA Gross irrigated area
GJ Gigajoules
 Acronyms and abbreviations xxv

GJ/t Gigajoules/tonne
GLS Generalized lighting system
GoI Government of India
GSPCL Gujarat State Petroleum Corporation Ltd
GW Gigawatt
GWh Gigawatt hour
HCV Heavy commercial vehicle
HEV Hybrid electric vehicles
HG High growth
HHYB High growth hybrid
HINDALCO Hindustan Aluminium Company Ltd
HP Horsepower
HPCL Hindustan Petroleum Corporation Ltd
HSD High-speed diesel
HYB Hybrid
IEA International Energy Agency
IGCC Integrated gasification combined cycle
IIASA International Institute for Applied Systems Analysis
IMF International Monetary Fund
INDAL Indian Aluminium Company Ltd
IOCL Indian Oil Corporation Ltd
IPCC Intergovernmental Panel on Climate Change
IREP Integrated Rural Energy Programme
ISLE Indian Society of Lighting Engineers
ISO Indian Statistical Organization
JV Joint venture
kcal Kilocalories
kg Kilogram
kgoe Kilogram of oil equivalent
km Kilometres
KRL Kochi Refineries Ltd
kWh Kilowatt hour
LBNL Lawrence Berkeley National Laboratory
LCV Light commercial vehicle
LEAP Long-range energy alternative planning
LG Low growth
LNG Liquefied natural gas
LP Linear programming
LPG Liquefied petroleum gas
l Litres
m Metres
m3 Cubic metres
xxvi Acronyms and abbreviations

MALCO Madras Aluminium Company Ltd

MARKAL MARKel ALlocation model
MESSAGE Model for Energy Supply Systems Analysis and General Equilibrium
Mha Million hectares
MmBtu Million metric British thermal units
MMSCMD Million metric standard cubic metres per day
MMTPA Million metric tonnes per annum
MNES Ministry of Non-conventional Energy Sources
MoA Ministry of Agriculture
MoC Ministry of Commerce
MoEF Ministry of Environment and Forests
MoF Ministry of Finance
MoP Ministry of Power
MoPNG Ministry of Petroleum and Natural gas
MoSPI Ministry of Statistics and Programme Implementation
MoWR Ministry of Water Resources
MPC Marginal propensity to consume
MPCE Monthly per capita expenditure
MRPL Mangalore Refinery and Petrochemicals Ltd
MSEB Maharashtra State Electricity Board
MT Million tonnes
Mtoe Million tonnes of oil equivalent
MTPA Million tonnes per annum
MW Megawatt
NALCO National Aluminium Company Ltd
NCA Net cropped area
NCAER National Council for Applied Economic Research
NELP New Exploration Licensing Policy
NIOC National Iranian Oil Company
NPCIL Nuclear Power Corporation of India Ltd
NUC High nuclear capacity
ODC Oxygen depolarized cathodes
OECD Organization for Economic Co-operation and Development
OIDB Oil Industry Development Board
OIL Oil India Ltd
ONGC Oil and Natural Gas Corporation Ltd
OPC Ordinary Portland Cement
PCRA Petroleum Conservation Research Association
PFBG Pressurized fluidized bed gasification
PFI Population Foundation of India
PHWR Pressurized heavy water reactor
PJ Petajoules
 Acronyms and abbreviations xxvii

PLF Plant load factor

POLES Prospective Outlook on Long-term Energy Systems
PPC Portland Pozzolana Cement
PSA Principal Scientific Adviser
PSC Portland Slag Cement
PSF Polyester staple fibre
PSU Public Sector Undertaking
RBPL Rural below poverty line
REN Aggressive renewable energy
RES Reference energy system
RET Renewable energy technology
RH Rural high
RL Rural low
RLM Rural lower middle
RM Rural middle
RPL Reliance Petroleum Ltd
RUM Rural upper middle
SAIL Steel Authority of India Ltd
SCR Selective catalytic reduction
SHP Small hydro power
SIAM Society of Indian Automobile Manufacturers
SPV Solar photovoltaic
SRTU State road transport undertaking
SSP Single super phosphate
TEDDY The Energy Data Directory Yearbook
TERI The Energy and Resources Institute
TPD Tonnes per day
TPES Total primary energy supply
UBPL Urban below poverty line
UH Urban high
UL Urban low
ULM Urban lower middle
ULSD Ultra-low sulphur diesel
UM Urban middle
UNPD United Nations Population Division
USC Ultra-supercritical
USDoE US Department of Energy
UUM Urban upper middle
VCP Video cassette player
VCR Video cassette recorder
WBCSD World Business Council for Sustainable Development
WEC World Energy Council
Introduction
1.1 Background
The growth of a developing economy is
highly dependent on the growth on its en-
ergy consumption. Because of the possibility
of inter-fuel substitution in end-use applica-
tions, the optimal long-term energy supply
requirements of a country necessitates ex-
amination of all energy resources available
both indigenously and globally.
The Government of India plans to
achieve a GDP (gross domestic product)
growth rate of 10% in the Eleventh Five Year
Plan and maintain an average growth of
about 8% in the next 15 years (Planning
Commission 2002).
Given the plans for rapid economic
growth, it is evident that the countrys re-
quirements for energy and supporting infra-
structure would increase rapidly as well. In
view of the rising energy prices and other
geo-political considerations regarding en-
ergy imports, it is important to identify and
adopt policies and measures that enhance
energy security and help reduce the final en-
ergy requirements of the economy. An inte-
grated assessment of all the technological
options available to the economy is therefore
crucial to examine possible energy pathways
and their impacts in terms of costs, infra-
structure requirements, and fuel-mix pat-
terns over time.
1
This chapter provides an overview of
Indias energy sector and the challenges it
faces.
1.2 Overview of the energy sector
Energy has been universally recognized as
one of the most important inputs for eco-
nomic growth and human development.
There is a strong two-way relationship be-
tween economic development and energy
consumption. On one hand, the 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 energy demand.
The energyGDP elasticity, defined as
the ratio of the growth rate of energy to the
growth rate of GDP, captures both the struc-
ture as well as efficiency of the economy. The
energyGDP elasticity during 19532001
has been above unity. However, the elasticity
for primary commercial energy consump-
tion 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
2 National Energy Map for India: Technology Vision 2030

growth of services, improvement in efficiency 1.3 Energy demand and supply

of energy use, and inter-fuel substitution.
scenario
The energy sector in India has been re-
ceiving high priority in the planning process.
In the recent years, Indias energy consump-
The total outlay on energy in the Tenth
tion has been increasing at one of the fastest
Five Year Plan was about 4.03 trillion rupees
rates in the world due to population growth
at 2001/02 prices, which comprised 26.7%
and economic development. Primary com-
of the total outlay. An increase of 84.2% is
mercial energy demand grew at the rate of
projected over the Ninth Five Year Plan in
6% between 1981 and 2001 (Planning Com-
terms of the total plan outlay for the energy
mission 2002). India ranks fifth in the world
sector. The Government of India in the
in terms of primary energy consumption, ac-
mid-term review of the Tenth Five Year Plan
counting for about 3.5% of the world com-
recognized the fact that under-performance
mercial energy demand, as per 2003 data.
of the energy sector can be a major con-
Despite the overall increase in energy de-
straint in delivering a growth rate of 8%
mand, per capita energy consumption in the
GDP during the plan period. It has, there-
country 323 kilograms of oil equivalent in
fore, called for acceleration of the reforms
2003 is still very low compared to other de-
process and adoption of an integrated
veloping countries (MoPNG 2004a).
energy policy.
India is relatively well endowed with both
In the recent years, the government has
exhaustible and renewable energy resources.
rightly recognized the energy security con-
Coal, oil, and natural gas are the three pri-
cerns of the nation and more importance is
mary commercial energy sources. Indias en-
being placed on energy independence. On
ergy policy, till the end of the 1980s, was
the eve of the 59th Independence Day (on
mainly based on the availability of indig-
14 August 2005), the President of India em-
enous resources. Coal was by far the largest
phasized that energy independence has to be
source of energy. However, Indias primary
the nations first and highest priority, and
energy mix has been changing over a period
India must be determined to achieve this
of time. Table 1.1 gives the break-up of pri-
within the next 25 years.

Table 1.1 Production of primary energy sources of conventional energy in India

Source Unit 1970/71 1980/81 1990/91 2001/02 2002/03 2003/04

Coal and lignite MT 76.34 119.02 228.13 352.60 367.29 389.11
Crude oil MT 6.82 10.51 33.02 32.03 33.04 33.38
Natural gas BCM 1.45 2.36 18.00 29.71 31.40 31.95
Nuclear power bkWh 2.42 3.00 6.14 19.48 19.39 17.78
Hydro power bkWh 25.25 46.54 71.66 73.70 64.10 75.33
Wind power bkWh 0.03 1.97 2.10 3.40
MT million tonnes; BCM billion cubic metres; bkWh billion kilowatt-hours
Source MoC (2004); CEA (2005)

mary energy production for various fuels
from 1970 onwards.
Despite the increasing dependency on
commercial fuels, a sizeable quantum of
energy requirements (40% of total energy
requirement), especially in the rural house-
hold sector, is met by non-commercial
energy sources, which include fuelwood,
crop residue, and animal waste, including
human and draught animal power. However,
other forms of commercial energy of a much
higher quality and efficiency are steadily re-
placing the traditional energy resources be-
ing consumed in the rural sector.
Resource augmentation and growth in
energy supply have not kept pace with in-
creasing demand and, therefore, India con-
tinues to face serious energy shortages. This
has led to increased reliance on imports.
1.4 Coal
India now ranks third amongst the coal pro-
ducing countries in the world. Being the
most abundant fossil fuel in India till date, it
continues to be one of the most important
sources for meeting domestic energy needs.
It accounts for 55% of the countrys total
energy supplies. Power sector alone con-
sumes 75% of the coal produced in the
country (MoC 2005).
Through sustained increase in invest-
ment, the production of coal has increased
from about 70 MT (million tonnes) in the
early 1970s to 382 MT in 2004/05 (MoC
2005). Despite this increase in production,
the existing demand exceeds the supply. In-
dia currently faces coal shortages of 23.96
MT. This shortage is likely to be met through
imports, mainly by the steel, power, and ce-
Introduction 3
ment sectors (MoC 2005). The development
of such core infrastructure sectors is depen-
dent on coal.
1.5 Power
Access to affordable and reliable electricity
is critical to a countrys growth and prosper-
ity. India has made significant progress to-
wards the augmentation of its power
infrastructure. In absolute terms, the in-
stalled power capacity has increased from
only 1713 MW (megawatts) as on 31 De-
cember 1950 to 118 419 MW as on March
2005 (CEA 2005). The all-India gross elec-
tricity generation, excluding that from the
captive generating plants, was 5107 GWh
(gigawatt-hours) in 1950 and increased to
565 102 GWh in 2003/04 (CEA 2005).
Energy requirement increased from
390 bkWh (billion kilowatt-hours) during
1995/96 to 591 bkWh by 2004/05, and peak
demand increased from 61 GW (gigawatts)
to 88 GW over the same time period. The
country experienced an energy shortage of
7.3% and peak shortage of 11.7% during
2003/04. The growth in electricity consump-
tion over the past decade has, however, been
slower than the GDP growth. This could be
due to the high growth of the service sector
and efficient use of electricity.
Per capita electricity consumption rose
from merely 15.6 kWh (kilowatt-hours) in
1950 to 592 kWh in 2003/04 (CEA 2005).
However, it is a matter of concern that per
capita consumption of electricity is among
the lowest in the world. Moreover, the poor
quality of power supply and frequent power
cuts and shortages impose a heavy burden
on Indias fast-growing trade and industry.
4 National Energy Map for India: Technology Vision 2030
1.6 Oil and natural gas
1.6.1 Oil sector
India is becoming a major player in the inter-
national oil and gas industry and is willing to
take on the political and financial risks in-
herent in overseas investments.
The country currently imports 70% of its
oil and this share is expected to exceed by
90% by 2030. It began importing gas in
2004 and is projected to reach an import de-
pendency of almost 40% in 2030. It has
adopted a four-pronged approach to energy
security, comprising import source diversifi-
cation and acquisition of equity oil, strategic
oil stocks, increased domestic exploration
and production, and fuel diversification.
Indian oil and gas companies are encour-
aged to invest overseas and to build strong
relations with strategically important coun-
tries. India aims to produce 20 MT of equity
oil by 2010 and 60 MT by 2025 so that do-
mestic consumption could reach 250 MT.
The latest estimates indicate that India
has about 0.4% of the worlds proven
reserves of crude oil. The production of
crude oil in the country has increased from
6.82 MT in 1970/71 to 33.38 MT in
2003/04 (MoPNG 2004b). The quantity of
crude oil imported increased from 11.66
MT during 1970/71 to 81 MT by 2003/04.
Besides, imports of other petroleum prod-
ucts increased from 1 MT to 7.3 MT during
the same period. The exports of petroleum
products went up from about 0.5 MT during
1970/71 to 14 MT by 2003/04. The refining
capacity, as on 1 April 2004, was 125.97
MTPA (million tonnes per annum). The
production of petroleum products increased
from 5.7 MT during 1970/71 to 110 MT in
2003/04.
1.6.2 Natural gas sector
India has recently entered a new era in its
gas industry with large discoveries of indig-
enous gas and the arrival of the first LNG
(liquefied natural gas) tanker in 2004. The
importance of gas in Indias energy mix is
expected to increase sharply from 7% of
TPES (total primary energy supply) in 2000
to 13% by 2030. In the same year, import
dependency on gas will reach almost 40%.
In order to meet the projected consumption,
investment needs of about 44 billion dollars
between 2001 and 2030 are projected.
India will continue to depend on import-
ing LNG in the short- to medium-term to
bridge the demand gap. The capacity of
Indias only operating LNG terminal is ex-
pected to double by 2005 and two more
LNG terminals are expected to become op-
erational in the next two years.
The major challenges that India faces to-
wards becoming a sophisticated gas
economy include lack of sufficient transmis-
sion infrastructure and lack of a coherent le-
gal and regulatory framework.
Indias consumption of natural gas has
risen faster than any other fuel in the recent
years. Natural gas demand has been growing
at a growth rate of about 6.5% for the last 10
years. Industries such as power, fertilizer,
and petrochemical are shifting towards natu-
ral gas. Although Indias natural gas demand
has traditionally been met entirely through
domestic production for the past few years,
the core sectors of the economy have started
facing a gas shortage. To bridge this gap,
apart from encouraging domestic produc-
tion, the import of LNG is being considered
as one of the possible solutions. Several
LNG terminals have been planned in the
country and two have already been commis-

sioned: (1) a petronet LNG terminal of
5 MTPA at Dahej, and (2) an LNG import
terminal at Hazira. In addition, an in-prin-
ciple agreement has been reached with Iran
for import of 5 MTPA of LNG.
1.7 Renewable energy sources
Renewable energy sources are clean and in-
digenously available, and can play an impor-
tant role in addressing the energy security
concerns of a country. Today, India has one
of the highest potentials for effectively using
renewable energy sources. The country is the
worlds fifth largest producer of wind power
after Germany, USA, Spain, and Denmark.
There is a significant potential in India for
the generation of power from renewable en-
ergy sourceswind, small hydro, biomass,
and solar energy. The country has an esti-
mated SHP (small hydro power) potential of
about 15 000 MW. The installed combined
electricity generation capacity of hydro and
wind has increased from 19 194 MW in
1991/92 to 31 995 MW in 2003/04, with a
compound growth rate of 4.35% during this
period (MoF 2005). The penetration of
other renewable energy technologies, in-
cluding solar photovoltaic, solar thermal,
small hydro, and biomass power is also in-
creasing. Greater reliance on renewable
energy sources offers enormous economic,
social, and environmental benefits.
The potential for power production
from captive power plants and field-based
biomass resources, using technologies for
distributed power generation, is currently
assessed at 19 500 MW, including 3500 MW
of exportable surplus power from bagasse-
based cogeneration in sugar mills (MNES
2005).
Introduction 5
1.8 Future scenario
Increasing pressure of population and in-
creasing use of energy in different sectors of
the economy are concern areas for India.
With a targeted GDP growth rate of 8% dur-
ing the Tenth Five Year Plan, energy demand
is expected to grow at the rate of 5.2%.
Driven by the rising population, expanding
economy, and a quest for improved quality
of life, the total primary energy consumption
is expected to be about 412 Mtoe (million
tonnes of oil equivalent) and 554 Mtoe in
the terminal years of the Tenth and Eleventh
Five Year Plans, respectively (Planning Com-
mission 1999) (Table 1.2).
The International energy outlook 2005
(EIA 2005) projects Indias gas consump-
tion to grow at an average annual rate of
5.1%, thereby reaching 2.8 trillion cubic feet
by 2025 with electric power accounting for a
share of 71%. Coal consumption is expected
to increase to 315 MT over the forecast pe-
riod. In India, slightly less than 60% of the
projected growth in coal consumption is at-
tributed to the increased demand of coal in
the electricity sector while the industrial sec-
tor accounts for most of the remaining
increase. Coal-fired generation capacity is
expected to increase by 59 000 MW between
2002 and 2025 such that use of coal for
electricity generation would be 2.2% per
annum. Oil demand in India is expected to
increase by 3.5% per annum during the
same period.
It is quite apparent that coal will continue
to be the predominant form of energy in
future. However, imports of petroleum and
gas would continue to increase substantially
in absolute terms, involving a large energy
import bill. There is, therefore, an urgent
need to reduce energy requirements by
6 National Energy Map for India: Technology Vision 2030

Table 1.2 Estimated energy demand

Demand (in original units) Demand (Mtoe)

Primary fuel Unit 2006/07 2011/12 2006/07 2011/12
Coal MT 460.50 620.00 190.00 254.93
Lignite MT 57.79 81.54 15.51 22.02
Oil MT 134.50 172.47 144.58 185.40
Natural gas BCM 47.45 64.00 42.70 57.60
Hydro power bkWh 148.08 215.66 12.73 18.54
Nuclear power bkWh 23.15 54.74 6.04 14.16
Wind power bkWh 4.00 11.62 0.35 1.00
Total commercial energy 411.91 553.68
Non-commercial energy 151.30 170.25
Total energy demand 563.21 723.93
MT million tonnes; BCM billion cubic metres; bkWh billion kilowatt-hours; Mtoe million tonnes of oil equivalent
Source Planning Commission (2002)

demand-side management and by adopting phasizes on regulatory reform to improve

more efficient technologies in all sectors.
1.9 The road ahead
The energy needs of the country are ex-
pected to increase at a rapid rate in the com-
ing decades. Therefore, it is imperative to
take steps to increase the indigenously avail-
able energy resources so as to avoid excessive
reliance on external sources. The options
available in terms of nuclear and hydel en-
ergy, as well as non-conventional sources of
energy, also need to be seriously looked into.
Non-conventional sources of energy may
come to play an increasing role in meeting
energy needs, particularly of the rural popu-
lation, which depends mostly on non-com-
mercial sources of energy today. The
mid-term appraisal of the Tenth Five Year
Plan (Planning Commission 2005) also em-
the energy efficiency of the country (Box 1).
However, availability of capital and envi-
ronmental considerations is appearing as se-
rious constraints to the efforts of generating
more capacity to meet the growing demand.
Prudent management of the indigenous en-
ergy resources; judicious approach to energy
imports; and progressive shift in favour of
environmentally benign sources of energy,
including non-renewable sources and de-
mand-side management, are some of the so-
lutions to the problems and can, therefore,
be the guiding principles for long-term en-
ergy policy of the country.
1.10 Investments in energy
infrastructure
India faces the challenging task of mobiliz-
ing financial resources to invest in energy
 Introduction 7

Box 1 Highlights of the proposals made under the mid-term appraisal of the Tenth Five Year
Plan across the energy sector

Improve regulation by

creating a regulatory academy;

institutionalizing the selection of regulators under the regulatory academy;

mandating training for all regulators;

granting financial autonomy to regulatory institutions;

limiting the quasi-judicial role of regulators to tariff setting and dispute resolution, providing a sys-
tem to make regulators accountable to the Parliament; and

developing a debt pool that would provide up to 20-year loan funding for energy projects, estab-
lishing and enforcing energy efficiency standards (the Bureau of Energy Efficiency and PCRA Petro-
leum Conservation Research Association must develop standards for energy-intensive industries
and appliances, and develop modalities for a system of incentives/penalties for compliance/non-
compliance).

infrastructure. The problem is further aggra- 1.12 Energy security

vated by the different financial risks that
have been introduced by the transition to
competitive markets. Far-reaching reforms
are urgently needed to facilitate higher capital
flows in the energy sector.
1.11 Role of new and energy-
efficient technologies
New and energy-efficient technologies have
a key role to play in the optimal utilization of
resources. At this juncture, there is an urgent
need to address barriers to the adoption of
clean coal technologies and other new
energy processing technologies. R&D (re-
search and development) and demonstration
of these technologies under government-
supported programmes are very crucial.
The focus currently is on energy security.
The energy security concerns now encom-
pass access to coal, natural gas, electricity,
and oil, and insulation from abnormal price
fluctuations. Indias oil import dependency
is expected to increase from 70% at present
to 90% by 2030. Apart from this, imports of
coal as well as gas are expected to increase
significantly in the next couple of decades.
Furthermore, access to energy supply needs
to be compatible with policy objectives like
mitigation of environmental consequences.
The Government of India has a policy to
mitigate risks by diversifying geological re-
sources of fuel supply and maximizing indig-
enous use of renewable energy sources and
non-renewable energy sources.
8 National Energy Map for India: Technology Vision 2030
1.13 Objectives of the study
In order to have an integrated energy ap-
proach and to meet the policy goals of
economic efficiency, energy security, energy
access, and environment protection, the
Principal Scientific Advisers Office to the
Government of India awarded the study, A
national energy map for Indiatechnology vi-
sion 2030, to T E R I in March 2004. The
time frame of the study is from 2001 to
2031. The objectives of the study are
1 to develop a framework for optimal ex-
ploitation of energy resources through ap-
propriate technology deployment;
2 to determine the energy technology poli-
cies and strategies that would lead to opti-
mal use of energy resources;
3 to suggest a technology deployment strat-
egy at the national level; and
4 to identify energy demand and supply, and
energy-technology related data gaps that
will strengthen such analyses in the future.
The above-mentioned objectives are to be
addressed by building a national-level, bot-
tom-up, technology-driven, optimization-
modelling framework. The model is to be
run under various scenarios to capture un-
certainties and bring out its implications on
the national energy scene.
Methodology
2.1 Approach
As described in Chapter 1, the key focus of
this study was to examine the role that vari-
ous technological options could play under
alternative scenarios of economic growth
and development; resource availability; and
technological progress. For this purpose, it
was important to choose an integrated mod-
elling framework that would facilitate the
creation and analysis of various scenarios of
energy demand and supply at the national
level, as well as provide a detailed represen-
tation and analysis at the technological level
for each category of resource as well as
sectoral end-use demand.
Energy demand is driven by the GDP
(gross domestic product) and population
growth. Different GDP growth rates were
used to develop various scenarios of eco-
nomic growth while the population projec-
tions of the PFI (Population Foundation of
India) were considered to reflect trends in
population growth. These population and
GDP figures were used to estimate end-use
demand in the five sectors of the economy
(agriculture, commercial, residential, indus-
trial, and transport) over the modelling period.
The MARKAL (MARket ALLocation)
Program model was selected to examine the
pathways for optimal energy supply to meet
the end-use services in the five economic
sectors under each scenario. The model indi-
2
cates the minimized total system cost of the
energy sector under various scenarios. Also,
the main outputs provided by the model in-
clude information regarding the level of up-
take of total energy resources, their
distribution across the consuming sectors,
choice of the technological options at the re-
source supply end, conversion and end-use
levels, investment levels during each five-
year time period, an indication of capacity
addition, retirement of equipment and ap-
pliances, emission levels associated with re-
sources, end-use technological options
adopted, and so on. The modelling time
frame is from 2001 to 2031, and the data in-
put to the model is from 2001 to 2036. The
overall methodology is schematically de-
picted in Figure 2.1.
Given wide scope and vast nature of the
exercise, it was important to draw on the
knowledge base of a large and varied team of
experts so as to provide inputs of adequate
quality to the model. Several rounds of inter-
actions with policy-makers and experts in
each sector were crucial to the development
of the modelling framework and the overall
analysis. The choice of the possible techno-
logical options (existing and futuristic) to be
included in the model, the development of
the RES (reference energy system), and the
technology characterization for each option
on the demand side as well as the supply side
evolved on the basis of an extensive litera-
10 National Energy Map for India: Technology Vision 2030
Figure 2.1 Schematic representation
of methodological framework
ture review. In addition, several rounds of
deliberations and focused interactions with
sectoral experts, researchers, industry
associations, research and development in-
stitutions, government agencies, and policy-
makers in each of the individual sectors were
held to finalize the input data to the model.
2.2 Choice of modelling framework
Figure 2.2 illustrates various types of energy
sector models widely used across several
developed and developing countries for car-
rying out their economic and energy sector
planning. These models also consider differ-
ent overall approaches towards the analysis
of energy and environmental systems. The
evaluation of the model to be finally used for
the analysis was governed primarily by the
ability of the models to undertake a detailed
representation as well as evaluation of the
technological options for both existing and
emerging technologies related to energy ex-
traction/supply, conversion, transportation,
and economy. Some of these models, includ-
ing the ENPEP (Energy and Power Evalua-
tion Program), the MARKAL, the LEAP
(Long-range Energy Alternatives Planning)
System, the AIM (Asia-Pacific Integrated
Model), the MESSAGE (Model for Energy
Supply Systems Analysis and General Envi-

ronment), and the POLES (Prospective
Outlook on Long-term Energy Systems),
were extensively reviewed to evaluate the
best option to be used for this study. Various
energy sector models listed in Figure 2.2 are
described in detail in Appendix 1.
Following extensive survey of the existing
models and frameworks, the MARKAL
model was selected as the preferred frame-
work on account of several reasons, as dis-
cussed below.
1 MARKAL provides an integrated frame-
work for examining the flow of resources
from the point of extraction up to the
point of end-use, while accounting for
conversion efficiencies, losses, costs of
transport and transmission, and so on.
2 Using a bottom-up framework provides
an adequate scope for representing each
technological option in detail in terms of
its availability, costs, and so on.
3 As a technology mix optimization model,
MARKAL database typically contains a
fairly comprehensive account of tech-
nologies for supply and end-use produc-
Figure 2.2 Energy sector models
Methodology 11
tion, conversion, transmission, and utili-
zation. Supply technologies are described
in terms of their initial, construction, and
operating costs; fuel requirements; dis-
count rates; useful lives; and efficiencies.
Such assumptions may vary with time.
Definition and description of technolo-
gies are limited only by the modellers
preferences. A single energy system may
contain definitions of several hundred
technologies that contribute to supply,
demand, efficiency, production, or any re-
lationship defined by the modeller.
4 The model is dynamic in the sense that it
optimizes over the entire time period and
considers retirement of equipment and
appliances over their lifetime and invest-
ment in new capacities while considering
the entire modelling time period.
MARKAL is accordingly an appropriate
framework for conducting a medium- to
long-term analysis over a 30-year model-
ling time frame.
5 The model has the ability to include user-
defined constraints to reflect physical re-
strictions on the availability or processing
of resources, maximum penetration ratios
for a set of technologies, and so on.
6 MARKAL model provides a generalized
structure that can be adapted well for the
Indian energy sector analysis. It allows for
formulating and analysing policy and
technology scenarios easily, so that the
implications pertaining to economy, en-
ergy, and environment of a particular set
of policies can be evaluated.
7 The MARKAL being an optimization
framework was preferred to a simulation
framework as it helps in providing a rela-
tive ranking of various technological op-
tions from the viewpoint of cost minimi-
zation as well.
12 National Energy Map for India: Technology Vision 2030
8 The MARKAL model was developed by
the IEA (International Energy Agency) to
evaluate optimal mix of energy supply
and demand technologies under different
scenarios and objectives. The MARKAL
framework is, therefore, geared towards
expressing energy technology interac-
tions. As a mathematical tool, it is used
for optimizing technology mixes to meet
specified objectives such as least energy
system costs. The MARKAL family of
models provides a flexible, easy-to-under-
stand, proven, and verifiable methodol-
ogy that can provide insights to assist with
informed decision-making. Policy ana-
lysts in several developed and developing
countries have used this model to frame
energy policy and evaluate options based
on their projected financial and environ-
mental effects.
2.3 Modelling framework of the
MARKAL model
2.3.1 Model structure
The MARKAL model is a dynamic LP (lin-
ear programming) model of a generalized
energy system. It uses LP methods to solve
for the technology mix that best meets the
specified objectives. It is demand-driven for
which feasible solutions are obtained only if
all specified end-use energy demands are
satisfied for every time period. The end-use
demands for each sector and for each time
period are exogenously forecasted.
Being an LP model, the main function of
the MARKAL model is to optimize a linear
objective function under a set of linear con-
straints. The problem is to determine the
optimum activity levels of processes that sat-
isfy the constraints at a minimum cost. Ex-
amples of constraints in the model include
availability of primary energy resources, pro-
duction/use balances, electricity/heat peak-
ing, availability of certain technologies, and
upper bounds on pollution emissions.
The elements of the MARKAL simulate
the flow of energy in various forms (energy
carriers), from the sources of supply (im-
port, export, mining, and stockpiling)
through transformation systems (resource,
process, conversion, and demand technolo-
gies) to the devices that satisfy the end-use
demands. The basic structure of the
MARKAL model is shown in Figure 2.2.
The elements of an energy system in
MARKAL can be grouped as follows.

Energy carrier The component that
encompasses all the energy forms in the
energy system.

End-use demands The component that
comprises the demands for end-use
energy services in the economy.

Demand technologies All devices that
consume energy carriers to meet energy
demands.

Conversion technologies All load-depen-
dent plants that generate electricity or
district heat or both.

Process technologies All load-indepen-
dent processes that convert one energy
carrier to another.

Resource technologies The means by
which energy enters or leaves the energy
system, other than end-use consumption.

Emissions The component that encom-
passes the environmental impacts of the
energy system.
Figure 2.3 depicts the MARKAL build-
ing blocks, also called the RES. The RES is a

Figure 2.3 MARKAL building blocks
convenient tool to map the flow of each en-
ergy resource over its entire fuel cycle. It
provides a blueprint for each sector in terms
of the resources that it uses/could use and
the end-use demands that are associated
with it. It provides a flow chart of the basic
building blocks of the overall model that can
then be easily mapped onto the actual model
without missing out on important compo-
nents or links.
2.3.2 Solutions of the models
The MARKAL creates solutions by mini-
mizing the present value of the total energy
system costs throughout the planning hori-
zon, subject to specified constraints. As
such, it uses perfect foresight whereby all
decisions are made with full knowledge of
the future events. The MARKAL solutions
include the following.

An optimal resource/fuel/technology mix

A complete breakdown of the costs asso-
ciated with each technology
Methodology 13

Seasonal activity and capacity
level for each conversion
technology in each time pe-
riod

Annual activity and capacity
level for each process and de-
mand technology in each time
period

The level of additional capac-
ity for each conversion pro-
cess and demand technology
developed in each time period

Activity level for each re-
source technology in each
time period

A full range of energy prices,
such as electricity price by
season and time of day and energy price
provided by renewable technologies

Emission levels for each technology
and the total energy system in each time
period
2.3.3 Description of the model
framework used in analysis
The MARKAL database has been created
over a 35-year period, from 2001 to 2036, at
five-year intervals, coinciding with the Gov-
ernment of Indias Five Year Plans. The year
2001/02 is chosen as the base year as it coin-
cides with the first year of the Government
of Indias Tenth Five Year Plan (2001/02
2006/07). In the model, the Indian energy
sector is disaggregated into five major en-
ergy-consuming sectors, namely, agricul-
ture, commercial, industry, residential, and
transport. Each of these sectors is further
disaggregated to reflect the sectoral end-use
demands. The model would be driven by the
demands on the end-use side.
14 National Energy Map for India: Technology Vision 2030
On the supply side, the model considers
various energy resources that are available
both domestically and from abroad for
meeting various end-use demands. These in-
clude both the conventional energy sources
such as coal, oil, natural gas, hydro power,
nuclear power as well as renewable energy
sources such as wind, solar, biomass, and so
on. The availability of each of these fuels is
represented by constraints on the supply
side. The relative energy prices of various
forms and sources of fuels dictate the choice
of fuels, which play an integral role in cap-
turing inter-fuel and inter-factor substitu-
tion within the model. Furthermore, various
conversion and process technologies charac-
terized by their respective investment costs,
operating and maintenance costs, technical
efficiency, operational life, and so on, to
meet the sectoral end-use demands are also
incorporated in the model. Although, as-
sumptions related to resource availability
and other input parameters of the model re-
lated to technology characterization are pre-
sented till 2036, the results from the model
are presented till 2031. The effects of incon-
sistent behaviour of the MARKAL, an opti-
mization model, are thus avoided with
perfect foresight. A detailed description of
the main resources and technology choices
included within each of the main sectors in
the modelling framework is provided in
Chapter 3. A detailed schematic representa-
tion of the RES for these sectors, tracing the
resource from the point of extraction to the
point of use, is given in Appendix 2.
2.3.4 Integrating the workshop
inputs into the exercise
Integrating up-to-date data and information
was the key to this integrated and well-tested
methodological framework. Towards this
end, several sectoral workshops were con-
ducted, which involved discussions and fo-
cused deliberations with researchers,
stakeholders, and experts from each of the
individual consuming and supplying sectors.
The experts from various fields provided not
only their knowledge and judgments regard-
ing various technological options to be con-
sidered in each of the sectors, but also
information regarding key parameters asso-
ciated with these technologies. Detailed de-
scriptions of each of the technological
options in terms of its techno-economic sta-
tus and potential at the national and interna-
tional levels including details regarding its
costs, efficiencies, availability and diffusion
timelines, and so on came to the fore in the
deliberations and discussions held in the
workshops. This helped in the technology
characterization of each of the sectoral op-
tions in the model.
2.4 Socio-economic drivers of
final energy demands
Population and GDP were considered as the
main drivers for estimating and projecting
sectoral end-use demands in terms of physi-
cal industrial production or useful energy
services. Based on the optimal fueltechnol-
ogy mix chosen by the MARKAL model to
meet these demands, final energy required is
obtained from the model run.
Population growth and the dynamics of
the demographic shifts across various in-
come classes have a direct influence on the
future energy demands. Accordingly, estima-
tion of growth and distribution of popula-
tion are vital for any government to
efficiently allocate its resources and plan to-
wards achieving its economic and social
 Methodology 15

goals. Similarly, a high rate of economic
growth, as measured by the GDP and its al-
location across the agriculture, industry, and
services sectors, has an impact on energy
consumption. This is mainly because rise in
the GDP, which manifests itself in the form
of increased agricultural production, accel-
erated industrial production, and rising de-
mand for commercial services, would
inevitably lead to a rise in the energy re-
quirement of the economy at large.
2.4.1 Population projection and
distribution across various income
groups in India
2.4.1.1 Population and
demographic trends in India
Indias population stood at nearly 350 mil-
lion at the time of independence. It in-
creased at an unprecedented annual growth
rate of 2.11% during 19512001 to reach
the one billion mark at the dawn of new mil-
lennium.
Although the family planning programme
was initiated in the country in 1951, the
1971 census indicated that due to high
growth rate, the population had increased by
24.8% during 196171 as compared to
21.5% during 195161. In spite of the vast
network of personnel involved in the
programme and sizable expenditure from
the centre, this continuing increase in popu-
lation growth rate disturbed the policy-mak-
ers and programme administrators, which
led to the adoption of draconian measures
during the emergency period of 1975/76. A
revised population policy was adopted in
1977 and the family planning programme
was renamed as family welfare programme.
This programme chose to achieve demo-
graphic change through education and moti-
vation. As indicated in Table 2.1, population
growth decelerated marginally during the
1980s, evident from the decadal population
growth rate that reduced by 23.9%. Con-
certed efforts by the government and the in-
centives offered during 198691 to young
couples having one or two children led to a
slow but steady acceptance of family plan-
ning programme.

Table 2.1 Demographic trends in India

Rate/measure for the 10-year period before the census

Enumerated Percentage Crude Crude Total Expectation of
population change in birth death fertility life at birth
Census year (in million) population rate rate rate Male Female
1951 361.1 13.3 4044 2832 5.36.0 3234 3234
1961 439.2 21.6 4648 2628 6.36.6 3739 3739
1971 548.2 24.8 4344 2122 6.46.6 4345 4244
1981 683.3 24.6 37 15 5.1 50 49
1991 846.6 23.9 35 13 4.3 54 53
2001 1027.0 21.3 29 10 3.7 59 60
Source Bhat (2001)
16 National Energy Map for India: Technology Vision 2030

2.4.1.2 Population projection for growth rate would decline over the decades
during the forecast period. As per the
India
UNPD figures in the medium-variant sce-
nario, annual growth rate of population de-
A number of national and international
clines from 1.41% to 1.08% to 0.73%
agencies have attempted to project Indias
during 200111, 201121, and 202131, re-
population over various time periods. Inter-
spectively. As per the PFIs projections, the
nationally, the Population Division of the
growth rate is 1.37%, 1.34%, and 0.92%
Department of Economic and Social Affairs
during the same time periods.
of the United Nations Secretariat (UNPD or
For this study, the PFI estimates are pre-
United Nations Population Division) is
ferred to the UNPD estimates, since the PFI
entrusted with the responsibility of demo-
relies more on the country-specific details.
graphic estimation and projections for all
The UNPD estimates are based on the as-
countries and areas of the world, including
sumptions that are derived on the basis of
urban and rural areas and major cities, and
experience of all the countries in the world,
these projections serve as the standard and
which might not reflect the specific charac-
provide consistent set of population figures
teristics inherent in Indian demography. The
for use throughout the United Nations sys-
PFI estimates, on the other hand, have been
tem. Within the country, prominent research
derived on the assumptions specific to vari-
organizations like the PFI and renowned de-
ous Indian states. The PFI population pro-
mographers like P N Mari Bhat have also
jections are used by the Office of Registrar
made population projections for India. Their
General of India that conducts the popula-
projections are based on the Component
tion census in the country every 10 years.
method,1 although different assumptions for
Moreover, the Planning Commission also
various influencing factors, such as fertility
adopts the set of population projections pro-
rate, mortality rate, and migration, are used.
vided by the PFI for formulation of various
Table 2.2 provides a comparative assessment
national plans and policies.
of the assumptions used by the above-men-
tioned agencies.
Table 2.3 provides the population projec- 2.4.1.2.1 Ruralurban population
tions for India as estimated by various
sources. A close look at the estimates reveals As energy-use patterns, choice of fuels, and
that the UNPD (medium variant) estimates so on vary considerably among rural and ur-
are not very different from the PFI esti- ban areas, examining the trend of urbaniza-
mates. For the period 200136, the UNPD tion in the future assumes high significance
projects population to increase at an annual for a country like India.
growth rate of 1% while the PFI estimates Indias population has grown 2.84 times
the growth rate to be 1.14%. Both the agen- from 1951 to 2001, that is, from 361 million
cies estimate that the annual population in 1951 to 1027 million in 2001. Its rural

1
The component method for population projections separately studies the drivers of the future size of the population,
such as fertility rate, mortality rate, and migration.
 Methodology 17

Table 2.2 Assumptions for population projections

Factors UNPD PFI Mari Bhat

Total fertility Assumed to decline based on
rate the past trend of fertility rate
during 19502000 (a lower limit
of 1.85 children per woman)
Mortality rate Medium path of mortality de-
cline is used to project future
mortality levels
Migration The future path of international
migration is set on the basis of
past international migration es-
timates and on assessment of
the policy stance of countries
with regard to future interna-
tional migration flows
Extrapolation by fitting lin-
ear trend (197196) for
each of the larger states in
India. The figure 1.6 is
taken as the floor value
Three values of life ex-
pectancy for the periods
199195, 201116, and
202126 were extrapo-
lated, using linear fit, at
five-year intervals from
2001 to 2051, for each of
the 15 larger states. The
figures for India are ob-
tained as weighted aver-
age of the figures of the
major states
No large-scale inter-state
migration in the country
Assumed to fall to
2.8 in 2010 and
reach very close to
the replacement
level only by 2025
The life expectancy
at birth has been as-
sumed to reach 67
for males and 71 for
females by 2025
Net migration to In-
dia assumed to be
zero

UNDP United Nations Population Division; PFI Population Foundation of India

urban distribution has also undergone struc-
tural changes over the same period. Its
population in rural areas has more than
doubled (~2.5 times) from 298 million dur-
ing 1951 to 740 million in 2001, whereas
population in urban areas has increased
more than four times (~4.6 times) from 62
million to 287 million during the same time
period. The UNPD estimates the urban
population to increase by about 33% by
2016 and 42% by 2031, while corresponding
figures given by the Census of India are 34%
and 40% for the same time period.
As indicated in Tables 2.4 and 2.5, the
percentage shares of the population residing
in urban areas projected by both the UNPD
18 National Energy Map for India: Technology Vision 2030

Table 2.3 Population projections (in million)

Source Scenario 2001 2006 2011 2016 2021 2026 2031 2036
UNPD Low variant 1031 1099 1156 1203 1242 1269 1282 1283
Medium variant 1033 1112 1188 1259 1323 1378 1424 1461
High variant 1034 1125 1220 1315 1405 1490 1573 1653
Mari Bhat Optimistic 1026 1109 1191 1271 1345
Realistic 1025 1103 1173 1244 1320
PFI 1027 1092 1177 1264 1344 1413 1473 1526
PFI Population Foundation of India; UNPD United Nations Population Division
Note UNPD projections were available from 2000 to 2050 on a five-year interval. Figures presented in this table are
interpolated for the years mentioned.

Table 2.4 Ruralurban distribution (%) as per the UNPD

Region 2001 2006 2011 2016 2021 2026 2031 2036

Urban 28 29 31 33 35 37 42 45
Rural 72 71 69 67 65 62 58 56
UNDP United Nations Population Division; PFI Population Foundation of India
Source UNPD (2003)
Note Projection distribution was available from 2000 to 2016 on a five-year interval. Figures presented in this table
are interpolated for 2001, 2006, 2011, etc. and, based on the past trend of 200116, these have been extrapolated
for the period 201636.

Table 2.5 Ruralurban distribution (%) as per the Census of India

Region 2001 2006 2011 2016 2021 2026 2031 2036

Urban 28 30 32 34 36 38 40 42
Rural 72 70 68 66 64 62 60 58
Source Census of India (1991)
Note Figures were available till 2016 and, based on the past trend of 200116, these have been extrapolated for
the period 201636.

and the PFI are more or less similar. The
data given by the PFI is considered in this
analysis to ensure consistency with the set of
population projection provided by the PFI
and adopted by the Office of Registrar Gen-
eral of India, Government of India.
2.4.1.2.1.1 Number of households
The household size for rural and urban areas
has been estimated based on the rate of
decrease in average number of households
in rural and urban areas during the period
 Methodology 19

Table 2.6 Projected population and number of cate the number of urban and
rural households under six ex-
households in rural and urban areas (million)
penditure classes, namely, BPL
Population Number of households (below poverty line), L (low),
Year Rural Urban Rural Urban LM (lower middle), M
(middle), UM (upper middle),
2001 739.44 287.56 137.34 56.26
and H (high) for the three sce-
2006 764.40 327.60 144.53 65.36
narios based on three different
2011 800.36 376.64 154.06 76.62 projected GDP growth rates,
2016 834.24 429.76 163.48 89.14 namely, 6.7%, 8%, and 10%,
2021 860.16 483.84 171.60 102.34 considered in this study. It may
2026 876.06 536.94 177.92 115.80 be noted that in the tables, these
2031 883.80 589.20 182.73 129.57 six expenditure classes in rural
areas are denoted by RBPL, RL,
2036 885.08 640.92 186.30 143.71
RLM, RM, RUM, and RH
Source Census of India (1991)
whereas the corresponding
Note The figures were available till 2016 and, based on the past
trends, have been extrapolated for the period 201636.
classes in urban areas are de-
noted by UBPL, UL, ULM,
UM, UUM, and UH, respec-
tively, with the prefixes R and U
19812001. Following the rate of decrease denoting rural and urban households, re-
during this period, household size has been spectively.
projected to decline by 4.75% and 4.46% for It is clear from the projections presented
rural and urban, respectively, by 2036. Table in Tables 2.72.12 that as the economy
2.6 presents the projected population and achieves high GDP growth rate by 2031, the
number of households in rural and urban areas. number of urban and rural households in the
BPL and L expenditure classes diminishes.
Subsequently, there is a rise in the number
2.4.1.2.1.1.1 Income-wise house- of households in the higher expenditure
hold distribution classes in the rural and urban areas by 2031.

To estimate the distribution of population in

various income groups, a lognormal curve is
fitted on the data sets for the MPCE
(monthly per capita expenditure) for rural
and urban areas, and frequency of popula-
tion in various income groups has been cal-
culated using statistical software package
SYSTAT11. A detailed methodology for es-
timating and projecting the number of
households in various expenditure classes is
given in Appendix 3. Tables 2.72.12 indi-
2.5 Gross domestic product as a
measure of economic growth
The significance of economic growth for a
polity cannot be undermined in the context
of overall development. Economic growth
results from an increased production of
goods and services leading to high income
generation. This ultimately translates into
improvement in the quality of life of the
20 National Energy Map for India: Technology Vision 2030

Table 2.7 Number of rural households (in million) in various expenditure categories for
6.7% GDP growth

Rural 1999 2001 2006 2011 2016 2021 2026 2031

RBPL (<615) 88.5 84.5 68.2 49.0 27.3 10.0 2.1 0.2
RL (615775) 20.0 21.8 26.7 29.1 25.3 15.4 5.3 0.9
RLM (775950) 12.4 14.0 19.9 25.7 28.1 22.5 11.0 2.7
RM (9501200) 8.2 9.9 15.8 23.7 32.0 34.0 23.8 9.3
RUM (12002800) 5.8 7.0 13.7 26.0 49.2 84.3 117.3 118.0
RH (>2800) 0.1 0.1 0.1 0.5 1.5 5.5 18.3 51.5
RBPL rural below poverty line; RL rural low; RLM rural lower middle; RM rural middle; RUM rural upper middle;
RH rural high; GDP gross domestic product
Note Figures in brackets represent monthly per capita consumption expenditure in rupees.

Table 2.8 Number of urban households (in million) in various expenditure categories for 6.7%
GDP growth

Urban 1999 2001 2006 2011 2016 2021 2026 2031

UBPL (<665) 15.6 18.1 13.3 8.0 3.2 0.6 0.0 0.0
UL (6651120) 14.5 19.2 22.5 23.1 18.1 8.9 2.1 0.1
ULM (11201500) 6.4 8.9 12.7 17.1 19.6 16.2 7.4 1.4
UM (15001925) 3.5 5.0 8.0 12.6 18.1 20.8 15.3 5.2
UUM (19254000) 3.4 4.8 8.3 14.9 27.8 49.2 71.3 70.7
UH (>4000) 0.2 0.3 0.5 1.0 2.3 6.7 19.7 52.1
UBPL urban below poverty line; UL urban low; ULM urban lower middle; UM urban middle; UUM urban upper
middle; UH urban high; GDP gross domestic product
Note Figures in brackets represent monthly per capita consumption expenditure in rupees.

people in terms of various economic and 2.5.1 Literature review on gross

social indicators such as enhanced purchas-
ing power and improved access to quality
education and health care services. GDP is
considered as the most commonly used mea-
sure of economic growth. It tracks the
domestic economic activity in terms of
the value added and income generated
(in monetary terms) during a specified time
period.
domestic product growth projections
There are several agencies engaged in mak-
ing short-term forecasts of the growth rate of
real GDP for the Indian economy based on
the regular monitoring of key parameters
that influence it. These agencies include
many bilateral and multilateral organiza-
 Methodology 21

Table 2.9 Number of rural households (in million) in various expenditure categories for 8%
GDP growth rate

Rural 1999 2001 2006 2011 2016 2021 2026 2031

RBPL (<615) 88.50 84.46 60.56 32.66 11.77 2.40 0.18 0.00
RL (615775) 20.00 21.84 27.17 25.57 15.86 5.49 0.89 0.00
RLM (775950) 12.43 14.01 21.39 26.34 22.07 10.98 2.85 0.18
RM (9501200) 8.24 9.89 17.92 28.19 31.88 22.82 8.54 1.64
RUM (12002800) 5.81 7.00 17.20 40.06 76.67 110.68 110.67 68.52
RH (>2800) 0.14 0.14 0.29 1.23 5.23 19.22 54.80 112.38
RBPL rural below poverty line; RL rural low; RLM rural lower middle; RM rural middle; RUM rural upper middle;
RH rural high; GDP gross domestic product
Note Figures in brackets represent monthly per capita consumption expenditure in rupees.

Table 2.10 Number of urban households (in million) in various expenditure categories for 8%
GDP growth rate

Urban 1999 2001 2006 2011 2016 2021 2026 2031

UBPL (<665) 15.64 18.06 11.44 4.90 1.25 0.10 0.00 0.00
UL (6651120) 14.46 19.19 21.31 18.01 9.81 2.87 0.35 0.00
ULM (11201500) 6.36 8.89 13.07 16.32 14.62 7.68 1.85 0.13
UM (15001925) 3.53 5.01 8.76 13.87 17.03 13.41 5.44 0.91
UUM (19254000) 3.35 4.84 10.07 21.30 39.67 58.23 57.90 32.78
UH (>4000) 0.22 0.28 0.72 2.22 6.78 20.06 50.26 95.75
UBPL urban below poverty line; UL urban low; ULM urban lower middle; UM urban middle; UUM urban upper
middle; UH urban high; GDP gross domestic product
Note Figures in brackets represent monthly per capita consumption expenditure in rupees.

tions like the World Bank and the IMF
(International Monetary Fund); leading
financial consulting firms like McKinsey,
Goldman Sachs, Morgan Stanley, and so on;
and prominent Indian business associations
like the CII (Confederation of Indian Indus-
try) and the FICCI (Federation of Indian
Chambers of Commerce and Industry).
These organizations forecast GDP growth
rate using econometric techniques such as
ARIMA (Autoregressive Integrated Moving
Average) and Exponential Smoothing. 2

2
The ARIMA model is a univariate method in which the values of the variable under consideration are forecasted based
on the lagged/past values of the variable itself. Exponential Smoothing technique simplifies the time-series data of the
variable under consideration by reducing or cancelling the effect due to random variations in the data. This technique
can be used for forecasting by assigning weights to the past observations of the variable under consideration.
22 National Energy Map for India: Technology Vision 2030

Table 2.11 Number of rural households (in million) in various expenditure categories for 10%
GDP growth rate

Rural 1999 2001 2006 2011 2016 2021 2026 2031

RBPL (<615) 88.50 84.46 54.92 21.26 4.09 0.34 0.00 0.00
RL (615775) 20.00 21.84 27.03 20.95 7.68 1.03 0.00 0.00
RLM (775950) 12.43 14.01 22.40 24.50 13.73 3.09 0.18 0.00
RM (9501200) 8.24 9.89 19.51 30.04 24.85 8.92 1.07 0.00
RUM (12002800) 5.81 7.00 20.38 54.69 98.74 104.85 55.87 11.88
RH (>2800) 0.14 0.14 0.29 2.62 14.39 53.37 120.81 170.85
RBPL rural below poverty line; RL rural low; RLM rural lower middle; RM rural middle; RUM rural upper middle;
RH rural high; GDP gross domestic product
Note Figures in brackets represent monthly per capita consumption expenditure in rupees.

Table 2.12 Number of urban households (in million) in various expenditure categories for
10% GDP growth rate

Urban 1999 2001 2006 2011 2016 2021 2026 2031

UBPL (<665) 15.64 18.06 10.00 2.83 0.36 0.00 0.00 0.00
UL (6651120) 14.46 19.19 20.39 13.56 4.37 0.51 0.00 0.00
ULM (11201500) 6.36 8.89 13.33 14.86 8.91 2.15 0.12 0.00
UM (15001925) 3.53 5.01 9.35 14.40 13.28 5.42 0.69 0.00
UUM (19254000) 3.35 4.84 11.37 27.12 47.34 49.73 24.32 4.15
UH (>4000) 0.22 0.28 0.92 3.83 14.89 44.52 90.67 125.42
UBPL urban below poverty line; UL urban low; ULM urban lower middle; UM urban middle; UUM urban upper
middle; UH urban high; GDP gross domestic product
Note Figures in brackets represent monthly per capita consumption expenditure in rupees.

However, these forecasts provide a short-
term view of the Indian economy, ranging
from one quarter to one year.
The Institute of Economic Growth, New
Delhi, has projected the GDP growth rate
for the Tenth Five Year Plan period (2002
07) using a macro-econometric model that
generates forecasts of the GDP growth tra-
jectory at the aggregate as well as the
sectoral levels. The Institute has developed
three alternative long-term growth scenarios
based on different assumptions regarding
the investment rate. In the BAU (business-
as-usual) scenario, which assumes normal
rainfall and an investment rate of 27.6% of
the GDP, the GDP is projected to grow at a
rate of 6.1% over the modelling time frame.
In the optimistic scenario, assuming normal
rainfall and an investment rate of 31% of the
GDP, the growth rate forecast for the period

200207 is 6.8%. Similarly, with an invest-
ment rate of 32.9%, the growth rate forecast
is 7.4%. The pessimistic scenario, which as-
sumes low rainfall and an investment rate of
28% of the GDP, forecasts a GDP growth of
about 5.4% for the economy.
The NCAER (National Council for Ap-
plied Economic Research) has also projected
the GDP growth rate based on a macro-
econometric model consisting of simulta-
neous system of equations at an aggregate as
well as at a sectoral level. The NCAER has
forecast three alternative growth scenarios
using this model. In the realistic scenario, re-
ferred to as the most likely scenario,
the GDP growth rate is projected to increase
from 6.54% in 2004/05 to 7.82% in
2008/09. In the pessimistic and optimistic
scenarios, the GDP growth rate is forecast at
7.18% and 8%, respectively, for 2008/09.
2.5.2 Gross domestic product
growth projections
TERI worked out the most likely GDP
growth scenario for the long term. It was es-
timated that the GDP would be no more
than 6.7% over the 30-year modelling
period. The methodology for the same is
Table 2.13 Projections of GDP at factor cost at 1993/94 prices (in crore rupees) under vari-
ous GDP growth rate scenarios
GDP growth (%) 2001 2006 2011
6.7 1 267 945 1 676 029 2 240 639
8 1 267 945 1 802 078 2 647 845
10 1 267 945 1 904 059 3 066 507
GDP gross domestic product
Methodology 23
provided in detail in Appendix 3. This par-
ticular study, however, was conducted with a
projected GDP growth rate of 8% consid-
ered in the BAU scenario that reflected gov-
ernment plans. The rationale for choosing a
GDP growth rate of 8% throughout the pe-
riod 200436 is also explained in detail in
Appendix 3. Given that the Indian economy
is already in the last year of the Tenth Five
Year Plan, the Planning Commission is in
the process of readying the Eleventh Five
Year Plan (200712). The Government of
India is expected to target a growth rate of
10% for the Eleventh Five Year Plan period.
Hence, additionally, a 10% GDP scenario
has been considered to reflect an even higher
growth rate of the economy, as suggested by
the Office of the PSA (Principal Scientific
Advisor), to examine the impact of a two-
digit (a higher rate of GDP growth relative
to the BAU) GDP growth on the future tra-
jectories of energy consumption. Accord-
ingly, three GDP growth rates have been
considered in this study: 8% (reflecting the
BAU scenario), 6.7% (representing a low-
growth scenario), and 10% (representing a
high-growth scenario).
Table 2.13 presents the figures for
aggregate GDP under the three growth
scenarios.
2016 2021 2026 2031
3 061 793 4 258 687 6 004 800 8 551 719
3 890 552 5 716 498 8 399 411 12 341 490
4 938 640 7 953 729 12 809 559 20 629 924
24 National Energy Map for India: Technology Vision 2030

2.5.3 Trends in sectoral composi- 2.5.4 Projections of sectoral com-

tion of gross domestic product position of gross domestic product

The sectoral composition of the GDP has The India Vision 2020 document (Planning
undergone significant transformation, start- Commission 2002) highlights that knowl-
ing from the First Five Year Plan (195055). edge resources (technology, organization,
Figure 2.4 depicts the historical trend of information, education, and skills) have re-
the contribution of sectoral GDP in aggre- placed capital as the most important deter-
gate GDP through the period 19802003. minants of development. This is the prime
The trend clearly suggests that the share of reason for a rapidly increasing share of ser-
agriculture sector in the aggregate GDP de- vices sector in GDP as the sector is essen-
clined from 60% in 1950/51 to about 40% in tially knowledge-based. The document lays
1979/80 and to 24% in 2003/04. The share down the reference levels for sectoral com-
of industry in the GDP has increased from position in GDP (%) that India should strive
13% in 1950/51 to about 22% in 1979/80 to attain by 2020. The reference levels for
and 24.5% in 2003/04, whereas the share of 2020 as presented in the document and by
services in GDP has exhibited a rise from T E R I estimates for 2020 for sectoral
27% in 1950/51 to about 37% in 1979/80 composition of GDP (%) are presented in
and 51% in 2003/04. Table 2.14.
The reference 2020 levels mentioned in
Table 2.14 are highly optimistic. As per these
levels, share of agriculture in aggregate GDP
is projected to decline to 6% with a corre-
sponding rise in the
share of industry
Figure 2.4 Share of sectoral GDP
and services to 34%
in aggregate GDP (%)
and 60%, respec-
tively, in 2020. Such
levels in 2020 could
be possible only with
the economy achiev-
ing and sustaining a
high aggregate GDP
growth rate of 10%
per annum, begin-
ning from 2004/05
till 2036/37.
The historical
time trend of the
GDP of the agricul-
Source MoF (2005) ture sector suggests

Table 2.14 Sectoral composition of GDP (%)
Sectoral composition of GDP (%)
Reference T E R I estimates
Sector 2020 2020
Agriculture 6 17
Industry 34 28
Services 60 55
GDP gross domestic product
Source Reference 2020 data is from the World Bank
(2001)
that although the contribution of agriculture
in the GDP has declined, the proportion of
population dependent on agriculture has not
declined in a similar fashion. According to
the Census of India (2001), 65% of the total
population is still dependent on agriculture
for its livelihood. In this context, it is essen-
tial to highlight that 6% share of agriculture,
34% of industry, and 60% of services sector
in total GDP implies that income generated
by the agriculture sector would be quite low
and hence would necessitate shifting of
large chunks of population engaged in the
agriculture activities to industry and services
sectors that employ skilled labour. Further-
more, given the thrust on accelerating the
rate of agricultural growth in the Tenth Five
Year Plan, various policies focusing on agri-
culture growth are being formulated and
implemented. Moreover, achieving food se-
curity3 has been a major goal of development
in India after independence. Despite the fact
that food production in the country has in-
creased from 51 MT (million tonnes) in
3
According to the World Food Summit (1996), Food security exists when all people, at all times, have physical and
economic access to sufficient, safe, and nutritious food to meet their dietary needs and food preferences for an
active and healthy life (FAO 1996).
Methodology 25
1950/51 to 210.8 MT in 2003/04, complete
food security at the household level has still
not been achieved, with 21% of the popula-
tion still suffering from under-nourishment
(FAO 2004). Thus, the decline in the share
of agriculture sector in the scenarios using
6.7% and 8% projected GDP growth rate is
not expected to be as rapid as mentioned in
the report of the Planning Commission
(Vision 2020).
For the 6.7% and 8% GDP scenarios, we
assume that the services sector continues to
grow at the current rate (0.51% during
2003/04) till 2036/37, achieving a share of
60% in the GDP by 2036/37. The share of
industrial sector in the aggregate GDP has
increased at an average annual growth rate
of 0.31%. It is estimated that it will achieve a
share of 30% in the GDP by 2036/37. The
rest of the share (10%) is accounted for by
the agriculture sector in our analysis.
The sectoral GDPs at factor cost under
each of the three GDP scenarios are pre-
sented in Tables 2.152.17.
2.6 Approach for sectoral end-
use demand estimation
Econometric techniques, such as regression
techniques, process models, and end-use
methods, are deployed to estimate and
project the end-use sectoral demand. The
population and GDP projections were used
as the main driving force for estimating
the end-use demands in each of the energy
consuming sectors.
26 National Energy Map for India: Technology Vision 2030

Table 2.15 Sectoral GDP at factor cost (in crore rupees) under 6.7% GDP growth rate scenario

Sector 2001 2006 2011 2016 2021 2026 2031

Agriculture 333 274 367 050 450 368 560 308 698 425 864 691 1 068 965
(26%) (22%) (20%) (18%) (16%) (14%) (13%)
Industry 309 557 457 556 620 657 860 364 1 213 726 1 741 392 2 514 205
(24%) (27%) (28%) (28%) (28%) (29%) (29%)
Services 625 114 851 423 1 169 614 1 641 121 2 346 537 3 398 717 4 968 549
(49%) (51%) (51%) (54%) (55%) (57%) (58%)
Total 1 267 945 1 676 029 2 240 639 3 061 793 4 258 688 6 004 800 8 551 719
GDP gross domestic product

Table 2.16 Sectoral GDP at factor cost (in crore rupees) under 8% GDP growth rate scenario

Sector 2001 2006 2011 2016 2021 2026 2031

Agriculture 333 274 395 320 533 024 711 190 936 593 1 213 019 1 536 733
(26%) (22%) (20%) (18%) (16%) (14%) (13%)
Industry 309 557 491 106 732 865 1 093 635 1 632 004 2 435 397 3 634 279
(24%) (27%) (28%) (28%) (28%) (29%) (29%)
Services 625 114 915 652 1 381 955 2 085 727 3 147 901 4 750 995 7 170 477
(49%) (51%) (51%) (54%) (55%) (57%) (58%)
Total 1 267 945 1 802 078 2 647 845 3 890 552 5 716 498 8 399 411 12 341 490
GDP gross domestic product

Table 2.17 Sectoral GDP at factor cost (in crore rupees) under 10% GDP growth rate scenario

Sector 2001 2006 2011 2016 2021 2026 2031

Agriculture 333 274 358 212 383 575 410 734 477 224 768 574 1 237 795
(26%) (19%) (13%) (8%) (6%) (6%) (6%)
Industry 309 557 539 630 987 235 1 670 286 2 704 268 4 355 250 7 014 174
(24%) (26%) (29%) (31%) (34%) (34%) (34%)
Services 625 114 1 006 218 1 695 697 2 857 620 4 772 237 7 685 736 12 377 954
(49%) (53%) (58%) (58%) (60%) (60%) (60%)
Total 1 267 945 1 802 078 2 647 845 3 890 552 5 716 498 8 399 411 12 341 490
GDP gross domestic product

The industrial sector is disaggregated
into eight energy-consuming industries,
namely, chlor-alkali, aluminium, iron and
steel, cement, textile, fertilizer, and pulp and
paper, along with other manufacturing units
grouped as other industries. The physical
outputs from the above-mentioned indus-
tries are considered as the demands of in-
dustrial outputs. The future demand of
industrial output for each of the aforemen-
tioned industrial sub-sectors is based on in-
come generated by various sectors of the
economy. This is measured by the GDP and
the value added by the industrial sector
(GDP of industry), per capita income, and
so on. Similarly, the transportation demand
(disaggregated further into mode-wise
passenger demand and freight transport
demand) is projected using various socio-
Methodology 27
economic indicators such as per-capita in-
come (indicator of purchasing power), per-
centage share of population residing in
urban areas, population, and so on. In the
agriculture sector, demand is estimated for
land preparation and irrigation pumping. In
the residential sector, the demand is pro-
jected for lighting, space conditioning, cook-
ing, and refrigeration separately for urban
and rural households to account for the dif-
ferences in lifestyles and choice of fuel and
technology options. In the commercial sec-
tor, the demand is projected for cooking,
lighting, and space conditioning, using the
value added by the services sector as an
explanatory variable. The detailed method-
ology and estimates of energy demands
for each of the end-uses are presented in
Chapter 3.
Sectoral demand projections,
technological characterization,
and resource availability
This chapter presents the input parameters
to the MARKAL (MARket ALLocation)
model. As discussed in Chapter 2, demands
for five end-use sectors (agriculture, indus-
try, transport, residential, and commercial)
have been considered in this analysis. The
estimates of these demands across different
GDP (gross domestic product) growth rates
are presented in this chapter. Further, the
technology characteristics of various options
in each supply- and demand-side sector are
described. The characterization includes de-
tails of the efficiency, cost, life, availability,
and penetration over the modelling time
frame (200131).
3.1 Demand sectors
3.1.1 Agriculture sector
Traditionally, India has been an agricultural
economy. Since Independence, the share of
agriculture in the countrys GDP has been
declining in comparison to the growth of the
industrial and services sectors. The percent-
age share of GDP from agriculture at factor
cost at current prices has come down from
28.4 in 1993/94 to 20.3 in 2002/03 (MoA
2004). However, agriculture is still a major
source of income for about 53.2% of the
population (MoA 2004). It provides raw
3
material to several major industries, such as
sugar, textiles, jute, paper, food processing,
and milk and milk processing. Agriculture is
crucial for maintaining the food security of
the country. This sector has forward and
backward linkages with other economic sec-
tors. Therefore, changes in the agricultural
sector have a multiplier effect on the entire
economy. High growth rate of agriculture
ensures good performance of agro-based in-
dustries, supports creation and improve-
ment of the rural infrastructure, and
facilitates reduction in poverty.
Agriculture accounts for 43% of the total
geographical area. In terms of cultivated
area, the leading crop is rice the staple food
of a large section of the Indian population
(Figure 3.1) followed by wheat.
There has been a continuous fragmenta-
tion of land holdings, partly because of the
growing population pressure and partly be-
cause of the peculiar slow shift of the labour
force from agriculture to non-agricultural
economic activities. Per capita availability of
cultivable land (excluding forests) has de-
creased from 0.48 ha (hectares) in 1951 to
0.15 ha in 2000.
Development of improved production
technologies, efficient input use and im-
proved delivery system, rural infrastructure
development, pricing policies, and market-
ing arrangements have led to a remarkable
30 National Energy Map for India: Technology Vision 2030
Figure 3.1 Area under cultivation
in India (million hectares)
Source FAI (2004)
increase in food grain production from just
51 MT (million tonnes) in 1950/51 to
174.19 MT in 2002/03 and further to
212.02 MT in 2003/04 (Figure 3.2).
Figure 3.2 Food grain production
in India (million tonnes)
Source FAI (2004)
There has been a spectacu-
lar increase in agricultural
productivity since 1950/51,
whereby yield of food grains
went up from 522 kg/ha (kilo-
grams per hectare) during
1950/51 to 1707 kg/ha in
2003/04. Yield of rice and
wheat increased from 668
kg/ha and 663 kg/ha to 2051
kg/ha and 2707 kg/ha, respec-
tively, during the same pe-
riod. Yield of coarse cereals
went up from 408 kg/ha in
1950/51 to 1228 kg/ha in
2003/04. Yield of nine oil-
seeds and pulses increased
from 481 kg/ha and 441 kg/ha
to 1072 kg/ha and 623 kg/ha, respectively,
during the same period.
Horticultural production was 156.1 MT
in 2003/04. This sector contributed 30% of
the share of agriculture to the GDP. India
was the largest producer of vegetables and
the second largest producer of fruits in
the world with 90 MT and
47.5 MT of production,
respectively, and accounted
for about 10% of the global
production of fruits. India is
ranked first in the production
of mango, banana, sapota, acid
lime, and cauliflower; second
in onion; and third in cabbage
(MoF 2005).
India is the largest producer
and consumer of tea in the
world, accounting for 27% of
the world production, with
850.5 thousand tonnes of
production in 2003/04. India
is also among the leading
 Sectoral demand projections, technological characterization, and resource availability
producers of sugar cane, cotton, and jute in
the world, with production of 236.2 MT,
13.8 MT, and 11.2 MT, respectively, in
2003/04. Cashews, coffee, and spices are
also important cash crops (MoF 2005).
3.1.1.1 End-use demand estima-
tion for the agriculture sector
The country had a stagnant agriculture at
the time of Independence. The traditional
tools and implements used in agriculture re-
lied mostly on human and animal power.
The sector used a negligible amount of com-
mercial energy. However, during the past
five-and-a-half decades, Indian agriculture
has witnessed numerous changes. The
Green Revolution is one of the most strik-
ing success stories of the post-Independence
era. The impact of the Green Revolution
was, however, so dramatic that India became
a role model for many developing countries.
This innovation coupled with investments
in irrigation infrastructure and expansion of
credit, marketing, and processing facilities
led to a significant increase in the use of
modern inputs. As a consequence, the re-
quirement of commercial energy of the farm
sector increased by several times.
The availability of farm power per unit
area (kW/ha [kilowatt per hectare]) has been
considered as one of the parameters for ex-
pressing the level of mechanization. Power
availability for carrying out various agricul-
tural operations has increased from 0.3 kW/ha
in 1971/72 to 1.4 kW/ha in 2003/04 (MoF
2005).
The contribution of different power
sources to the total power has also changed
over time. The share of mechanical and elec-
trical power in agriculture increased from
31
40% in 1971/72 to 84% in 2003/04 (MoF
2005). However, the extent of use of me-
chanical power in agriculture is much below
the ideal value. In 1996, the net cultivated
area in the country stood at 142 Mha (mil-
lion hectares), of which 53.5 Mha was irri-
gated. Even if it is assumed that tractors are
used only in irrigated areas, there were 38
tractors per 1000 ha. This translates into
1.14 hp (horsepower) per hectare of mecha-
nized power as compared to 25 hp per hect-
are in developed countries (Venugopal 2004).
Various agricultural operations like
threshing, harvesting, land preparation, and
irrigation, account for energy demand in the
agricultural sector. But, energy demand in
the agricultural sector in India is mainly attrib-
uted to two major agricultural operations.
1 Land preparation
2 Irrigation
3.1.1.1.1 Demand for land
preparation
3.1.1.1.1.1 Gross cropped area
Energy demand for land preparation de-
pends on the extent of area under cultiva-
tion. The total land area being constant,
NCA (net cropped area) has also remained
constant at about 141 Mha since 1970s. This
implies that increase in GCA (gross cropped
area) has been made possible by increase in
CI (cropping intensity) over the years. NCA
has been assumed to remain constant in the
next 30 years also.
Facilitated by improvement in the irriga-
tion sector, CI is initially expected to in-
crease. However, with further development
of the sector, CI will move towards its satu-
ration level because production time of
32 National Energy Map for India: Technology Vision 2030

crops cannot be reduced beyond a certain Coefficient is calculated. Theils Inequality

level. Therefore, CI has been assumed to fol- Coefficient always lies between zero and
low a logistic growth pathincreasing at an one, where the smaller the Theils value, the
increasing rate in the initial years of develop- better the forecasting technique, relative to
ment, followed by an increase at diminishing the nave method. Zero value indicates a per-
rate, and finally attaining the asymptotic fect fit. In this study, the calculated Theils
limit. Inequality Coefficient is 0.0026, which is
near to zero. This indicates that the logistic
Logistic curve equation equation for estimating CI is a perfect fit for
exp (a + bt ) estimating the GCA.
Y = Y0
1 + exp (a + bt ) (3.1) During 197199, GCA increased at an
annual growth rate of 0.496% and is ex-
pected to increase at the rate of 0.430% dur-
where, ing 200136 (Table 3.1).
Y is the CI;
Y0 is the asymptotic limit of CI;
a and b are the parameters to be esti- 3.1.1.1.1.2 Number of tractors
mated from the time series data of CI;
and At the time of Independence, and even in
t denotes the time period. the 1950s, the use of tractors for agricultural
The parameters are estimated by a linear purpose was very limited. Tractor manufac-
regression of the loglog form of Equation turing in India started in 1961 with a
3.2. capacity to manufacture 11 000 tractors
per year. The level of mechanization has
z = + t (3.2) been increasing steadily over the years as a
result of joint efforts made by the govern-
where,
( Y / Y0 )
1 (Y / Y0 )
z = ln Table 3.1 Projected cropping intensity
and gross cropped area

a and b in Equation 3.1 are estimated val- Cropping Gross cropped area
ues of and . The asymptotic limit of CI is Year intensity (million hectares)
taken to be 3 in a year, and Z = 0.4478 +
2001 1.360 192.054
0.0084t
2006 1.391 196.472

GCA = NCA CI (3.3) 2011 1.423 200.904

2016 1.454 205.345
where, 2021 1.485 209.792
GCA is gross cropped area; and 2026 1.517 214.240
NCA is net cropped area. 2031 1.548 218.687
To validate the predictive accuracy of
2036 1.580 223.127
the logistic equation, Theils Inequality
 Sectoral demand projections, technological characterization, and resource availability 33

ment and the private sector. The number of
tractors manufactured from all units during
1997 was over 255 000 (Venugopal and
Pingali 2004). Annual average rate of growth
for tractors manufactured was 9.73% during
19712001.
In the following equation, the number of
tractors has been determined by the GDP in
the agriculture sector and GIA (gross irri-
gated area).
Tractors =1628872 + 6.388 (GDPA) +
(11.863) (2.7644)
20617.42 (GIA)
(2.009) (3.4)
(R2 = 0.97)
where, GDPA represents the gross domestic
product from agriculture.
The above regression equation for the
sample period 197198 shows a high R2
(0.97), indicating that the regressor used ex-
plains 99.7% of the variation in the number
of tractors. The t-statistics denotes that coef-
ficients are significant.
The negative intercept indicates that the
number of tractors starts increasing only af-
ter a certain level of GDP is attained. In
other words, it implies that mechanization of
agriculture picked up only after a certain
level of growth was achieved by the agricul-
ture sector.
3.1.1.1.1.3 Area under tractors
reduce the size of average landholdings, and
the average command area per tractor is ex-
pected to remain more or less the same. The
area under tractors is derived by multiplying
the number of tractors with the average
command area per tractor.
At a GDP growth rate of 6.7%, the num-
ber of tractors increases and, therefore, area
under tractors increases at the annual aver-
age growth rate of 4.1% during 200136. At
the end of forecast period, that is, 2036, 71%
of the total GCA is expected to be under
tractors. At 8% and 10% GDP growth rate
scenarios, the GCA under tractors increases
at the rate of 5.2%, and by 2036, the entire
GCA would be under tractors. The GCA un-
der tractors is lower in the 10% GDP growth
rate scenario as compared to that in 8%
growth scenario during 200631, because at
10% GDP growth rate, agricultural contri-
bution to GDP is relatively lower, implying a
relatively low GDP from agriculture. It may
be noted here that in 2036, maximum limit
of GCA under tractors is equal to the total
GCA in the country. The projected demand
for land preparation is presented in Table 3.2.
Table 3.2 Demand for land preparation
at various GDP (gross domestic product)
growth rates (in million hectares)
Year 6.7% GDP 8% GDP 10% GDP
2001 38.28 38.28 38.28
2006 43.88 47.06 44.87

The average command area per tractor was 2011 55.14 64.57 50.98
1516 ha in 1995 (Singh and Singh 1995). It 2016 69.34 86.75 57.41
was 18 ha per tractor in 2001, and has been 2021 86.93 114.40 68.48
assumed to remain constant since. This is 2026 108.17 147.93 105.50
because, over time, the efficiency of tractor 2031 132.67 186.93 163.08
in terms of command area may increase but
2036 158.48 223.13 223.12
the fragmentation of landholdings might
34 National Energy Map for India: Technology Vision 2030

3.1.1.1.1.4 Demand for irrigation GIA increases at the rate of 0.97% during
the forecast period (200136) (determined
Besides China, the irrigation system in no by the equation above) and increases from
other country is as extensive as in India. It is about 78 Mha in 2001 to 110 Mha by 2036
the irrigation system that has fuelled Indias in the low- and medium-growth scenarios.
growth in agricultural production. Irrigation In the high-growth scenario, it has been
plays a vital role in Indian agriculture for assumed that the government allocates
two important reasons. First, India has a funds to make more canals and builds more
monsoon-dependent farming system, with infrastructure for irrigation. Therefore, the
large areas receiving inadequate rainfall. percentage area under irrigation follows the
Moreover, much of this rainfall is restricted rate of increase during 19712001, thereby
temporally to a few months while the rest of increasing from 41% in the base year to 65%
the year is predominantly dry. In such a cir- by 2036 (Table 3.3).
cumstance, it is only with irrigation that cul- One of the biggest developments that has
tivation on an annual basis is possible. taken place in Indian irrigation after Inde-
Second, irrigation has acquired an addi- pendence is in the field of groundwater irri-
tional importance since the Green Revolu- gation, and one of the major engineering
tion in India. The Green Revolution has inputs adopted has been irrigation pumps.
been characterized by the use of high-yield- Farmers use electric-motor- and diesel-
ing crop varieties, fertilizers, and other in-
puts. These inputs into agriculture are
combined with a regular water supply pro-
vided by irrigation. In such a situation, irri- Table 3.3 GIA and GCA under irrigation
gation has assumed considerable under various growth scenarios
significance at the state, regional, and na- 6% and 8% GDP 10% GDP
tional levels. GCA GCA
GIA under GIA under
(million irrigation (million irrigation
3.1.1.1.1.5 Gross irrigated area Year hectares) (%) hectares) (%)
2001 78.90 41.22 78.90 41.22

Increase in cropping intensity is difficult in 2006 83.34 42.55 88.93 45.26

the absence of proper irrigation facilities. 2011 87.85 43.85 97.54 48.55
Therefore, it has been assumed that the in- 2016 92.42 45.11 106.46 51.84
crease in GCA is due to an increase in the
2021 97.07 46.33 115.66 55.13
area irrigated, and thus, GIA is calculated as.
2026 101.79 47.51 125.16 58.42

GIAt, t-1 = GCAt GCA t-1 (3.5) 2031 106.58 48.66 134.95 61.71

2036 110.46 49.34 145.03 65.00

The GIA has increased from 38.4 Mha in GIA gross irrigated area; GCA gross cropped area;
1971/72 to 76.3 Mha in 1998/99. GDP gross domestic product
 Sectoral demand projections, technological characterization, and resource availability 35

engine-operated irrigation pumps with a
preference for the former. Groundwater now
is an important source of irrigation and ful-
fils about 43.6% of the total irrigation de-
mand in the country (CMIE 2004). The
contribution of groundwater irrigation in
achieving self-sufficiency in food grain pro-
duction in the past three decades has been
phenomenal. In the coming years, ground-
water utilization is likely to increase for the
expansion of irrigated agriculture. Given
that tube wells (especially, individual-owned
tube wells) are a perennial source of irriga-
tion, as they encourage crop activity in rain-
deficient seasons with minimum risk, the
percentage area under groundwater irriga-
tion is expected to increase with time.
Pump sets costing about 10 00015 000
rupees are encouraged in the wake of subsi-
dized power tariffs, soft loans, and subsidies.
The government can make efforts to bring
about more area under irrigation by increas-
ing the production of pump sets.
In the low-growth scenario, it is assumed
that the government does not provide incen-
tives to bring more area under groundwater
irrigation. Therefore, the percentage GIA
under groundwater remains constant at
43.6%, that is, the 2001 level (CMIE 2004).
The projections of GIA for groundwater irri-
gation are shown in Table 3.4.
In the medium- and high-growth
scenarios, it is assumed that the government
has resources to allocate for boosting the
number of pump sets. Therefore, the per-
centage area under groundwater irrigation
increases at an average annual growth rate of
1.11%the rate of increase during 1971
2001 (CMIE 2004). Accordingly, the per-
centage area under groundwater irrigation

Table 3.4 GIA under groundwater irrigation at various GDP growth rate scenarios

6% GDP 8% GDP 10% GDP

GIA under GIA under GIA under
groundwater GIA under groundwater GIA under groundwater GIA under
irrigation groundwater irrigation groundwater irrigation groundwater
(million irrigation (million irrigation (million irrigation
Year hectares) (%) hectares) (%) hectares) (%)
2001 34.40 43.60 34.40 43.60 34.40 43.60
2006 36.33 43.60 38.40 46.08 40.84 46.08
2011 38.30 43.60 42.79 48.71 47.33 48.71
2016 40.29 43.60 47.59 51.49 54.57 51.49
2021 42.3 43.60 52.83 54.43 62.64 54.43
2026 44.38 43.60 58.56 57.73 71.61 57.73
2031 46.46 43.60 64.82 60.81 81.58 60.81
2036 48.16 43.60 71.01 64.28 92.62 64.28
GIA gross irrigated area; GDP gross domestic product
36 National Energy Map for India: Technology Vision 2030

increases from 43.6% in the base year to ture has been assumed to remain constant
64% by 2036. over the years.

Total groundwater demand = water demand

3.1.1.1.1.6 Groundwater per hectare GIA under groundwater irri-
requirement gation

Table 3.5 gives the crop-wise GCA and wa-
ter consumption. The weighted average of
water consumption for GIA under various
crops was calculated to get the water con-
sumption per hectare of GIA. The weighted
water requirement per hectare for agricul-
Although groundwater is an annually
replenishable resource, its availability is
non-uniform in space and time. A complex-
ity of factors hydrological and climatologi-
cal controls the groundwater occurrence
and movement. Energy requirement for

Table 3.5 Crop-wise GCA and water consumption

Irrigation water Water Percentage Water

requirement consumption GCA of GCA consumption
3
Crop (mm) (m ) (Mha) irrigated (MCM)
Rice 300950 6250 45.16 53.9 152 133
Jowar 350650 5000 10.25 7.7 3946
Maize 400750 5750 6.42 22.9 8453
Wheat 300450 3750 27.49 87.2 89 892
Pulses 5000 21.12 16.1 17 002
Soyabean 500860 6800 6.22 1.6 677
Sugar cane 10001500 12 500 4.22 92.0 48 530
Cotton 550950 7500 8.71 35.2 22 994
Tobacco 600 6000 0.43 46.0 1187
Groundnut 506 5060 24.28 25.2 30 960
Bajra 5000 8.9 8.3 3693
Gram 5000 6.15 29.1 8948
Sunflower 350500 4350 1.29 23.3 1307
Total 170.64 389 723
3
GCA gross cropped area; Mha million hectares; mm millimetres; m cubic metres; MCM million cubic
metres
Sources <http://www.iasri.res.in/agridata/db2002tb3_27.htm>; <http://www.ikisan.com/links/ap_irrigation.shtml>;
<www.Indiastat.com>; MoA 2004
Note Average figure is considered for water consumption.
For pulses, bajra, and gram, water consumption corresponding to Jowar is considered
 Sectoral demand projections, technological characterization, and resource availability 37

pumping out water depends on the water where, dh/dt = change in water head to
table. change in time
Rc = recharge (recharge is 325 m3 for 140
Mha)
3.1.1.1.1.7 Water head Q = discharge of water for irrigation
0.8 is the constant
It is a very difficult exercise to determine the
Sy = specific yield of the aquifer
level of water table at the national level and
to forecast it. However, an attempt has been
Specific yield of the aquifer (which is a
made wherein maximum number of villages
property of the aquifer determining the vol-
in India at a particular water head is taken as
ume of water that can be taken out from the
a representative figure of water head for In-
aquifer per unit area per unit fall of water
dia based on the Third Census of Minor Irriga-
table) is taken as 0.1. When extraction
tion Schemes 2000/01 (MoWR 2005). The
reaches the limit of utilizable groundwater
Census reveals that shallow tube wells con-
potential, which means when static water
stitute 94.03% of the total tube wells in the
head is reached and thereafter there are frac-
country. Andhra Pradesh, Bihar, Haryana,
tured zones, then the specific yield is taken
Madhya Pradesh, Punjab, Uttar Pradesh,
as 0.25, and the water head decreases
and West Bengal constitute 85.7% of the to-
sharply after this limit.
tal shallow tube wells in India. In these
states, pumps of 68 hp are dominant, con-
stituting 26.4% of the total pumps, whereas, 3.1.1.2 Technologies in the
pumps of 46 hp constitute 24% of the total
agriculture sector
pumps. Moreover, in these states, maximum
number of villages, that is, 36% of the total
In the past two decades, there has been a
villages, is at a water head of less than 10 m
proliferation of groundwater irrigation in In-
(metres). States like Haryana, Punjab, and
dia and, therefore, large penetration of
Uttar Pradesh having more than 89%, 90%,
pump sets. Estimates put the figure of diesel
and 62% of the NCA irrigated have maxi-
pump sets in India at 6.5 million. To this, an-
mum number of villages at 1015 m water
other 11 million pumps with electric motor
head. Consequently, these states have the
can be added (Bom and Steenbergen 1997).
maximum number of pump sets of 68 hp.
The Minor Irrigation Census 2001 reveals
This supports the fact that as the area under
that 94% of the total tube wells in India are
irrigation increases, groundwater extraction
shallow tube wells. About 85% of the shal-
increases and so does the water head.
low tube wells are accounted for by states
In 2001, we take the average water head at
such as Andhra Pradesh, Haryana, Punjab,
10 m and, based on the discharge/groundwa-
Madhya Pradesh, Uttar Pradesh, West Ben-
ter exploitation, calculate it to go down in
gal, and Bihar.
the forecasted period by applying the follow-
The configuration of pump sets in areas
ing formula.
with shallow water tables ranges between
2.5- and 10-hp engines. The typical irriga-
dh/dt = (Rc Q)/0.8Sy (3.6)
tion tube well configuration differs within
38 National Energy Map for India: Technology Vision 2030
this broad range in different areas depending
on the depth of water table, prevailing land
ownership, soil conditions, and local tradi-
tion. However, the tube well configuration is
not optimal in terms of fuel consumption or
water saving. In fact, substantial improve-
ment in well technology, pump set design,
and conveyance systems is possible at a
modest cost (Bom and Steenbergen 1997).
Modifications such as flow restriction/
drum cooling, reduced speed, and removed
foot value can help increase the fuel effi-
ciency of a diesel pump set by 45%60%
(Bom, Van, Majumdar, et al. 2001). Electric-
ity consumption for electric pump sets can
be reduced by 30%50% employing simple
measures, such as pipes with larger diameter
(Sant and Dixit 1996).
Therefore, diesel and electric pump sets
are mainly divided into two categories: stan-
dard and efficient (Table 3.6). An attempt
has been made to study the energy-saving
potential. Fuel consumption of the efficient
diesel pump is 45% lower than that of a stan-
dard pump set. For efficient electric pump
sets, it has been assumed that 30% efficiency
improvements would be realized by 2036.
Other than improvement in the efficiency of
pump sets, the efficiency scenario also con-
siders augmentation of irrigation efficiency.
Table 3.6 Technology characterization of pump sets
Diesel pump sets
Standard
Price (rupees) 10 000
Water discharge (litres per second) 4 4.5
Diesel/electricity consumption 1.1 litres
per hour
kWh kilowatt hour
In India, the existent irrigation practice
results in considerable amount of water
wastage. For example, the evapotranspira-
tion requirement for growing paddy is about
8001000 mm (millimetres), whereas in ca-
nal/tank command areas, farmers use as
much as 20002500 mm, which is wasteful
and also affects the yield due to drainage
problems. Scientists have found that there is
no need to flood the paddy field to a depth of
1520 cm (centimetres), as practised by
farmers, and it is enough to irrigate the field
to a depth of 35 cm as soon as the standing
water disappears. This can reduce the water
use by 30% while increasing the productivity
substantially. For row crops, such as cotton,
sugar cane, and vegetables, the furrow
method is suitable. In addition, the skip fur-
row, pair row, or alternate furrow method
can reduce the need for water by 25%30%,
without affecting the yield (Sivanappan
1995).
Therefore, the efficiency scenario also
considers the improvement in irrigation effi-
ciency, whereby, the concern of water wast-
age is addressed and 30% reduction in the
water requirement of 2036 is realized.
Technical specifications are considered
for standard and efficient tractors. A 35-hp
standard tractor is priced at 260 000 rupees
Electric pump sets
Efficient Standard Efficient
14 600 8000 10 600
5.5 5.5
0.6 litres 4.8 4.83.4
per hour kWh kWh
 Sectoral demand projections, technological characterization, and resource availability 39

and it ploughs 0.31 ha in one hour by con- In the analysis, the focus is mainly on
suming 4.5 litres of fuel. It is assumed that road- and rail-based freight and passenger
an efficient tractor ploughs 0.40 ha of land traffic, although air- and coastal-based
in 1 hour by consuming 3 litres of fuel per movements are also included in the frame-
hour and is priced at 310 000 rupees. work.
Figure 3.3 depicts the composition of
fleet of registered passenger vehicles consist-
3.1.2 Transport sector ing of cars, jeeps, taxis, and buses for the
period 19802003. The fleet of cars, jeeps,
The transport sector plays a crucial role in taxis, and two-wheelers (depicted on pri-
shaping the nations economic development. mary y-axis in Figure 3.3) taken together ex-
The GDP from the transport sector is the hibits an average annual growth rate of 13%
aggregate of GDP from various means such for the 19802003 period. In contrast, the
as railways, road, water, and air transport. fleet of buses has registered a low growth of
The GDP accruing from the services inci- 7.4% for the same period. Two-wheelers ac-
dental to transport is also included in the count for more than four-fifth, that is, 84%,
GDP generated by the transport sector. The of the total passenger vehicle fleet. The re-
GDP (measured at 1993/94 prices) accruing maining 16% is accounted for by cars, jeeps,
from the transport sector
activities (comprising rail-
ways, road, air, and coastal Figure 3.3 Trends in the composition of
transportation) has in- fleet of registered passenger vehicles
creased at an average an-
nual rate of 6.42% for the
time period 19902003,
doubling from 35 356
crore rupees in 1990/91 to
79 374 crore rupees in
2003/04 (MoSPI 2005).
Historically, road and
rail transport have domi-
nated the passenger as
well as freight movement
within the country. The
road and rail transport
modes carried about 95%
of the total passenger and
freight traffic in the coun-
try in 2001 (GoI 2001).
Air and inland water trans-
port assume importance
Source MoRTH (2005)
for long-distance travel.
40 National Energy Map for India: Technology Vision 2030

taxis, and buses. Of all the road passenger to 541.2 billion passenger kilometres in
vehicles, the number of cars, jeeps, and taxis 2003. The freight traffic (both the revenue-
has increased at an average annual growth earning and non-revenue-earning traffic)
rate of 10%, whereas the two-wheelers have handled by railways has more than doubled
exhibited the highest average annual growth from 158.5 billion tonne kilometres in 1980
rate of 14% during the period 19802003. to 384.1 billion tonne kilometres in 2003.
However, the bus fleet has grown at an aver-
age annual growth rate of 7%.
Railways have been the principal mode of 3.1.2.1 Transport sector end-use
long-distance freight and passenger trans- demands
port within the country. The growth of rail-
ways is closely interlinked with the overall
3.1.2.1.1 Data problems in
economic, agricultural, and industrial devel-
opment of the country. Fuelled by the road-based movement
countrys economic growth and an expand-
ing population base, Indian railways have The road passenger and freight transport
grown to a national network moving, on an demand estimation and projection exercise
average, 1.5 MT of freight and 14 million is beset with data gaps. Furthermore, no
passengers per day (2003/ reliable data at a point in time or over time
04) data.
The long-term trends of Figure 3.4 Trends in passengers
passenger traffic (in terms of and freight carried by railways
billion passenger
kilometres1) and freight traf-
fic (in terms of billion tonne
kilometres2) are shown in
Figure 3.4.
The passenger and freight
traffic handled by railways
has exhibited an upward
trend, as shown in the figure,
during the period 1980
2003, with the passenger
traffic recording an average
annual growth rate of 4.2%
and the freight traffic. The
passenger traffic more than
doubled from 208.6 billion
passenger kilometres in 1980 Source MoR (2005)

1
Passenger kilometres is the product of the number of passengers carried and average distance travelled.
2
Tonne kilometres is the product of the tonnes of freight moved and average distance travelled.
 Sectoral demand projections, technological characterization, and resource availability 41

is available of the actual road passenger 3.1.2.1.2 Methodology for

and freight traffic. There exist wide varia-
tions in the estimates of various agencies
for the year 1999 and 2000 as shown in
Tables 3.7 and 3.8.
projecting mode-wise road
transport demand
A bottom-up approach has been deployed to
estimate and project the road passenger, and
freight transport demand. For estimating
and projecting the mode-wise transportation

Table 3.7 Comparison of the transport sector demand estimates by various agencies for the
year 1999

Estimated road traffic movement in 2000

Study Passenger traffic (billion Freight traffic (billion
passenger kilometres) tonne kilometres)
RITES study (1998) 1880 1136
Lucknow Plan (1984) 2152 1004
MOST: Study on estimation of total road
transport in 2000 30004000 6001000
Vehicle Fleet Modernization Study (1988) 23003800 8001030
Steering Committee on Respective
Planning for Transport 24004000 540900
India Infrastructure Report 3000 800
Source Kapoor (2002)

Table 3.8 Comparison of the transport sector demand estimates by various agencies for the
year 2000

Estimates of Indian
Demand estimates Planning Commission Roads Congress
Billion passenger kilometres 2450 2087
Billion tonne kilometres 870 1102
Source Kapoor (2002)

3
Taxis have been considered separately as they are used for carrying passengers on a commercial basis. The utiliza-
tion rate for taxis is higher when compared to the utilization rates for cars and jeeps. This is due to the increased num-
ber of trips per day because of the commercial use of taxis.
42 National Energy Map for India: Technology Vision 2030

demands, the motorized transport vehicles
have been classified separately into transport
vehicles for passenger and freight movement
as follows.

Vehicles for passenger movement
 Cars and jeeps
 Taxis3
 Two-wheelers
 Buses
 Three-wheelers

Vehicles for freight movement
 LCVs (Light goods/commercial
vehicles)
 HCVs (Heavy goods/commercial
vehicles)
The objective is to estimate the travel de-
mand separately for each of the vehicle types
(on-road/in use4) mentioned above. The fol-
lowing equation is used to estimate the total
passenger or freight travel demand in the
year t by the vehicle type j.
PKm tj or TKmtj = Vtj O tj (Utj 365)
(3.7)
where, PKmtj is the passenger travel demand
by the vehicle type j in the year t (measured
in passenger kilometres). TKmtj is the freight
travel demand by the vehicle type j in the
year t (measured in tonne kilometres). Vtj is
the number of vehicles (on-road/in use) of
the type j in the year t. O tj is the occupancy
rate (measured in number of persons per ve-
hicle per trip) for the year t of the vehicle
type j. U tj is the utilization factor (kilometres
travelled by a vehicle per day) for the vehicle
of type j for the year t. Multiplying Utj by 365
gives the annual utilization rate for the ve-
hicle type j for the year t.
3.1.2.1.2.1 Cars
The historical annual time-series data on the
number of registered passenger cars for the
period 1980 until 20035 is used for estimat-
ing and projecting the travel demand by cars
until 2036. The relationship between the
registered car fleet (representing the stock of
cars) and car sales is
Carst+1 = Carst + Sales (during period
t and t+1) (3.8)
As mentioned in Equation 3.8, the differ-
ence between cumulative number of regis-
tered vehicles at time t and time t+1 gives
the car sales between these two time periods.
Econometric technique (regression
model) is used for estimating the car sales
for the period 19802003. The variables that
are most likely to influence the passenger car
sales in India are the consumers purchasing

4
On-road vehicles refer to the vehicles actually plying on road.
5
The Motor Transport Statistics, official document of the Ministry of Shipping, Road Transport and Highways, Govern-
ment of India, does not give the number of cars, jeeps, and taxis separately. The CMIE Infrastructure (2002 issue) gives
the number of registered cars, jeeps, and taxis separately. However, their total does not match with the total number
of registered cars, jeeps, and taxis reported in the Motor Transport Statistics. Furthermore, on analysing the historical
data of CMIE Infrastructure, cars and jeeps account for 91% of the total in all the years while the rest 9% are taxis.
Applying this percentage to the total numbers reported in the Motor Transport Statistics, the number of cars, jeeps,
and taxis is obtained separately. The two series so obtained are used for analysis.
 Sectoral demand projections, technological characterization, and resource availability 43

power measured by the per capita income as
well as the percentage of population in urban
areas (urbanization index/urban size).
In order to measure the extent of respon-
siveness of demand for passenger cars in In-
dia to changes in per capita income, and to
account for the impact of increasing urbaniza-
tion on car sales, loglinear (double log) speci-
fication of regression model was found
appropriate. The estimated regression equa-
tion is
Log (car sales) = 1.03 Log (PCY) + 0.16 (UI)
(10.7) (3.36)
(3.9)
(adjusted R2 = 0.72)
where, PCY= per capita income
UI = urbanization index
Both the independent variables (per
capita income and urbanization index) are
found to be statistically significant in ex-
plaining the passenger sales as indicated by
values of the t-statistic (given in brackets)
associated with the coefficients of the model
estimated above. The adjusted R2 is a statis-
tical measure of goodness of fit of the model
to the historical data. In this case, it is as
high as 0.72, implying that 72% of the varia-
tion in passenger sales can be explained by
variations in the per capita income of
economy and the urbanization index.
Using Equation 3.9, car sales are pro-
jected till 2036. The number of registered
passenger cars for each year within the fore-
cast period 200436 is obtained by adding
the forecasted annual sales figures to the
number of registered vehicles. The number
of cars in use/on-road is less than the total
number of registered cars. Therefore, the
number of passenger cars, in use is obtained
by deducting the number of cars considering
a lifetime of eight years.
The travel demand by cars (measured in
passenger kilometres) is estimated using
Equation 3.7. There exist variations in the
average annual utilization rate as reported in
different sources (Table 3.9).
Based on discussion with experts and
with reference to the above sources, the oc-
cupancy rate for cars is assumed to decline
from three persons per car in 1980 to 1.5
persons in 2036 (that is, decline by half).

Table 3.9 Assumptions on occupancy rate and utilization rate for cars

Assumptions on occupancy Assumptions on utilization

Source rate per car rate per car
IEA (2004) 1.89 persons per car 8000 km/year equivalent to
in 2000 declining to 21.4 km/day (assumed constant
1.64 persons in 2035 throughout the projection period)
Kapoor (2002) 1.5 persons 7000 km/year (equivalent to
19.76 km/day) in 1995 increasing
by 100 km/year (0.27 km/day)
Bose and Chary (2003) 1.92.9 persons per car/jeep 26 km/day in 2000/01
44 National Energy Map for India: Technology Vision 2030
The rationale behind this assumption is that
with increasing passenger car sales, vehicle
ownership (number of vehicles owned per
capita) would rise. As a result, the number of
persons travelling per car is assumed to decline
during the entire period, from 1980 to 2036.
Similarly, with reference to the sources men-
tioned in the table, it has been assumed that
the utilization rate of passenger cars (effec-
tive average distance travelled by a passenger
car) would increase by 100 km every year
(that is, 0.27 km daily), starting from
21.4 km/day in 1980.
3.1.2.1.2.2 Taxis
The historical annual time-series data on the
number of registered commercial passenger
taxis for the period 1980 until 2003 is used
for estimating and projecting the travel de-
mand by taxis until 2036.
Econometric technique (regression
model) is used for estimating the number of
commercial passenger taxis for the period
19802003. The percentage of population in
urban areas (urbanization index/urban size)
and the growth of the economy in general
measured by GDP are considered as vari-
ables significant in explaining growth in the
number of taxis plying on Indian roads.
In order to measure the extent of respon-
siveness of demand for taxi services in India
to changes in economic growth, and to ac-
count for the impact of increasing urbaniza-
tion, loglinear (double log) specification of
regression model was considered appropri-
ate. The estimated regression equation is
Log (Taxis) = 0.11 (UI) +0.70 Log (GDP)
(4.7) (14.8)
(3.10)
(adjusted R 2 = 0.91)
where, UI = urbanization index
GDP = gross domestic product
Both the independent variables (GDP
and UI) are found to be statistically signifi-
cant in explaining the equation as indicated
by values of the t-statistic (given in brackets)
associated with the coefficients of the model
estimated above. The adjusted R2 is as high
as 0.91, implying that 91% of the variation
in passenger sales can be explained by varia-
tions in the economic growth and the urban-
ization index.
The number of registered passenger taxis
for each year within the forecast period
200436 is obtained by inserting the pro-
jected values of GDP and UI. The number of
taxis in use/on-road is less than the total
number of registered taxis. Therefore, the
number of passenger cars in use is obtained
by deducting the number of taxis, consider-
ing a lifetime of eight years (same as that of
passenger cars).
The travel demand by taxis (measured in
passenger kilometres) is estimated using
Equation 3.7. The occupancy rate for taxis is
assumed to remain constant at three persons
per taxi throughout the projected period.
The effective distance travelled daily by a
taxi is assumed to increase from 60 km/day
in 2001 to 80 km/day in 2036. The rationale
behind assuming varying utilization rate lies
in the fact that with huge investments
pumped into the construction of roads and
highways, commercial passenger taxi ser-
vices are being used for long-distance inter-
city travel as well.
 Sectoral demand projections, technological characterization, and resource availability
3.1.2.1.2.3 Two-wheelers
The historical annual time-series data on the
number of registered two-wheelers for the
period 1980 until 2003 is used for estimat-
ing and projecting the travel demand by two-
wheelers until 2036.
TWt+1 = TWt + Sales (during time t and t+1)
(3.11)
where, TW = two-wheeler
As mentioned above, the difference be-
tween cumulative number of registered ve-
hicles at time t and t+1 gives the
two-wheeler sales between the two time peri-
ods, t and t+1.
The variables most likely to influence the
two-wheeler sales in India are the propor-
tion of the middle-income group residing in
urban areas (UMIG [urban middle-income
groups]) as well as the consumers purchas-
ing power measured by per capita income. In
order to measure the extent of responsive-
ness of demand for two-wheelers in India to
changes in per capita income, and to ac-
count for the impact of rising proportion of
the UMIG on car sales, loglinear (double
log) specification of regression model was
found appropriate. The estimated regression
equation is
Log (two-wheeler sales) = 0.57 (UMIG) +
(3.37)
0.62 Log (PCY)
(11.2) (3.12)
(adjusted R2 = 0.81)
Both the independent variables (per
capita income and percentage of the middle-
income group) are found to be statistically
45
significant in explaining the sales of two-
wheelers, as indicated by the values of the t-
statistic (mentioned in brackets) associated
with the coefficients of the model estimated
above. Furthermore, 81% of the variation in
the two-wheeler sales can be explained by
variations in the per capita income and
UMIG, given that the adjusted R 2 is as high
as 0.81. Using Equation 3.12, the two-
wheeler sales are projected till 2036.
The number of registered two-wheelers
for each year within the forecast period
200436 is obtained by adding the forecast
annual sales figures to the number of regis-
tered two-wheelers. The number of two-
wheelers in use/on-road is less than the total
number of registered two-wheelers. There-
fore, the number of two-wheelers in use is
obtained by deducting the number of two-
wheelers, considering lifetime of eight years.
The travel demand by two-wheelers
(measured in passenger kilometres) is esti-
mated using Equation 3.7. The assumptions
on occupancy rate and utilization rate for
two-wheelers as reported in different
sources are as follows.
For the purpose of our analysis, the occu-
pancy rate for a two-wheeler is assumed to
be constant at 1.2 persons per two-wheeler
throughout the projection period (200436).
The average annual utilization rate is as-
sumed to be constant at 27.4 km per two-
wheeler per annum (Table 3.10).
3.1.2.1.2.4 Buses
The historical annual time-series data on the
number of registered buses for the period
1980 until 2003 is used for estimating
and projecting the travel demand by buses
until 2036.
46 National Energy Map for India: Technology Vision 2030
Table 3.10 Assumptions on occupancy rate and utilization rate for two-wheelers
Assumptions on occupancy
Source rate per two-wheeler
IEA (2004) 1.7 (assumed constant)
Kapoor (2002) 1.2 (assumed constant)
Bose and Chary (1993) 1.21.7 (assumed constant)
The estimated regression equation is
Log (Buses) = 11.06 + 3.51 Log (POP)
(-41.4) (88.9)
(3.13)
(adjusted R2 = 0.99)
where, POP = population
The only independent variable, that is,
population, is found to be statistically sig-
nificant in explaining the number of buses as
indicated by values of the t-statistic (given in
brackets) associated with the coefficients of
the model. In order to measure the extent of
responsiveness to the population base of the
Indian economy, loglinear (double log)
specification of regression model is found
appropriate. In this case, the adjusted R2 is
as high as 0.99, implying that 99% of the
variation can be explained by variations in
the population growth rate.
The number of registered buses for the
period 200436 is obtained using Equation
6
The historical data on fleet utilization of buses operated by state road transport undertakings clearly shows that the fleet
utilization (%) lies in the range 90%95%. Thus, the maximum asymptotic limit is taken to be 100 for fleet utilization.
Assumptions on effective
distance travelled per day
by a two-wheeler
10 000 km/year equivalent to
27.4 km/day (assumed constant
throughout the projection period)
3500 km/year (equivalent to
9.6 km/day) assumed constant
25 km/day in 2000/01 (assumed
constant throughout the
projection period)
3.13. The number of buses plying on road is
obtained by taking into account the utiliza-
tion rate of the fleet of buses (in %), as indi-
cated by the data on fleet utilization of buses
operated by the SRTUs (state road transport
undertakings). The fleet-utilization rate is
estimated and projected (yt) for the period
200436 using a logistic curve represented
by the following equation.
Yt = 100[exp (1.78 + 0.474 t)/1 + exp
(1.78 + 0.474 t)]t = 1,2-49 (3.14)
where, 100 is the asymptotic limit for the
fleet utilization6; 1.78 and 0.474 are the val-
ues of the coefficients to be estimated from
historical time-series data; and t denotes the
time period
The travel demand by buses (measured in
passenger kilometres) is estimated using
Equation 3.7 as the product of number of
buses on road, the occupancy rate, and
the average annual utilization rate. The
occupancy rate for buses is assumed to be
 Sectoral demand projections, technological characterization, and resource availability 47

Table 3.11 Assumptions on occupancy rate and utilization rate for buses

Assumptions on occupancy Assumptions on utilization

Source rate per bus
IEA (2004) 28 persons per bus
Kapoor (2002) 40 persons per bus (assumed
constant throughout the
projection period)
Bose and Chary (1993) 3047 persons per bus
rate per bus
40 000 km/year in 2000 (assumed
to be constant throughout the
projection period)
40 000 km/year in 1995, increasing
by 400 km/year
46 355 km/year

constant at 50 persons per bus throughout The independent variable (population) is

the projection period (200436). The aver-
age annual utilization is assumed to increase
by 400 km/year over the modelling time
frame starting from 40 000 km/year in 1995
(Table 3.11).
3.1.2.1.2.5 Three-wheelers
The historical annual time-series data on the
number of registered passenger three-wheel-
ers for the period 1980 until 2001 is used for
estimating and projecting the travel demand
by three-wheelers until 2036.
Loglinear (double log) specification of
regression model is found appropriate to ac-
count for the responsiveness of three-
wheeler fleet to the increasing population.
The estimated regression equation is
Log (3-W) = 29 + 6.3 Log (POP)
(34) (50)
(3.15)
(adjusted R2 = 0.99)
where, POP = population
3-W = three-wheeler
found to be statistically significant in ex-
plaining the increasing number of three-
wheelers, as indicated by the values of the
t-statistic (given in brackets) associated with
the coefficients of the model estimated
above. In this case, the adjusted R2 is as high
as 0.99, implying that 99% of the variation
in three-wheelers can be explained by
variations in the population of Indian
economy.
The number of registered three-wheelers
for each year within the forecast period
200236 is obtained using the regression
equation estimated above by inserting the
values of forecast population into the regres-
sion equation.
The travel demand by three-wheelers
(measured in passenger kilometres) is esti-
mated using Equation 3.8. The occupancy
rate for two-wheelers is assumed to be con-
stant at two persons per three-wheeler
throughout the projection period (200236).
The average annual utilization rate is as-
sumed to increase by 80 km/year from
29 200 km/year in 1980 until 2036.
The figures for mode-wise road passenger
demand expressed in billion passenger
kilometres are presented in Tables 3.123.14
48 National Energy Map for India: Technology Vision 2030

Table 3.12 Mode-wise road passenger travel demand (in billion passenger kilometres) un-
der 6.7% GDP (gross domestic product) growth scenario

Mode 2001 2006 2011 2016 2021 2026 2031

Cars and taxis 102 139 195 346 574 1187 2307
Two-wheelers 255 341 332 413 524 678 891
Buses 1177 1594 2141 2790 3493 4234 4969
Three-wheelers 116 200 306 447 618 808 1003
Total 1650 2274 2974 3996 5210 6908 9170

Table 3.13 Mode-wise road passenger travel demand (in billion passenger kilometres)
under 8% GDP (gross domestic product) growth scenario

Mode 2001 2006 2011 2016 2021 2026 2031

Cars and taxis 102 142 216 412 733 1550 3 117
Two-wheelers 255 344 354 466 616 823 1 107
Buses 1177 1594 2141 2790 3493 4234 4 969
Three-wheelers 116 200 306 447 618 808 1 003
Total 1650 2280 3018 4114 5461 7416 10 196

Table 3.14 Mode-wise road passenger travel demand (in billion passenger kilometres)
under 10% GDP (gross domestic product) growth scenario

Mode 2001 2006 2011 2016 2021 2026 2031

Cars and taxis 102 144 236 487 956 2167 4 760
Two-wheelers 255 351 394 558 799 1230 1 908
Buses 1177 1594 2141 2790 3493 4234 4 969
Three-wheelers 116 200 306 447 618 808 1 003
Total 1650 2289 3077 4281 5866 8440 12 641

for 6.7%, 8%, and 10% projected GDP
growth rates.
3.1.2.2 Freight transport
The historical annual time-series data on the
number of registered HCVs and LCVs for
the period 1980 till 2002 is used for estimat-
ing and projecting the travel demand by two-
wheelers till 2036.
The variables most likely to influence the
growth in the number of HCVs and LCVs
plying on Indian roads are the values of the
output from the agriculture and industrial
sectors (measured by the GDP of agricul-
 Sectoral demand projections, technological characterization, and resource availability 49

ture and industry). The number of HCVs
and LCVs is estimated separately by using
the linear specification of the regression
model as follows.
HCVs = (398100)+3.96 (GDPI + GDPA)
(4.36) (19.61)
(3.16)
(adjusted R2 = 0.94)
LCVs = (792686) + 2.38 (GDPI + GDPA)
(6.42) (9.14)
(3.17)
(adjusted R2 = 0.81)
where, GDPA = gross domestic product of
the agriculture sector
GDPI = gross domestic product of the
industrial sector
Both the independent variables (GDPA
and GDPI) are found to be statistically sig-
nificant, as indicated by values of the t-sta-
tistic (given in brackets) associated with the
coefficients of the model estimated above. In
this case, the adjusted R2 is as high as 0.94
and 0.81 for the regression equations (Equa-
tions 3.16 and 3.17), estimated separately
for the HCVs and LCVs, respectively. This
implies that 94% and 81% of the variation in
number of HCVs and LCVs (respectively) can
be explained by variations in the GDPA and
GDPI.
The number of registered HCVs and
LCVs for each year within the forecast pe-
riod 200336 is obtained from the estimated
regression equations by inserting the pro-
jected values of GDPA and GDPI.
The travel demand (measured in tonne
kilometres) for HCV is estimated using
Equation 3.7. The payload for HCV is as-
sumed to increase by 0.1 tonne until 2036,
from 5.5 in 1995. Similarly, it is assumed
that the average annual utilization for HCV
will increase by 400 km every year until
2036, from 40 000 km in 1995 (Planning
Commission 2001).
Similarly, the travel demand (measured in
tonne kilometres) for LCV is estimated us-
ing Equation 3.7. The payload for LCV is as-
sumed to be constant at 1.7 tonnes
throughout the projection period. Similarly,
it is assumed that the average annual utiliza-
tion for LCV will increase by 200 km every
year, from 23 000 km in 1995 until 2036.
The above demand estimation and pro-
jection exercise has been undertaken for
6.7%, 8%, and 10% growth rates of GDP.
The projected figures for mode-wise freight
transport movement by road under alterna-
tive growth scenarios, expressed in billion
tonne kilometres, are presented in Tables
3.153.17.

Table 3.15 Mode-wise freight travel demand (in billion tonne kilometres); 6.7%
GDP (gross domestic product) growth scenario

Mode 2001 2006 2011 2016 2021 2026 2031

HCV 531 842 1268 1926 2933 4478 6838
LCV 37 50 78 120 181 269 398
Total 568 892 1347 2046 3114 4747 7236

HCV heavy commercial vehicle; LCV light commercial vehicle

50 National Energy Map for India: Technology Vision 2030

Table 3.16 Mode-wise freight travel demand (in billion tonne kilometres); 8%
GDP (gross domestic product) growth scenario

Mode 2001 2006 2011 2016 2021 2026 2031

HCV 531 914 1523 2487 3996 6341 9 955
LCV 37 57 99 162 256 393 593
Total 568 970 1622 2649 4252 6734 10 548

HCV heavy commercial vehicle; LCV light commercial vehicle

Table 3.17 Mode-wise freight travel demand (in billion tonne kilometres); 10% GDP (gross
domestic product) growth scenario

Mode 2001 2006 2011 2016 2021 2026 2031

HCV 531 1044 1858 3219 5615 10 085 17 948
LCV 37 66 124 214 365 632 1 078
Total 568 1111 1982 3433 5980 10 717 19 026

HCV heavy commercial vehicle; LCV light commercial vehicle

3.1.2.3 Rail transport 3.18. In this case, the adjusted R2 is as high

as 0.98, implying that 98% of the passenger
movement by railways can by explained by the
3.1.2.3.1 Passenger movement
variations in the socio-economic indicators,
namely, GDP and population.
The historical annual time-series data on the
The projections for rail passenger trans-
passenger traffic (in billion passenger
port demand for the period 200436 are ob-
kilometres) for the period 1980 until 2003 is
tained by inserting the projected values of
used for estimating and projecting the travel
GDP and POP in Equation 3.18.
demand by rail till 2036.
The demand estimation and projection
exercise has been undertaken for 6.7%, 8%,
Log (rail passenger) = 0.78 Log (GDP) +
and 10% growth rates projected for GDP.
(3.83)
The figures for projected rail passenger
30.95 Log (POP)
travel demand expressed in billion passenger
(2.88) (3.18)
2
kilometres are presented for the three alter-
(adjusted R = 0.98)
native growth scenarios in Table 3.18.
The independent variables (POP and
GDP) are found to be statistically significant 3.1.2.3.2 Freight movement
as indicated by values of the t-statistic (given
in brackets) associated with the coefficients The historical annual time-series data on the
of the model estimated above in Equation freight traffic (in billion tonne kilometres)
 Sectoral demand projections, technological characterization, and resource availability 51

Table 3.18 Rail passenger transport demand (in billion passenger kilometres) under
alternative GDP (gross domestic product) growth scenarios

GDP growth rate (%) 2001 2006 2011 2016 2021 2026 2031
6.7 491 608 770 1000 1329 1791 2424
8 491 637 864 1184 1634 2264 3125
10 491 673 986 1458 2174 3254 4853

for the period 1980 till 2003 is used for esti-
mating and projecting the travel demand by
rail till 2036.
The variables that are most likely to influ-
ence the freight transport by rail are the val-
ues of outputs from the agriculture and
industrial sectors (measured by the GDP of
agriculture and industry). The linear specifi-
cation of the regression model is found ap-
propriate to estimate and project the freight
transport demand by rail.
Freight movement= (52.84) + 0.00045
(6.72)
(GDPI + GDPA)
(27.52) (3.19)
(adjusted R2 = 0.97)
where,
GDPA = gross domestic product of the
agriculture sector
GDPI = gross domestic product of the
industrial sector
Both the independent variables (GDPA
and GDPI) are found to be statistically sig-
nificant, as indicated by values of the t-sta-
tistic (given in brackets) associated with the
coefficients of the model estimated above. In
this case, the adjusted R2 is as high as 0.97,
implying that 97% of the freight movement
by railways can be explained by the varia-
tions in the GDPA and GDPI.
The projections for freight transport de-
mand by rail for the period 200436 are ob-
tained by inserting the projected values of
GDP and POP in Equation 3.19.
The demand estimation and projection
exercise has been undertaken for 6.7%, 8%,
and 10% growth rates of GDP.
The figures for projected rail freight
transport demand expressed in billion tonne
kilometres are presented for the three alter-
native GDP growth rates in Table 3.19.

Table 3.19 Rail freight transport demand (in billion tonne kilometres) under alternative GDP
(gross domestic product) growth rates

GDP growth rate (%) 2001 2006 2011 2016 2021 2026 2031
6.7 336 423 534 691 912 1223 1662
8 336 451 621 863 1206 1691 2375
10 336 456 668 987 1481 2354 3758
52 National Energy Map for India: Technology Vision 2030

Figure 3.5 Category-wise sale engine fraction, less

of two-wheelers pumping losses at part
load, better cold
startability, and low
production and main-
tenance cost (MoPNG
2005). The disadvan-
tages are high fuel con-
sumption and high
unburnt hydrocarbon
emission. Hence, pen-
etration of the four-
stroke technology into
different segments of
two-wheelers has been
increasing rapidly over
Source SIAM (2005)
the last few years. This
can be attributed
3.1.2.4 Description of technology partly to the enforcement stringent emission
regulations and partly to the fast-changing
options in the transport sector consumer preferences. However, penetra-
tion of the four-stroke technology is limited
3.1.2.4.1 Two-wheelers in the scooter and moped category as com-
pared to motorcycles. As such, many buyers
There are three different types of two-wheel- still prefer two-stroke to four-stroke. The
ers that have been considered in the model: techno-economic parameters of two-wheel-
scooters, motorcycles, and mopeds. Figure ers are presented in Tables 3.20 and 3.21.
3.5 is the graphical representation of the cat-
egory-wise sales of two-wheelers.
The figure indicates that the motorcycle 3.1.2.4.2 Three-wheelers
segment exhibits the highest growth rate
(37%) amongst the three categories of two- A wide variation exists in the Indian three-
wheelers. Motorcycles now dominate the wheeler market in terms of the current tech-
two-wheeler market that was dominated by nological status as well as its progression
scooters and mopeds until the late 1990s. over the modelling time frame. Three-wheel-
At present, two-wheelers use petrol as ers powered by petrol two-stroke engines oc-
fuel and employ the spark-ignition system. cupy a major share in the Indian
They can be classified further into those em- three-wheeler market. The penetration of
ploying the two- and four-stroke technology. three-wheelers powered by petrol four-
The population of two-stroke engines is very stroke engine is lower as compared to its
large. Two-stroke engines are widely used for two-stroke counterpart due to the resistance
motorcycles, scooters, and mopeds, prima- offered by owners/operators of
rily because of their high specific power out- autorickshaws. This resistance is derived
put, simple and compact design, lower from the notions that the maintenance
 Sectoral demand projections, technological characterization, and resource availability 53

Table 3.20 Technological characterization of two-stroke two-wheelers

Efficiency Investment Fixed operating

Two-wheeler Start (km/litre)/ cost* and maintenance
category Technology year (MJ/km) (rupees) cost (rupees/km)
Motorcycle
Improved engine with 2001 53.83 36 000 0.18
improved oxicat
using petrol as fuel

Hydrogen IC engine 2031 0.56 42 000
Scooters
Improved engine with 2001 66.11 32 000 0.14
improved oxicat
using petrol as fuel

Hydrogen IC engine 2031 0.16 37 000
Mopeds
Improved engine with 2001 78.51 22 000 0.18
improved oxicat
using petrol as fuel

Hydrogen IC engine 2031 0.38 25 000
MJ megajoules; IC internal combustion
* Investment cost here is the vehicle price.
Source T E R I (2004)

Table 3.21 Technological characterization of four-stroke two-wheelers

Investment Fixed operating

Two-wheeler Start Efficiency cost* and maintenance
category Technology year (km/litre) (rupees) cost (rupees/km)
Motorcycles
Improved engine with 2001 85.64 43 500 0.11
improved oxicat
using petrol as fuel

Hydrogen IC engine 2031 0.36 50 000
Scooters
Improved engine with 2001 71.10 39 000 0.13
improved oxi-cat
using petrol as fuel

Hydrogen IC engine 2031 0.42 45 000
Mopeds
Improved engine with 2001 94.21 34 000 0.12
improved oxi-cat
using petrol as fuel

Hydrogen IC engine 2031 0.32 40 000
MJ megajoules; IC internal combustion
* Efficiency of hydrogen IC engine technologies is given in MJ/km.
Source T E R I (2004)
54 National Energy Map for India: Technology Vision 2030

expense of a three-wheeler employing a hybrids before the battery-operated vehicles

four-stroke engine is much higher than that
of a two-stroke engine. The CNG (com-
pressed natural gas) three-wheelers are
prevalent mainly in the four-stroke version.
The penetration of CNG-based
autorickshaws is limited mainly to major
metropolitan cities like Delhi and Mumbai.
The limited penetration of CNG three-
wheelers can be attributed primarily to the
inadequate CNG supply infrastructure and
the high investment cost entailed in develop-
ing this infrastructure. Diesel three-wheelers
powered by four-stroke technology are also
available in the country. The introduction of
hybrid electric vehicles7 (powered by CNG
and petrol) as well as the electric/battery-op-
erated vehicles is likely only by 2020 and
2025, respectively. The introduction of
is due to concerns regarding the range of
battery-operated vehicles. Three-wheelers
and electric vehicles are also commercially
available in the country. Scooter India Ltd,
Mahindra Eco Mobiles, Bajaj, Eicher, and so
on are entering the electric three-wheeler
market. The three-wheelers are used for
commercial purposes and thus, have a high
daily utilization. The techno-economic pa-
rameters for three-wheelers are given in
Table 3.22.
3.1.2.4.3 Cars
As per the classification norms adopted by
SIAM (Society of Indian Automobile
Manufacturers) in 2002, passenger cars are

Table 3.22 Technological characterization of three-wheelers

Fixed operating and

Efficiency Investment cost maintenance cost
Technology Start year (km/litre) (rupees) (rupees/km)
Petrol two-stroke 2001 36.00 75 000 0.27
Petrol four-stroke 2001 41.00 100 000 0.22
CNG four-stroke 2001 1.00* 95 000 0.22
Diesel four-stroke 2001 27.00 125 000 0.21
Battery operated 2026 0.36* 115 000 0.22
Petrol hybrid 2021 120.00 125 000 0.30
CNG hybrid 2021 120.00 125 000 0.30
Hydrogen four-stroke 2031 51.00 114 000 8.45
CNG compressed natural gas; MJ megajoules
* Efficiency expressed in MJ/km.
Source T E R I (2004)

7
HEVs (hybrid electric vehicles) use the combination of engine of a conventional vehicle and electric motor pow-
ered by traction batteries and/or fuel cells. This combination helps in achieving both the energy and environment
goals. In HEV propulsion, energy is available from more than one source. The three configurations of HEVs are series
hybrid system, parallel hybrid system, and split hybrid system.
 Sectoral demand projections, technological characterization, and resource availability 55

classified, according to lengths, under the Table 3.23 Percentage of cars sold by
following five categories.
various manufacturers

Mini (upto 3400 mm)

Compact (34014000 mm) Petrol Diesel

Mid-size (40014500 mm)
Model car (%) car (%)

Executive (47015000 mm)
Fiat Siena 70 30

Luxury (5001 mm and above)
Fiat Uno 45 55

The classification is further extended to Mitsubishi Lancer 90 10

take into account the fuel- and technology-
wise break-up. Petrol-based cars (based on
internal combustion engine) constitute the
majority of the passenger car segment. In In-
dia, indirect injection diesel engine is used in
passenger cars. However, diesel car sales
have not kept pace with the corresponding
rise in the variant (Table 3.23). The benefit
offered by diesel cars in terms of higher fuel
efficiency relative to the gasoline cars is off-
set by the higher maintenance/servicing cost.
However, due to the pricing policies of fuels,
the running cost of diesel cars is lower as
compared to petrol cars. This makes diesel
engines more popular for taxis.
Ford Ikon 79 21
Mercedes Benz 45 55
GM Astra 85 15
Source The Economic Times (2002)
New technologies, such as battery-oper-
ated cars, are also available commercially in
the country. At present, the Bangalore-based
electric car company REVA is the sole
manufacturer of electric cars in India. Fur-
thermore, cars running on alternative fuels
such as CNG have also penetrated the In-
dian market. The technology characteriza-
tion of cars is given in Table 3.24.

Table 3.24 Technological characterization of cars

Fixed operating and

Efficiency Investment maintenance cost
Technology Start year (km/litre) cost (rupees) (rupees/km)
Small car diesel 2001 13.39 388 000 0.80
Small car gasoline 2031 12.25 387 000 1.43
Small car gasoline hybrid 2021 14.70 670 140 1.43
Small car diesel hybrid 2021 16.06 671 140 0.80
Battery-operated car 2001 14.70* 249 500 0.64
CNG car 2001 13.37** 354 000 1.64
Large car based on diesel 2001 10.85 646 000 0.80
Large car based on gasoline 2001 9.55 625 667 1.43
MJ megajoules; CNG compressed natural gas
*Efficiency expressed in MJ/km.
** Efficiency expressed in km/kg.
Source Figures of fuel economy compiled from Overdrive and Autocar (October 2005); T E R I (2004)
56 National Energy Map for India: Technology Vision 2030

3.1.2.4.4 Buses 3.1.2.4.5 Goods vehicles

The fuels used by buses plying on Indian
roads are mostly diesel and CNG. Until
1991, buses powered by compression igni-
tion engines consuming diesel were plying
on Indian roads. DTC (Delhi Transport
Corporation) became the first transport cor-
poration in the country to have inducted
CNG buses in its city fleet in 2001. The en-
tire fleet of DTC buses has been replaced by
CNG buses. Table 3.25 presents the techno-
logical characteristics of buses indicated by
efficiency, investment cost, and so on.
Both the heavy and light goods vehicles use
diesel and ULSD (ultra low-sulphur diesel)
as fuels. The parameters related to cost, effi-
ciency, and so on associated with each of the
technologies are shown in Table 3.26.
3.1.2.4.6 Locomotives
Diesel and electric locomotives are used for
both passenger- and freight-based rail move-
ment. The technological details of these op-
tions are provided in Tables 3.27 and 3.28.

Table 3.25 Technological characterization of buses

Start year of Life Efficiency Investment cost

Types of buses technology (years) (km/litre) (million rupees/bus)
Diesel bus 2001 15 4.63 2.48
CNG bus 2001 15 3.84* 3.66
Hybrid electric bus 2021 15 6.71 8.38
powered by diesel
* Efficiency expressed in km/kg

Table 3.26 Technological characterization

of goods vehicles

Types of Start Table 3.27 Technological characteriza-

good year of Life Efficiency tion of locomotives (freight)
vehicles technology (years) (km/litre)
Fuel Investment
HCV: diesel 2001 15 5.0
efficiency cost (million
HCV: ULSD 2031 15 5.0
Type (Mtoe/btkm) rupees/btkm)
LCV: diesel 2001 15 8.5
Diesel locomotive 0.0041 344
LCV: ULSD 2031 15 8.5
Electric locomotive 0.0021 450
HCV heavy commercial vehicle; LCV light com- Mtoe/btkm million tonnes of oil equivalent per bil-
mercial vehicle; ULSD ultra-low sulphur diesel lion tonne kilometres
 Sectoral demand projections, technological characterization, and resource availability 57

Table 3.28 Technological characterization
of locomotives (passenger)
Fuel Investment
efficiency cost (million
Type (Mtoe/bpkm) rupees/bpkm)
Diesel locomotive 0.0041 156
Electric locomotive 0.0021 132
Mtoe/bpkm million tonnes of oil equivalent per bil-
lion passenger kilometres
3.1.2.5 Alternative fuels for transport
3.1.2.5.1 Biofuels
Biofuels are receiving a great deal of atten-
tion as a substitute to petroleum since they
can be produced from several agricultural
sources and also because of their low-emis-
sion characteristics. The two biofuels con-
sidered as the potential fuels for surface
transportation are bio-diesel and ethanol.
The term bio-diesel refers to the neat ethyl
esters of vegetable oils. Presently, pure 100%
or neat methyl esters of rapeseed, soyabean,
sunflower, talon, and other fats and oils are
used as diesel fuel without any substantial
modification to the existing design of the
engine. According to a survey of 26 coun-
tries by the IEA (International Energy
Agency), biofuels are being produced for the
past six years in 21 countries, mainly in the
European Union, East Europe, Malaysia,
and the US, with an overall capacity of about
generated. Biofuels have the following ad-
vantageous properties: high oil-bearing ca-
pacity, low cost, easy to develop and use,
environmentally safer and compatible, bio-
degradable, non-toxic, and free of sulphur
and aromatic compounds.
In this analysis, the maximum production
of bio-diesel is assessed based on the poten-
tial area for jatropha plantation, which is es-
timated at about 40.03 Mha. Based on the
seed yield of 2 tonnes/hectare, oil yield of
27%, and percentage area brought under the
plantation of jatropha over the modelling
time frame, Table 3.29 provides the esti-
mates of bio-diesel production as used in
this study. Based on the discussion with ex-
perts, it has been assumed that 5% of the
potential area is likely to be brought under
jatropha plantation by 2011, 25% by 2021,
and 100% by 2036.
Various scenarios have been developed
for the transport sector, which represent dif-
ferent types of policy interventions, techni-
cal measures, and so on. A detailed
description of the transport sector scenarios
is given in Chapter 4. Assumptions for each
of the scenarios are detailed in Table 3.30.
Table 3.29 Estimates of bio-diesel
production
Area under Bio-diesel
Year plantation (%) (million tonnes)
2006 0 0
2011 5 2.0

1.3 MT. In most of the developed countries, 2016 10 3.9

bio-diesel is produced from saffola, sun- 2021 25 9.8
flower, peanut, and so on that are essentially 2026 70 27.5
edible in the Indian context. On the other 2031 90 31.9
hand, there are a host of forest and non-ed-
2036 100 35.4
ible plant resources from which oil can be
58 National Energy Map for India: Technology Vision 2030

Table 3.30 Assumptions in various transport scenarios

Scenario Parameter Year 2001 Year 2036

Business-as-usual
Share of rail vis--vis road in pas- 23% 23%
senger movement

Share of rail vis--vis road in freight 37% 17%

movement

Share of public transport modes 80% 51%
vis--vis personalized transport

modes in road transport

Bio-diesel penetration in transport

Autonomous efficiency improve-
ments in transport
High efficiency
Share of rail vis--vis road in pas-
senger movement
No bio-diesel penetration in transport
Fuel economy of existing motorized transport
modes constant throughout the period 200136
23% 35%

Share of rail vis--vis road in freight 37% 50%

movement

Share of public transport modes 80% 60%

vis--vis personalized transport

modes in road transport

Autonomous efficiency improve- Fuel economy of existing motorized transport

ments in transport modes increasing by 50% throughout the period

200136

Bio-diesel Bio-diesel penetration in transport Maximum level of bio-diesel penetration is

35.4 million tonnes by 2036

Hybrid Combination of high efficiency

and bio-diesel scenario

3.1.3 Industry sector intensive industries due to the emphasis laid

The Indian industrial sector is a major en-
ergy user, accounting for 48% of the com-
mercial energy consumption. The increased
energy intensity in Indian industry is partly
due to investments in basic and energy-
in the past development plans on achieving
self-reliance. Industrial fuel use (including
non-energy uses) grew from 45.7 Mtoe in
1984/85 to 76 Mtoe in 2001/02. The indus-
trial sector8 contributed about 25% of
Indias GDP in 2002/03 (CMIE 2004).

8
According to the Central Statistical Organization, Ministry of Statistics and Programme Implementation, Govern-
ment of India, the industrial sector is subdivided into manufacturing, mining, and electricity.
 Sectoral demand projections, technological characterization, and resource availability
Production (as a proxy of demand) in
each of the industrial sub-sectors is esti-
mated using econometric techniques. Linear
regression analysis is carried out for each of
the major industry sub-sectors, taking pro-
duction as the dependent variable and using
various macro-economic indicators, such as
GDP (aggregate), GDP of industrial sector,
services, and agriculture, as the independent
variables. As described in the earlier chapter,
in the present study three GDP growth
rates 6.7%, 8%, and 10% have been con-
sidered for demand projections.
3.1.3.1 Industrial sectoral demands
The demand for industrial goods in seven
energy-intensive industry sectors is esti-
mated and projected. Time-series produc-
tion data (1980/81 to 2003/04) was
considered. Production (as a proxy of de-
mand) in each of the industrial sub-sectors
is estimated using econometric techniques.
The sections below present the demand pro-
jections for different industrial sub-sectors
considered in the analysis.
3.1.3.1.1 Demand for chlor-alkali
Chlor-alkalis are used as feedstock in many
industries. The chlor-alkali industry is char-
acterized by the production of three inor-
ganic chemicals: caustic soda, soda ash, and
chlorine. Although they have different end
uses, caustic soda and chlorine are produced
simultaneously in the same plant; the pro-
cess for soda ash production is different.
Contrary to the US and European countries
the demand for chlor-alkalis in India is
driven by caustic soda while chlorine is con-
sidered as a by-product. Therefore, only the
59
demands for caustic soda and soda ash have
been considered in this study.
3.1.3.1.1.1 Demand for caustic
soda
The caustic soda industry in India is ap-
proximately 65 years old. There are about 40
major caustic soda plants in India. The aver-
age plant size is about 150 TPD (tonnes per
day), which is relatively small compared to
the average size of 500 TPD in developed
countries. The production of caustic soda
was about 1.73 MT in 2001/02.
Regression analysis was used to project
the future caustic soda demand in the coun-
try. Since caustic soda is used in many indus-
tries, its production has been correlated with
the GDP contributed by the industrial sec-
tor in the country, using data from 1980/81
to 2003/04. The following linear relationship
is established.
DCS,t = 286 + 0.0042 (GDPI,t) (3.20)
(16.26)
(R2 = 0.92)
where, DCS,t and GDPI,t represent the de-
mand of caustic soda (in thousand tonnes)
and GDP contributed by the industrial sec-
tor (at 1993/94 prices in crore rupees) in the
year t, respectively. The figure in parenthesis
is the value of t-statistics. Table 3.31 pre-
sents the projected demand of caustic soda
in the country.
3.1.3.1.1.2 Demand for soda ash
Soda ash (sodium bicarbonate) is one of the
basic ingredients for manufacturing soaps,
60 National Energy Map for India: Technology Vision 2030

Table 3.31 Demand projection of caustic

per capita income, the following equation is
estimated
soda in India

Demand (thousand tonnes) Log (DSA,t) = 0.79 Log (PGDPt) + 0.84 [AR(1)]
6.7% 8% 10%
(80.3) (3.21)
GDP GDP GDP
(R 2 = 0.97)
growth growth growth
Year rate rate rate where, DSA,t represents the demand of soda
2001/02 1 732 1 732 1 732 ash (in thousand tonnes) in the year t and
2006/07 2 209 2 346 2 462 PGDPt represents the per capita GDP in the
2011/12 2 896 3 360 3 846 year t (at 1993/94 prices in rupees per
2016/17 3 909 4 873 6 108
capita). The coefficient 0.79 associated with
Log (PGDPt) indicates the income elasticity
2021/22 5 404 7 131 9 810
of demand for soda ash. The [AR (1)] term is
2026/27 7 615 10 500 15 863
used to correct for autocorrelation in the
2031/32 10 886 15 529 25 765 random error terms. The projected demand
2036/37 15 722 23 032 41 961 of soda ash is given in Table 3.32.
GDP gross domestic product

3.1.3.1.2 Demand for aluminium

detergents, and glass. About 40% of the soda
ash produced in India is consumed by the Aluminium is an essential raw material for
detergent industry, 20% by the glass indus- modern manufacturing. It is a light-weight,
try, and 16% by the sodium silicate industry.
The remaining is consumed by the chemical Table 3.32 Projected demand of soda
industry. In India, soda ash is not obtained
ash in India
as a naturally occurring product. It is pro-
duced through a synthetic manufacturing Demand (thousand tonnes)
process. Currently, there are six soda ash 6.7% 8% 10%
manufacturing plants in India. In view of the
GDP GDP GDP
local availability of inputs such as salt, lime-
Year growth growth growth
stone, coke, water, chemical compounds,
and power, five out of six soda ash plants are 2001 1 560 1560 1 560

located in the state of Gujarat. The domestic 2006 2 260 2040 2 160
demand was 1.82 MT in 2003/04, while the 2011 3 140 2450 2 790
total production was 2.23 MT. 2016 4 380 3000 3 620
Soda ash is used as a raw material for 2021 6 150 3750 4 720
household consumer goods such as glass,
2026 8 690 4760 6 200
soaps, and detergents whose demands are a
2031 12 350 6150 8 200
function of per capita income of the con-
sumers. Thus, in order to capture the re- 2036 17 660 8010 10 900

sponsiveness of this demand to changes in GDP gross domestic product

 Sectoral demand projections, technological characterization, and resource availability 61

high-strength, corrosion-resistant metal Table 3.33 Demand projections of

with high electrical and thermal conductiv-
aluminium
ity. Aluminium is extensively used in the
power (for transmission and distribution), Demand (thousand tonnes)
transport, construction, and domestic sec- 6.7% 8% 10%
tors. Aluminium is easy to recycle. Its pro-
GDP GDP GDP
duction is highly electrical-energy-intensive,
growth growth growth
and it requires uninterrupted power supply
(commencing with an installed capacity of Year rate rate rate
4055 tonnes in 1950/51, the aluminium in- 2001 636 636 636
dustry has grown to 880 000 tonnes by 2006 888 950 1 002
2003/04, with an average annual growth rate 2011 1179 1383 1 597
of 5.7%. While 73% of aluminium was im- 2016 1601 2019 2 556
ported in 1950/51, since 2000/01, India has
2021 2216 2954 4 100
become an exporter of aluminium).
2026 3113 4328 6 586
In India, five industries account for the
entire production of aluminium (TERI 2031 4422 6347 10 591
2005b). Of these, four units HINDALCO 2036 6328 9312 17 040
(Hindustan Aluminium Company Ltd), GDP gross domestic product
MALCO (Madras Aluminium Company
Ltd), INDAL (Indian Aluminium Company
Ltd), and BALCO (Bharat Aluminium where, DAL,t and GDPt, respectively, repre-
Company Ltd) belong to private sector sent the demand of aluminium (in thousand
and NALCO (National Aluminium Com- tonnes) and GDP of entire economy (at
pany) is a public sector unit. HINDALCO 1993/94 prices in crore rupees) in the year t.
and NALCO together account for 76% of the The projected demand for aluminium is
total installed capacity in India. given in Table 3.33 for 6.7%, 8%, and 10%
Since aluminium is used for infrastruc- GDP growth rates.
ture development in the power, transport,
and construction sectors, a rapid growth in
its demand is expected along with the ex- 3.1.3.1.3 Demand for steel
pected high economic growth rate. In the
present study, aluminium demand has been The iron and steel sector is one of the largest
correlated with GDP, using the linear regres- energy-consuming sectors in the Indian
sion technique. Using GDP and aluminium manufacturing industry. Crude steel pro-
consumption data for the period 1980/81 to duction, which was 1.4 MT in 1950/51, has
2002/03, the following linear relationship increased to 30 MT in 2000/01 (SAIL
has been obtained. 2002). During the first two decades of the
Five Year Plan, that is, 195060 and 1960
DAL,t = 27 + 0.00051 (GDPt) 70, the economy saw growth in steel produc-
(14.35) (3.22) tion touching 8%. The growth rate of steel
production declined during the next two de-
(R2 = 0.90) cades to pick up again in the 1990s to about
62 National Energy Map for India: Technology Vision 2030

6.65%. However, the industry grew in a Table 3.34 Demand projections for
highly protected and controlled environ-
finished steel in India
ment, with massive import tariffs, and ad-
ministrative control over process, Demand (thousand tonnes)
distribution, and imports. The centralized 6.7% 8% 10%
planning process allocated resources for the
GDP GDP GDP
industry. The major change in policy deci-
growth growth growth
sions started in 1999, with de-licensing of
the steel industry. Decontrol of the produc- Year rate rate rate
tion, distribution, pricing, and import/ex- 2001 31 372 31 372 31 372
port of steel products has made a significant 2006 44 768 48 630 51 913
impact on the industry. 2011 63 010 75 856 89 334
Steel being a vital input for economic de- 2016 89 540 115 861 149 601
velopment, a linear relationship is obtained
2021 128 210 174 641 246 661
between demand for steel and GDP.
2026 184 624 261 008 402 977

DS,t = 9381 + 0.032 (GDPt) 2031 247 884 387 909 654 726
(25.76) (3.23) 2036 386 756 574 369 1 060 171
GDP gross domestic product
(R2 = 0.97)

where, DS,t represents the demand for fin-
ished steel (in thousand tonnes) in the year t.
Table 3.34 presents the estimated demand
for finished steel in India.
3.1.3.1.4 Demand for cement
Cement is a key component of infrastructure
development. It is used in the construction
of buildings, bridges, roads, airports, and so
on. India is the second-largest producer of
cement in the world. Cement production ca-
pacity in India has grown from 3.2 MT in
1950 to 136 MT in 2002/03 (CMA 2004).
A tremendous growth in cement produc-
tion has been registered, especially during
the past two decades. During this period
(19812001), the production has increased
from about 21 MT to 107 MT, with an an-
nual average growth rate of 8.4%. However,
the per capita cement consumption of 110
kg (kilograms) in India is much below the
world average per capita of 273 kg. It even
falls much behind almost all Asian major ce-
ment producers like Japan (540 kg), South
Korea (1090 kg), Taiwan (754 kg), Thailand
(300 kg), and Indonesia (150 kg). In view of
the expected high infrastructure growth in
India, the growth of cement is also expected
to be high.
A linear regression has been established
for cement demand projection in India.
DC,t = 19 + 0.0001 (GDPt)
(62.25) (3.24)
(R 2 = 0.99)
where, DC,t represents the demand for ce-
ment (in MT) in the year t. Table 3.35 pre-
sents the projected demand for cement in
India under 6.7%, 8%, and 10% GDP
growth scenarios.
 Sectoral demand projections, technological characterization, and resource availability 63

Table 3.35 Cement demand projections

segment comprises mainly small power
looms and the handloom units.
Demand (thousand tonnes) Cotton is the predominant fabric used in
6.7% 8% 10% the Indian textile industrynearly 60% of
GDP GDP GDP
the overall consumption in textiles and more
than 75% in spinning mills is cotton. India is
growth growth growth
among the worlds largest producers of cot-
Year rate rate rate
ton, with over 9 Mha of land under cultiva-
2001 107 107 107 tion, and an annual crop output of about
2006 148 167 184 1.7 MT (2001/02) (MoA 2004).
2011 204 254 309 Clothes are essential commodities in the
2016 286 382 509 basket of consumption goods for every con-
2021 405 570 831
sumer. Cotton cloth being a high-value com-
modity, its consumption is influenced by the
2026 579 846 1350
consumers purchasing power measured by
2031 833 1252 2186
the per capita income. Thus, in order to
2036 1203 1782 3532 measure the income elasticity of cotton-
GDP gross domestic product cloth demand, the following linear regres-
sion relationship has been established.

3.1.3.1.5 Demand for cotton Log(DCC,t) = 0.81 [Log(PGDPt)] + 0.57AR(1)

The Indian textile industry contributes
about 3% to GDP and 14% of the total in-
dustrial production. This sector also con-
tributes to 27% of the national export
earnings. Moreover, the textile industry
plays a major role in employment genera-
tion, accounting for about 27% of the total
work-force of the country (second after the
agriculture sector).
The textile industry can be classified into
two categories: (i) organized sector and (ii)
unorganized or rural sector. The organized
segment of the textile industry produces 4%
of the total fabrics produced in the country,
with most of it being manufactured in power
looms. The total yarn required by both the
organized and the decentralized sectors is
produced entirely within the organized seg-
ment. The cotton textile/man-made fibre in-
dustry is the single-largest organized
industry in the country. The decentralized
(249.3) (3.25)
(R2 = 0.94)
where, DCC,t represents the demand of cot-
ton cloth (in thousand tonnes) in the year t
and PGDPt represents the per capita GDP in
the year t (at 1993/94 prices in rupees per
capita). Table 3.36 presents the projected
demand for cotton cloth in India under
6.7%, 8%, and 10% GDP growth scenarios.
3.1.3.1.6 Demand for fertilizer
The inorganic, organic, natural, or synthetic
chemical elements that provide nutrient for
the growth of plants are generally considered
as fertilizers. These play an exceedingly im-
portant role in the countrys performance in
the agriculture sector. They are usually clas-
sified according to the plant nutrients. Three
64 National Energy Map for India: Technology Vision 2030

Table 3.36 Cotton cloth demand

Fertilizer production is estimated using
the production of high-yielding varieties of
projection
crops. The following linear regression equa-
Demand (thousand tonnes) tions are established for demand projection
6.7% 8% 10%
of nitrogenous and phosphatic fertilizers in
India.
GDP GDP GDP
growth growth growth
DN,t = 5480 + 197.4 (PHYV,t)
Year rate rate rate (20.55) (3.26)
2001 2 210 2 210 2 210
2006 2 520 2 680 2 800 (R2 = 0.95)
2011 3 030 3 470 3 910
2016 3 730 4 530 5 500
DP,t = 2102 + 68.5 (PHYV,t)
(18.60) (3.27)
2021 4 680 5 950 7 790
2026 5 990 7 870 11 100
(R2 = 0.94)
2031 7 780 10 490 15 940
2036 10 220 14 050 23 010 where, DN,t and DP,t represent the demand of
GDP gross domestic product nitrogenous and phosphatic fertilizer, re-
spectively, in thousand tonnes (in terms of
nutrient N and P2O5) in the year t and PHYV,t
types of primary fertilizers are used in India: production of high-yielding varieties crops
N (nitrogen), P2O5 (phosphorous), and K (in thousand tonnes).
(potassium). Secondary and micronutrients Production of high-yielding variety crops
also play an important role in plant growth. has been estimated using the GIA and GDP
However, the primary nutrients are relevant (discussed in detail in the section on de-
in the present context of the energy con- mand for agriculture sector). Table 3.37 pre-
sumption as most of the energy input is in sents the projected demand for fertilizers in
the form of primary nutrient fertilizers, par- India.
ticularly nitrogenous fertilizers. Fertilizers
containing only one primary nutrient are
called straight fertilizers whereas those 3.1.3.1.7 Demand for paper
with more than one are called complex fer-
tilizers. India produces nitrogenous and The pulp and paper industry provides em-
phosphatic fertilizers only. Due to the un- ployment to about 3.5 million people di-
availability of raw materials, the entire re- rectly and indirectly. The Indian pulp and
quirement of potassic fertilizers is met paper industry recorded a constant average
through import. During 2001/02, produc- annual growth rate of 5.47% over the past
tion figures of nitrogenous and phosphatic three years. Broadly, there are two types of
fertilizers were 10.7 and 3.9 MT, respec- paper products: paper and paperboard, and
tively (in terms of N and P2O5 nutrients). newsprint. Paper and paperboard can fur-
 Sectoral demand projections, technological characterization, and resource availability 65

Table 3.37 Demand projection for fertilizer Table 3.38 Projected demand for paper
and paper board in India
Demand (thousand tonnes)
6.7% and 8% GDP 10% GDP Demand (thousand tonnes)
growth rate growth rate 6.7% 8% 10%
Year N P 2O 5 N P 2O 5 GDP GDP GDP
2001 10 690 3873 10 690 3 870 growth growth growth
2006 12 351 4090 14 010 4 670 Year rate rate rate
2011 13 692 4555 16 570 5 550 2001 4 950 4 950 4 950
2016 15 051 5027 19 220 6 470 2006 6 929 7 615 8 198
2021 16 432 5506 21 950 7 420 2011 9 345 11 479 13 719
2026 17 833 5993 24 770 8 400 2016 12 823 16 949 22 238
2031 19 256 6487 27 680 9 410 2021 17 839 24 765 35 508
2036 20 409 6887 30 680 10 450 2026 25 096 36 034 56 363
GDP gross domestic product; N nitrogen; 2031 35 613 52 385 89 370
P2O5 phosphorus pentaoxide 2036 50 836 76 185 141 820
GDP gross domestic product

ther be sub-divided into industrial grade

(wrapping and packaging, specialty, kraft,
and so on) and cultural (writing and print-
ing) paper. The output of the Indian paper
industry is about 5.4 MT, with a turnover of
about 120 billion rupees.
Paper consumption in India was about
5.5 kg per capita in 2003 as against the world
average of 50 kg (TERI 2005b). Moreover,
the demand for paper and paper products in
India has continuously been increasing over
time. Since the demand for paper is directly
related to economic development, India will
have higher growth in future as compared to
the average worldwide growth rate. Demand
for paper and paperboard has been esti-
mated using per capita GDP to account for
both demographic and economic growth im-
pacts on paper demand. The following linear
relationship has been established for de-
mand projection.
DP,t = 2658 + 0.638 (PGDPt)
(40.48) (3.28)
(R2 = 0.98)
where, D P,t and PGDPt represent demand for
paper and paperboard (in thousand tonnes)
and per capita GDP (at 1993/94 prices in
rupees) in the year t, respectively. Table 3.38
presents the projected demand for paper and
paperboard in India.
3.1.3.1.8 Demand of other
industries
The other energy-consuming industries in-
clude small-scale industries such as food
processing, glass and ceramics, sugar mills,
66 National Energy Map for India: Technology Vision 2030

brick making, foundry, and leather/tanning. 3.1.3.2 Description of technology

These industries are quite fragmented. In
options in the industry sectors
the model, all these industries are grouped
under a single sub-sector, since data on pro-
This section describes the status of each of
duction of each of these industries is not
the industrial sector technological options
available. In this study, the residual energy
and its penetration level, as assumed across
consumption of the industrial sector (energy
different scenarios.
not accounted for in the seven industries de-
scribed above) is assigned to other indus-
tries. For demand projection in this study, it 3.1.3.2.1 Caustic soda industry
is assumed that other industries will grow at
the same growth rate as that of GDP growth. Caustic soda is produced by the electrolysis
Table 3.39 presents projected useful energy of brine (a solution of common salt and wa-
demand for other industry. Efficiency of en- ter). In this process, chlorine and caustic
ergy utilization in other industry is consid- soda are produced simultaneously. Addi-
ered at 40% for 2001. Further, it is assumed tionally, hydrogen is also produced. The pro-
that efficiency of utilization of energy of duction of caustic soda is a very
other industry will increase to 44% and 57% electric-energy-intensive process. In view of
in the BAU (business-as-usual) and high high electric tariff in India, it is reported that
efficiency scenario, respectively. the cost of power accounts for about 50%
65% of the total production cost (Pramanik
2002).
Worldwide, there are three processes used
Table 3.39 Energy demand projection for for manufacturing caustic soda: (i) dia-
other industries phragm cell process, (ii) mercury cell pro-
cess, and (iii) membrane cell process. The
Demand (thousand tonnes) diaphragm cell process is the oldest among
6.7% 8% 10% all three. However, in India, presently, none
GDP GDP GDP of the plants are using this technology
(AMAI 2004). In 1996, majority of the
growth growth growth
plants in India were using mercury cell pro-
Year rate rate rate
cess (56% of the total installed capacity).
2001 726 726 726 During 2004, this share reduced to 29%.
2006 1004 1066 1 169 The share of membrane cell process in-
2011 1389 1566 1 883 creased from 56% in 1996/97 to 71% in
2016 1920 2302 3 033 2003/04. Table 3.40 presents the time trend
2021 2656 3382 4 884 of percentage share of different processes
used for caustic soda production in India
2026 3673 4969 7 866
(AMAI 2004).
2031 5080 7301 12 668
Membrane process is the most energy-ef-
2036 7026 10 728 20 402 ficient process followed by the mercury cell
GDP gross domestic product process. Therefore, the shift towards more
 Sectoral demand projections, technological characterization, and resource availability 67

Table 3.40 Production of caustic soda

pected to decrease in the near future. How-
ever, the current process (the membrane cell
through different processes: 1998/99 to
process) is a mature technology that has very
2003/04 little scope for further efficiency improve-
Percentage share
ment. Moreover, due to the lack of domestic
production of membrane cell in the country,
Process 1996/97 1998/99 2001/02 2003/04
India is entirely dependent on imported
Membrane 56 65 69 71
technology of membrane cell. Therefore, all
cell new plants are coming with state-of-the-art
Mercury 37 34 31 29 technology. A new technology called ODC
cell (oxygen depolarized cathodes) is currently
Diaphragm 7 <1 0 0 developed. In Europe, a new plant using the
cell
ODC technology has been built in Germany
at Brunsbuttel (LBNL 2005). It is reported
that the ODC technology has a substantial
penetration of the membrane cell process potential for saving electricity (440530
has resulted in the reduction of average spe- kWh/t) (LBNL 2005). In the present analy-
cific energy consumed during caustic soda sis, it is assumed that in India, ODC tech-
production. As per a study by the LBNL nology will be commercially available from
(Lawrence Berkeley National Laboratory), 2016. Since this technology is still in the de-
US, the specific energy consumption during velopment phase and a reliable cost figure is
caustic soda production in India is about not available, the capital cost of the ODC
36% lower than that in the US (LBNL plant is assumed to be 10% higher than the
2005). Similarly, the specific energy con- cost of the membrane-cell-based plant.
sumption is also lower than the reported val- Since no new plants based on the mercury
ues for the European Union (LBNL 2005). cell technology are being built and cost data
In India, due to environmental concerns is also not available, for modelling purpose,
(heavy metal pollution), no new plants based the capital cost is taken to be the same as
on mercury cell process are allowed. There- that for the membrane-cell-based plant.
fore, the specific energy consumption is ex- Table 3.41 presents the technological char-

Table 3.41 Technological characterization of caustic soda industry

Average specific Repair and

electricity Capital cost maintenance cost
consumption (million rupees/ as a percentage
Process (kWh/t) MTPA) of capital cost Life (year)
Mercury cell 3300 41 000 2.5 10
Membrane cell 2848 41 000 2.5 10
ODC 2363 45 100 2.5 10
ODC oxygen depolarized cathodes; MTPA million tonnes per annum; kWh/t kilowatt-hour per tonne
68 National Energy Map for India: Technology Vision 2030

Table 3.42 Details of Indian soda ash plants

Capacity Total
Year of (thousand tonnes capacity
Company commissioning Process per year) (%)
Tata Chemicals 1948 Standard Solvay 875 33
Saurashtra Chemicals Ltd 1960 Standard Solvay 650 25
GHCL 1988 Akzo dry lime 525 20
Nirma Ltd 1998 Akzo dry lime 365 14
Tuticorin Alkalis 1982 Modified Solvay 115 4
DCW Ltd 1939 Standard Solvay 96 4

GHCL Gujarat Heavy Chemicals Ltd; DCW Dhrangadhie Chemical Works

Table 3.43 Technological characterization of soda ash industry

Repair and
Average specific maintenance
consumption Capital cost cost as a
Fuel Electricity (million rupees/ percentage
Process (GJ/t) (kWh/t) MTPA) of capital cost Life (year)
Solvay 15.93 282 19 800 2.5 10
Modified Solvay 14.48 257 19 800 2.5 10
Akzo dry lime 9.31 607 24 800 2.5 10
GJ/t gigajoules per tonne; kWh/t kilowatt-hour/tonne; MTPA million tonnes per annum

acterization of caustic soda industry in the sidered as a state-of-the-art technology. In

model (TERI 2004; CMIE 1996).
3.1.3.2.2 Soda ash industry
The manufacture of soda ash includes pul-
verizing of the salt, brine purification,
absorption of ammonia in brine, and car-
bonation. The precipitate of sodium bicar-
bonate is filtered and calcined to obtain soda
ash. The technologies mostly used by the in-
dustries are Solvay process, modified Solvay
process (or dual process), and Akzo dry-lime
process. The Akzo dry-lime process is con-
India, soda ash is produced in six plants.
Table 3.42 presents the production capacity
and the technology being used in these six
plants (LBNL 2005). It may be noted that
three of these plants are based on the stan-
dard Solvay process (62% of the production
capacity), one unit on the modified Solvay
process (4% of the production capacity),
and the remaining two units use the Akzo
dry-lime process (34% of the production ca-
pacity) (LBNL 2005). Technology charac-
terization of soda ash industry considered in
the model is given in Table 3.43.
 Sectoral demand projections, technological characterization, and resource availability
3.1.3.2.3 Aluminium industry
Bauxite is the primary raw material used in
production of primary aluminium. India has
about 3037 MT of bauxite reserves and
ranks sixth in the world. The BHH (Bayer
HallHeroult) process being used for more
than 100 years is practically the only viable
commercial manufacturing process used for
the production of aluminium. Though con-
siderable research efforts have been made
for alternate processes for aluminium pro-
duction, these are not yet commercialized.
Production of aluminium has two distinct
processes: production of alumina from
bauxite ore (Bayer process) and conversion
of alumina to aluminium in smelters (smelt-
ing process). A process flow diagram for pri-
mary aluminium production is shown in
Figure 3.6.
There are five different steps involved in
the manufacturing of alumina: (i) bauxite
crushing/grinding/slurrying, (ii) digestion
(iii) precipitation, (iv) evaporation, and (v)
Figure 3.6 Primary aluminium production
69
calcination of aluminium hydrate. The ex-
traction of aluminium involves the electroly-
sis of alumina at 950970 oC in electrolytic
cells (smelter). While the cathode in the elec-
trolytic cells is made of carbon, two types of
anodes are used (i) Soderberg (or self-bak-
ing) and (ii) pre-baked. In India, about 76%
of the installed capacity is based on pre-
baked system while only 24% is based on the
Soderberg technology (TERI 2004).
Electricity cost forms about 40% of the
total production costs and hence, energy ef-
ficiency continues to be a major area of focus
for the aluminium industry. In India, the in-
dustry average for the electrical consump-
tion in smelters has reduced from
18 00020 000 kWh/tonne of aluminium
produced in 1960s to 14 00017 000 kWh/
tonne of metal produced in 2000s (TERI
2005b).
3.1.3.2.3.1 Energy efficiency options
The aluminium manufacturing process is
highly electrical-energy-intensive. The break-
up of energy indicates that more than 80% of
the energy is electrical energy, and is con-
sumed in the smelting of alumina. The major
energy-saving opportunities in the Indian alu-
minum industry lie in the switch over to gas-
suspension calciners (as against rotary kilns)
and waste heat utilization, and converting the
smelters from Soderberg systems to pre-baked
systems. The other operational improvements
include current efficiency improvements and
reduction in operating voltage (TERI 2005b).
In the MARKAL model, the aluminium
industry is modelled in two steps: (1) Bayer
process, and (2) smelting process. Table 3.44
presents the technological characterization
of the aluminium industry in India. Eco-
nomic life of the aluminium plant is taken as
30 years, and the annual repair and mainte-
70 National Energy Map for India: Technology Vision 2030

Table 3.44 Technological characterization of the aluminium industry

Average specific energy

consumption (per
tonne of aluminium) Capital cost
Technology Fuel (GJ) Electricity (kWh) (dollars/tonne)
Bayer process 32.00 583 1200
Improved Bayer process 28.80 525 1500
Soderberg process 1.81 17 449 2900
Pre-baked process 3.03 15 613 3000
Improved pre-baked process 2.50 13 200 3300
GJ gigajoules; kWh kilowatt-hour
Sources Vasudevan (1999); TERI (2004); <http://www.aluminum.org/Content/ContentGroups/News_Releases1/
October_2005/AlumPriceTrends.pdf>

nance cost is assumed at 2.5% of the total
capital cost.
Further, it is assumed that the improved
Bayer process and the improved pre-baked
process will be available only in the (EFF)
high-efficiency scenario by 2011.
3.1.3.2.4 Iron and steel industry
The four different steel manufacturing tech-
nologies existing in the country are: (a) BF
BOF (blast furnacebasic oxygen furnace),
(b) scrapEAF (scrapelectric arc furnace),
(c) DRIEAF (direct reduction ironEAF),
and (d) COREX. In scrapEAF, the process
scrap steel is used in place of iron ore. There
are eight integrated steel plants in India pro-
ducing steel using the BFBOF process.
During 2001/02, of the total 31.37 MT of
steel produced in India, 12.98 MT was pro-
duced in those eight integrated steel plants.
Table 3.45 presents the process-wise break-
up of steel production in India as well as the
technological characterization of the tech-
nology used in India. Repair and mainte-
nance cost is considered at 4% of the capital
cost of the plant (Hidalgo et al. 2005).
3.1.3.2.4.1 Energy efficiency
options
Though the specific energy consumption of
the Indian integrated steel plants decreased
significantly (by about 22%) from 1990/91
to 2003/04 (Figure 3.7), it is still high when
compared to the US and Japan. This indi-
cates scope for further improvement in en-
ergy efficiency. Table 3.46 presents the
energy-efficiency measures applicable to the
integrated steel plants in India (LBNL
1999). Similarly the efficiency improvement
measures for EAF-based plants are given in
Table 3.47 (LBNL 1999). The data on cost
estimates for different efficiency improve-
ment options is only available for 1995 in
dollars (LBNL 1999). The same value is
converted to Indian rupees for 2001/02
prices by using the exchange rate for 1995/96
 Sectoral demand projections, technological characterization, and resource availability 71

Table 3.45 Production and technological details of Indian steel industry during 2001/02

Production Capital cost Specific fuel consumption

Process (million tonnes) (dollars/tonne) Fuel (GJ/t) Electricity (kWh/t)
BFBOF 12.98 240 29.01 401
ScrapEAF 7.87 173 2.23 622
DRIEAF (coal-based) 5.66 214 26.63 453
DRIEAF (gas-based) 3.46 214 22.63 453
COREX* 1.40 583 28.81
Total 31.37
GJ/t gigajoules per tonne; kWh/t kilowatt-hour per tonne; BFBOF blast furnacebasic oxygen furnace; EAF
electric arc furnace; DRI direct reduction iron
* In COREX plant, electricity requirement is met through internally generated electricity using COREX gas in
cogeneration plant.
Sources SAIL (2002); OECD (2001); CCME (2002); TERI estimates

Figure 3.7 Time trend of specific energy MARKAL model, the above-
consumption of SAIL steel plants mentioned options are
grouped into different catego-
ries. For example, integrated
steel plants are divided into
existing efficient plants. It is
assumed that only the retiring
capacity could be retrofitted.
Similarly, two categories are
considered for scrap-EAF
and DRIEAF: (a) existing
and (b) efficient. The specific
energy consumption of new
categories of plants has been
estimated in terms of energy
savings from the existing
plants.
During 2001/02, the share
of steel production through
Source SAIL (2006)
BFBOF and scrapEAF
plants was 41% and 24%, re-
and inflation rate during that period (5.76% spectively. The scrapEAF technology uses
per annum). scrap steel in place of iron ore. In India,
In view of the large number of mitigation scrap steel is obtained from domestic old
options, for modelling purpose in the steel, ship breaking, and import of scrap
72 National Energy Map for India: Technology Vision 2030

Table 3.46 Efficiency improvement measures for integrated steel plants

Fuel Electricity Retrofit cost

savings saving (million
Option (GJ/t) (GJ/t) rupees/MTPA)
Adopt continuous casting 0.24 0.08 554.30
Preventative maintenance 0.43 0.02 0.50
Pulverized coal injection to 130 kg/thm 0.69 0.00 529.70
Hot blast stove automation 0.33 0.00 254.60
Use of waste fuels in sinter plant 0.04 0.00 53.80
Improved blast furnace control systems 0.36 0.00 275.00
Energy monitoring and management system 0.11 0.01 7.00
Programmed heating-coke plant 0.05 0.00 14.40
Controlling oxygen levels and VSDs on combustion air fans 0.29 0.00 20.40
Automated monitoring and targeting system 0.00 0.12 29.20
Process control in hot strip mill 0.26 0.00 28.30
Efficient ladle pre-heating 0.02 0.00 2.30
Improved process control 0.01 0.00 13.90
Recuperative burners 0.61 0.00 101.10
Recovery of blast furnace gas 0.06 0.00 45.50
Sinter plant heat recovery 0.12 0.00 30.60
Energy-efficient drives (rolling mill) 0.00 0.01 7.90
Heat recovery on the annealing line 0.17 0.01 71.90
Cogeneration 0.03 0.35 673.50
Reduced steam use (pickling line) 0.11 0.00 74.70
Hot charging 0.52 0.00 607.10
Recuperator hot blast stove 0.07 0.00 55.20
Variable speed drive: flue gas control, pumps, fans 0.00 0.02 60.30
BOF gas and sensible heat recovery 0.92 0.00 1020.40
Waste heat recovery (cooling water) 0.03 0.00 32.50
Coke dry quenching 0.37 0.00 104.40
Top pressure recovery turbines (wet type) 0.00 0.10 199.00
Insulation of furnaces 0.14 0.00 404.90
Coal moisture control 0.09 0.00 25.50
Total 6.07 0.72 5308.40
GJ/t gigajoules per tonne; MTPA million tonnes per annum; kg/thm kilogram/tonnes of hot metal;
BOF basic oxygen furnace; VSD variable speed drive
Sources LBNL (1999); TERI estimates
 Sectoral demand projections, technological characterization, and resource availability 73

Table 3.47 Efficiency improvement measures for EAF-based steel plants

Fuel Electricity Retrofit cost

savings saving (million rupees/
Option (GJ/t) (GJ/t) MTPA)
Oxy-fuel burners 0.00 0.14 223
Scrap pre-heating, post combustion: 0.70 0.43 278
Shaft furnace (FUCHS)
Bottom stirring/stirring gas v 0.00 0.07 28
Improved process control (neural network) 0.00 0.11 44
Scrap preheating: tunnel furnace (CONSTEEL) 0.00 0.22 232
Controlling oxygen levels and VSDs on combustion air fans 0.29 0.00 20
Process control in hot strip mill 0.26 0.00 28
Efficient ladle pre-heating 0.02 0.00 2
Energy monitoring and management system 0.02 0.01 7
Recuperative burners 0.61 0.00 101
Twin-shell DC w/scrap pre-heating 0.00 0.07 278
Flue gas monitoring and control 0.00 0.05 93
Transformer efficiency: UHP 0.00 0.06 128
EBT on existing furnace 0.00 0.05 148
Foamy slag practice 0.00 0.07 464
Waste heat recovery from cooling water 0.03 0.00 32
Insulation of furnaces 0.14 0.00 405
Total 0.67 1.28 2512
GJ/t gigajoules per tonne; MTPA million tonnes per annum; VSD variable speed drive; DC direct current;
UHI ultra high power; EBT eccentric bottom tapping; EAF electric arc furnace
Sources LBNL (1999); TERI estimates

from other countries. In view of the existing
low per capita steel consumption, domestic
availability of steel scrap is low in the country.
In view of the low per capita steel con-
sumption in India, and due to the environ-
mental concerns associated with ship
breaking, production of steel through scrap
EAF technology is expected to reduce in the
future. Accordingly, the share in 2036 is ex-
pected to reduce to 10%. Because of the
high decommissioning cost of BFBOF
plant, all existing plants are expected to pro-
duce steel in the future also. Furthermore,
due to economy of scale of BFBOF plants,
a single plant caters to significant domestic
demand. Table 3.48 provides our assump-
tions regarding the maximum/minimum
levels of BFBOF and scrapEAF plants
in 2001 and 2036 under the BAU and EFF
scenarios.
74 National Energy Map for India: Technology Vision 2030

Table 3.48 Level of share of BFBOF and Scrap-EAF steel plants

Share (%)
Scenario Parameter Level 2001 2036
BAU Share of BFBOF Minimum 41 20
BAU Share of scrapEAF Maximum 24 10
High efficiency Share of BFBOF Minimum 41 80
High efficiency Share of scrapEAF Maximum 24 10

BAU business-as-usual; BF blast furnace; BOF basic oxygen furnace; EAF electric arc furnace

3.1.3.2.5 Cement industry Figure 3.8 Time trend of process

profile of cement industry
Three different cement manu-
facturing processes in the coun-
try are: (a) wet process, (b)
semi-dry process, and (c) dry
process. The contribution of ce-
ment production from the wet
and semi-dry processes has
been decreasing over the past
four decades. Until 1960, the
major share of cement capacity
was from the wet process
(94.4%); the semi-dry process
contributed 4.5%; and the dry
process only 1.1%. During
2003, the share of wet process Source TERI (2004)
was only 3.7% whereas the dry
process accounted for 94.7% of the total in-
stalled capacity. Figure 3.8 presents the time
Table 3.49 Percentage distribution of
trend of process-wise cement production ca-
cement production in the year 2002/03
pacity in India (TERI 2005). Table 3.49 pre-
sents the process-wise production share Process Total production (%)
during 2002/03 (CMA 2003).
Dry process 94.1
There are more than 13 different varieties
Wet process 1.3
of cement produced in India. Amongst them
the three main varieties are: OPC (Ordinary Semi-dry process 0.2
Portland Cement), PPC (Portland Poz- Others 4.4
zolana Cement), and PSC (Portland Slag Source CMA (2003) (others are added in the dry
Cement) (Figure 3.9). These three varieties process in the model)
 Sectoral demand projections, technological characterization, and resource availability
Figure 3.9 Time trend of percentage distribution
of different variety of cement in India
Source Cement Statistics (2003)
accounted for more than 99% of the total
production in India during 2001/02 (CMA
2003). The variation in cement products is
due to the type of additives blended with the
clinker at the stage of grinding and their
share in per tonne of cement. Table 3.50 pre-
sents the typical share of additive used in
OPC, PPC, and PSC cement (Das 1997).
While PSC can be used for all purposes for
Table 3.50 Percentage distribution of
input material for different varieties of
cement production in India
Percentage distribution
Input material OPC PPC PSC
Clinker 95 80 65
Gypsum 5 5 5
Fly ash 15
Slag 30
OPC Ordinary Portland Cement; PPC Portland
Pozzolana Cement; PSC Portland Slag Cement
75
which OPC is used, PPC can-
not be used for pre-stressed
and high-strength concrete,
as in bridges and airports.
On the basis of the tech-
nology level, the dry process
plants are further classified
into three main categories:
(a) 4-stage pre-heater pre-
calcinator, (b) 5-stage pre-
heater pre-calcinator, and (c)
6-stage pre-heater, twin-
stream, pre-calcinator, pyro-
step cooler. Table 3.51
presents the technological
details of process-wise ce-
ment production (TERI
2005b and NCCBM 2003).
For estimating variety-wise specific heat
consumption for plants using different
technology levels, their respective clinker-to-
cement ratio (Table 3.52) and specific heat
consumption for clinker production are used.
However, specific electricity consumption is
assumed to be the same for all varieties of ce-
ments, depending on the technology used.
It may be noted that wet and semi-dry
process technologies were commercialized
during the 1950s and 1970s (TERI 2005b).
These few available plants are almost at the
end of their economic life. Therefore, it is as-
sumed that all wet and semi-dry process
plants will die out by 2011 (TERI 2005b).
Similarly the 4- and 5-stage dry-process
plants were commercialized in the country
during the 1980s and 1990s. Therefore, it is
assumed that all 4- and 5-stage plants will be
retrofitted to 6-stage plants within the next 20
and 30 years, respectively, in a phased manner.
Coal is the primary fuel for the cement
industry. It is used for both thermal applica-
tion as well as electricity generation in the
76 National Energy Map for India: Technology Vision 2030

Table 3.51 Technological details of process-wise cement production in India

Specific Specific Capital

heat power cost (million
consumption consumption rupees/
(kcal/kg (kWh/tonne MTPA of Life
Process of clinker) of cement) cement) (years)
Wet 1300 115 3300 10
Semi-dry 900 110 3300 10
Dry process
4-stage pre-heater pre-calcinator 800 105 3300 20
5-stage pre-heater pre-calcinator 750 88 3500 30
6-stage pre-heater, twin-stream,
pre-calcinator, pyro-step cooler 665 68 3800 50
kcal/kg kilocalories per kilogram; kWh/tonne kilowatt-hour per tonne; MTPA million tonnes per annum
Sources TERI (2004); NCCBM (2003); TERI estimates

Table 3.52 Variety-wise percentage distribution of cement production in 2001 and 2036

Production (%)
Scenario Parameter Level 2001 2036
BAU Share of OPC Minimum 56 28
Share of PSC Maximum 12 12
Share of PPC Maximum 32 60
High efficiency Share of OPC Minimum 56 5
Share of PSC Maximum 12 30
Share of PPC Maximum 32 65
BAU business-as-usual; OPC Ordinary Portland Cement; PSC Portland Slag Cement; PPC Portland Pozzolana
Cement

captive plants. Besides the linked quota, the
cement industry takes coal from the open
market and through import. The present
cost of gas is uneconomic for cement plants
(as compared to imported coal) as no plant
is using natural gas for process heating.
However, in some plants, natural gas is used
for captive generation. Moreover, in the
model, 6-stage natural-gas-based plants (for
all three varieties of cement) are also mod-
elled to allow the model to choose natural
gas for its future economic viability.
 Sectoral demand projections, technological characterization, and resource availability
3.1.3.2.5.1 Energy efficiency
options
The energy efficiency options for the cement
industry are conversion of 4- and 5-stage ce-
ment plants to modern 6-stage plants (with
pre-heater, twin-stream, pre-calcinator, and
pyro-step cooler) and higher share of
blended cement in the total cement produc-
tion.
Clinker production is the most energy-in-
tensive process in the manufacture of ce-
ment. Due to lower clinker requirements in
the blended cement, its specific energy con-
sumption is lower than the OPC cement.
The energy cost accounts for about 30%
50% of the production cost of cement.
Therefore, the share of blended cement pro-
duction in India is increasing, it has in-
creased from 28% in 1993/94 to 44% in
2000/01. It is also opined that the share of
blended cement will continue to increase in
the future also.
Since the share of PSC remained almost
constant from 1993/94 to 2000/01, in the
BAU scenario, the share of PSC is assumed
to be the same (12%) during the entire mod-
elling period. The share of PPC that uses fly
ash (a waste from power plant) will contrib-
ute upto 60% of the total cement produc-
tion. While in the EFF scenario, the share of
PSC and PPC cement is assumed to increase
to 30% and 65%, respectively. Table 3.52
presents the maximum/minimum share as-
sumed for different varieties of cement pro-
duction in the year 2001 and 2036 in the
BAU and EFF scenarios.
77
3.1.3.2.6 Textile industry
The textile production process consists of
four main activities: spinning, weaving, knit-
ting, and wet processing. The production
from fibres to spun yarn takes place through
the spinning process and constitutes the first
stage. Then the yarn is weaved to make fab-
rics in looms. These fabrics then undergo
several different processes including bleach-
ing, printing, dyeing, and finishingthese
are grouped under the category of wet pro-
cessing. The industry uses cotton, jute, wool,
silk, and synthetic fibres as raw material. In
India, cotton accounts for about 60% of the
raw material being used in the industry. In-
dia is also the largest producer of cotton.
The textile industry can be classified into:
(i) textile mills comprising composite and
spinning mills in the organized segment and
(ii) small power loom and handloom units in
the unorganized sector. The organized sector
produces only 4% of the total fabrics pro-
duced in the country. Yarn is produced by
the mills in the organized segment but is
consumed by power loom and handloom in
the unorganized sector as well.
There is a wide variation in the processes
and technologies employed in different fac-
tories across India. Composite mills cover
complete sets of processes, from raw mate-
rial to final products. However, most manu-
facturing units tend to deal only with a part
of the process. The primary energy inputs in
the textile industry are steam and power.
The requirement of steam and power varies
with the yarn count, yarn productivity, type
of fabric (product mix), fabric productivity,
and extent of wet processing (dyeing and
printing). In view of the increased mechani-
78 National Energy Map for India: Technology Vision 2030
zation, the energy consumption in the textile
industry has also increased. Specific energy
consumption of modern textile mills is
higher due to replacement of manual labour
by electric power. Moreover, there is a trend
of shift towards more mechanization.
3.1.3.2.6.1 Energy efficiency
options
Some of the major energy saving options in
textile mills as reported in a study conducted
by TERI are as follows (TERI 1995 and
TERI 2005a).
Adoption of new spinning processes: it is pos-
sible to save 15%20% of the energy re-
quirement in spinning by adoption of new
spinning technologies like friction spinning
and air-jet spinning. Modifications in ring
frame spinning machines that account for
majority of the power consumption in a
composite textile mill can reduce energy
consumption by 5%10%.
Use of advanced drying processes: processes
like high-speed drying machine and stenters
for reducing energy consumption (20%
30%) can be adopted. Use of radio fre-
quency dryers can eliminate use of thermal
energy in drying applications.
Use of solar energy for water heating: in the
textile industry, 80% of the energy used is
utilized in wet processing, with temperatures
ranging from 40 oC to 140 oC. There is sub-
stantial scope to reduce fossil fuels used in
boilers by utilizing solar thermal energy.
The energy costs in textile production ac-
count for up to 17% of the total manufactur-
ing costs (ADB 1998). Therefore, energy
conservation has become quite important.
Most of the textile units in India have made
lot of efforts towards energy conservation on
a short- and medium-term basis. As a result
of these efforts, the extent of energy savings
reported by many mills varies from 5% to
15%. Some of the progressive mills have in-
vested a huge amount of money for imple-
mentation of long-term measures such as
boiler replacement, cogeneration system,
and changing of process machines. These
measures have resulted in energy savings to
the extent of 20%25%. Moreover,
electric energy consumption is expected to
continue rising over time due to increasing
automation and higher running speeds for
machines.
The textile sector is very diverse and thus,
data collection is a challenging task. There-
fore, due to unavailability of adequate disag-
gregated data on technologies, this
sub-sector is not modelled in detail and is
captured as two technologies (existing and
efficient), representing the cotton textile in-
dustry. The specific energy consumption of
an efficient mill is taken to be 10% lower
than the existing one. Further it is assumed
that efficient mill will be available by 2011.
Table 3.53 presents technological character-
ization of the textile sector.
3.1.3.2.7 Fertilizer industry
The fertilizer industry is one of the largest
consumers of energy. Earlier in an fertilizer
industry, various feedstock like firewood,
coke, lignite, and coke oven gas were utilized
for ammonia production. This wide spec-
trum of feedstock changed gradually with
the advent of new process techniques and
availability of petroleum-based feedstock
(naphtha, fuel oil, natural gas, and so on).
Over the past decade, there has been a no-
ticeable decline in the use of coal and naph-
 Sectoral demand projections, technological characterization, and resource availability 79

Table 3.53 Technological characterization of a cotton textile industry

Capital cost
Energy consumption (million rupees/ Life time
Technology Thermal (GJ/t) Electricity (kWh/t) MTPA) (year)
Existing 32.69 3500 280 000 30
Efficient 29.42 3150 280 000 30
GJ/t gigajoules per tonne; kWh/t kilowatt-hour per tonne; MTPA million tonnes per annum
Sources ARRPEEC (2003); CMIE (1996); Swaminathan and Rudramoorthy (2004); TERI (2004)

tha as feedstock, and natural gas has increas-
ingly been used instead (Table 3.54) (T E R I
2005b).
In view of the largest share of urea and
SSP (single super phosphate) in the produc-
tion of nitrogenous and phosphatic fertiliz-
ers, respectively, only the production of urea
and SSP is considered in this study. The
principle raw materials used for making urea
are ammonia and carbon dioxide. Produc-
tion of ammonia is the highest energy-inten-
sive process in fertilizer manufacturing. It
accounts for almost 80% of the energy con-
sumption in the manufacturing processes of
a variety of final fertilizer products. There-
fore, ammonia is considered as a key inter-
mediate for determining the overall energy
efficiency of fertilizer production. Besides

Table 3.54 Installed capacity according to sources of feedstock (percentage) used for ni-
trogenous fertilizer production

Natural Electric Coke Fuel Ammonia

Period Naphtha gas power oven gas Lignite Coal oil (external supply)
1965 43.5 14.0 30.3 12.2
1970 65.3 10.2 6.0 13.3 5.2
1975 73.2 13.7 3.1 7.3 2.7
1980 51.7 13.0 1.7 1.4 9.9 19.6 2.7
1985 42.6 24.0 1.4 1.1 7.7 19.8 3.4
1990 30.4 41.9 1.0 0.9 5.6 14.5 5.7
1995 27.4 47.6 1.4 5.0 13.5 5.1
1997 24.5 53.9 1.5 3.1 11.9 5.1
1998 28.5 50.0 1.4 2.9 11.2 6.0
1999 30.8 47.2 1.3 2.7 10.7 7.3
2000 29.9 45.4 1.3 2.6 10.3 10.5
Source FAI (various years)
80 National Energy Map for India: Technology Vision 2030
air as the source of nitrogen, the ammonia-
manufacturing process requires various raw
materials such as water, natural gas, naph-
tha, fuel oil, coal, and coke oven gas. Natural
gas is the best feedstock for ammonia pro-
duction. Worldwide, about 83% of ammonia
production capacity is based on natural gas
(GoI 2003). However, in India, the choice of
feedstock was determined by the Govern-
ment of India, depending on the availability
of resources (TERI 2005b). Feedstock
choice was not necessarily governed by the
energy efficiency consideration. In India,
during 2003/04, about 64% of ammonia
production was based on natural gas, 12%
on fuel oil and LSHS, and 24% on naphtha
(TERI 2005b).
Better feedstock and process technolo-
gies, together with improved operation and
maintenance practices, retrofitting, and so
on, have resulted in significant amount of
energy savings during ammonia production.
The average specific energy consumption for
ammonia production in India has declined
significantly from 13.7 Gcal (gigacalories)/
tonne in 1985/86 to 9.14 Gcal/tonne in
2003/04 (a remarkable reduction of 33%)
(TERI 2005b; Das 1997). The reported low-
est specific energy consumption of an am-
Table 3.55 Specific energy consumption for urea production in India
Fuel* (Gcal/tonne of urea)
Feedstock All India average Best plant in India
Natural gas 5.61 4.94
Naphtha 6.04 5.46
Fuel oil 8.00 7.42
* Fuel used for both feedstock and heat production, specific ammonia requirement for urea production is taken
at 0.58 tonne (TERI 2004)
Gcal gigacalories; kWh kilowatt-hour
Source TERI (2004)
monia plant in India is about 7.3 Gcal/tonne
during 2003/04, while the reported figure of
the lowest specific energy consumption all
around the world was 7 Gcal/tonne of am-
monia production (TERI 2005b) during the
same period. Moreover, the slightly higher
energy consumption can be attributed to the
hot and humid condition in India, and con-
sequently higher cooling water temperature
as compared to the western countries. Fur-
thermore, the average energy consumption
of 25% of the most-efficient Indian ammo-
nia plants is 8.14 Gcal/tonne. This figure is
lower than 8.49% for the most-efficient 25%
ammonia plants in the world. The FAI (Fer-
tilizer Association of India) is targeting to
reduce specific energy consumption to the
level of 6.5 Gcal/tonne within the next 15
years (TERI 2005b). Table 3.55 presents the
feedstock-wise specific energy consumption
for urea production in India (TERI 2005b).
SSP is the only straight phosphatic fertil-
izer produced in India. The raw materials
used in the production of SSP are rock phos-
phate and sulphuric acid. In SSP plants, the
major energy consumption is in the form of
electricity for rock-grinding and material-
handling equipment. Most of the SSP plants
have their own sulphuric acid production
Electricity (kWh/tonne of urea)
All India average Best plant in India
261 235
261 235
261 235
 Sectoral demand projections, technological characterization, and resource availability
facility. A major portion of the power re-
quired for production is used in the
sulphuric acid plant. A small amount of
steam is also required for granulated SSP.
Since most of the SSP plants are located
along with the sulphuric acid plants, surplus
steam is always available. The average spe-
cific electricity requirement for SSP produc-
tion is 34.9 kWh/tonne of SSP (Das 1997).
3.1.3.2.7.1 Energy efficiency
options
In this study, natural-gas-based urea plants
are classified into three categories: (a) exist-
ing plant having specific energy consump-
tion equal to all India average, (b) efficient-1
plant having efficiency equal to todays best
plant in India, (c) efficient-2 plant with spe-
cific energy consumption equal to FAI target
(6.5 Gcal/tonne of ammonia). For a naph-
tha-based plant, only existing and efficient
(specific energy consumption equal to todays
best plant) are considered. In case of a fuel-oil-
based urea plant and SSP plant, only one cat-
egory (existing plant) is considered. Since
the average specific energy consumption
takes into consideration all the existing
plants (inefficient and efficient), the introduc-
tion year for efficient-1 plants is considered
2006. For efficient-2 plants, the introduction
year is 2016 (target year set by FAI).
As mentioned earlier, natural gas is the
best feedstock for urea production. It is re-
ported that the worldwide share of natural
gas for ammonia production is more than
80% (LBNL 2005). However, the use of
natural gas in India for urea production is
constrained due to its unavailability. In this
study, the share of natural gas is assumed
constant at 64% over the entire modelling
81
time period in a BAU scenario. In the EFF
scenario it is assumed that the share of natu-
ral gas for urea production will increase to
100% by the year 2036.
3.1.3.2.8 Pulp and paper industry
Paper making essentially consists of four
major stages: preparation of pulp; stock
preparation; sheet formation; and water re-
moval and sheet finishing. Different types of
processes are used in the paper industry de-
pending upon the type of raw material used
and the end product desired. Although the
kraft sulphate process, semi-mechanical pro-
cess, and sulphite process are the most
popular ones, the kraft technology accounts
for about 80% of the pulping in the Indian
industry. Therefore, in this study, only the
kraft process is considered.
Based on the installed capacity, the In-
dian mills are categorized into two types:
large mills (with an installed capacity of
more than 100 TPD) and small mills (capac-
ity less than 100 TPD). There are 525 pulp
and paper mills with an installed capacity of
6.5 MT and production capacity of 5.5 MT.
Paper production can also be classified on
the basis of raw material: wood- and bam-
boo-based (38%), agricultural-residue-
based (32%), and waste-paper-based (30%).
Out of 525 units, 67% are waste-paper-
based, 28% are agro-based, and the remain-
ing 5% are forest-based. All 27 large mills
use hardwood and bamboo, while the
smaller ones utilize agri-residue and waste
paper. These small mills account for more
than 50% production capacity with poor en-
ergy and environment performance levels.
Agricultural residues are emerging as a
significant alternative raw material source
82 National Energy Map for India: Technology Vision 2030

for the pulp and paper industry in India. The
use of agricultural residues has grown since
the early 1970s, partly due to the reducing
resources of wood and bamboo, and partly
due to the governments industrial policy
encouraging investment in agri-residue-
based paper production. The agri-residue-
based paper mills mainly use bagasse and
straw as raw material. Even if the theoretical
availability of bagasse and straw is high,
there are limitations in their use due to sea-
sonal availability, transportation cost, and
environmental problems. The third raw ma-
terial is waste paper. It comes from both do-
mestic and imported sources. The installed
capacities of Indian mills vary over a wide
range, from 5 TPD to 600 TPD.
Pulp and paper production is highly en-
ergy-intensive. Most of the energy (80%
85%) is used as process heat and 15%20%
as electrical power. The technological
characteristics of kraft mills are shown in
Table 3.56 (TERI 2005b).
Coal and electricity are the main sources
of energy for the industry. In addition to
coal, internally available waste biomass is
also used to supplement heat requirement.
In Indian mills, internally available biomass
contributes to about 35% of the total ther-
mal energy requirement of the mill (CSE
2004). It is also reported that in 2001/02, of
the total electricity consumed in large-scale
wood-based mills, about 81% was self- gen-
erated primarily through cogeneration (CSE
2004).
The capital cost of wood-based mill is
worked out using the values of average costs
of four mills installed during 1998, and by
using inflation rate. For agri-residue- and
waste-paper-based mills, the cost of cogen-
eration facility is subtracted from the cost of
wood-based mill. The annual repair and
maintenance cost is assumed at 1.5% of the
capital cost for all types of mills. The eco-
nomic life of all paper mills is considered at
30 years.
3.1.3.2.8.1 Energy efficiency
options
Many of the paper mills that exist today have
been installed over a span of more than 100
years, and the technologies range from very
old ones to the most modern ones. Indian
plants are well below the standards of energy
performance when compared to their coun-
terparts in the developed countries. Being
protected from international competition
for about four decades, Indian paper mills,

Table 3.56 Technological characteristics of paper mills

Specific energy consumption Capital cost

Thermal energy Power consumption (million rupees/ Life
Input material (GJ/t of paper) (kWh/t of paper) MTPA) (year)
Agri residue 27.3 1250 90 700 30
Wood 27.3 1450 93 700 30
Waste paper 11.3 725 45 400 30
GJ/t gigajoules per tonne; kWh/t kilowatt-hour per tonne; MTPA million tonnes per annum
 Sectoral demand projections, technological characterization, and resource availability 83

Table 3.57 Energy conservation options for Indian paper mills

Savings Retrofit cost

Thermal Power (million
(GJ/t of (kWh/t of rupees/

Energy saving options paper) paper) MTPA) Remark

Cogeneration 3667 Applicable to all
Blow heat recovery 3.32 150 Applicable to all

Fibre recovery system 0.40 15 117 Applicable to all

Oxygen de-lignification 0.54 183 Applicable to all
Replacement of turbine with 32 233 Applicable to all

DC drive
Press section re-building/long 0.66 300 Applicable to all
nip (shoe) press

Hot dispersion system 120 500 Applicable to all

Drum chipper 11 100 Only in wood-based plant
Long-tube falling-film evaporators 0.83 3288 Only in wood-based plant

High solid concentration of

black liquor 8.97 60 Only in wood-based plant
Continuous digester 5.81 75 685 Only in new wood-

based plant

GJ/t gigajoules per tonne; kWh/t kilowatt-hour per tonne; MTPA million tonnes per annum; DC direct current
Source TERI (2004)

in general, did not keep up with the techno-
logical advancement in the other parts of the
world. A few large paper mills have imple-
mented new technologies because of high
product quality, international competition,
mounting pressure from environmental
regulatory, rise in energy prices, and so on.
Most of the paper mills operating in India,
particularly the small ones, are very old, us-
ing outdated technology. In fact, most of the
Indian mills have imported old, used ma-
chinery from Europe. However, several pa-
per mills are taking steps to restructure,
upscale, and replace old and outdated ma-
chinery with new ones. A remarkable gap
between specific energy consumption in In-
dia and developed countries indicates the
scope for efficiency improvement. Table 3.57
presents the suitable options for Indian pa-
per mills (TERI 2005b).
For modelling purpose, agri-residue and
waste-paper-based mills are classified into
two categories (1) existing mills and (2) effi-
cient mills, that include efficiency improve-
ment options listed in Table 3.57. Retrofit
option is also considered for retiring capac-
ity. For wood-based paper mills, the three
categories considered are: (1) existing mill,
(2) efficient-1 mill, with efficiency improve-
ment options listed in Table 3.57, and (3)
84 National Energy Map for India: Technology Vision 2030
efficient-2 mills, that incorporate all effi-
ciency improvement measures. Retrofit op-
tion in wood-based mills is consider only
from existing to efficient-1 mill.
In view of the high cost of financing and
small-scale nature of waste paper and agri-
residue-based paper mills in India, it is as-
sumed that in a BAU scenario, all existing
waste-paper and agri-residue-based mills
will remain operational beyond their eco-
nomic life, without any improvement in their
energy efficiency. Similarly, in case of wood-
based paper mills, efficient-2 mills are not
allowed in the BAU scenario. In the EFF
scenario, all retrofit options are allowed, and
wood-based efficient-2 mills are also allowed
by 2011.
As mentioned earlier, the Government of
India is encouraging the use of agri-residue
for paper production. However, its use is re-
stricted by localized availability. The maxi-
mum potential of pulp production from
agri-residue is estimated at 14 MT (CPPRI
2003) for 2001that translates into 9.8 MT
of paper production. During the same year,
production of agri-residue-based paper was
about 1.58 MT, which is only 16% of the
maximum potential. In the last decade, the
aggregated growth of wheat, paddy, and
sugar cane crops was about 2%. Residues of
these crops are used for paper production.
Therefore, in this study, it is assumed that
the potential will also increase by an average
annual growth rate of 2% during the model-
ling period. It is assumed that 35% of the
maximum potential of agri-residue-based
paper could be achieved by 2036 as com-
pared to 16% in the year 2001. The percent-
ages share of maximum potential translates
into 9% of the total paper production in
2036. It may be noted that the growth in pa-
per demand is higher than the growth rate of
potential of agri-residue-based paper.
Therefore, despite the increased penetration
level, to the maximum potential, of agri-resi-
due-based paper, its overall percentage con-
tribution to total paper production will
decrease significantly from 32% in the 2001
to 9% in 2036.
During 2001, the share of waste-paper-
based paper production was 30% of the total
production. Waste paper is obtained from
domestic collection and through import.
Due to exclusive reuse of paper in India, the
collection rate is relatively low (22%) as
compared to other countriesChina (33%),
Thailand (42%), and Germany (71%). The
collection rate is expected to be constant in
the future. This essentially means that do-
mestic waste paper can only contribute upto
15% of the total paper production, and the
remaining 15% is produced by using im-
ported waste paper. In view of environmen-
tal concerns, there is a possibility of a ban on
import of waste material to India as some-
times these materials also contain hazardous
waste. Therefore, in this study, it is assumed
that the import of waste paper will be com-
pletely stopped by 2036 in a phased manner.
3.1.4 Residential sector
The population of India was about 1.027
billion in 2001 as per Census 2001 of the
Government of India (GoI 2001).
The average number of members per
household is 5.15 in rural areas and 4.47 in
urban areas. Out of 10 households, seven in
India are in the rural areas, and 0.09% of the
households do not have a dwelling unit. Of
the every 100 households in the rural areas,
36 are pucca houses, 43 are semi-pucca
houses, and the rest are kuchcha houses. On
 Sectoral demand projections, technological characterization, and resource availability 85

the other hand, out of ev- Figure 3.10 Time trend of fuel and electricity
ery 100 households in ur- consumption in the residential sector
ban areas, 77 are pucca
structures, 20 semi-pucca,
and only 3 are kuchcha
structures. Plinth level of
the house, that is, the
height of ground floor of
the house from the land
on which the building is
constructed, is zero for
36% of the rural and 32%
of the urban households.
On an average, a rural
household occupies 38 m2
(square metre) of floor
area and an urban house- Source CEA (2004); MoPNG (2004)
hold occupies 37 m2. The
poorest segment, that is,
households in the lowest MPCE (monthly leum gas) (propane), firewood, crop residue,
per capita consumption expenditure) class dung, and other renewable sources such as
of less than 225 rupees in rural areas, occupy solar energy.
2
31 m of floor area and those in urban slums, Figure 3.10 indicates that commercial en-
29 m2. About 30% of the dwelling units in ergy use has been growing quite rapidly in
rural and 4% in urban areas do not have ba- the residential sector. During the period
sic facilities like drinking water, electricity 19902003, of the three commercial fuels,
for lighting, and a toilet. About 97% of the consumption of LPG has grown at the an-
rural and 99% of the urban households get nual rate of 11.26%. The average annual
drinking water within half a kilometre of growth rate of electricity consumption has
their premises (MoSPI 2004). been 8.25%. However, kerosene consump-
tion has grown at the rate of 0.85% only.
Since 2000, kerosene consumption in the
3.1.4.1 End-use demands in the residential sector has declined in absolute
residential sector terms. Kerosene use in the residential sector
came down by 13.9% during 200003. This
Energy services make up a sizeable part of high rate of consumption of LPG and elec-
the total household expenditure. The resi- tricity vis--vis kerosene explains the substi-
dential sector in India is responsible for tution of kerosene, a primary source of
13.3% of the total commercial energy use energy, amongst the lower- and middle-in-
(TERI 2004). The energy sources utilized by come groups.
the residential sector in India mainly include Despite its impressive growth in the resi-
electricity, kerosene, LPG (liquefied petro- dential sector, the fuel consumption is still
86 National Energy Map for India: Technology Vision 2030
Figure 3.11 Percentage distribution of
households by source of cooking in rural India
Source MoSPI (1997, 2001)
very low in India as compared to that in
other countries. Commercial energy con-
sumption in the residential sector in the US
for 2002 was 2466.91 Mtoe (US DoE 2003)
whereas for India, the figure is only about 22
Mtoe (TERI 2004). The per capita energy
use in the residential sector of the US is
about 8.56 ToE/year while this is as low as
0.22 ToE/year for India.
Households use energy for many pur-
poses: cooking; cooling and heating their
homes; heating water; and for operating
many appliances such as refrigerators,
stoves, and televisions.
The energy mix for cooking in the domes-
tic sector in India shows that traditional fu-
els are predominantly used in the household
sector. In the rural areas of the country, the
households use mainly three primary
sources of energy for cooking: firewood and
chips, dung cake, and LPG. Fuelwood is a
major source of cooking for
61.1% of the total households
in India. Among the different
sources, firewood and chips
are used by almost three-
fourths of the rural house-
holds. Only 3% of the
households have switched
away from it since 1993/94
(Figure 3.11).
As can be seen in Figure
3.12, in urban areas of the
country, the households use
mainly three primary sources
of energy for cooking: fire-
wood and chips, kerosene, and
LPG. Of these, LPG is pre-
dominant, with 45% of the
households using it. About
22% of the urban households
use firewood and chips. There
has been an increase of about 15% in the num-
ber of households using LPG and a decrease of
about 8% in the number of households using
firewood and chips since 1993/94.
Although electricity, kerosene, gas,
candles, and other oils are used for lighting,
at the national level, kerosene and electricity
constitute the primary fuel for lighting in
99% of the households. There has been an
increase in the percentage of households us-
ing electricity as the primary source of light-
ing over the years. During the period 1993/
94 to 1999/2000, the number of households
using electricity as the primary source of
lighting grew at the rate of 11% for rural and
6% for urban India. However, an estimated
84 million households still do not have ac-
cess to electricity. The majority of these
households are using fuel-based lighting sys-
tems, mainly in the form of kerosene. These
systems are less energy-efficient than electri-
 Sectoral demand projections, technological characterization, and resource availability
Figure 3.12 Percentage distribution of
households by source of cooking in urban India
Source MoSPI (1997, 2001)
cal lighting systems, and have a wide range
of adverse social and environmental impacts.
The Rajiv Gandhi Grameen Vidyutikaran
Yojana of the Government of India (MoP
2005) plans to provide electricity to all
households in the next five years. It should
be noted here that providing access to elec-
tricity to all households does not necessarily
imply that every household will have a me-
tered connection. Therefore, we expect that
all households may have access to electricity
by 2010/11 but actually every household will
have a metered connection only by 2020/21.
The amount of energy that the house-
holds consume and the types of fuel they use
also depend on a variety of other factors. The
micro-perspective of each consumer is the
driving force behind the sectors use of en-
ergy, and opportunities for change in the de-
87
mand and supply patterns.
This is because, a households
total energy consumption and
use of mix of fuels are the re-
sult of the familys attempt to
provide for its various needs
by employing its labour or
cash and specific technologies
that use a certain type of en-
ergy. Other factors include
issues of supply such as avail-
ability of fuels, energy prices,
and technologies, which have a
very large range of end-use ef-
ficiencies and hence, a large
potential for energy saving.
The rising rate of growth of
GDP, growth in disposable in-
come, improved lifestyles, and
the rising purchasing power of
people with higher propensity
to consume with preference
for sophisticated appliances
and modern fuels would provide constant
impetus to the growth of energy demand in
the residential sector.
For the present study, on the basis of end
use, a households energy consumption has
been divided into six categories.

Lighting

Cooking

Space conditioning

Refrigeration

Water heating

Others
The energy demand for fans, air condition-
ers, and air coolers has been categorized as
energy demand for space conditioning. The
category others comprises energy demand for
appliances such as televisions, washing ma-
chines, VCRs/VCPs, and music systems.
88 National Energy Map for India: Technology Vision 2030

3.1.4.1.1 Demand for lighting Table 3.58 Income categories based on

MPCE in rural and urban areas
Electricity and kerosene being the primary
fuels used for lighting, the energy demand Rural Urban
for lighting has been estimated for house- Class (rupees) (rupees)
holds that have electrified source of lighting Low < 615 < 665
and for those that depend on kerosene for
Middle 615950 6651925
lighting.
High > 950 > 1925
MPCE monthly per capita consumption expenditure
3.1.4.1.2 Electricity demand for
lighting three categories in rural and urban areas
based on MPCE (Table 3.58).
Data on income-wise number of lighting de- The number of light points per household
vices and usage is not available. Therefore, has been assumed as shown in Table 3.59.
for estimating the electricity demand for It has further been assumed that for rural
lighting, households have been divided into households, a light point is used for 4 hours

Table 3.59 Number of lighting points per household in various income classes in rural and
urban areas

Lamp Lamp Light Lamp Lamp Light

Rural type wattage points Urban type wattage points *
RL GLS 60 1 UL GLS 60 2
GLS 60
RM GLS 60 3 UM TL 55 4
GLS 60 TL 55
GLS 60 GLS 60
GLS 60
RH TL 55 4 UH TL 55 6
TL 55 TL 55
GLS 60 TL 55
GLS 60 GLS 60
GLS 60
CFL 11
RL rural low; RM rural middle; RH rural high; UL urban low; UM urban middle; UH urban high;
GLS generalized lighting system; TL tube light; CFL compact fluorescent lamp
* These are total light points actually used at a time by a household.
 Sectoral demand projections, technological characterization, and resources availability 89

per day whereas for urban households, the
usage is 5 hour per light point per day. The
lighting requirement has been taken as 100
lux per light point.
DLi = HHi Lpi H 100 365 (3.29)
where,
DLi = annual demand for lighting by elec-
trified households in ith income group
HHi = number of electrified households
in the ith income group
Lpi = light points per household in the ith
income group
H = hours of usage
3.1.4.1.3 Kerosene demand for
lighting
It has been assumed that the unelectrified
households used one lamp for lighting.
A hurricane lamp gives an illuminance of
70 lux per hour while a wick lamp provides
7 lux per hour (Stanford University 2003).
DLi = HHi H 365 (3.30)
where,
DLi = annual demand for lighting by
unelectrified households in the ith income
group
HH i = number of unelectrified house-
holds in the ith income group
H = hours of usage
The demand for kerosene-based lighting
is expected to decrease and become zero by
2021 because of the assumption that as per
the Rajiv Gandhi Grameen Vidyutikaran
Yojana of the Ministry of Power (MoP
2005), all households may have access to
electricity by 2010/11. However, every
household is assumed to have a metered
connection only by 2020/21.
Demand for lighting for various GDP
growth scenarios is presented in Table 3.60.

Table 3.60 Demand for lighting (trillion lux hours)

8% GDP 6.7% GDP 10% GDP

Electricity-based Kerosene-based Electricity-based Kerosene-based Electricity-based Kerosene-based

Year Rural Urban Rural Urban Rural Urban Rural Urban Rural Urban Rural Urban

2001 36.0 33.8 2.8 0.7 36.0 33.8 2.8 0.7 36.0 33.8 2.8 0.7

2006 54.9 44.3 2.1 0.5 51.1 43.2 2.1 0.5 56.6 45.1 2.1 0.5

2011 77.1 57.6 1.4 0.3 69.9 55.1 1.4 0.3 80.4 59.6 1.4 0.3

2016 100.3 72.6 0.7 0.2 91.8 69.0 0.7 0.2 104.7 75.4 0.7 0.2

2021 120.9 89.0 0.0 0.0 112.9 84.7 0.0 0.0 124.3 91.9 0.0 0.0

2026 129.1 104.3 0.0 0.0 125.7 101.1 0.0 0.0 129.9 105.5 0.0 0.0

2031 133.4 118.0 0.0 0.0 132.6 117.0 0.0 0.0 133.4 118.2 0.0 0.0

2036 136.0 131.1 0.0 0.0 135.9 131.0 0.0 0.0 136.0 131.1 0.0 0.0

GDP gross domestic product

90 National Energy Map for India: Technology Vision 2030

Table 3.61 Useful energy demand for cooking (petajoules)

2001 2006 2011 2016 2021 2026 2031 2036

Rural 700.60 724.25 758.32 790.42 814.98 830.04 837.38 838.59
Urban 228.51 260.33 299.30 341.51 384.49 426.68 468.21 509.31

3.1.4.1.4 Demand for cooking NSS (National Sample Survey) for 1999/
2000 (Figures 3.13 and 3.14).
Cooking requires energy in the form of heat. As the households shift from one income
Cooking energy consumption has been esti- class to another over time, and as their pur-
mated separately for rural and urban re- chasing power increases, the demonstration
gions. effect sets in. In other words, person always
The per capita per day useful energy aspires to reach the consumption level of
requirement for cooking is taken to be 620 relatively higher income groups. Therefore,
kcal in rural areas and 520 kcal in urban ar- as a household moves up the income ladder,
eas (ABE 1985) it tries to adopt the consumption pattern of
Since the per capita cooking energy re- the higher income group. It also aspires to
quirement remains constant, the total en- acquire the basket of goods/appliances pos-
ergy demand for cooking increases at the sessed by the relatively higher income group.
rate of population growth,
that is, at the rate of 2.32%
in urban areas and at 0.51%
in rural areas during the time Figure 3.13 Number of households (per 1000) in highest
period 200136 (Table income class possessing specified durable goods (rural)
3.61).

3.1.4.1.5 Demand for

electrical appliances

The energy demand for ap-

pliances in the country de-
pends on the number of
appliances being used/ex-
pected to be used, hours of
usage, and wattage of the ap-
pliance.
Data on penetration of
appliances per 1000 house-
Source MoSPI (2001)
holds is available from the
 Sectoral demand projections, technological characterization, and resources availability 91

Figure 3.14 Number of households (per 1000) in highest Useful energy demand for re-
income class possessing specified durable goods (urban) frigeration is expected to in-
crease at the rate of 13.03%
and 7.05%, respectively, dur-
ing the same time period. TVs,
VCRs/VCPs, washing ma-
chines, and music systems
comprise the category oth-
ers. The useful energy de-
mand for this category is
expected to increase at the
rate of 11.1% in rural areas
and 7.7% in urban areas dur-
ing 200136. The energy de-
mand is likely to increase at a
relatively faster rate in rural
areas as a result of greater
Source MoSPI (2001) reach of these appliances in
the rural market.
Useful energy demand for
For the highest income groups in rural space conditioning, refrigeration and others
and urban, the increase in penetration of ap- under various GDP growth rate scenarios is
pliances over the forecast period has been presented in Tables 3.63, 3.64, and 3.65.
calculated based on the growth rate of pen-
etration of appliances for the same income
group during 1993/94 to 1999/2000. The Table 3.62 Usage norms for electrical
penetration rate per 1000 households has appliances
been capped in the case of growth rate being
unreasonably high. Working Working
Based on the appliance penetration rate hours/ hours/
(Figures 3.13 and 3.14), the income shifts Device day Watt year
over time, and the usage norms (Table 3.62), Fan 10 60 225
the energy demand has been calculated.
Geyser 1 1500 150
The demand for fans, coolers, and air
Refrigerator 24 2400 365
conditioners has been categorized under
space conditioning. AC 4 2100 100
In the BAU scenario, useful energy de- Cooler 8 250 90
mand for space conditioning is expected to Washing machine 0.5 1000 200
increase at the rate of 14.16% in rural areas TV 3.1 120 365
and at 12.87% in urban areas during 2001 VCR/VCP 3 20 25
36 due to the air conditioners becoming
Music system 1 60 200
more popular and affordable in the future.
92 National Energy Map for India: Technology Vision 2030

Table 3.63 Useful energy demand for various end uses (petajoules) at 6.7% GDP growth rate

2001 2006 2011 2016 2021 2026 2031 2036

Space conditioning Rural 10.38 21.66 46.44 104.94 234.27 426.41 697.41 1067.67

Urban 23.51 35.70 59.40 114.56 248.89 510.40 952.27 1623.24

Refrigeration Rural 8.08 23.51 59.46 134.82 264.67 391.58 500.60 586.43
Urban 41.77 63.30 95.46 143.17 210.85 292.20 376.11 452.40

Others Rural 2.76 6.21 13.32 27.26 50.75 73.53 93.57 109.77
Urban 7.66 11.02 16.23 24.78 38.97 58.92 81.41 102.59

GDP gross domestic product

Table 3.64 Useful energy demand for various end uses (petajoules) at 8% GDP growth rate

2001 2006 2011 2016 2021 2026 2031 2036

Space conditioning Rural 10.38 23.57 56.76 133.45 279.92 461.34 710.66 1069.70

Urban 23.51 37.50 69.22 145.42 310.48 576.15 984.40 1628.31

Refrigeration Rural 8.08 27.13 78.48 178.90 320.33 424.34 510.02 587.51
Urban 41.77 67.73 109.03 166.96 240.18 314.05 383.76 453.21

Others Rural 2.76 6.85 16.50 34.62 60.17 79.16 95.21 109.96
Urban 7.66 11.62 18.48 29.76 46.48 65.31 83.82 102.86

GDP gross domestic product

Table 3.65 Useful energy demand for various end uses (petajoules) at 10% GDP growth rate

2001 2006 2011 2016 2021 2026 2031 2036

Space conditioning Rural 10.38 25.07 65.81 155.01 302.30 470.23 711.32 1069.70
Urban 23.51 38.88 78.19 172.60 349.81 599.98 989.36 1628.31
Refrigeration Rural 8.08 30.06 95.55 212.40 347.54 432.62 510.49 587.51

Urban 41.77 71.11 120.42 186.29 258.65 322.24 385.08 453.21

Others Rural 2.76 7.35 19.30 40.17 64.75 80.58 95.29 109.96
Urban 7.66 12.08 20.49 34.23 51.58 67.80 84.25 102.86

GDP gross domestic product

 Sectoral demand projections, technological characterization, and resources availability 93

3.1.4.1.6 Demand for water heating Table 3.66 Percentage distribution of

households in various income groups
Data on penetration of geysers is not avail- using sources other than geyser for
able with the NSSO (National Sample Sur-
heating water
vey Organization) for 1999/2000. Therefore,
it has been assumed that the penetration rate Income Electric
of geysers is equal to that of air conditioners class Firewood rod LPG
and coolers. Moreover, apart from electric-
RL 100 0 0
ity, LPG, kerosene, and firewood are also
RM 70 10 20
used for meeting the energy needs for heat-
ing water in the country. It has been as- RH 60 20 20
sumed that 80% of the total households in UL 60 30 10
the country do not require hot water because UM 20 20 60
of hot/moderate climatic conditions or be- UH 0 30 70
cause of their preferences. Specifically, it can
RL rural low; RM rural middle; RH rural high;
be observed in rural areas that people do not UL urban low; UM urban middle; UH urban high;
heat water for bathing. Instead, they rely on LPG liquefied petroleum gas
fresh water at early morning hours. There-
fore, households requiring hot water but not
having geysers have been assumed to depend
The useful energy demand for heating
on fuels other than electricity. For estimat- water is likely to increase at the rate of
ing energy demand for lighting, households
13.65% and 8.27% in rural and urban areas,
have been divided into three categories in
respectively, during the time period 200136
rural and urban areas (Table 3.66). for 8% GDP. The useful energy demand for
It has been assumed that a household de-
heating water under various GDP growth
pending on firewood, on an average, requires
rate scenarios is presented in Table 3.67.
1 kg of wood for heating water per day. On
the other hand, for households using LPG, it
has been assumed that an LPG cylinder of 3.1.4.2 Description of technology
14.2 kg lasts roughly 30 days, that is, 0.5 kg
per day, and that 30% of the LPG is con-
options in the residential sector
sumed for heating water, that is, 0.15 kg/day/
household. An electric rod has been as- 3.1.4.2.1 Lighting
sumed to be consuming 2 kW/h electricity.
Although the light bulb was invented in
Dw = HH N (3.32) 1854, the first usable electric lamp was de-
veloped in 1879. The early lamp had a deli-
where, cate carbon filament with a very short life.
Dw = energy demand for water heating The first commercial lamp with tungsten
HH = number of households using differ- filament was made in 1905. Since then, the
ent fuels for lighting lamps have undergone a process of continu-
N = the usage and fuel consumption ous improvement. New ways of generating
norms light have been invented, and new technolo-
94 National Energy Map for India: Technology Vision 2030

Table 3.67 Useful energy demand for heating water 3.1.4.2.1.2 Compact
(petajoules) under the three GDP growth rates fluorescent lamps
8% GDP 6.7% GDP 10% GDP
Year Rural Urban Rural Urban Rural Urban These are essentially fluores-
cent tubes packaged in the
2001 1.4 5.8 1.4 5.8 1.4 5.8
compact form and are, there-
2006 4.7 8.8 4.1 8.4 5.1 9.2
fore, easy to use. CFLs give
2011 14.0 14.5 10.6 12.6 17.0 16.3 out excellent light with sig-
2016 33.6 24.6 25.3 20.0 40.0 28.9 nificant energy savings and
2021 62.4 40.3 51.4 33.0 67.7 45.4 great look. They also have a
2026 84.6 58.4 78.0 51.9 86.3 60.9 very long life.
2031 103.5 75.8 101.5 73.3 103.6 76.2 The development of light-
ing in India started 70 years
2036 120.7 93.1 120.5 92.9 120.7 93.1
ago. During the pre-Indepen-
GDP (gross domestic product) dence era, the lighting indus-
try in India was in its infancy,
importing finished products
and assembling components.
gies have been developed with the objective Through a gradual and evolutionary pro-
of achieving economy, efficient use of light- cess, the lighting industry in India is today a
ing, comfort, and aesthetic applications. self-sufficient producer of lighting systems.
Broadly there are GLS (generalized light- As per the ISLE (Indian Society of Light-
ing system); incandescent lamps; tungsten ing Engineers) (1999), the demand for GLS
halogen lamps; CFLs (compact fluorescent is increasing by approximately 5% every
tubes); gaseous discharge lamps such as year. The production of GLS has reached a
mercury vapour, sodium vapour, metal ha- figure of 750 million pieces per annum, out
lide; light-emitting diodes; and so on. of which 500 million pieces are produced by
the organized sector and 250 million pieces
by the unorganized sector, each having over
3.1.4.2.1.1 Incandescent gener- 20% higher installed capacity. However, the
alized lighting system bulbs market is still at a low level of sophistication.
Incandescent lamps of 25 W (watt), 40 W,
It is the earliest and simplest of lamps, and 60 W, and 100 W in clear bulb form the larg-
consists of a gas-filled glass tube with tung- est segment. Fluorescent lamps used to be
sten wire filament, which glows when elec- available only in cool daylight colour tem-
tric current is passed through it. The GLS peratures, and were restricted to the linear
bulb is often described as poor mans light 20-W and 40-W execution. The energy-sav-
bulb but with the escalating energy costs. ing 18-W and 36-W linear fluorescent lamps
Only the rich are able to afford these grossly are now available in the market. The demand
inefficient lamps. growth of fluorescent lamps declined from
7% to 5.5%, and in 1998/99, 145 million
 Sectoral demand projections, technological characterization, and resources availability 95

pieces were sold, 10% of which were manu- Table 3.69 Techno-economic parameters
factured by the organized sector. The de-
for kerosene-based lighting devices
mand for CFLs is growing at a steep rate of
35% per annum, with sales in 1998/99 cross- Wick Hurricane
ing 6.5 million pieces. Consumption of kerosene 0.008 0.05
The GLS lamps account for nearly 80%
(litre per hour)
of the lighting source market, and the rest is
Lumen output 10.000 100.00
claimed mainly by the tubes market. CFLs
have managed to gain a share of 1%2%. Lux available 7.000 70.00

This low share is due to high per unit price. Total assembly cost 45.000 135.00
Table 3.68 gives the characteristics of elec- (rupees)
tricity-based lighting devices. Life (years) 3.000 3.00
Despite the developments, the domestic
Source Rubab and Khandpal (1997)
market for lighting equipment remains slug-
gish and localized. Major share of the market
is limited to urban areas and even there, per lumen is more important to a user than
power shortages, voltage fluctuations, and so efficiency in lumen per watt. Kerosene
on, limit the usage of electricity-based light- lamps are a cheaper source of lighting, and
ing equipment. Moreover, India is yet to this makes up for their inefficiency but not
achieve 100% electrification. Therefore, the for their poor quality of light (Table 3.69).
use of kerosene-based lighting devices be-
comes imperative in the country, particu-
larly in the rural areas. Moreover, the cost 3.1.4.2.2 Cooking

Households in India use various fuels for

Table 3.68 Techno-economic parameters meeting the energy requirements for cook-
for various lighting devices ing. Among the traditional fuels, firewood is
used for cooking. Even the high-income
Device groups, especially those in rural areas, are
GLS FTL CFL reluctant to switch away from using freely
100 W 40 W TL + (13 W available firewood.
15 W CFL + 3 W Biogas is produced by the anaerobic di-
Characteristics Choke Choke) 2
gestion of animal dung and other biomass.
The gas can be burnt in a specially designed
Lumen output 1360 2500 2 200
stove that produces little CO (carbon mon-
Lux available 100 100 100
oxide) and no smoke. Furthermore, the di-
Total assembly gester slurry provides more fixed nitrogen to
cost (rupees) 20 240 1 360 the soil than dung.
Life (hours) 1000 5000 10 000 Charcoal emits relatively less smoke but
FTL fluorescent tube light; CFL compact fluores- generates considerable CO. Converting
cent lamp; W watt wood to charcoal has long been a way to im-
Note The figures have been normalized to 100 Lux. prove fuel quality.
96 National Energy Map for India: Technology Vision 2030

Crop residues and other biomass wastes
are alternative cooking fuels. When they have
no fertilizer value, their use reduces the
problem of waste disposal and the demand
for fuelwood. Plant stalks and straw can gen-
erally be burnt in traditional fuelwood
stoves.
A variety of stoves made up of mud are
used in the country, which use firewood,
crop residue, or dung. Many attempts have
been made to improve the energy efficiency
of these stoves.
Kerosene is an important cooking fuel
among the urban poor. However, it is a
smelly fuel that blackens pots and ranks low
in convenience of use as compared to the
more modern fuels like LPG and electricity.
Electricity can be termed as the cleanest
fuel. However, because of its expensive na-
ture and unreliable supply, its use in cooking
is still minimal.
LPG is recommended both for its higher
efficiency and lower environmental impact
than the alternatives. Techno-economic pa-
rameters of various cooking devices are
shown in Table 3.70.
3.1.4.2.3 Electrical appliances
3.1.4.2.3.1 Refrigerators
Among the consumer durables, refrigerators
rank next to televisions in the Indian middle-
class homes.
The refrigerator market in India has two
segments: the conventional direct-cool sys-
tem having a share of about 83% and the
frost-free type, which accounts for the re-
maining 17%. The frost-free type enjoys a
price supremacy between Rs 6000 and 8500.
Households account for 85% of the refrig-
erator market, and the remaining 15% is in-
stitutional. Rural areas have a share of just
22% in the total refrigerator sales as com-
pared to the urban areas (78%). The 165-li-
tre refrigerators, which were the most

Table 3.70 Techno-economic parameters of various cooking devices

Device Capital cost (rupees) Efficiency (%) Life (years)

Liquefied petroleum gas stove 1 200 60 20
Kerosene stove: wick 150 40 5
Kerosene stove: pressure 250 45 4
Dung chulha 10 8 1
Firewood based chulha 10 10 1
Biogas burner 800 55 4
Electric oven 5 000 100
Electric hot plate 400 71 15
Solar cooker 1 460 100 5
Crop residue chulha 10 8 1
Microwave oven 10 000 100 15
 Sectoral demand projections, technological characterization, and resources availability 97

Table 3.71 Characterization of refrigerators Table 3.72 Technological characteriza-

tion of fans
Standard Efficient
Cost (rupees) 8000 15 000 Standard Efficient
Capacity (watt) 1570 1 115 Cost (rupees) 1000 1300
Working hours/day 24 24 Capacity (watt) 60 55
Working days/year 365 365 Working hours/day 10 10
Life (years) 25 25 Working days/year 200 200
Life (years) 20 20

preferred over, have now given way to 185

and unorganized market, and has expanded
225 litre ones, and recently 200300 litre re-
the market. However, still the unorganized
frigerators are witnessing an emerging trend.
market of ACs has a 25% market share. The
Table 3.71 gives the technological character-
domestic sector accounts for 20% of the to-
ization of refrigerators.
tal ACs. Window ACs are the most popular
type with a share of 48% of the total market.
Packaged/ducked and mini split make up for
3.1.4.2.3.2 Fans
40% and 12% of the AC market, respec-
tively. Table 3.73 gives the characterization
Electric fan is a necessity for more than six
of ACs.
months in most parts in a tropical country
like India.
In India, 65% of the fans are ceiling fans
3.1.4.2.3.4 Washing machines
and 33% are wall/table ones, whereas, ped-
estal fans make up for a small share of 2%.
Increasing incomes and changing lifestyles
About 45% of the market for fans is orga-
have resulted in a spectacular increase in the
nized and 55% is informal. Urban areas ac-
count for a bigger market share (58%)
compared to rural areas (42%). Table 3.72 Table 3.73 Technological characteriza-
gives the technological characterization of tion of air conditioners
fans.
Standard Efficient
Cost (rupees) 20 000 45 000
3.1.4.2.3.3 Air conditioners Capacity (watt) 2000 1300
Working hours/day 8 8
Among the consumer durables, the market Working days/year 120 120
for ACs (air conditioners) is growing at a fast
Life (years) 15 15
pace.
Investment cost
Reduction in excise and import duties on
components has brought down the price of (million rupees/PJ) 6510 2893

the products manufactured by the organized PJ petajoules

98 National Energy Map for India: Technology Vision 2030
penetration of washing machines, especially
in urban households. About 82% of the
washing machines are sold in urban areas
while the rural market accounts for only
18%. A price differential of about 10 000
15 000 rupees between a semi-automatic
and a fully automatic washing machine
makes the semi-automatic one more popular
with a share of 85% in the market, and fully
automatic accounts for 15% of the market.
3.1.4.2.3.5 Television
About 75 million households in India pos-
sess a television. The market for CTVs
(colour televisions) is expanding very fast.
Between 1996 and 1999, the market regis-
tered a growth rate of 28%. About 60% of
the market is organized whereas 40% is un-
organized. About 98% of the products are
conventional, and flat-screen televisions
have negligible share of 2%. Urban areas
have a share of 60% in the CTVs market and
rural areas account for the remaining 40%.
However, in case of black and white televi-
sion, the rural areas account for 75% of the
total market and the share of urban area is
25%.
Table 3.74 Characterization of washing machines, televisions, VCRs/ VCPs, and music systems
Washing machine
Cost (rupees) 7500
Capacity (watt) 1000
Working hours/day 0.5
Working days/year 200
Life (years) 15
3.1.4.2.3.6 Audiovideo systems
The audio industry can be divided into vari-
ous segments: radios, cassette recorders/
players, CD players, and their combination.
CD-based systems are a recent development
but are replacing the cassette players very
rapidly. The market is divided into organized
and unorganized segments. Rural and urban
areas have a 50:50 share in the market.
VCRs and VCPs were a craze till late 1990s.
With the advent of VCDs, there has been a
sharp decline in the VCR/ VCP market. Video
systems are more popular with urban areas.
They have a share of 90% and the rural areas
have a share of 10%. About 60% of the market
is organized and 40% is unorganized. Table
3.74 gives the characterization of washing
machines, televisions, VCRs/ VCPs, and mu-
sic systems.
3.1.5 Commercial sector
The commercial sector comprises various
institutional and industrial establishments
such as banks, hotels, restaurants, shopping
complexes, offices, and public departments
supplying basic utilities. In other words, the
Television VCR/VCP Music system
8000 2500 1500
120 20 60
3.1 3 1
365 25 200
20 20 20
 Sectoral demand projections, technological characterization, and resources availability 99

commercial sector is a subset of the services 3.1.5.1 End-use demands in the

sector as defined by the Central Statistical
commercial sector
Organization, Government of India.9 Given
the structural changes in the economy, espe-
In India, the commercial energy demand es-
cially during the post-liberalization period,
timation and projection are beset with nu-
the services sector now accounts for a high
merous data gaps, particularly with respect
share (about 50% share of the GDP of ser-
to the reporting of the number of commer-
vices sector in aggregate GDP) in the total
cial establishments/consumers, their energy
national income. Economic growth has
consumption patterns, degree of usage of
paved the way for increasing demand for ser-
energy for different end-use energy consum-
vices fuelled by rising personal disposable
ing activities, and penetration of appliances
incomes/enhanced purchasing power. More-
and other end-use devices in the sector.
over, the structural reforms in the banking
Therefore, the entire demand estimation
sector has led to a fall in interest rates and
exercise is driven by assumptions on the dis-
resulted in real estate boom, encompassing
tribution of fuels consumed for cooking,
construction of large-scale commercial
lighting, space conditioning, refrigeration,
buildings, shopping malls, and so on, espe-
and miscellaneous services.
cially in urban centres. Coupled with this,
For the purpose of energy demand esti-
increased spending by the government on
mation and projections in the commercial
providing public services such as public
sector, a top-down approach is used in
lighting, water works, and sewer pumps has
which the total fuel consumption is first esti-
given a fillip to the commercial sector. En-
mated and projected using an appropriate
ergy consumption in the commercial sector
econometric model. The projected fuel con-
has, thus, increased as a consequence of the
sumption is then divided amongst various
accelerated growth of the commercial sector.
end-use activities involving that particular
Most commercial energy is used in build-
fuel.
ings or structures for the purpose of space
Fuels such as LPG and kerosene, and tra-
heating, water heating, lighting, cooking,
ditional fuels such as firewood/charcoal are
and cooling. Energy consumed for services
used for cooking in the commercial sector.
not associated with buildings such as for
The historical data on LPG consumed in the
traffic lights, city water, and sewer services is
commercial sector for the period 19802002
also categorized under commercial sector
(MIE 2005) is used for estimating and pro-
energy use.
jecting the total LPG consumption. LPG is
used as fuel for cooking in hotels and restau-
rants, that is, under the purview of the ser-
vices sector. Thus, a high rate of growth of
the services sector measured by the GDP

9
The services/tertiary sector, as defined by the Central Statistical Organization, consists of trade, hotels and restau-
rants, financing, insurance, real estate and business services, public administration, defence, and other services.
100 National Energy Map for India: Technology Vision 2030
generated by the sector results in high LPG
consumption and vice-versa. The appropri-
ate regression equation is as follows.
Log(LPG C,t) = 0.58 Log(GDPS t) + 0.94
(6.55) (24.7)
AR (1) (3.32)
(Adjusted R2 = 0.98)
where, LPGC,t is the LPG consumption in
the commercial sector (in thousand tonnes)
in the year t and GDPSt is the GDP contrib-
uted by the services sector (in crore rupees
at 1993/94 prices) in the year t. The values in
the brackets give the t-statistic associated
with the coefficients. The loglog specifica-
tion of the regression model is found appro-
priate as the coefficient associated with the
LPG consumption measures the income
elasticity of LPG consumption. The coeffi-
cient 0.58 being less than 1 implies that LPG
consumption is income-inelastic. This
means that LPG is a necessary fuel for cook-
ing in the commercial sector. The AR (1)
term corrects for the auto correlated distur-
bances present in the data. The adjusted R2
is a measure of the goodness of fit of the re-
gression equation. It is as high as 0.98 and
this implies that 98% of the variation in LPG
consumption can be explained by GDP gen-
erated by the services sector. The t-statistic
associated with the coefficients presented in
brackets above clearly shows that the vari-
ables are statistically significant in explain-
ing LPG consumption.
However, due to other exogenous factors
such as constraints on the accessibility to the
small vendors, eateries in the rural and re-
mote areas use kerosene as a fuel for cook-
ing. Historical data on kerosene consumed
in all sectors is available but the quantities
consumed in the commercial sector are not
known. Hence, it has been assumed that
1.42 MT of kerosene is consumed in the
commercial sector in 2001 (14% of total
kerosene consumed). The underlying ratio-
nale is that kerosene consumption would de-
cline in absolute terms in the future as
bottlenecks to the accessibility of LPG are
expected to ease in the future. However, the
extent of decline in kerosene consumed in
the commercial sector is not reported.
Hence, it has been assumed that the con-
sumption of kerosene in the commercial sec-
tor would remain constant at the 2001
consumption level of 1.42 MT over the
modelling time frame of 2001 till 2036.
Moreover, in the commercial sector in India,
firewood-based stove is used commonly for
grilled food items. It has been assumed that
10% of the total useful energy demand in the
commercial sector is met by firewood.
Therefore, the end-use devices in the
commercial sector comprise the LPG
burner, wick-type kerosene stove, and fire-
wood-based stove. The efficiency of these
devices is listed in Table 3.75.
The energy demand for cooking in the
commercial sector under different GDP
growth scenarios (expressed in Mtoe) is pre-
sented in Table 3.76.
Table 3.75 Technological options for
cooking in the commercial sector
Technology Efficiency (%)
LPG burner 60
Wick-type kerosene stove 48
Firewood-based stove 10
LPG liquefied petroleum gas
Sectoral demand projections, technological characterization, and resources availability 101

Table 3.76 Energy demand for cooking in commercial sector (in Mtoe)

GDP growth rate (%) 2001 2006 2011 2016 2021 2026 2031
6.7 65 81 100 125 157 198 250
8 65 83 107 139 180 234 302
10 65 84 114 155 212 290 397
Mtoe million tonnes of oil equivalent

3.1.5.2 Electricity demand in the sured by value of output from the services
sector, that is, GDP of the services sector.
commercial sector
The appropriate regression model for es-
timating electricity demand in the commer-
Electricity consumption in the commercial
cial sector is as follows.
sector is estimated using the historical data
on electricity sale to the commercial sector.
Log(ELCC,t) = ()2.87 + 0.97
Electricity consumption in the commercial
(-2.58) (11.36)
sector has been growing at an average annual Log(GDPSt) + 0.70 AR (1)
rate (Figure 3.15) of 8.1% per annum. The (4.89) (3.33)
growing electricity demand can be explained
by the increasing demand for services mea- (Adjusted R2 = 0.99)

The coefficient associated with

Figure 3.15 Trend of electricity consumption
in the commercial sector (19802003)
Source CEA (2004)
GDPS is 0.97. This implies that
1% rise in value added by the ser-
vices sector would increase elec-
tricity demand by 0.97%, implying
that electricity demand is income-
inelastic. This further implies that
electricity is necessary for the
commercial sector in carrying out
its operations.
However, the bifurcation of
electricity consumption amongst
various electricity consuming ac-
tivities such as lighting, space con-
ditioning, and refrigeration is
based on electricity usage norms.
Based on the Presidents address
at the CPWD (Central Public
Works Department) in 2004, it has
102 National Energy Map for India: Technology Vision 2030

been assumed that 60% of the total electric-
ity is consumed for lighting, 32% for space
conditioning, and 8% for refrigeration in the
commercial sector. These shares are as-
sumed to remain constant over the model-
ling time frame. The efficiency of
technologies for lighting in the commercial
sector is shown in Table 3.77.
Upper and lower bounds represent the
realistic levels of penetration of each of the
above technologies. It is assumed that 50%
Table 3.77 Technologies for lighting in the
commercial sector
Technologies Efficiency
GLS (generalized lighting Normalized to 1
system)
Tube light 1.818
CFL (compact fluorescent 3.125
lamp)
of the total lighting demand is met by GLS,
49% by tube lights, and 1% by CFLs. These
shares are fixed for the modelling time frame
200136. Thus, the electricity demand for
lighting (in GWh) under different scenarios
is presented in the Table 3.78.
The technologies for space conditioning
together with their efficiency in the commer-
cial sector are listed in Table 3.79.
The total electricity demand for space
conditioning in the commercial sector is met
by fans and air conditioners. The share of
fans in the total electricity is assumed fixed
at 70% and the remaining 30% is met by air
conditioners. Each of these electrical appli-
ances has an efficient counterpart. Under
the pessimistic scenario, it is assumed that
the penetration of efficient appliances is only
to the extent of 45% within both the fan and
air conditioner segments. These shares
are assumed based on the shares of the
organized market dealing with electrical
appliances.

Table 3.78 Electricity demand for lighting in the commercial sector (in GWh)

GDP growth rate (%) 2001 2006 2011 2016 2021 2026 2031 2036
6.7 14 484 19 813 26 971 37 504 53 059 76 066 110 113 160 445
8 14 484 21 260 31 726 47 342 70 646 105 420 157 312 234 746
10 14 484 22 429 36 594 59 702 97 404 158 913 259 264 422 986
GDP gross domestic product; GWh gigawatt hour

Table 3.79 Technologies for space conditioning in the commercial sector

Technologies Efficiency
Fan (standard) Normalized to 1
Fan (efficient) 10% efficient compared to standard (1.1)
Air conditioner (standard) Normalized to 1
Air conditioner (efficient) 50% more efficient compared to standard
Sectoral demand projections, technological characterization, and resources availability 103

Table 3.80 Electricity demand for space conditioning in the commercial sector (in GWh)

GDP growth rate (%) 2001 2006 2011 2016 2021 2026 2031 2036
6.7 7725 10 567 14 384 20 002 28 298 40 569 58 727 85 571
8 7725 11 339 16 920 25 249 37 678 56 224 83 900 125 198
10 7725 11 962 19 517 31 841 51 949 84 753 138 274 225 593
GDP gross domestic product; GWh gigawatt hour

Table 3.81 Electricity demand for refrigeration in the commercial sector (in GWh)

GDP growth rate (%) 2001 2006 2011 2016 2021 2026 2031 2036
6.7 1931 2642 3596 5001 7 074 10 142 14 682 21 393
8 1931 2835 4230 6312 9 419 14 056 20 975 31 299
10 1931 2991 4879 7960 12 987 21 188 34 569 56 398
GDP gross domestic product; GWh gigawatt hour

Thus, the electricity demand for space The appropriate regression model for es-
conditioning (in GWh) under different sce- timating and projecting electricity demand
narios is presented in Table 3.80. in the commercial sector is as follows.
The demand for refrigeration is met by a
standard refrigerator alone, with its efficiency Log(ELCo,t) = 0.74 Log(GDPSt) + 0.91
normalized to one. Thus, the electricity de- (32.58) (12.5)
mand for refrigeration (in GWh) under differ- AR(1) (3.34)
ent scenarios is presented in Table 3.81.
(Adjusted R2 = 0.98)

3.1.6 Electricity demand in other The coefficient associated with GDPS is

sectors
The other sectors consuming electricity con-
sist of public lighting, public water works, and
sewage pumping. The electricity consumption
in these sectors is assumed to be a function of
the expenditure incurred by the government
on providing services to these sectors.
The historical time-series data clearly de-
picts that electricity consumption has grown
at an average annual growth rate of 6% from
19802003 (Figure 3.16).
0.74. This implies that 1% rise in value
added by the services sector would increase
the electricity demand by 0.74% implying
that electricity demand is income-inelastic.
This further implies that electricity is a ne-
cessity for the other sector in carrying out its
operations.
Electricity demand projections (in GWh)
for other services under different growth
scenarios are presented in Table 3.82.
104 National Energy Map for India: Technology Vision 2030

Figure 3.16 Trend of electricity consumption in reduce the hazards other-

other electricity consuming sectors (19802003)
Source CEA (2004)
3.2 Description of resource supply
and conversion technologies
3.2.1 Coal and lignite
Coal is increasingly catering to our growing
energy needs. It meets about 60% of our
commercial energy needs, and about 70% of
the electricity produced in India comes from
coal. With proper technologies and initia-
tives for better management, it is possible to
wise associated with coal.
Through scientific mining
practices followed by land
reclamation, beneficiation
to reduce ash at source, and
better ways of utilization of
coal like liquefaction of
coal, coal gasification, in
situ coal gasification, and
coal-bed methane recovery,
coal can be used judiciously
as a major source of energy.
The geological coal re-
sources of the country are
estimated at 220.98 billion
tonnes as on January 2001.
Of this, proven reserves are
84.41 billion tonnes, while
98.55 billion tonnes are in-
dicated reserves and 38.02 billion tonnes are
inferred reserves. Coal continues to remain
the principal source of commercial energy,
accounting for nearly 50% of the total sup-
plies.
The current estimates of geological lig-
nite reserves in India are 34.76 billion
tonnes spread over Tamil Nadu and
Pondicherry (87.5%), Rajasthan (6.9%),
Gujarat (4.9%), Kerala (0.31%), and Jammu
and Kashmir (0.37%). The lignite deposits
in the southern and western regions have

Table 3.82 Electricity demand projections for other services (in GWh)

GDP growth rate (%) 2001 2006 2011 2016 2021 2026 2031 2036
6.7 21 551 23 868 30 858 40 229 52 876 69 986 93 137 124 412
8 21 551 25 188 34 931 48 059 65 793 89 789 122 294 166 359
10 21 551 26 239 38 953 57 371 84 078 122 830 179 089 260 791
GDP gross domestic product; GWh gigawatt hour
Sectoral demand projections, technological characterization, and resources availability
Table 3.83 Maximum values of domestic
coal availability
Fuel (MT) 2001/02 2036/37
Coking coal 27 50
Non-coking coal 299 550
Lignite 25 50
MT million tonnes
emerged as an important source of fuel sup-
ply for states like Tamil Nadu, Rajasthan,
and Gujarat. Over the years, considerable
emphasis has been placed on the develop-
ment of lignite for power generation.
The indigenous production of coking coal
in the country was 30 MT during 2001/02
and is expected to increase to 50 MT by
2036/37. The production of non-coking coal
was about 299 MT in 2001/02 and the maxi-
mum production is expected to be no more
than 550 MT in 2036/37. The values of in-
digenous production of different types of
coal are shown in Table 3.83.
3.2.1.1 Status of coal to oil
technologies in India
In India, studies on coal hydrogenation are
restricted to laboratory-scale R&D activi-
ties, principally at the CFRI (Central Fuel
Research Institute), Jharkhand. A 0.5 TPD
high-pressure plant was set up at the CFRI
to study the hydrogenation of coal. The
single-stage process followed by the plant
yielded 25% oil amidst many operational
problems.
Studies on the continuous reactor else-
where have shown a very poor conversion of
distillate product. The reactor also faces tre-
105
mendous difficulties in terms of operation,
valve erosion, choking, and so on. Basic
studies on reaction kinetics and mechanism,
action of catalyst, solvent quality, character-
ization of products, and comparative amena-
bility of Indian coal towards hydrogenation
have been carried out in detail. This coal hy-
drogenation technology is quite different
from the commercial operation undertaken
during the modelling time frame and hence
is not considered in our analysis.
3.2.1.2 Status of coal gasification
in India
Though coal reserves in India are abundant,
the quality of coal in general is inferior, with
mineral content as high as 50%. Since re-
serves of oil and natural gas in the country
are meagre, they need to be substituted with
coal to the extent feasible. At the same time,
all three fuels, especially coal, need to be
conserved for the future generation. The en-
ergy sector requires efficient, clean, and de-
pendable energy supplies. Hence, coal has to
be utilized with a multi-pronged strategy
that aims at higher efficiency, ensures its en-
vironmental acceptance and judicious use,
thus prolonging its availability, considers it
as a replacement for oil, and so on. This is
possible only through sustainable develop-
ment, and gasification is the best option to
achieve it. The major advantage of gasifica-
tion is that coal is converted into a gaseous
fuel that is a clean form of energy and easy to
handle. Thus, in gaseous form, coal is able to
substitute for petroleum products and natu-
ral gas.
Synthesis gas has a wide range of applica-
tion. It can be used in a combined cycle sys-
tem that ensures an efficient and clean
106 National Energy Map for India: Technology Vision 2030
generation of electric power. It is suitable for
the manufacturing of hydrogen and chemi-
cals such as ammonia, methanol, and acetic
acid; as substitute natural gas; as a reducing
gas for metallurgical purposes; and so on. It
can be used in multipurpose plants for the
simultaneous production of electric power,
chemicals/fertilizers, and fuels that also im-
prove the economics of coal gasification.
India already has some experience in coal
gasification and has even made advances in
developing an indigenous technology.
The scenario of coal gasification, which is
intimately connected to the particular char-
acteristics of Indian coal, is not as bright as
that of oil gasification. Indian coal has the
advantage of relatively low sulphur content.
The problem lies in the extremely high ash
content, which can often be as high as 40%,
and nature of the ash, which contains very
high amounts of silica and alumina. (Typical
figures from the Talcher coalfield show that
60% and 30% of the ash contains silica and
alumina, respectively. The ash deformation
temperature is 11701240 oC and the fusion
temperature is above 1400 oC.) This high ash
content combined with a high melting point
presents great difficulties to all slagging pro-
cesses. Any gasifier operating in slagging
mode consumes more oxygen because of the
heat required to keep the ash molten at the
slag tap. In most coal types, this disadvan-
tage is outweighed by the advantages of
high-temperature operation, which ensures
elimination of all volatiles in the gas, and re-
duced methane slip. Thus, modern process
developments have taken the high-tempera-
ture route. The high-ash content of the
Indian coals, however, makes modern high-
temperature processes extremely expensive
due to their high oxygen demand. Besides,
there are problems of handling large vol-
umes of silica in an entrained flow process.
Thus, when looking at gasifying Indian
coal, the tendency has been to take into ac-
count non-slagging processes. The Indian
Institute of Chemical Technology Unit at
Hyderabad is a small test unit involved pri-
marily in research and coal testing. The
BHEL (Bharat Heavy Electricals Ltd) Unit
at Trichy is an indigenous development, also
aimed at finding a way to improve coal use in
India. It is, however, necessary to take cogni-
zance of the fact that since most Indian coals
have low sulphur content, relatively simple
gas cleaning technologies can be introduced
in conventional combustion plants to meet
the environmental requirements.
Indian scientists and engineers have
gained experience in the gasification of coal
through moving bed process on pilot/dem-
onstration scale. This process (Lurgi dry ash
process) is a commercially proven process in
Germany and South Africa, and uses high-
ash coal for power generation and produc-
tion of synthesis gas, chemicals, and liquid
fuels. Therefore, it may be a low risk or
mostly no risk strategy to pursue with mov-
ing bed gasification process.
Fluidized bed gasification process is su-
perior to moving bed process for utilization
of high-ash Indian coals through gasification
route. The country has very limited experi-
ence in fluidized bed process. Internation-
ally also, the experience gained so far is
limited only to low-ash coals. The first
107-MW IGCC (integrated gasification
combined cycle) demonstration plant based
on air blown, pressurized, and fluidized bed
process (that is, KRW [KelloggRust
Westinghouse] process) has been established
at Reno, USA (Pinion pine IGCC power
project). The plant is already in operation.
Results and performance of this plant would
help India in adopting the fluidized bed
process.
Sectoral demand projections, technological characterization, and resources availability
India can go in for a hybrid concept, that
is, a combination of moving bed and fluid-
ized bed gasification processes. Based on the
results obtained from this concept, a fluid-
ized bed coal gasification system can be
added to the moving bed plant at the same
location. As India has a vast reserve of coal,
it will be advantageous for it to adopt two
coal gasification processes. The hybrid con-
cept results in the economy of coal, as coal of
varying sizes supplied to a power plant can
be utilized, that is, 650 mm size coal can be
used for moving bed and coal below 6 mm
for fluidized bed. Moreover, moving bed
cannot tolerate more than 10% of coal fines
due to operational problems.
The Trichy BHEL pilot plant established
in 1988 has gained rich experience in de-
signing, engineering, fabrication, erection,
and operation of the integrated gasification
combined cycle technology. In fact, the
BHELs operational experience of over 5000
hours of the PFBG (pressurized fluidized
bed gasification)-based IGCC is significant
in the context of just about 100 hours logged
on by other plants using similar coal gasifi-
cation technology in USA and other coun-
tries. The combined cycle technology uses
gas turbinesteam turbine combination for
power generation, and instead of natural gas,
uses coal gas along with steam for power
generation in the turbines to achieve higher
efficiency. Gasification is the cleanest
method of utilization of coal, while com-
bined cycle generation gives the highest effi-
ciency. Hence, the integration of the two
technologies for power generation in IGCC
plants offers the benefit of very low emis-
sions, higher efficiency, and the potential for
lower cost of electricity generation. The
BHEL Trichy set up a 6.2-MW IGCC power
plant at a cost of 15 crore rupees in 1989,
which is the first coal-based IGCC in Asia
107
and the second in the whole world. In 1996,
a PFBG demonstration plant of 150 TPD
capacity was designed and retrofitted in the
6.2-MW plant to supply coal gas to the exist-
ing unit.
3.2.1.2.1 Status of coal-bed
methane in India
There are very good prospects for the devel-
opment of coal-bed methane in India. The
coal-bearing formations of India occur in
two distinct geological horizons in the Lower
Gondwana (Permian) belts of India and the
Tertiary sediments (EoceneOliocene) of
north-eastern India, Rajasthan, Gujarat, and
Jammu and Kashmir. Methane gas is en-
trapped within these formations at a wide
range of sub-surface depths. Indian coal has
gas content values ranging from 1 to 23 m3
(cubic metres)/tonne.
The coal-bed methane occurrence is pre-
dicted in Damodar Valley basin, a potential
source presently under consideration. Also,
Amlabad, Jharkhand, is expected to give
higher specific gas yield compared to Raniganj
field, West Bengal. Amlabad is well known as
a potential source of coal-bed methane.
Giving highest priority to the efficient use
of energy resources and long-term
sustainability of energy supplies, the Gov-
ernment of India requested international as-
sistance in coal-bed methane recovery and
its commercial utilization. The country is
one of the chief producers of coal from un-
derground mines in the world. One of the
major fields in Jharia is on fire as can be seen
from satellites in space. Two of the mines in
this coalfield are particularly gassy, and
have been selected as demonstration sites for
a GEF (Global Environment Facility)
project.
108 National Energy Map for India: Technology Vision 2030

In India, the Reliance Gas has carried out
comprehensive geologic assessment of
coal/lignite basins, based on which about
20 000 km2 (square kilometres) of area has
been identified as a prospective site for coal-
bed methane, with an estimated in-place re-
source of about 2000 BCM (billion cubic
metres). The recoverable reserve of about
800 BCM and gas production potential of
about 105 million cubic metres per day over a
period of 20 years have been estimated. Coal-
bed methane potential is thus about 1.5 times
the present natural gas production in India,
which is capable of generating about 19 000
MW of electricity. The potential of gas produc-
tion in India is given in Table 3.84.

Table 3.84 Coal-bed methane production potential in India

CBM production Energy equivalent

potential (million Power
Basin/area cubic metres/day) generation (MW) LNG (MTPA)
Cambay Basin
North Gujarat 30.0 5500 7.50
Barmer Basin
South Rajasthan 19.0 3500 4.75
Damodar Basin
Raniganj 12.0 2200 3.00
Jharia 3.5 650 1.00
East Bokaro 2.5 450 0.60
North Karanpura 6.0 1100 1.50
Rajmahal Basin
Rajmahal 4.5 800 1.20
Birbhum 6.0 1100 1.50
Others
Singrauli 1.0 180 0.25
Sohagpur 4.0 720 1.00
Satpura 1.5 270 0.40
Ib River 5.0 900 1.25
Talcher 2.5 450 0.60
Wardha Valley 1.5 270 0.40
Godavari Valley 4.0 720 1.00
Cauvery Basin 2.5 450 0.60
All India 105.5 19 260 26.55
CBM coal-bed methane; MW megawatts; LNG liquefied natural gas; MTPA million tonnes per annum
Sectoral demand projections, technological characterization, and resources availability
3.2.2 Hydrocarbons
The year 2004/05 was a mixed one for the
Indian oil and gas sector. The import depen-
dency was over 75%, as the country im-
ported 95.86 MT of crude oil for refinery
throughput of 127.368 MT. The year wit-
nessed extreme volatility in the international
crude oil market, with crude oil touching an
all time high of over 70 dollars per barrel.
Increasing input costs but stagnant retail
prices of the transport fuels resulted in losses
for oil companies in the country. There were
some positive developments too. Under the
fifth round of the NELP-V (New Exploration
Licensing Policy-V), 20 blocks were offered
and an overwhelming response was received
from both Indian and international compa-
nies. Sixty-nine bids were received for these
blocks and finally 18 of these blocks were
awarded to different companies and consor-
tium. Indias second LNG (liquefied natural
gas) terminal was commissioned at Hazira,
Gujarat, this year. The terminal is the invest-
ment of Shell Ventures and includes an LNG
receiving and storage terminal within a func-
tional port. Following section highlights the
key developments in the E&P (exploration and
production) of oil and natural gas. Subsequent
sections deal in detail with crude oil, petro-
leum products, and natural gas.
3.2.2.1 Exploration and
development
3.2.2.1.1 Overview
In continuation with the previous year,
2004/05 saw significant activity in explora-
tion and development of oil and gas. In
109
2004/05, ONGC (Oil and Natural Gas
Corporation Ltd) had four new oil and gas
finds at Vashista (eastern offshore), D-33
(western offshore), Wamaj (Gujarat), and
Tiphuk (Assam shelf). The total reserve ac-
cretion to ONGC for the year was about
49.40 MT.
ONGC also reported a new offshore oil
discovery in the Cambay Basin. Oil India
had three discoveries in Assam, namely
Samdang (Eocene), West Zaloni, and North
Tanali. The GSPCL (Gujarat State Petro-
leum Corporation Ltd)-led consortium with
Geo Global Resources and Jubiliant made a
gas discovery at KG-8 well, which it won in
the second round of the NELP. The
GSPCLs claim of 20 TCF (trillion cubic
feet) of gas remains to be certified by an in-
dependent agency. Apart from these domes-
tic finds, 2004/05 saw significant
developments in Indias efforts towards ac-
quiring oil and gas equity abroad. ONGC
signed important deals in Egypt, Qatar, and
Venezuela.
3.2.2.1.2 Crude oil/natural gas
production
The crude oil production for 2004/05 was
33.98 MT, of which 11.59 MT was onshore
and 22.39 MT offshore. The natural gas
production was 31.77 BCM, of which
8.97 BCM was onshore and 22.88 BCM
offshore (MoPNG 2005). Company-wise
details of crude oil and natural gas are given
in Tables 3.85 and 3.86.
The two national oil companies ONGC
and OIL (Oil India Ltd) accounted for
87.34% and 79.66% of the total crude oil
and natural gas production in the country,
respectively, with ONGC accounting for the
110 National Energy Map for India: Technology Vision 2030

Table 3.85 Company-wise crude oil production (MT)

Onshore Offshore
Year OIL ONGC Private/JV Total ONGC Private/JV Total Grand total
1994/95 2883 9130 4 12 017 20 226 251 20 477 32 494

1995/96 2882 8971 26 11 879 22 665 624 23 289 35 168

1996/97 2870 8504 38 11 412 20 181 1307 21 488 32 900
1997/98 3094 8387 42 11 523 19 863 2472 22 335 33 858

1998/99 3295 8100 77 11 472 18 286 2965 21 251 32 723

1999/2000 3283 7921 94 11 298 16 727 3924 20 651 31 949
2000/01 3286 8428 293 12 007 16 629 3788 20 417 32 424

2001/02 3183 8635 71 11 889 16 073 4070 20 143 32 032

2002/03 2950 8445 75 11 470 17 559 4013 21 572 33 042
2003/04 3002 8384 74 11 460 17 681 4240 21 921 33 381

2004/05 3196 8321 74 11 591 18 164 4226 22 390 33 981

OIL Oil India Ltd; ONGC Oil and Natural Gas Corporation Ltd; JV joint venture; MT million tonnes
Source MoPNG (2005)

Table 3.86 Company-wise production of natural gas (MCM)

Year OIL ONGC Private/JV Total

1995/96 1433 20 875 331 22 639
1996/97 1496 21 281 479 23 256
1997/98 1670 23 050 1681 26 401
1998/99 1713 22 841 2874 27 428
1999/2000 1729 23 252 3465 28 446
2000/01 1861 24 020 3596 29 477
2001/02 1619 24 041 4054 29 714
2002/03 1744 24 244 5407 31 395
2003/04 1880 23 584 6491 31 955
2004/05 2007 22 985 6782 31 774
OIL Oil India Ltd; ONGC Oil and Natural Gas Corporation Ltd;
JV joint venture; MCM million cubic metres
Source MoPNG (2005)
Sectoral demand projections, technological characterization, and resources availability
major share, as per 2005 data. Private play-
ers continued to make their presence felt in
crude oil production, with a share of 18.87%
in 2004/05 in offshore production, up from
virtually nil some years back. However, their
share in onshore production is still less than
1%. Their share in natural gas production
has also gone up from 2% in 1996/97 to
21.34% in 2004/05, which is slightly higher
than the previous year and promises to go up
even further with several NELP fields yield-
ing natural gas.
However, an important cause of concern
is that the domestic crude oil production in
the country has not kept pace with rising
demand. The R/P (reserves/production) ra-
tio for crude oil has stagnated over the past
few years at 22 years. For gas, the R/P ratio is
marginally better at about 29 years. In 2004/
05, India imported 95.86 MT of crude oil
for a total refinery throughput of 127.368
Figure 3.17 Production and import
of crude oil over the years
Source MoPNG (2005)
111
MT. This translates into a crude oil import
dependency of almost 75%. Figure 3.17
summarizes the trend in Indias import de-
pendency. The IEA (International Energy
Agency) (2002) has projected that if this
trend continues, then Indias import depen-
dency may increase to 94% by 2030. How-
ever, the crude import dependency gives a
partial picture. In fact, with an increase in
refining capacity and India becoming a net
exporter of petroleum products, countrys
net import dependency has decreased from
80% in 1999/2000 to nearly 70% in 2004/05
(MoPNG 2005).
The Government of India has initiated
many steps to ensure oil security for the
country. One such step was to intensify do-
mestic exploration and development efforts
to explore new fields and increase the re-
serve base of the country. Hydrocarbon Vision
2025 laid down a phased programme for re-
appraising all the sedimentary
basins of the country by 2025
(Planning Commission 1999).
This includes intensive explo-
ration in the producing basins
to upgrade yet-to-find hydro-
carbon resource and promote
exploration in non-produc-
ing, poorly explored, and
new frontier basins like the Hi-
malayan foothold. To meet
these objectives, the DGH (Di-
rectorate General of Hydrocar-
bons) has conducted a number
of studies to upgrade informa-
tion on the unexplored or less
explored regions in the coun-
try. About 1.96 million km2 of
the regions of which 86% are
offshore and the rest on-land
have already been covered
112 National Energy Map for India: Technology Vision 2030
under these efforts. These surveys have given
information about structure, tectonics, and
sedimentary thickness of these areas.
Overseas acquisition of equity oil is an-
other major strategy adopted to enhance oil
security of the country. The Government of
India aims to produce 20 MTPA (million
tonnes per annum) of equity oil and gas
abroad by 2010. Under the Tenth Five Year
Plan, the target for oil and gas equity abroad
was 5.2 MT and 4.88 BCM, respectively.
The likely achievement under the plan pe-
riod is expected to be about 16.45 MT for
oil and 4.41 BCM for natural gas. The po-
tential in-place reserves of oil for the block
have been estimated to be more than 600
million barrels.
3.2.2.1.3 New Exploration
Licensing Policy
The DGH has divided Indias topography
into 26 sedimentary basins comprising
1.35 million km2 of onshore area and
0.39 million km 2 of offshore area (up to
200 metre isobaths). Despite several devel-
opments in the countrys hydrocarbon sec-
tor, plenty of areas, which may have
hydrocarbon reserves, remain to be ex-
Table 3.87 Progress during NELP rounds
Blocks NELP I
Offered 48
Awarded 25
Awardees
PSU and PSU-led consortiums 9 18
Private players and consortiums 16
NELP New Exploration Licensing Policy; PSU public sector undertaking
plored. Though the bidding for exploration
blocks started as early as 1979, earlier
rounds were not successful. In all, nine
rounds were conducted from 1979 to 1995,
which resulted in a total investment of 2 bil-
lion dollars. In the ninth round, the concept
of JV (joint venture) fields was mooted,
which met with moderate success. In 1997/
98, the Government of India announced the
NELP with the twin objectives of enhancing
the indigenous production by attracting pri-
vate capital and foreign technology for In-
dian upstream sector and for mapping the
sedimentary basins of the country as exten-
sively as possible. Under this framework, to-
tal freedom has been given to market crude
in the domestic market and a company can
bid directly without the participation of the
ONGC or the OIL, which was mandatory
earlier.
Till date, five rounds of the NELP have
been conducted, and a total of 109 onshore
and offshore blocks have been awarded com-
pared to 21 blocks in 199297. This has led
to a number of new operating companies in
the private and joint sectors entering the up-
stream petroleum sector. The details of five
NELP rounds are given in Table 3.87.
There was a mixed response in the first two
rounds of the NELP. One of the criticisms
NELP II NELP III NELP IV NELP V
25 27 24 20
23 23 20 18
14 14 8
5 9 6 10
Sectoral demand projections, technological characterization, and resources availability
often made about these rounds was that the
blocks offered under the successive rounds
were largely recycled from the previous
rounds and were the ones that national oil
companies did not consider as prospective.
The NELP-III, launched in April 2002, had
an attractive feature to counter these criti-
cisms. All the 27 blocks offered under the
NELP-III were divided into three catego-
ries: Category 1 comprised those blocks that
had never been offered before; Category 2
comprised those blocks that were offered
before but extensive data is now available;
Category 3 comprised those blocks that were
offered before with limited data provided by
the ONGC and the OIL, but were now being
offered with re-interpreted, repackaged, and
reprocessed data. The 20 blocks under the
NELP-IV attracted several international as
well as private players, including Cairn En-
ergy, Hardy Exploration and Production
Inc., Canada GeoGlobal Resources Ltd, Re-
liance Industries Ltd, Jubilant Enpro, Enpro
Finance, and GSPCL.
3.2.2.1.4 Strategic reserves
In a major move aimed at enhancing energy
security of the country, on 7 January 2004,
the union cabinet approved the setting up of
strategic storage facilities for 5 MT of crude
oil, sufficient to meet 15-day consumption at
three locations on the east and west coasts.
The construction of underground rock cav-
erns has been proposed at Mangalore
(1.5 MT), Visakhapatnam (1 MT), and at a
suitable location south of Mangalore
(2.5 MT). This strategic storage will be in
addition to the existing storage facilities for
crude and petroleum products and will pro-
vide an emergency response mechanism in
113
case of short-term disruptions. Currently,
the total crude oil storage capacity of domes-
tic refineries is 19 days (5.7 MT). Besides,
the country at present has tankages to pro-
vide for 45-day cover to petroleum products.
The IEA requires oil-importing member
countries to hold stocks equivalent to
90 days of net imports. Though India is not a
member of the IEA, after the setting of pro-
posed strategic storage, it will also have gross
storage capacity in line with the IEA guide-
lines. According to some reports, India will
seek Saudi Arabias help in building strategic
oil reserves. It was proposed that IOC (In-
dian Oil Company), a major public sector oil
company, float a SPV (special purpose ve-
hicle) for the purpose of construction and
operation of the storage system. However,
the project has not taken off yet, mainly be-
cause of the issue of funding and the high
crude oil prices in the international market.
With increased availability of natural gas
in the country, the Government of India is
also considering building of underground
natural gas storage facilities for strategic use.
The government has recognized that with
the growing importance of natural gas as
fuel/feedstock for several key sectors like
power, fertilizer, steel, transport, and do-
mestic, creation of strategic gas storage sys-
tems would be imperative for assuring
uninterrupted supplies. An expert team has
recommended building of reserves for 15
days of gas consumption at the current rate
of consumption of about 1000 million stan-
dard cubic metres or 1 BCM of gas. Initial
investment estimates for creating an under-
ground gas storage facility have been pegged
at 100 million dollars. It has been proposed
that a detailed feasibility survey be carried
out for development of underground gas
storage facilities in the country, which may
114 National Energy Map for India: Technology Vision 2030

be funded by the OIDB (Oil Industry Devel- Table 3.88 Oil refinery capacity in India
opment Board) through an initial grant.
(2005)

Name of the Location of Capacity

3.2.2.2 Global hydrocarbon company the refinery (MTPA)
reserves IOCL Guwahati 1.00
IOCL Barauni 6.00
The global hydrocarbon reserves as per the
IOCL Koyali 13.70
BP (2006) indicate that oil availability at the
IOCL Haldia 6.00
current R/P ratio is expected to be about
40.7 years. The global natural gas availability IOCL Mathura 8.00
at the current R/P ratio is 65 years. Appendix IOCL Digboi 0.65
4 gives information on the region-wise hy- IOCL Panipat 6.00
drocarbon reserves till the end of 2005, and HPCL Mumbai 5.50
the daily production and R/P ratios over the HPCL Visakhapatnam 7.50
past 26 years, from 1980 to 2005 (BP 2006).
BPCL Mumbai 6.90
CPCL Manali 9.50

3.2.2.3 Refineries in India CPCL Nagapattinam 1.00

KRL Kochi 7.50
As of July 2005, there are a total of 18 refin- BRPL Bongaigaon 2.35
eries in the country17 in the public sector NRL Numaligarh 3.00
and one in the private sector. Company-wise MRPL Mangalore 9.69
location and capacity of the refineries (as on
Tatipaka Andhra Pradesh 0.08
1 July 2005) are given in Table 3.88.
refinery
(ONGC)
3.2.2.3.1 Brief description of RPL Jamnagar 33.00

existing refineries Total 127.37

3.2.2.3.1.1 Guwahati Refinery,
Indian Oil Corporation Ltd (Assam)
Guwahati Refinery, the first in public sector,
was set up in collaboration with Rumania at
a cost of 17.29 crore rupees and commis-
sioned on 1 January 1962 with a design ca-
pacity of 0.75 MTPA. The present capacity
(2004/05) of this refinery is 1 MTPA. A
Hydrotreater Unit for improving the quality
of diesel has been installed, which was
IOCL Indian Oil Corporation Ltd;
HPCL Hindustan Petroleum Corporation Ltd;
BPCL Bharat Petroleum Corporation Ltd;
CPCL Chennai Petroleum Corporation Ltd;
KRL Kochi Refineries Ltd; BRPL Bongaigaon
Refinery and Petrochemicals Ltd; NRL Numaligarh
Refinery Ltd; MRPL Mangalore Refinery and
Petrochemicals Ltd; ONGC Oil and Natural Gas
Corporation Ltd; RPL Reliance Petroleum Ltd;
MTPA million tonnes per annum
Sectoral demand projections, technological characterization, and resources availability
commissioned in 2002. The refinery also in-
stalled in 2003 an Indmax Unit, a novel
technology developed by its R&D Centre for
upgrading heavy-end LPG, motor spirit,
and diesel.
3.2.2.3.1.2 Barauni Refinery,
Indian Oil Corporation Ltd (Bihar)
Barauni Refinery in the eastern India was
built in collaboration with the Soviet Union
at a cost of 49.4 crore rupees and went on
stream in July 1964. The initial capacity of
2 MTPA (in November 1967) was increased
to 3 MTPA by 1969. The current capacity
(2004/05) of this refinery is 6 MTPA.
A CRU (Catalytic Reformer Unit) was also
added to the refinery in 1997 for the produc-
tion of unleaded motor spirit. Projects are
also being planned for meeting improving
fuel quality.
3.2.2.3.1.3 Koyali Refinery, Indian
Oil Corporation Ltd (Gujarat)
Gujarat Refinery was built with the Soviet
assistance at a cost of 26 crore rupees and
went on stream in October 1965. The refin-
ery had an initial installed capacity of
2 MTPA and was designed to process crude
from Ankleshwar, Kalol, and Nawagam
oilfields of ONGC in Gujarat. In September
1967, the capacity of the refinery was in-
creased to 3 MTPA, which was further in-
creased to 4.3 MTPA (2004/05) through
debottlenecking measures and to 7.3 MTPA
in October 1978 with the setting up of an
expansion project worth 56.07 crore rupees.
With the addition of additional processing
115
facilities, the refinery could achieve a capac-
ity of 9.5 MTPA in 1989. The refining ca-
pacity was further increased to 12.5 MTPA
with the commissioning of a 3 MTPA CDU
(Crude Distillation Unit) in September
1999. The current refining capacity (as of
2004/05) of this refinery is 13.70 MTPA. In
order to improve fuel quality, motor spirit
quality improvement facilities are being
planned to be installed.
3.2.2.3.1.4 Haldia Refinery, Indian
Oil Corporation Ltd (West Bengal)
Haldia Refinery for processing 2.5 MTPA of
Middle East crude was commissioned in
January 1975 and comprised two sectors:
one for producing fuel products and the
other for producing lube base stocks. The
fuel sector was built with French collabora-
tion while the lube sector resulted from Ro-
manian collaboration. The capacity of the
refinery was increased to 2.75 MTPA in
1989 through debottlenecking measures.
With the commissioning of a new CDU of
1 MTPA in March 1997, the capacity was
further increased to 3.75 MTPA. The
present refining capacity (as of 2004/05) of
this refinery is 6 MTPA.
3.2.2.3.1.5 Mathura Refinery,
Indian Oil Corporation Ltd
(Uttar Pradesh)
Mathura Refinery with a capacity of
6 MTPA was set up at a cost of 253.92 crore
rupees. The refinery was commissioned in
January 1982, excluding FCCU (Fluidized
Catalytic Cracking Unit) and Sulphur
116 National Energy Map for India: Technology Vision 2030
Recovery Units, which were commissioned
in January 1983. The refining capacity of
this refinery was increased to 7.5 MTPA in
1989 by debottlenecking and revamping. A
DHDS (Diesel Hydrodesulohurization)
Unit was commissioned in 1989 for the pro-
duction of diesel with low sulphur content of
0.25% wt (max.). The present refining capac-
ity (as of 2004/05) of this refinery is 8 MTPA.
3.2.2.3.1.6 Digboi Refinery (Assam)
The refinery was set up at Digboi in 1901 by
Assam Oil Company Ltd. The Indian Oil
Corporation Ltd took over the refinery and
marketing management of Assam Oil Com-
pany Ltd with effect from 14 October 1981
and created a separate division. This division
has both refinery and marketing operations.
The refinery at Digboi had an installed ca-
pacity of 0.5 MTPA. The refining capacity of
the refinery was increased to 0.65 MTPA in
July 1996 by modernizing the refinery. A
new delayed Coking Unit of 170 000 TPA
(tonnes per annum) capacity was commis-
sioned in 1999. A new Solvent Dewaxing
Unit for maximizing production of micro-
crystalline wax was installed and commis-
sioned in 2003. The refinery has also
installed a Hydrotreater to improve the qual-
ity of diesel.
3.2.2.3.1.7 Panipat Refinery,
Indian Oil Corporation Ltd
(Haryana)
The refinery was set up in 1998 at Baholi vil-
lage in Panipat district, Haryana, at a cost of
3868 crore rupees. The refining capacity of
this refinery was 6 MTPA in 2004/05. It was
increased to 12 MTPA in 2005/06.
3.2.2.3.1.8 Mumbai Refinery,
Hindustan Petroleum Corporation
Ltd (Maharashtra)
The refinery at Mumbai came into stream in
1954 under the ownership of ESSO. The
Government of India acquired it in March
1974. The HPCL (Hindustan Petroleum
Corporation Ltd) came into existence on
15 July 1974, after the merger of these com-
panies. The installed capacity of the Mumbai
refinery of HPCL was 3.5 MTPA, which was
increased to 5.5 MTPA in 1986 following an
expansion programme.
3.2.2.3.1.9 Visakh Refinery,
Hindustan Petroleum Corporation
Ltd (Andhra Pradesh)
Visakh Refinery went on stream under the
ownership of M/s Caltex India Ltd in 1957.
In May 1978, M/s Caltex Oil Refinery (India)
was amalgamated with HPCL. The installed
capacity of 1.5 MTPA was increased to
4.5 MTPA in 1985 and 7.5 MTPA in 1999
through an expansion programme.
3.2.2.3.1.10 Bharat Petroleum
Corporation Ltd (Maharashtra)
The refinery at Mumbai came on stream in
January 1955 under the ownership of
Burmah-Shell Refineries Ltd. Following the
governments acquisition of the Burmah-
Sectoral demand projections, technological characterization, and resources availability
Shell, name of the refinery was changed to
Bharat Refineries Ltd on 11 February 1976.
In August 1977, the company was given its
permanent name Bharat Petroleum Corpora-
tion Ltd. The installed capacity of 5.25 MTPA
was increased to 6 MTPA in 1985. The cur-
rent (as on 2004/05) refining capacity of the
refinery is 6.9 MTPA.
3.2.2.3.1.11 Manali Refinery,
Chennai Petroleum Corporation
Ltd (Tamil Nadu)
CPCL (Chennai Petroleum Corporation
Ltd), formerly known as MRL (Madras Re-
fineries Ltd), was formed as a JV in 1965 be-
tween the Government of India, AMOCO,
and NIOC (National Iranian Oil Company),
having a share holding in the ratio
74%:13%:13%, respectively. From the
grass-roots stage, the CPCL refinery was set
up with an installed capacity of 2.5 MTPA in
a record time of 27 months at a cost of
43 crore rupees, without any time or cost
over run. The Manali refinery has a capacity
of 9.5 MTPA and is one of the most complex
refineries in India with fuel, lube, wax, and
petrochemical feedstock production facilities.
3.2.2.3.1.12 Cauvery Basin
Refinery, Chennai Petroleum
Corporation Ltd (Tamil Nadu)
CPCLs second refinery is located at
Cauvery Basin at Nagapattinam. The initial
unit was set up with a capacity of 0.5 MTPA
in 1993, and later on, the capacity was en-
hanced to 1 MTPA.
117
3.2.2.3.1.13 Kochi Refineries Ltd
(Kerala)
KRL (Kochi Refineries Ltd) is a public sec-
tor undertaking, set up in pursuance of a for-
mation agreement dated 27 April 1963
between the Government of India, Phillips
Petroleum Co. of USA, and Duncan Broth-
ers of Calcutta, with an authorized capital of
15 crore rupees. The installed capacity of
2.5 MTPA was increased to 3.3 MTPA in
September 1973 and to 4.5 MTPA in
November 1994. The capacity of the refinery
was further enhanced to 7.5 MTPA in
December 1995.
3.2.2.3.1.14 Bongaigaon Refinery
and Petrochemicals Ltd (Assam)
On 20 January 1974, M/s BRPL
(Bongaigaon Refinery and Petrochemicals
Ltd) was incorporated in Assam under the
Companies Act, 1956, with an authorized
capital of 50 crore rupees. The refinery was
installed with a crude processing capacity of
1 MTPA and comprised a Petrochemicals
Complex consisting of Xylene, DMT (Di-
Methyl Terephthalate), and PSF (Polyester
Staple Fibre) Units. The complex was built
and commissioned in phases. From April
1987, the capacity of the CDU was in-
creased to 1.35 MTPA by debottlenecking.
Now the authorized capital (equity) of the
company is 200 crore rupees. The paid-up
capital as on date is 199.82 crore rupees. As
a part of the restructuring steps taken up by
the Government of India, IOCL (Indian
Oil Corporation Ltd) acquired the
governments equity in 2000/01. In view of
this, BRPL became subsidiary of IOCL in
118 National Energy Map for India: Technology Vision 2030
2001. The capacity of the refinery has been
increased to 2.35 MTPA in June 1995 by
installing an additional unit.
3.2.2.3.1.15 Numaligarh Refinery
Ltd (Assam)
NRL (Numaligarh Refinery Ltd), popularly
known as Assam Accord Refinery, has been
set up as a grass-root refinery at Numaligarh
in the district of Golaghat (Assam) at an ap-
proved cost of 2724 crore rupees. This
project has been set up in fulfilment of the
commitment made by the Government of
India in the historic Assam Accord, signed
on 15 August 1985. NRL was incorporated
on 22 April 1993. The refining capacity of
this refinery is 3 MTPA (as on 2004/05).
3.2.2.3.1.16 Mangalore Refinery
and Petrochemicals Ltd (Karnataka)
The government approved on 11 April 1991
the setting up of a 3 MTPA Oil Refinery
at Mangalore at an estimated cost of 1160
crore rupees, including foreign exchange
component of 300 crore rupees. The project
has been implemented by a JV company with
HPCL, Mumbai, and Indian Rayon and In-
dustrial Ltd, Gujarat, as co-promoters.
The refinery was commissioned in March
1996. MRPL (Mangalore Refinery and Pet-
rochemicals Ltd), which was a joint sector
company, became a public sector undertak-
ing subsequently on acquisition of majority
of shares by ONGC. The capacity of the re-
finery was assessed at 3.69 MTPA and was
been further enhanced to 9.69 MTPA in
September 1999.
3.2.2.3.1.17 Tatipaka Refinery, Oil
and Natural Gas Corporation Ltd
(Andhra Pradesh)
A mini refinery of ONGC with a capacity of
about 0.1 MTPA and an approved cost of
29.9 crore rupees was commissioned in Sep-
tember 2001 at Tatipaka in East Godavari
district of Andhra Pradesh.
3.2.2.3.1.18 Reliance Petroleum
Ltd (Jamnagar, Gujarat)
The private sector refinery RPL (Reliance
Petroleum Ltd) was commissioned on
14 July 1999 with an installed capacity of
27 MTPA at Jamnagar. The capacity of this
refinery as on 2004/05 is 33 MTPA.
3.2.2.3.2 Refining capacity and
capacity utilization
To meet the growing demand of petroleum
products, the refining capacity in the coun-
try has been gradually increased over the
years by setting up new refineries as well as
by enhancing the refining capacity of the ex-
isting refineries. The total refining capacity
in the country as on 1 July 2005 stands at
127.37 MTPA.
The refining capacity, actual crude
throughput, and capacity utilization
during the past five years are indicated in
Table 3.89.
Sectoral demand projections, technological characterization, and resources availability 119

Table 3.89 Refining capacity, actual crude throughput, and capacity utilization during the
past five years

2000/01 2001/02 2002/03 2003/04 2004/05

Refining capacity (as on 1 April) 114.59 114.66 116.96 127.37 127.37
Actual crude throughput (MTPA) 103.10 106.50 10.60 118.70 124.30
Capacity utilization (%) 91.00 93.00 95.00 99.00
MTPA million tonnes per annum

3.2.2.3.3 Expansion of existing 3.2.2.3.4 Hydrocarbon resources

refineries (input to the model)

Expansion plans of the refining capacities of
the existing refineries of the HPCL are de-
tailed below.

HPCL is enhancing the refining capacity
of Mumbai Refinery from 5.5 MTPA to
7.9 MTPA at an estimated cost of 1152
crore rupees. The project is expected to
be completed by December 2006.

Expansion of Visakh Refinery of HPCL
from 7.5 MTPA to 8.33 MTPA is taking
place at an estimated cost of 1635 crore
rupees. The project is expected to be
completed by December 2006.
Table 3.90 provides details of the new
refineries planned in the Eleventh Five Year
Plan.
The latest estimates indicate that India has
about 0.4% of the worlds proven reserves of
crude oil. The domestic crude consumption
is estimated at 2.8% of the worlds consump-
tion. The balance of recoverable reserves as
estimated in the beginning of 2001 is 733.70
MT of crude and 749.65 BCM of natural
gas. The share of hydrocarbons in the pri-
mary commercial energy consumption of the
country has been increasing over the years
and is presently estimated at 44.9% (36%
for oil and 8.9% for natural gas). The de-
mand for oil is likely to increase further dur-
ing the next two decades. The transport
sector will be the main driver for the pro-
jected increase in oil demand. Consequently,
the import dependency for oil, which is

Table 3.90 New refineries planned in the Eleventh Five Year Plan

Capacity Expenditure Actual/anticipated

Name of refineries (MTPA) (in crore rupees) completion date
IOCL, Paradip 9 8312 March 2010
BPCL, Bina 6 6354 September 2009
HPCL, Bhatinda 9 9806 December 2006
IOCL Indian Oil Corporation Ltd; BPCL Bharat Petroleum Corporation Ltd; HPCL Hindustan Petroleum
Corporation Ltd; MTPA million tonnes per annum
120 National Energy Map for India: Technology Vision 2030

presently about 70%, is likely to increase
further during the Tenth and Eleventh Plans.
India has about 0.4% of the worlds natu-
ral gas reserves. Initially, the gas reserves had
been developed largely for use as petro-
chemical feedstock and for the production of
fertilizers, but gas is now increasingly being
used for power generation, in industrial ap-
plications and, more recently, in the trans-
port sector. Presently, the share of power
generation capacity based on gas is about
10% of the total installed capacity. The India
Hydrocarbon Vision 2025 of the government
identifies natural gas as the preferred fuel for
the future and several options are being ex-
plored to increase its supply including build-
ing facilities to handle imports of LNG and
bringing gas from major gas-producing
countries by setting up pipelines. India is
also reported to have significant deposits of
gas hydrates. However, the true extent of this
resource and its potential for commercial
exploitation are still being evaluated. In ad-
dition, deep-sea gas reserves are unknown
and need to be explored.
Crude oil production in 2001/02 was
32 MT while crude imports were about
80 MT. The production levels have remained
more or less stagnant over the past few years
while the imports of crude and products
have been increasing. The refining crude
throughput in 2001/02 was 107 MT with a
production of 100 MT.
The production of natural gas in 2001/02
was 29.71 BCM. Natural gas may be im-
ported in the form of LNG by trans-national
pipelines. At present, India is importing
natural gas in the form of LNG by two ter-
minals, and three more terminals are being
planned. The daily availability of natural gas
in India through domestic extraction and
import through LNG terminals and pipe-
lines, as considered in our model, is shown
in Table 3.91. Besides these levels, we have
assumed LNG imports from the outer
harbour at an additional cost.

Table 3.91 Natural gas availability

Natural gas availability (MSCMD)

2006/07 2011/12 2016/17 2021/22 2026/27
Total domestic 84 123 125 125 125
Total LNG import 25 65 95 125 135
Trans-national pipelines
IranPakistanIndia 0 30 90 90 90
MyanmarIndia 0 0 30 30 30
Total pipelines 0 30 120 120 120
Total imports 25 95 215 245 255
Total 109 218 340 370 380
MSCMD million standard cubic metre daily; LNG liquefied natural gas
Sectoral demand projections, technological characterization, and resources availability 121

3.2.2.3.5 Energy prices Table 3.92 Prices of different types of coal

in three different scenarios
The economic costs of energy resources have
been considered in the model. Accordingly, Current
taxes and subsidies are not considered to re- price
flect the price differentiation across various Current deflated
consuming segments/uses. As such, c.i.f. price to 2001
(cost insurance freight) prices are consid-
(dollar/ (dollar/
ered for imported fuels while f.o.b. (freight
Fuel tonne) tonne)
on-board) prices are taken into account for
domestic extraction and exports. Owing to Non-coking Import 60 50

large variation in the fuel prices during the coal Export 41 34

past three to four years, we have considered Domestic 35 29
current fuel prices for this analysis. For coal, Coking coal Import 85 71
correction factors are used with f.o.b. price, Export 59 49
taking into account different calorific values
Domestic 59 49
of domestic coal, and imported and ex-
Lignite Domestic 25 21
ported coal. For non-coking coal, an import
price of 60 dollars per tonne is used. Table 1 dollar is 47.7 rupees for 2001 and 43.53 rupees for
2005.
3.92 presents the prices considered for dif-
ferent types of coal.
The current f.o.b price for petroleum 3.2.3 Power sector
products is estimated by using average value
of the ratios of their prices with respect to Total installed capacity of power utilities in-
the crude oil price (average value during the creased from 5106 GW (gigawatts) in 1950
period 200104). The c.i.f. prices are esti- to 264 231 GW in 1991, registering an an-
mated by adding load port charges, freight, nual growth rate of 10.4% over the period.
insurance, and ocean losses to the f.o.b. Until 1980s, the growth rate in hydro power
prices. Table 3.93 presents the prices consid- and thermal power was comparable, but
ered for crude oil and other key petroleum during the 1980s, hydro power generation
products. increased at a rate of 4.4% compared to the
For LNG, the c.i.f. cost of the latest Ira- growth rate of 11.6% in the thermal power.
nian deal (3.515 dollars/MMBTU), with an Owing to the decline in hydro power devel-
additional re-gasification cost of 0.58 dollar/ opment and prevailing peak power deficits,
MMBTU, has been used. For the import of coal-fired thermal power units are often
natural gas by pipelines, re-gasification cost used for meeting peak loads. Ten nuclear
is not included. For domestic natural gas, power plants account for 2.5%2.7% of total
f.o.b. price of 3.21 dollars/MMBTU has utility generation.
been considered. These prices have been de- The poor performance of Indias existing
flated for 2001. Table 3.94 presents prices of generating units has been a principal cause
natural gas considered in this study. of power shortages and unreliable power
122 National Energy Map for India: Technology Vision 2030

Table 3.93 Price of crude and other petroleum products

f.o.b./ Current Current price

Fuel c.i.f. Unit price deflated to 2001
Crude oil f.o.b. dollars/bbl 60 50
c.i.f. dollars/bbl 62 51
HSD f.o.b. dollars/tonne 531 443
c.i.f. dollars/tonne 544 453
Gasoline f.o.b. dollars/tonne 627 523
c.i.f. dollars/tonne 641 534
Kerosene f.o.b. dollars/tonne 567 472
c.i.f. dollars/tonne 580 484
ATF f.o.b. dollars/tonne 567 472
c.i.f. dollars/tonne 580 484
Naphtha f.o.b. dollars/tonne 544 453
c.i.f. dollars/tonne 557 464
LPG f.o.b. dollars/tonne 554 462
c.i.f. dollars/tonne 873 728
HSD high speed diesel; ATF aviation turbine fuel; LPG liquefied petroleum gas;
f.o.b. freight on-board; c.i.f. cost insurance freight; bbl barrel

Table 3.94 Prices of natural gas supply. The primary culprits are coal-fired
thermal power stations that account for over
Current Current price 65% of the total installed capacity. The aver-
price deflated to age PLF (plant load factor) of thermal
(dollars/ 2001 (dollars/
power stations in India is less than 60%, but
varies considerably across regions. In 1989/
MMBTU) MMBTU)
90, the southern region had the highest PLF
Domestic natural gas 3.210 2.68
of 65.6%, while the eastern and the north-
Import of natural gas 3.515 2.93 eastern regions recorded very low PLFs of
by pipelines 38.5% and 26.8%, respectively. In contrast,
LNG import by terminal 4.100 3.42 hydro power stations have far better track
LNG liquefied natural gas; MMBTU million British record due to the fact that their performance
thermal unit relies largely on water flow.
However, not all thermal power generat-
ing stations have such dismal records. For
instance, the performance of 500-MW and
200-MW units has been satisfactory, and
their PLFs have been higher than the
Sectoral demand projections, technological characterization, and resources availability
national average. It is, in fact, the thermal
units of 120 MW, 140 MW, and less that are
the cause for concern. Most of these units
have already logged more than 100 000 run-
ning hours, and their performance can only
be improved through a long-term rehabilita-
tion or re-powering programme.
3.2.3.1 Thermal power generation
Till 1969, the thermal power generation
plants in India were in the capacity range of
3060 MW, having moving grate stoker or
pulverized coal firing and conventional
steam cycle with steam parameters of 90 ata
(atmospheres absolute) and 540 oC, and no
reheating (Table 3.95). This gave heat rates
above 2200 kcal/kWh for the turbinegen-
erator system. With pulverized coal firing,
there has been a gradual rise in unit ratings
to 210, 250, and 500 MW over the years. The
heat rate has thus been improved to a level of
1950 kcal/kWh for 250- and 500-MW units.
The earlier heat rate of 1970 for a 210-MW
unit has also been improved recently by
Table 3.95 Power generation steam cycles with different unit ratings
Unit rating (MW) Cycle parameters
70 90 ata, 537 oC, non-reheat
120/130 130 ata, 537 oC/537 oC, reheat
210 150 ata, 537 oC/537 oC, reheat
(with motor-driven BFP)
250 150 ata, 537 oC/537 oC, reheat
(with motor-driven BFP)
500 170 ata, 537 oC/537 oC, reheat
(with steam-driven BFP)
*Considering boiler efficiency as 85%. For net heat rate, auxiliary power consumption also to be considered.
MW megawatts; ata atmospheres absolute; BFP back focal plane; kcal kilocalories; kWh kilowatt-hours
123
39 kcal/kWh (BHEL 2002) through T4
blading, used in place of the earlier T2 type
blading, and implemented for Khaperkheda
TPS extension units 3 and 4 of Maharashtra
State Electricity Board. Introduction of T4
blade profiles for the future 250- and 500-
MW units will also improve upon the exist-
ing heat rates. However, as far as sub-critical
steam cycle is concerned, the plant effi-
ciency has reached virtually its peak. Further
improvement will be possible only by adopt-
ing super-critical steam parameters and
other advanced cycles based on PFBC and
gasification.
While using premium fuels like natural
gas and naphtha, contemporary design of
gas turbines (Table 3.96) has been adopted
in the country, and the combined cycle
power generation efficiency to the level of
53% has been achieved at ISO conditions,
that is, 15 C ambient temperature, 60%
relative humidity, and barometric pressure
corresponding to mean sea level. The effi-
ciency levels in Indian conditions are, thus,
50%51%. Now, we have to look further to
achieve higher efficiencies.
Turbine heat rate *Gross plant heat
(kcal/kWh) rate (kcal/kWh)
2200 2588
1980 2330
1970 2318
1970 2314
1945 2288
124 National Energy Map for India: Technology Vision 2030

Table 3.96 Contemporary gas turbines using natural gas as fuelperformance at ISO
conditions

Exhaust GT inlet CCPP

ISO rating Heat rate Efficiency flow temperature efficiency
o
Model (MW) (kcal/kWh) (%) (kg/s) ( C) (%)
V94.2 163.3 2496 34.5 526.0 1060 52.5
PG9171(E) 126.1 2545 33.8 418.0 1124 52.7
GT13E2 172.2 2363 36.3 532.0 1150 53.1
M701 144.1 2472 34.8 440.8 1120 51.4
MW megawatts; kcal kilocalories; kWh kilowatt-hours; kg kilogram; s seconds; GT gas turbine;
CCPP combined cycle power plant

From atmospheric pollution control to overall high concentration of SOx, leading

point of view, there has been a significant
progress with respect to control of particu-
late matter emissions to the desired levels of
150 mg/Nm3 (milligrams per Newton per
cubic metre) for most of the 200- and 210-
MW units, and 100 mg/Nm3 for 500-MW
units. Emissions from the older units, in
which retrofit of modified ESP (electrostatic
precipitator) has not been done, are high.
However, there are no mandatory controls
desired for SOx (oxides of sulphur) and NOx
(oxides of nitrogen). We in India are lucky
that coal contains generally less than 0.5%
sulphur, and SOx emissions are within limits.
3.2.3.1.1 Advanced technologies
3.2.3.1.1.1 Flue gas desulphurization
and deNOx system
Even though SOx emissions from individual
stacks, while using low-sulphur coal, are
within limits, those from super thermal
power stations within a small space may lead
to acid rain. In such cases, removing SO x by
scrubbing off flue gases with lime, known as
FGD (flue gas desulphurization), may be-
come necessary. This will lead to an increase
in capital and operating cost. Literature sur-
vey reveals that the increase in capital cost
will be of the order of 15%20%, and cost of
generation may increase by 10%15%.
The FGD technology is fully established
in advanced countries for the past two de-
cades, and can be obtained for applications
in India whenever required.
Presence of NOx in the flue gases of pul-
verized coal-fired boilers can be controlled
at the combustion stage (through low-NOx
burners/overfire air) or through SCR (selec-
tive catalytic reduction). In this process,
NOx and NH3 (ammonia) react to form ni-
trogen and water vapour. The capital cost of
SCR system is in the range 90100 dollars
per kW of the installed capacity. The systems
can be designed both for high dust applica-
tions (before subjecting dust to APH [air
pre-heater] and low dust applications (after
subjecting dust to ESP). However, India
lacks experience with respect to application.
Sectoral demand projections, technological characterization, and resources availability 125

3.2.3.1.1.2 Supercritical steam eters of 306 ata/598 oC/598 oC are adopted.

For a pithead 3 660 MW supercritical
cycle
station, the capital cost saving projected
in 1999 was about 2.5% as compared to
The steam cycle operating at steam pressure
4 500 MW units. In developed countries,
above 225.36 ata is called supercritical
where the technologies for supercritical
steam cycle. At this pressure, the density of
power plants are mature, the capital cost per
water and steam is same. Thus, there is no
kW is virtually the same as that of sub-criti-
need for a boiler drum that separates steam
cal plants. Thus, selection of a sub-critical or
from water. The boiler used for this applica-
supercritical unit often depends upon a
tion is called once-through unit. The rest of
power producers experience and the pres-
the power plant remains the same, except the
sure to reduce fuel consumption (giving
number of HP/LP (high pressure/low pres-
benefits of reduction of cost of power gen-
sure) heaters chosen to optimize the cycle.
eration as well reduced emissions of particu-
The improvement in heat rates while adopt-
lates, SOX, NOX, and CO2).
ing supercritical parameters for Indian am-
In terms of operational availability and
bient conditions is shown in Figure 3.18.
reliability, the EPRI (Electric Power Re-
It may be seen from this figure that com-
search Institute) study of supercritical plants
pared to the base case of steam parameters
operating in USA has confirmed that outage
(170 ata/537 oC/537 oC), the improvement
rates are comparable to drum-type units, af-
in heat rate will be 2.1% when steam param-
ter initial period of learning of technology
eters adopted are 246 ata/537 oC/565 oC and
operations.
5% when USC (ultra-supercritical) param-
With the commercial in-
troduction of new steel al-
Figure 3.18 Improvement in heat loys with higher allowable
rates with steam parameters stresses and longer life at el-
evated temperatures, a num-
ber of power plants with
USC parameters (above 280
ata with double reheat or
306 ata/598 oC/598 oC) have
come up in advanced coun-
tries like Japan, EU, and
USA. Based on these suc-
cesses, researchers continue
to improve designs and ma-
terials, and it appears that
the USC plants with main
steam parameters of 357 ata/
625 oC/625 oC will become
fully commercial in the next
510 years.
126 National Energy Map for India: Technology Vision 2030

3.2.3.1.1.3 Advance class gas
turbines
With the increase in the cost of premium fu-
els like natural gas, naphtha, and LNG, there
is an ever-increasing pressure on gas turbine
designers and manufacturers of higher effi-
ciency combined cycle systems to produce
power at competitive rates compared to
coal-fired plants. The improved efficiency
obviously leads to reduction in emissions of
SOx, NO x, and CO2 also.
Introduction of advance class turbines
with inlet temperature in the range 1250
1350 oC has led to combined cycle power
plant efficiency of about 58% on LHV (low
heating value) basis and under ISO condi-
tions (Table 3.97). Corresponding value in
Indian conditions is in the range 55%
56.5%. A number of plants are in operation
throughout the world. However, there are
only a few in India (for example, 2 9 FA at
Dabhol and 3 6 FA at Kovilkallapal,
Peringulam, and Dhuvaram). Advance class
gas turbines with dry low NOx combustion
system using natural gas also generate less
than 25 PPM (parts per million) NOx.
Further research to improve efficiency is
in progress, and gas turbines employing
steam injection with gas inlet temperature of
1430 oC and combined cycle efficiency of 60%
are available commercially in the UK and
USA.
3.2.3.1.1.4 Coal-based
combined cycle systems
The approach towards further improvement
in efficiency of, or reduction of pollution
from, coal-based power generation leads to
two thermodynamic cycles including gas
turbine in topping cycle and a steam turbine
in a bottoming cycle, and hence is called
combined cycle. However, gas turbines need
clean fuel gas or clean flue gas. Therefore,
use of coal calls for its conversion to clean
combustion products or coal gas at high
pressure. Two technologies have been devel-
oped: (a) PFBC and (b) IGCC.

Table 3.97 Advance class gas turbinesperformance at ISO conditions

Exhaust CCPP
ISO rating Heat rate Efficiency flow GT inlet/exhaust efficiency
o
Model (MW) (kcal/kWh) (%) (kg/s) temperature ( C) (%)
V94.3A 278.0 2239 38.4 670.0 1300/582 57.5
9FA 255.6 2331 36.9 641.0 1300/602 57.1
GT26 281.0 2245 38.3 631.7 1280/615 57.8
M701F 270.3 2250 38.2 650.8 1350/586 57.3
M701G 334.0 2180 39.4 736.8 1400/587 58.7
MW megawatts; kcal kilocalories; kWh kilowatt-hour; kg kilogram; s seconds; GT gas turbine;
CCPP combined cycle power plant
Sectoral demand projections, technological characterization, and resources availability 127

3.2.3.1.1.4.1 Pressurized fluidized it is economical to adopt pressurized gasifi-

cation. The hot raw gas from the gasifier is
bed combustion
cooled by generating steam through HRSG
(heat recovery steam generation). This steam
In the PFBC concept, the conventional com-
is integrated in the combined cycle with the
bustion chamber of the gas turbine is re-
steam produced from HRSG downstream of
placed with PFB combustor (bubbling or
the gas turbine. Part of the steam produced
circulating) and hot gas clean-up system.
is used in the gasifier. Thus, the cycle is
The combustion products pass through gas
called IGCC.
turbine and the heat recovery steam genera-
Typically, the IGCC efficiency is the
tor. The system is thus a combined cycle,
product of the gasifier efficiency (achievable
which is capable of giving generation effi-
90%) and the combined cycle efficiency
ciency 5%6% higher than sub-critical
(55% with contemporary gas turbines, as
steam cycle plants. Therefore, the system is a
explained in Section 4.3), giving a value of
strong competitor for USC steam cycle.
41%42% compared to 40% achievable
Six commercial PFBC demonstration
through USC steam cycle. This will propor-
plants (each less than 100-MW capacity) are
tionately reduce CO2 emission. The SO x
operating around the world. The application
emission can be brought down to 40115
is generally CHP (combined heat and
mg/Nm3, as the sulphur is removed in the
power). A 360-MW unit based on ABB tech-
gasification process itself. The NOx emission
nology and a 250-MW unit based on Hitachi
has also been reported to reduce to levels
technology were commissioned in 2003/04
below 125 mg/Nm3. A number of commercial
in Japan. The operating experience obtained
plants using coal or refinery residues as fuel
from these units will have a strong influence on
have come up all over the world (Table 3.98).
the future of commercial PFBC technology.
The main barriers to widespread adop-
In India, only BHEL has done R&D work
tion of IGCC technologies are: (a) high capi-
on pilot-scale PFBC, and tested combustion
tal cost compared to pulverized coal plant
characteristics of few coal types. Recently,
and (b) demonstration of high availability, at
they have also tested ceramic-candle-based
least equal to existing PC plants. However,
hot gas clean-up system. The data generated
the costs are coming down. A recent joint
will be useful in designing a demonstration
study by Texaco, General Electric, and
plant in India.
Praxair has shown that for a 550-MW power
block, with the introduction of 9H gas tur-
bine technology with firing temperature in
3.2.3.1.1.4.2 Integrated the range 14001450 0C, the efficiency,
gasificaiton combined cycle capital cost, and cost of generation have sig-
nificantly improved (Figure 3.19) for the pe-
Coal gas can be produced by reacting coal riod 19942000.
with air/steam or oxygen/steam; the former In India, pioneering work has been done
reaction produces low CV (calorific value) on coal-based IGCC by BHEL on a 6.2-
gas whereas the latter reaction produces me- MWe pilot plant at Trichy, using both pres-
dium CV gas. For combined cycle operation, surized moving bed gasifier and PFBG.
128 National Energy Map for India: Technology Vision 2030

Table 3.98 Integrated gasification combined cycle experience in the world

Project Process Start-up Output Feed Power block

GSK (Japan) Texaco 2001 540 MW VB Tar 2xGE 9EC
Fife Power (Scotland) BGL 2000 400 MW Coal/RdF 2xGE 9FA

Shell Pernis (the Netherlands) Shell 1997 120 MW + H 2 Heavy oil 2xGE 6B
Sierra Pacific (1) (Nevada) KRW 1998 100 MW Coal GE 106 F
Elcogas (Spain) Pernflow 1998 300 MW Coal/coke KWU V94.3

ISE (Italy) Texaco 2000 520 MW Asphalt 2xKWU V94.3

SARAS (Italy) Texaco 2000 550 MW VB Tar 3xGE 109E
Star (Delaware) Texaco 1999 240 MW Petcoke 2xGE 6FA

API (Italy) Texaco 2000 275 MW VB Tar ABB 13 E2

Cool Water (California) Texaco 1984 120 MW Coal GE 107E
Dow Plaquemine (USA) Destec 1986 220 MW Coal GE 107E

Demkolee (the Netherlands) Shell 1993 250 MW Coal KWU V94.2

Tampa Electric (Florida) Texaco 1996 260 MW Coal GE 107 FA
Texaco-Eldorado (Kansas) Texaco 1996 40 MW Petcoke GE 6B

PSI-Wabash (1) (Indiana) Destec 1996 262 MW Coal GE 7FA

Schwarze/Pumpe (Germany) Noell 1996 40 MW Coal/oil GE 6B
Fife Power (Scotland) BGL 1999 120 MW Coal/sldg GE 106FA

Total (France) Texaco 2004 365 MW Ref. residue ABB

EXXON (USA) Texaco 1999 40 MW Petcoke GE 6B
EXXON (Singapore) Texaco 2000 180 MW Ref. residue 2xGE 6FA

NPRC (Japan) Texaco 2003 340 MW Asphalt

Repsol (Spain) Texaco 2004 824 MW Ref. residue
CITAGO (USA) Texaco 2004 350 MW Petcoke

MW megawatts; BGL British gas Lurgi; KRW KelloggRustWestinghouse

Based on this work, design of a 100-MW 1992 a feasibility assessment report of

IGCC demonstration plant with PFBG has
been developed. It is learnt that BHEL and
National Thermal Power Corporation are
jointly working for setting up a plant of this
rating. Also a techno-economic feasibility
study for a 500-MW IGCC plant is being
worked out. The Council of Scientific and
Industrial Research has also published in
IGCC for a 500600 MW plant with the
primary objective of selecting gasification
technology for its application for high-ash
Indian coal (base case of North Karanpura
coal with HHV [high heating value] of
3332 kcal/kg). This study gave the cost
comparison as presented in Table 3.99.
Sectoral demand projections, technological characterization, and resources availability 129

Figure 3.19 Economic impact of integrated gasification natural gas for power genera-
combined cycle design study improvements tion is picking up, the advan-
tages being no particulate
matter pollution and reduced
CO2 emission per kWh of
power generated. The present
environment policy defines
primarily for particulate mat-
ter control, but gives no strict
conformance standards for
other gaseous pollutants like
SOx, NO x, and CO2 (except a
gazette notification of the
Ministry of Environment and
Forests stipulating NOx
emissions for gas turbines).
The higher chimney height
may disperse SOx and NOx in
low concentrations over
larger area, but does not re-
duce/eliminate their effects.
Besides, the international
3.2.3.1.2 Technology and protocols in future may require limiting
emissions of CO2 and NOx, the greenhouse
environment policy
gases that lead to global warming.
The integrated policy for technology and
Coal is the primary fuel for thermal power
environment for thermal power generation
generation in India. In the process, it gives
should encompass the following action
rise to atmospheric pollution due to particu-
plans.
late matter, SO x, NOx, and CO2. The use of

Table 3.99 Cost comparison of different IGCC technologies (1989 pricing)

IGCC plant PC plant

Entrained Fluidized Moving Without With
bed bed bed FGD FGD
Net power output (MW) 564.40 496.20 577.20 585.70 549.00
Capital cost ratio 2.17 1.33 1.36 1.00 1.22
Cost of generation ratio 1.94 1.18 1.32 1.00 1.17
MW megawatts; IGCC integrated gasification combined cycle; PC pulverized coal; FGD flue gas
desulphurization
130 National Energy Map for India: Technology Vision 2030

All future coal-based thermal power
plants of 250 MW and above should have
supercritical steam parameters. Immedi-
ately, studies should also be initiated for
ultra-supercritical steam parameters and
the aim should be to establish these plants
in next six to seven years.

CFBC (circulation fluidized bed combus-
tion)-based plants of 250 MW, with high
sulphur lignite and petcoke, and very high
ash coal/washery rejects should be
encouraged.

Environment (Protection) Amendment
Rules, 1997, for using washed coal for the
plants located beyond 1000 km should be
enforced without giving further exten-
sion. This will definitely reduce the prob-
lems related to particulate emissions and
fly ash disposal.

All the generating stations should be di-
rected to examine the techno-economic
feasibility of using blended coal in a mix-
ture of high-ash and good quality coal
from other mines in India or through im-
port of coal. This can be easily established
through generation efficiency (specific
fuel consumption) tests on an operating
station.

Benchmark for the introduction of IGCC
technology in India should be seven to
eight years. A decision for a 250300-
MW commercial demonstration plant
should be taken up immediately.

Regular energy audit of operating plants
for generation efficiency should be made
mandatory, and the recommendations for
improvements should be implemented.
This is possible under the Energy Conser-
vation Act, 2001.

The new Electricity Tariff Policy (draft
circulated in March 2004) should
suitably reward improvements in energy
efficiency through sharing the benefits
between the power generator and the con-
sumer.

The coal pricing should be linked to the
calorific value of the delivered fuel so that
supplier has an incentive to improve qual-
ity and the power generator gets good and
consistent quality of fuel.

The development of advanced technology
for thermal power generation is very
closely linked to the environment policy
with respect to emissions of particulate
matter, SOx, NOx, and CO2. It takes 10
15 years for introduction of any new tech-
nology. Thus, we must have long-term en-
vironment policy to guide the develop-
ment and introduction of new technologies.
3.2.3.1.3 Technology forecast till
2030
It is felt that till 2007, no new technology
will be introduced. All new plants will be
based on sub-critical steam parameters. In
addition, stress will be on renovation and
modification or performance improvement
of old power plants to get higher output/PLF
from them.
The technology for natural gas-/naphtha-
fired combined cycle plants will also not un-
dergo much change except that plants with
Tech. FA will be introduced at few sites.
The period 200712 will see the commis-
sioning of the first thermal plant with
supercritical steam parameters, and also set-
ting up of a 100-MW coal-based IGCC
plant. This period may also see the introduc-
tion of the first combined cycle plant based
on gas turbine with Tech. H. Based on the
experience gained from the introduction of
Sectoral demand projections, technological characterization, and resources availability
these new technologies, more plants will
come up in the subsequent plan period of
201217. During this period, the first
commercial IGCC technology will come up.
This will also set up the trend for the refin-
ery rejectsvistar- and petcoke-fired IGCC
plants.
During 201722, the first coal-fired
power plant with ultra-supercritical steam
parameters is also likely to come up. This
will be followed by the introduction of this
technology fully. Then, till 2030, no new
technology will be introduced. However,
further improvement in steam temperature
may be witnessed. This will mainly depend
upon the development of high-temperature
metallic alloys internationally.
During 202227, a demonstration plant
for the generation of power using natural-
gas-based solid oxide fuel cell technology
may come up, and the first commercial plant
based on this technology will then come up
during 202732. During this decade, new
coal-based plants will be based on ultra-
supercritical steam parameters.
3.2.3.2 Hydroelectric potential
India is endowed with economically viable
hydro potential. The CEA (Central Electric-
ity Authority) has assessed Indias hydro
power potential to be about 148 700 MW of
installed capacity. The hydroelectric capac-
Table 3.100 Upper bound on installed capacity of large hydro-based power generation
(in GW)
2001/ 02 2006/07 2011/12 2016/17
24.9 37.0 60.54 84.08
131
ity currently under operation is about 26
000 MW and 16 083 MW capacity is under
various stages of development. The CEA has
also identified 56 sites for pumped storage
schemes with an estimated aggregate in-
stalled capacity of 94 000 MW. In addition, a
potential of 15 000 MW in terms of installed
capacity is estimated from small, mini, and
micro hydel schemes.
It may be noted that due to lower cost of
per unit power generation by large hydro,
this option is introduced into the model as
an upper bound over the modelling time
frame as shown in Table 3.100. Hydro ca-
pacity utilization is assumed to be 32%.
3.2.3.3 Nuclear energy resources
Nuclear energy has the potential to meet the
future electricity demand of the country.
The country has developed the capability to
build and operate nuclear power plants ob-
serving international standards of safety.
The current installed capacity of nuclear
power plants is 2860 MW, accounting for
2.8% of the total installed capacity of the
country. The NPCIL (Nuclear Power Cor-
poration of India Ltd) proposes to increase
the installed capacity to 9935 MW by 2011/
12. The future strategies focus on a three-
stage nuclear power programme for the opti-
mal utilization of the available nuclear
energy resources. The first stage of 10 000
2021/22 2026/27 2031/32 2036/ 37
107.63 131.17 150.0 150.0
132 National Energy Map for India: Technology Vision 2030
MW of nuclear power generation is based on
PHWR (pressurized heavy water reactor)
technology using indigenous natural ura-
nium resources. The second stage is pro-
posed to be based on FBR (fast breeder
reactor) technology using plutonium ex-
tracted by reprocessing of the spent fuel ob-
tained from the first stage. In the third stage,
the countrys vast thorium resources will be
utilized for power generation.
India has limited availability of uranium
resources (about 70 000 tonnes), but has
one of the largest resources of thorium in the
world, amounting to 360 000 tonnes. There-
fore, India needs to adopt a fuel cycle that
maximizes the energy yield of the nuclear
energy producing ores. The adoption of the
three-phase development of nuclear
programme in India was envisaged by Dr
Homi Bhabha way back in 1944. India is
currently in the second phase where the
FBRs are to be commissioned.
Indias nuclear programme is described
below in three stages.
1 Stage I construction of natural uranium-
based, and pressurized heavy-water-mod-
erated and cooled reactors. Spent fuel
from these reactors can be reprocessed to
obtain plutonium.
2 Stage II construction of FBRs fuelled
by the plutonium produced in Stage I.
These reactors are also to breed U-233
from thorium.
3 Stage III power reactors using U-233/
thorium as fuel.
Indias uranium resource base can only
support 10 000 MW of power generation
through the PHWR route, which is the Stage
I of Indias nuclear programme. Stage II,
that is, the FBR route, will require the pluto-
nium derived from the Stage I. This has
technological limitations with respect to the
production of plutonium by using the fuel in
the oxide form. If the FBRs are fuelled by
using metallic fuel, the rate of plutonium
generation is twice as fast as the MOX (me-
tallic oxide) route, which will generate the
required fuel for rapid growth of FBRs. In-
dia currently has the experience and capabil-
ity to use only MOX-derived fuels and it
needs to invest in the development of metal-
lic fuel based reactors. Therefore, it cur-
rently needs international cooperation to
meet its fuel requirements in the Stage II so
that the FBRs become self-sustaining.
In the model, nuclear-energy-based power
generation has been included as per the gov-
ernment plans. The installed capacity of the
nuclear-energy-based power generation in
2001/02 was 2820 MW and increased to 3310
MW as on 31 January 2006. This capacity is
expected to increase to 6780 MW by 2010 and
21 180 MW by 2020. Accordingly, as shown in
Table 3.101, we expect 21.18 GW of nuclear-
energy-based capacity to materialize by 2020
under the baseline as well alternative sce-
narios. Beyond 2021, in the baseline scenario,
we assume that availability of nuclear fuel
would be constrained and that the generation
capacity would remain constant from 2021 till
2035 in the baseline. However, in the alterna-
tive scenario that considers an aggressive
pursuit of nuclear-energy-based power gen-
eration, we consider the nuclear generation
capacity to increase to 70 GW by 2031/32 by
being able to import nuclear fuel (enriched
uranium) (Table 3.101).
Beyond 2030, enough plutonium is ex-
pected to be generated so that the thorium
plutonium fuel cycle (advanced fast breeder
reactors) can be commissioned. This could
enable a maximum potential generation
capacity of about 530 GW (after 2030).
Sectoral demand projections, technological characterization, and resources availability
3.2.3.4 Renewable energy sources
India is endowed with abundant natural and
renewable sources of energy like sun, wind,
and biomass. The country has been able
to achieve significant capacity addition of
1367 MW through wind farms and ranks
fifth in the world after Germany, USA,
Spain, and Denmark in the generation of
wind energy, as per 2004/05 data. The avail-
able renewable resources need to be ex-
ploited by giving a commercial orientation
wherever possible. It may be necessary to
continue with subsidies in the case of so-
cially oriented programmes to meet the en-
ergy requirements of rural areas,
particularly, remote villages, which may be
difficult to service through the conventional
power grid in the near future. Table 3.102
gives the available potential and the actual
potential exploited till August 2001 for vari-
ous renewable sources of energy as provided
by the MNES (Ministry of Non-conven-
tional Energy Sources).
Apart from these resources, the country
has significant potential for ocean thermal
power, sea wave power, and tidal power,
which at this point of time are not expected
to be realized due to high cost.
Renewable natural sources, such as biom-
ass, wind, water, and solar energy, have been
included in the model. The RETs (renew-
Table 3.101 Installed capacity of nuclear energy based power generation
Expected installed capacity (GW)
Scenario 2001/02 2006/07 2011/12
BAU 2.8 3.31 6.78
NUC 2.8 3.31 6.78
BAU business-as-usual; GW gigawatts; NUC High nuclear capacity
133
able energy technologies) are environmen-
tally sustainable and have a vast potential
that can be exploited for energy generation
in the future.
3.2.3.4.1 Wind energy
Wind-based generation capacity has been
rapidly growing in India. The installed wind
power capacity increased from 40 MW at the
beginning of the Eighth Plan to 992 MW in
December 1998 (MNES 2004). The poten-
tial of wind farms is estimated at 28 910 MW
or 1038 TWh (terrawatt-hours) (TERI 1995).
3.2.3.4.2 Solar energy
Apart from using solar energy for the gen-
eration of grid-based power, decentralized
solar devices are also included in the model.
PV (photovoltaic) systems have emerged as
useful power sources for applications such as
lighting, water pumping, telecommunica-
tions, and power for meeting the require-
ments of villages, hospitals, lodges, and so
on. Based on the reports from the state
implementing agencies, 15 206 home-light-
ing systems, 20 484 solar lanterns, and 437
street lighting systems were installed in
1997/98.
2016/17 2021/22 2026/27 2031/32 2036/37
13.98 21.18 21.18 21.18 21.18
13.98 21.18 45.5 70 70
134 National Energy Map for India: Technology Vision 2030
Table 3.102 Renewable energy source potential
Source/technology Unit
Biogas plants Million
Biomass-based power MW
Efficient wood stoves Million
2
Solar energy MW/km
Small hydro MW
Wind energy MW
Energy recovery from wastes MW
MW megawatts; sq km square kilometres
3.2.3.4.3 Small hydel
The total potential for small hydro power up
to 3 MW in India has been estimated at
about 10 000 MW (MNES 2004/05). The
installed capacity of units less than 3 MW
was 170 MW in 1997 while an additional
191 MW capacity was under construction.
Their installed capacity as on 31 March
1998 was 155 MW.
The MNES has identified the potential
for small hydel sites of up to 3 MW as
2852 MW and for sites between 3 and
15 MW as 5519 MW (MNES 1999).
3.2.3.4.4 Biomass gasifiers
Decentralized biomass-based power plants
are ideal in cases where it is either too costly
to extend the grid or the power demand is
very low.
Biomass is produced by numerous small
agro-processing industries such as cigarette
factories, cashew-processing units, and
ayurvedic medicine manufacturing units.
The main problem is of collecting and trans-
Potential/ Potential
availability exploited
12 3.22
19 500 384.00
120 33.86
20 1.74
15 000 1398.00
45 000 1367.00
1700 16.20
porting the biomass to places where it may
be required.
The biomass yield is estimated at
35 tonnes/hectare/year, and biomass con-
sumption is 1.2 kg/kWh, assuming a PLF of
60% for biogas plants.
Due to the poor quality and unreliability
of the grid, industries in many states are
forced to switch over to diesel-based captive
power generation. The low cost of procuring
biomass makes it desirable to couple these
gensets with gasifiers. Dual-fuel (gasifier
and diesel) electric power generators, there-
fore, offer a great potential for fuel saving
and decentralized power generation.
Till 1998, more than 1000 wood gasifiers
have been installed in the country with a
generating capacity of 14 MW. A 0.5-MW
grid-connected gasifier-based R&D project
was also commissioned in 1997.
3.2.3.4.5 Biomass consumption
The MNES has already implemented three
major BCPPs (biomass-consumption-based
power projects). A 6-MW prosopis-based
Sectoral demand projections, technological characterization, and resources availability
project was set up in the state of Andhra
Pradesh in June 1999 and a 5-MW rice-
husk-based project in Madhya Pradesh was
commissioned in August 1999. A 12-MW
cane trash and bagasse-based private sector
project, supported by IREDA (Indian Re-
newable Energy Development Agency),
came up in Tamil Nadu.
During 199497, 18 BCPPs with a total
capacity of 69 MW were installed for supply-
ing power to the grid. So far, over 100 mil-
lion units of electricity have been fed to the
grid from these plants. Seventeen projects
aggregating 97 MW are under implementa-
tion and once these are commissioned, more
than 800 million units will be fed to the grids
every year, saving 0.5 MT of coal.
3.2.3.4.6 Cogeneration potential
from bagasse
The biomass waste generated from the sugar
industry has a large potential for generating
power. Although the total installed capacity
as on 31 March 1998 is only 82 MW, it has
been estimated that nearly 3500 MW of
power can be generated from this industry if
the existing sugar mills adopt modern tech-
niques of cogeneration. High capital invest-
ment costs and lack of proper mechanisms
for pricing and wheeling of power exported
by the cogenerating industries are the main
obstacles to the development of this technol-
ogy at this stage.
10
100 hectares = 1 km 2.
135
3.2.3.5 Traditional fuels
Biofuels play an important role in the energy
scenario of the developing countries. In
terms of their use in physical energy, biofuels
are very much similar to coal. However, due
to their low calorific content as well as low
end-use efficiencies associated with their
use, the useful energy demand met by these
sources is much smaller.
The Indian residential sector continues to
be dominated by biofuels, with about 95% of
rural households and 40% of urban house-
holds still relying mainly on these traditional
energy forms. All these fuels are generally
collected free of cost and do not find their
way to commercial markets. Moreover, the
supply RES (reference energy system) of the
traditional energy forms is simplistic and
consists of only the domestic availability of
the resource, as there are no associated im-
ports or exports for these fuels.
3.2.3.5.1 Fuelwood
According to the IREP (Integrated Rural
Energy Programme 1992), the supply of
fuelwood was estimated at 169 MT (3294 PJ
[petajoules]). However, this level of
fuelwood use is considered to be unsustain-
able in the long run. The sustainable
fuelwood supply is, therefore, estimated
based on future estimates of the area under
forests and a sustainable yield of 55 tonnes /
km2 of forestland. In 1997, the area under
forests was 63 million hectares10 and this is
projected to increase to 93 million hectares
136 National Energy Map for India: Technology Vision 2030
by 2020 (DISHA 2000). The supply of
fuelwood is assumed to decline from the cur-
rent levels to 51.2 MT (998 PJ) by 2020, and
remain at this level henceforth. The supply
of fuelwood is considered at zero cost in the
model.
3.2.3.5.2 Dung
Dung and crop residue are generally used by
households that own cattle or farmlands.
Therefore, the issue of unsustainable use of
these fuels as in the case of fuelwood does
not arise. However, estimates on the avail-
ability and use of dung and crop residue vary
widely.
The supply of dung depends on the cattle
population in the country, the proportion of
dung collected, and the share used for pro-
ducing energy. Dung has a calorific value of
3290 kcal/kg. Estimates on the availability of
dung range from 30 MT to 100 MT for
2001. The model assumes a dung availability
of about 100 MT at zero cost. The REDB
(rural energy database) estimates an average
availability of 106.9 MT of dung. The use of
dung is, therefore, really constrained by the
restrictions on utilization levels of technolo-
gies using the fuel and the share of popula-
tion using this form of energy in the future.
Dung can be used directly in the form of
dung cakes for cooking in the traditional
cook stoves or in the form of biogas that is a
cleaner form of using energy.
3.2.3.5.3 Crop residue
Biomass production is pegged at 127 MT/
year, of which half goes to the sugar industry.
With a calorific value of 3500 kcal/kg, its
production is kept constant at 912 PJ in the
model.
3.2.3.6 Power generation tech-
nologies: techno-economic input
parameters
Table 3.103 provides the characteristics of
all the power-generating technologies input
to the model.
 Sectoral demand projections, technological characterization, and resources availability
Table 3.103 Techno-economic parameters of power generating technologies

Annual
operation and
Capital maintenance
Availability cost (million cost (million Life Efficiency
Technology factor Plant characteristics rupees /GW) rupees/GW) (years) (%)
Coal-fired plantold (before 1980) 0.58 Base load Centralized Sunk costs 988 10 22.7
Coal-fired plantold (after 1980) 0.58 Base load Centralized Sunk costs 988 30 29.5
New coal plant (sub-critical) 0.85 Base load Centralized 39 547 988 30 32.3
Retrofit coal plant (first built before 1980) 0.85 Base load Centralized 15 000 988 30 30.0
Retrofit coal plant (19802000) 0.85 Base load Centralized 12 500 850 30 32.2
CFBC 0.85 Base load Centralized 45 653 1141 30 39.0
IGCC (refinery residue) 0.85 Base load Centralized 52 753 1141 30 46.0
IGCC (coal) 0.85 Base load Centralized 52 753 1141 30 44.0
Coal supercritical 0.85 Base load Centralized 42 600 1065 30 37.7
Coal pressurized bed combustion 0.85 Base load Centralized 45 653 1141 30 43.0
Coal ultra-supercritical 0.85 Base load Centralized 51 120 1331 30 44.0
Lignite power plant (existing subcritical tech) 0.58 Base load Centralized 40 000 988 30 29.5
Small generator set (2 kW) 0.20 Base load Decentralized 27 000 712.5 10 25.0
Existing open cycle gas based 0.90 Standard Centralized Sunk costs 520 20 28.0
Existing combined cycle gas based plant 0.90 Base load Centralized Sunk costs 399 25 44.1
New open cycle gas based plant 0.90 Standard Centralized 15 975 240 20 39.0
NGCC (New) 0.90 Base load Centralized 22 000 330 25 53.8
NGCC (New high efficiency) 0.90 Base load Centralized 27000 405 25 60.0
Hydro reservoir new Fixed capacity Standard Centralized 40 000 600 50 32.3
Small hydro grid connected Fixed capacity Standard Centralized 90 000 1350 40 32.3
Heavy water reactor 1 (using natural uranium) 0.90 Base load Centralized 60 000 1500 25 21.4
Light water reactor 1 (using enriched uranium) 0.90 Base load Centralized 78 750 1969 25 17.0
Decentralized electricity from fuelwood 0.20 Standard Decentralized 27 000 713 15 21.7
Solar photovoltaic with battery bank 0.29 Standard Decentralized 300 000 4500 25
Solar photovoltaic without battery bank 0.29 Standard Decentralized 200 000 1000 25
Grid interactive solar photovoltaic power Fixed capacity Standard Centralized 250 000 1250 25
Wind turbines Fixed capacity Standard Centralized 38 000 570 20

137
CFBC circulating fluidized bed combustion; IGCC integrated gasification combined cycle; NGCC natural gas combined cycle; Rs/GW rupees/gigawatts;
kW kilowatt
Energy scenarios
4.1 Introduction
Scenarios are images of alternative futures.
Energy scenarios provide a framework for
exploring future energy perspectives, includ-
ing various combinations of technology op-
tions and their implications. Many scenarios
in the literature illustrate how energy system
developments will affect national and inter-
national issues. Scenarios are neither predic-
tions nor forecasts. Each scenario can be in-
terpreted as one particular image of how the
future could unfold. Scenarios are useful
tools for investigating alternative future de-
velopments and their implications, for learn-
ing about the behaviour of complex systems,
and for policy-making. Some scenarios de-
scribe energy futures that are compatible
with sustainable development goals, such as
improved energy efficiencies and adoption
of advanced energy supply technologies.
Sustainable development scenarios are also
characterized by low environmental impacts
(local, regional, and global) and equitable
allocation of resources and wealth.
Sustainable development has become a
synonym for desirable transitions into the
new millennium. This is often reflected in
energy scenarios that consider conditions for
achieving sustainable development. Because
energy systems change slowly, energy
scenarios have long time horizonsoften
4
extending over 100 years into the future.
These long time periods are needed to allow
transition to sustainable development paths.
4.2 Brief review of the literature
on energy scenarios
The development of scenarios to investigate
alternative future developments under a set
of assumed conditions dates far back in his-
tory. Scenarios were, and continue to be, one
of the main tools for dealing with the com-
plexity and uncertainty of future challenges.
Perhaps most famous in the literature is
the use of scenarios by the Shell Group in
the wake of the so-called oil crisis to plan its
corporate response strategies (Schwartz
1991). Today, scenarios are quite widespread
and are found in enterprises of all kinds
around the world. Many are quantitative, as
is often the case with enterprises in the en-
ergy sector. Some of them also include con-
cepts of sustainability. Recently, the
WBCSD (World Business Council for Sus-
tainable Development) presented a set of
scenarios that were developed in collabora-
tion with 35 major corporations (WBCSD
1998).
A number of global studies have used
scenarios as a tool to assess future paths of
energy system development over the past
140 National Energy Map for India: Technology Vision 2030
30 years. One of the first global studies to
employ scenarios for this purpose was con-
ducted by the IIASA (International Institute
for Applied Systems Analysis) during the
late 1970s (Hafele 1981). Another influen-
tial series of scenarios that included the as-
sessment of sustainable development was
developed by the WEC (World Energy
Council) (WEC 1993). The IPCC (Inter-
governmental Panel on Climate Change) has
used scenarios since its inception to assess
greenhouse gas emissions and climate
change. In 1992, it developed a set of very
widely-accepted scenarios that gave a de-
tailed account of energy sector develop-
ments. The set includes six scenarios called
IS92, three of which describe futures that
include characteristics of sustainable devel-
opment (Pepper, Leggett, Swart, et al.
1992).
A growing number of global studies con-
sider futures with radical policy and
behavioural changes to achieve sustainable
development (Goldemberg, Johansson,
Reddy, et al. 1988). One of the first global
scenarios to focus on achieving sustainable
development was put forward by
Greenpeace International (Lazarus, Greber,
Hall, et al. 1993). Another among the first
global energy scenarios, with characteristics
of sustainable development, describes a
transition to renewable energy futures
(Johansson, Kelly, Reddy, et al. 1993). In its
second assessment report, the IPCC also
considered a range of global energy sce-
narios, based on some elements of the IS92
set, with varying degrees of sustainability
(Ishitani, Johansson, Al-Khouli, et al. 1996).
In more recent studies, sustainable devel-
opment scenarios are usually included
among other alternative futures. This class of
sustainable scenarios can be characterized
by low environmental impacts at all scales
and more equitable allocation of resources
and wealth relative to current situations. Re-
cently, the Global Scenario Group presented
a set of three scenarios that received consid-
erable attention (Raskin, Gallopin, Gutman,
et al. 1998). These scenarios were based on
elaborate narratives describing alternative
futures, including some that are decisively
sustainable. The set of scenarios developed
by the WBCSD also includes narratives and
describes alternative development paths,
some of which place strong emphasis on sus-
tainable development (WBCSD 1998).
There is also substantial literature on glo-
bal energy scenarios that serves as a refer-
ence for showing that under business-as-
usual conditions, many of the developments
crucial for the achievement of sustainability
would not be realized. Many of these global
energy scenarios are limited to develop-
ments during the next 2030 years.
The literature on sustainable energy sce-
narios is vast, and this brief review cannot
give a comprehensive account. The IPCC
has developed a database that includes a
number of global energy scenarios that can
be characterized as describing sustainable
development (Morita and Lee 1998). This
database, which includes more than 400 glo-
bal and regional scenarios, illustrates that
the literature is quite rich. Not all the sce-
narios can be described in this chapter.
The IPCC, in its recent Special report on
emissions scenarios considers 40 scenarios
that include a large number of sustainable
futures (Nakicenovic, Alcamo, Davis, et al.
2000). This set of scenarios is unique in
many respectsit was developed using six
different models, covers a wide range of
alternative futures based on the scenarios
in the literature, includes narrative

descriptions of alternative futures, and has
been reviewed extensively.
4.3 Energy scenarios for
sustainable development in India
Eight alternative development scenarios
namely, BAU (business-as-usual), LG (low
growth), HG (high growth), EEF (high effi-
ciency), NUC (high nuclear), REN (aggres-
sive renewable energy), HYB (hybrid), and
HHYB (high-growth-cum-hybrid) are
analysed in this exercise.
The aforementioned eight scenarios can
be broadly classified into two categories:
(1) varying economic growth rate scenarios,
and (2) technological progression scenarios.
Economic growth scenarios are prepared
based on different projected GDP (gross do-
mestic product) growth rates for the
economy as a whole. However, technological
progression scenarios deal with varying levels
of technology penetration across different time
horizons in the modelling framework.
It may be noted that these eight scenarios
provide a holistic picture of the entire inte-
grated energy system of the economy. In ad-
dition to these economy-wide scenarios, al-
ternative scenarios encompassing different
policy and technology options related to the
transport sector having a high share in the
consumption of petroleum products are
analysed in detail in view of high import de-
pendency, especially in the case of petro-
leum products.
The section below briefly explains the
underlying assumptions for each of the
above-mentioned scenarios.
Energy scenarios 141
4.3.1 Economy-wide scenarios
4.3.1.1 Business-as-usual scenario
This scenario is characterized as the most
likely path of development in the absence
of any major intervention. This scenario
incorporates existing government plans and
policies.
In the BAU, an 8% GDP growth rate
(uniform growth rate over the entire model-
ling time frame, 200131) reflects the Gov-
ernment of Indias expectations as high-
lighted in various government policy docu-
ments.
The estimates regarding the domestic
availability of various fuels are also incorpo-
rated in this scenario. Maximum availability
of imported natural gas is considered as per
the Government of Indias plan for
transnational gas pipelines and the construc-
tion of LNG terminals. However, there are
no import constraints on coal and oil to sat-
isfy energy demand.
With regard to technology penetration in
the power sector, limited deployment of
clean coal technologies is assumed. The pen-
etration of various renewable energy tech-
nologies is considered as per the existing
trend and expert opinion. The nuclear-en-
ergy-based power generation capacity is
constrained to the extent of 21.18 GW (gi-
gawatts) from 2021 onwards in view of the
non-availability of indigenous nuclear fuel
and import restrictions. The capacity real-
izations of large hydroelectric plants to a
maximum level of 150 GW are assumed as
per the expectations of the Government of In-
dia. Autonomous efficiency improvements are
built as per the current technological diffusion
in both conversion and end-use sectors.
142 National Energy Map for India: Technology Vision 2030
Thus, although a substantial improve-
ment over the current situation, this scenario
falls short of achieving a transition towards
sustainable development.
4.3.1.2 Low-growth scenario
This scenario assumes a low GDP growth
rate of 6.7% relative to the 8% GDP growth
rate assumed in the BAU scenario. Thus, the
impact of projected GDP growth rates on
the future trajectories of energy demand is
captured by this scenario.
All other underlying assumptions with re-
spect to resource availability, technology
progression, and other parameters are simi-
lar to those in the BAU scenario.
4.3.1.3 High-growth scenario
This scenario assumes a very high GDP
growth rate of 10% (uniform over the mod-
elling time frame, 200131) relative to the
GDP growth rate of 8% assumed in the BAU
scenario. This scenario paints an optimistic
picture of the Indian economy and envisages
the ensuing influence a growth rate of such
magnitude would have on overall energy
consumption in the country. It also reflects
significant structural changes in the Indian
economy by apportioning a greater percent-
age (94%) of the GDP generated by the ser-
vices and industry sectors relative to the
GDP contributed by the agriculture sector
in the aggregate GDP. The macroeconomic
shifts in the GDP amongst the agriculture,
industry, and services sectors of the
economy manifest themselves in the form of
changing the demand of industrial output
and transport and commercial services,
thereby exhibiting differences in the inter-
sectoral energy consumption patterns. The
rationale for choice of different GDP growth
rates was explained in Chapter 2.
As in the case of the LG scenario, all
other underlying assumptions with respect
to resource availability, technology progres-
sion, and other parameters are similar to
those in the BAU scenario.
4.3.1.4 High-efficiency scenario
This scenario takes into account the energy-
efficiency measures spanning across all
sectors.
On the supply side, advanced gas-based
power generation (for example, the H-frame
combined-cycle gas turbine) with 60% effi-
ciency is assumed to be commercially avail-
able by 2016/17. Renovation and modern-
ization of old coal plants are allowed only till
2011 as per the governments plan. In view
of the possibility of greater technology trans-
fer across countries and a greater thrust on
indigenous R&D (research and develop-
ment) in the power sector in this scenario, all
clean coal technologies are allowed to pen-
etrate in an unconstrained manner to their
maximum capacity from their year of intro-
duction. The availability factor of wind
power plants is assumed to increase from
17.5% in 2001 to 26% in the year 2011 and
35% in 2016 and onwards as compared to
the constant figure of 17.5% in the BAU sce-
nario.
On the demand side, efficiency improve-
ments, such as increased share of efficient
electrical appliances used to meet the de-
mands for space-conditioning, lighting, and
refrigeration in residential and commercial
sectors, are considered in various end-use
sectors In addition, this scenario also incor-
porates the faster rate of displacement of in-

ferior fuels like firewood and kerosene by
clean fuels such as LPG (liquefied petro-
leum gas) vis--vis the BAU scenario for
cooking in the residential and commercial
sectors. Furthermore, energy-efficient mea-
sures in transport sectors in the form of
policy interventions by the government
such as increased share of rail vis--vis road
in passenger and freight movement, and pro-
moting public transport are also incorpo-
rated in this scenario. The industry sector
also boasts of measures that lead to signifi-
cant energy savings. For instance, in the iron
and steel industry, the penetration of effi-
cient BF-BOF (blast furnacebasic oxygen
furnace) is allowed up to 80% of the manu-
facturing capacity by the year 2036. Further,
a higher share of blended cement in total ce-
ment production (95% by the year 2031, up
to 100% by the year 2036) is allowed, an in-
creased share of natural gas (100% by the
year 2036) is used in the fertilizer and other
sectors, etc. The details related to the level of
efficiency improvements in different sectors
were described in Chapter 3.
However, this scenario assumes a pro-
jected GDP growth rate of 8% (uniform over
the modelling time frame, 200131) as in
the BAU scenario.
4.3.1.5 High nuclear capacity
scenario
In this study, nuclear-energy-based power
generation has been included as per govern-
ment plans. The installed capacity of nuclear
power plants was 2.82 GW in 2001/02 and
1
Ministry of Power, Government of India
2
Nu Power, Vol. 18 (23), Department of Atomic Energy, 2004
3
Anil Kakodkar, Department of Atomic Energy
Energy scenarios 143
3.31 GW on 31 January 20061. The nuclear-
energy-based power generation capacity is
expected to increase to 6.78 GW2 by 2010
and further to 21.18 GW by 20203 as per the
first stage Indian nuclear power programme.
Beyond 2021, in the BAU scenario, the
nuclear-energy-based power generation ca-
pacity is constrained in view of the non-
availability of indigenous nuclear fuel and
the import restrictions that have several geo-
political dimensions associated with it. The
NUC scenario assumes importance in view
of the latest development in the nuclear sec-
tor due to enhanced international civil
nuclear cooperation and the Government of
Indias initiative in this direction. This sce-
nario considers an aggressive pursuit of
nuclear-energy-based power generation
whereby the nuclear-energy-based genera-
tion capacity is considered to increase to 40
GW by 2021 and 70 GW by 2031/32, driven
by the assumption that the country is able to
import nuclear fuel (enriched uranium).
Table 4.1 presents the expected installed
capacity of nuclear-energy-based power gen-
eration over the modelling time frame in the
NUC scenario vis--vis the BAU scenario.
4.3.1.6 Aggressive renewable
energy scenario
In this scenario, high penetration of renew-
able energy is considered. Anout 4233 po-
tential sites are identified for small hydro
power plants in the country. The corre-
sponding capacity is worked out at about
10 GW (MNES 2005a). It is assumed that
144 National Energy Map for India: Technology Vision 2030

Table 4.1 Installed capacity of nuclear-energy-based power generation

Expected installed capacity (GW)

Scenario 2001/02 2006/07 2011/12 2016/17 2021/22 2026/27 2031/32
BAU 2.82 3.31 6.78 13.98 21.18 21.18 21.18
NUC 2.82 3.31 6.78 13.98 40.0 55.0 70.0
GW gigawatts; BAU business-as-usual; NUC high nuclear capacity
Note All other assumptions are similar to those in the BAU scenario.

the maximum identified potential could be
tapped by 2016. Similarly, for wind power
generation in India, gross potential is esti-
mated at 49 GW (MNES 2005a). However,
the technically feasible potential is reported
at 13 GW (MNES 2005a). In the REN
scenario, it is assumed that 12 GW of wind
capacity could be created by 2036. In this
scenario, in addition to the increase in the
capacity of wind-based power generation,
the availability factor of wind power plants is
also assumed to increase from 17.5% in
2001 to 26% in the year 2011 and 35% 2016
onwards.
Tables 4.2 and 4.3 present the level of the
installed capacity of small hydro-based and
wind-based power generation, respectively.
India is blessed with abundant sunshine
as most parts of the country have 230300
sunny days in a year. Average daily solar ra-
diation incident over the land area is in the
range of 47 kWh/m2 (kilowatt hours per
square metre). The potential of SPV (solar
photovoltaic) power in India is estimated at

Table 4.2 Installed capacity of small hydro-based power generation

Lower bound on installed capacity of small hydro in GW

Scenario 2001/02 2006/07 2011/12 2016/17 2021/22 2026/27 2031/32
BAU 1.5 2.0 8.0 8.0 8.0 8.0 8.0
REN 1.5 2.0 8.0 10.0 10.0 10.0 10.0
GW gigawatts; BAU business-as-usual; REN aggressive renewable energy

Table 4.3 Installed capacity of wind-based power generation

Lower bound on installed capacity of wind turbine in GW

Scenario 2001/02 2006/07 2011/12 2016/17 2021/22 2026/27 2031/32
BAU 1.63 4.23 4.23 4.23 4.23 4.23 4.23
REN 1.63 5.00 7.00 8.00 9.00 10.00 11.00
GW gigawatts; BAU business-as-usual; REN aggressive renewable energy

20 MW/km2 (megawatts per square
kilometre) (MNES 2005a). The current cost
of an SPV cell is 150 rupees/ Wp (watt peak)
(MNES 2005b). Because of the high cost of
solar cells, the cost of electricity generation
from SPV is also very high. For example, the
cost of electricity generation from a grid-in-
teractive SPV system without storage is esti-
mated at 20 rupees/kWh (MNES 2005b).
For stand-alone systems, the cost of genera-
tion is higher due to the additional cost of
the battery. However, the National new and
renewable energy policy statement 2005 of the
Ministry of Non-conventional Energy
Sources reports that the cost of generation is
expected to reduce to the level of 4 rupees/
kWh by 2021/22 (MNES 2005b). Because
of high capital costs, the current installed ca-
pacity of the SPV system is only 2.25 MW
(GoI 2005). However, SPV production in
the country is increasing by an annual aver-
age growth rate of 25%. It is assumed that
the installed capacity of an SPV-based power
plant will increase up to 20 GW in 2036 in
the REN scenario.
Biomass can be used as a primary fuel by
direct combustion or as a secondary fuel
(solid, liquid, and gaseous) by conversion a
biological or thermochemical using process.
The main aim of the conversion process is to
increase efficiency of utilization for various
Table 4.4 Installed capacity of SPV- and biomass-based power generation in aggressive
renewable energy scenario
Lower bound on installed capacity
2001/02 2006/07 2011/12
SPV (GWp) 0.00 0.05 0.14
Biomass (GW) 0.00 0.25 0.50
GW gigawatts; GWp gigawatt peak; SPV solar photovoltaic
Energy scenarios 145
end-uses. Biomass gasification is basically
the conversion of solid biomass into a pro-
ducer gas, which has carbon monoxide as a
combustible gas. Several institutes including
T E R I are engaged in the R&D of gasifier
technology in India. The potential for biom-
ass-based power plants has been estimated
to be 16 GW, of which 234 MW has been es-
tablished so far, and a target of installation
of 250 MW of biomass-based power is set for
the Tenth Five Year Plan (200207). Table
4.4 presents the lower bound on the installed
capacity of SPV- and biomass-based power
generation in the REN scenario.
In addition to the power generation tech-
nologies, bio-diesel is also assumed to be
available to the transport sector in this sce-
nario. Based on the maximum potential area
that is available for plantation for bio-diesel
production, the lower bound is imposed on
the availability of bio-diesel in the REN sce-
nario. Table 4.5 below presents the availabil-
ity of bio-diesel for transportation in India
(detailed assumptions were given in the
analysis of the transport sector in Chapter 3)
However, this scenario assumes a pro-
jected GDP growth rate of 8% (uniform over
the modelling time frame) as in the BAU
scenario. All other assumptions are similar
to those in the BAU scenario.
2016/17 2021/22 2026/27 2031/32
0.39 1.04 2.78 7.46
1.00 2.00 4.00 8.00
146 National Energy Map for India: Technology Vision 2030

Table 4.5 Availability of bio-diesel for transportation

Lower bound on the availability of bio-diesel in MT

Scenario 2001/02 2006/07 2011/12 2016/17 2021/22 2026/27 2031/32
REN 0 0 2 3.9 9.8 27.5 31.9
MT million tonnes; REN aggressive renewable energy

4.3.1.7 Hybrid scenario technological advancements geared towards

This scenario is a combination of the BAU,
EEF, REN, and NUC scenarios. It describes
the energy future of the Indian economy by
incorporating the entire range of energy-effi-
cient measures in the end-use sectors, the
complete deployment of clean coal tech-
nologies, aggressive penetration of nuclear-
energy-based power generation technolo-
gies, and an aggressive push towards renew-
able energy sources.
4.3.1.7 High-growth-cum-hybrid
scenario
This scenario combines a high GDP growth
rate of 10% coupled with high efficiency lev-
els, high nuclear capacity, and an aggressive
use of renewable energy. This scenario is
representative of the most optimistic sce-
nario in terms of both economic growth and
steering the economy on the most energy-ef-
ficient path.
4.3.2 Intra-sector scenarios:
transport sector illustration
The transport sector is a major consumer of
petroleum products. From the point of view
of energy security concerns for the Indian
economy at large, five alternative scenarios
in addition to the BAU have been developed
using the MARKet ALLocation model.
These scenarios enable the analysis of the
impact of different policy and technology al-
ternatives and their quantitative significance
on energy consumption in transport. Each of
the five scenarios encompass different policy
and technology options related to the trans-
port sector. Table 4.6 lists these scenarios
and provides a description.

Table 4.6 Description of energy-efficient scenarios for the transport sector
Scenario
Enhanced share of public transport
Increased share of rail in passenger and
freight movement vis--vis road
Fuel efficiency improvements
Use of bio-diesel in transport
Transport sector hybrid
Mtoe million tonnes of oil equivalent
Energy scenarios 147
Description
Share of public transport modes to increase to 60%
in 2036.
Railway freight share to increase from 37% in 2001
to 50% in 2036.
Railway passenger share to increase from 23% in 2001
to 35% in 2036.
Share of electric traction to increase for rail
passenger and freight to 80%.
Fuel efficiency of all existing motorized transport
modes to increase by 50% from 2001 to 2036.
Enhanced penetration of bio-diesel by 65 Mtoe
by 2036.
Incorporates all the above-mentioned scenarios,
in addition to those in the BAU.
Model results and analyses
5.1 Introduction
This chapter presents the analytical results
of the scenarios mentioned in Chapter 4.
The results were obtained after running the
India MARKAL (MARKet ALlocation)
model for eight alternative scenarios: (1)
BAU (business-as-usual) at 8% GDP (gross
domestic product), (2) LG (low growth) at
6.7% GDP, (3) HG (high growth) at 10%
GDP, (4) EFF (high efficiency) at 8% GDP,
(5) NUC (high nuclear capacity) at 8%
GDP, (6) REN (aggressive renewable en-
ergy) at 8% GDP, (7) HYB (hybrid) at 8%
GDP, and (8) HHYB (high-growth hybrid)
at 10% GDP. In addition to these eight
economy-wide macro scenarios, the analyti-
cal results of five transport sector scenarios
are also presented in this chapter. The re-
sults of all the above-mentioned scenarios
pertain to the following issues: total and
fuel-wise energy requirement; trends in
sectoral energy mix; trends in energy supply
(domestic and imported resources); technol-
ogy shifts; and cost implications.
5.2 Results and analysis of the
business-as-usual scenario
The BAU scenario, as described in Chapter
4, considers the Government of Indias
5
targets and existing policies and plans. In
addition, the adoption of efficient and new
technological options continues as per the
likely progression, without any major inter-
ventions.
5.2.1 Total commercial energy
requirements in the business-as-
usual scenario
Total commercial energy consumption in-
creases by 7.5 times (6.9% growth rate) over
the 30-year period (2001/022031/32) in
the BAU. Table 5.1 presents the fuel-wise
commercial energy requirements. This data
is also represented pictorially in Figure 5.1.
Coal remains the dominant fuel as far as
the commercial energy consumption is con-
cerned. Its consumption increases from
150 Mtoe (million tonnes of oil equivalent)
in 2001 to 1176 Mtoe in 2031, that is, by
about 7.9 times (compound average annual
growth rate of 7.1%).
The variation of percentage share of com-
mercial fuels over the modelling time frame
is shown in Figure 5.2. The percentage share
of coal in the commercial energy mix is the
highest, ranging from 45% to 55% over the
entire modelling period. The share of oil in
total commercial energy ranges between
36% and 40% during 200131. The oil
150 National Energy Map for India: Technology Vision 2030

Table 5.1 Commercial energy requirements in the BAU (Mtoe)

Fuel 2001/02 2006/07 2011/12 2016/17 2021/22 2026/27 2031/32

Coal 150 193 242 344 466 757 1176
Natural gas 25 36 51 74 132 136 136
Oil 101 151 211 298 405 555 757
Hydro power
(large and small) 7 9 18 24 30 36 40
Nuclear energy 2 2 4 8 13 13 13
Renewable energy 0 1 1 1 1 1 1
Total 285 391 527 749 1046 1497 2123
BAU business-as-usual; Mtoe million tonnes of oil equivalent

Figure 5.1 Commercial energy requirement increases by about 7.5

use in the business-as-usual times during the same period.
Although the use of natural gas in-
creases over the modelling time period
in terms of magnitude, its share in total
commercial energy is observed to de-
crease after 2021. Indigenous gas pro-
duction reaches its maximum capacity
by 2011/12 (~44 Mtoe). Imports of gas
increase till 2021 after which their in-
crease is restricted due to infrastructural
constraints in the model. Due to its high
efficiency and better overall economics,
gas is a preferred option among the fossil
fuels for power generation and fertilizer
production in the model, especially post
2016/17.
The model indicates that hydro
power is also a preferred option, which
reaches the maximum allowed potential
over the time period. From ~25 GW
(gigawatts) in 2001/02, large hydro
power generation capacity increases to
61 GW by 2011/12, 108 GW by 2021/22,
and 150 GW by 2031/32. The installed
 Model results and analyses 151

Figure 5.2 Percentage share of fuel The share of renewable energy (so-
mix (business-as-usual scenario) lar, wind, and bio-diesel) in commer-
cial energy supply remains lower than
1% throughout the modelling time
frame. None of the options are pre-
ferred in terms of their relative eco-
nomics.
In the BAU, consumption of tradi-
tional fuels, such as firewood, crop
residue, and dung in the residential
and commercial sectors, decreases to
half the current level of consumption
during the modelling time frame (from
149 Mtoe in 2001 to 73 Mtoe in
2031). The percentage share of the tra-
ditional fuels in the total primary
energy (commercial and non-commer-
cial) supply decreases from 36% in
2001 to 4% in 2031, as shown in
Figure 5.3. This is mainly due to
capacity for small hydro is low initially but switching over from non-commercial
increases to 8 GW by 2011/12. fuels to commercial ones for cooking
Although the percentage share of hydro purposes in the residential sector.
power in the total power gen-
eration capacity is 23% in
Figure 5.3 Variation in percentage share of
2031, its contribution in the
traditional fuels in total primary energy supply
total commercial energy mix
is as low as 2% due to low
PLF (plant load factor) of
about 30%.
The country has a nuclear
power programme that is ex-
pected to increase the current
capacity (2004/05) of 2.7
GW to 6.78 GW by 2011/12
and 21.18 GW by 2021/22 in
the BAU scenario. This share
is, however, insignificant
(0.6%1.2%) in the total
commercial energy mix.
152 National Energy Map for India: Technology Vision 2030

5.2.2 Import dependency of idly in the BAU scenario, from almost 0% in

2001 to 71% by 2031. Figure 5.4 and Table
fuels in the business-as-usual
5.3 show variation in production, import,
scenario and import dependency of non-coking coal
over the modelling time frame in the BAU
The model results indicate that the maxi- scenario.
mum allowable indigenous production for Figure 5.5 and Table 5.4 show the pro-
all fuels is achieved by 2016. The results fur- duction, import, and import dependency of
ther point to the fact that the dependency on coking coal in the BAU scenario over the
imports for coal, oil, gas, and nuclear fuel modelling time frame. Due to the increased
would increase significantly in the future, steel demand and inadequate availability of
which is described in the following section. coking coal in the country, import depen-
dency increases from 25% in 2001 to 75%
by 2031.
5.2.2.1 Import depen-
dency of coal
Figure 5.4 Production, import, and
Although the production of import dependency of non-coking
coal nearly doubles over the coal in the business-as-usual scenario
30-year period, it reaches its
maximum annual production
capacity and the economy
needs to resort to increasing
coal imports, as shown in Table
5.2. The total coal import de-
pendency (percentage of im-
ported fuel to total fuel
consumption) increases from
3% to 70% over the modelling
time frame.
Import dependency of non-
coking coal increases very rap-

Table 5.2 Annual production, import, and import dependency of coal

2001/02 2006/07 2011/12 2016/17 2021/22 2026/27 2031/32

Production (million tonnes) 343 396 440 485 530 574 619
Import (million tonnes) 10 45 92 223 384 811 1438
Total (million tonnes) 353 440 532 708 913 1385 2057
Import dependency (%) 3 10 17 31 42 59 70
 Model results and analyses 153

Table 5.3 Production, import, and import dependency of 5.2.2.2 Import depen-
non-coking coal in the business-as-usual scenario dency of natural gas
2001 2011 2021 2031
Gas is being targeted as the fu-
Production (million tonnes) 289 372 443 515 ture fuel and it is likely that its
Import (million tonnes) 0 61 306 1265 use would be more wide-
Import dependency (%) 0 14 41 71 spread. Large-scale invest-
ments would be required to
enable gas import, handling,
and transportation. As ob-
served in Figure 5.6, the im-
port dependency of gas in the
Figure 5.5 Production, import, and BAU scenario increases from
import dependency of coking coal in almost negligible levels in
the business-as-usual scenario 2001 to 66% by 2021. In
2031, as per the model, it hov-
ers at about 66%67% due to
constraints imposed on infra-
structure (LNG [liquefied
natural gas] terminals and
pipelines), but is likely to be
higher if adequate facilities for
the import and distribution of
gas are made available. Natu-
ral gas is a preferred fuel for
power generation at current
prices as compared with coal
and is also more economical
for fertilizer production.

5.2.2.3 Import
dependency of
Table 5.4 Production, import, and import dependency petroleum products
of coking coal in the business-as-usual scenario
In the BAU scenario, import
2001 2011 2021 2031 dependency (Figure 5.7) of oil
Production (million tonnes) 30 37 47 57 increases from 68% in 2001 to
Import (million tonnes) 10 32 78 173 90% by 2031, mainly on ac-
Import dependency (%) 25 46 62 75 count of the rapid growth in the
transport sector for moving
154 National Energy Map for India: Technology Vision 2030

Figure 5.6 Production, import, and import dependency both passengers and freight,
of natural gas in the business-as-usual scenario followed by growth in the in-
dustry sector.

5.2.3 Sectoral energy

consumption in the busi-
ness-as-usual scenario

Figure 5.8 and Table 5.5 show

the trends in commercial en-
ergy consumption from 2001
to 2031 in the BAU scenario.
The total consumption from
the end-use side grew by 8
times (CAGR [compounded
annual growth rate] of about
7%) over the modelling time
frame (200131). This is due
to the rapid increase in oil
consumption in the transport
sector, which grew by 13.7
Figure 5.7 Production, import, and times (CAGR of about 9%)
import dependency of petroleum in during the same period. This
the business-as-usual scenario rapid growth in the transport
sector can be attributed to a
shift towards more energy-in-
tensive modes of transport for
passengers and freight.
The second highest con-
tributor to this growth in com-
mercial energy consumption is
increasing consumption in the
industrial sector, which in-
creases by 7.9 times (CAGR of
about 7%) in the BAU sce-
nario during 200131. This
rapid growth in energy con-
sumption in the industrial sec-
tor is largely on account of the
growth in infrastructural de-
mands of the country (steel
 Model results and analyses 155

Figure 5.8 Sector-wise commercial energy and cement demands) as

consumption in the business-as-usual scenario well as small-scale indus-
trial growth.
The overall final en-
ergy consumption in the
residential sector in-
creases by only 5.2 times
from 2001 to 2031. How-
ever, during the first two
decades, the increase in
energy consumption is al-
most twice that in the base
year (2001).
Figure 5.9 and Table
5.6 depict the trends in
sectoral shares in com-
mercial energy consump-
tion in the BAU over the
modelling time frame
(200131). The figure and

Table 5.5 Sector-wise commercial energy consumption in the business-as-usual scenario

(in million tonnes of oil equivalent)

Sector 2001 2006 2011 2016 2021 2026 2031

Agriculture 15 17 18 20 22 23 25
Commercial 7 9 12 17 23 32 45
Residential 25 32 46 63 85 106 129
Industry 107 145 202 286 407 584 848
Transport 34 67 106 161 231 328 461

Table 5.6 Trends in sectoral shares in commercial energy consumption (in percentage)

Sector 2001 2006 2011 2016 2021 2026 2031

Agriculture 8 6 5 4 3 2 2
Commercial 4 3 3 3 3 3 3
Residential 13 12 12 12 11 10 9
Industry 57 54 53 52 53 54 56
Transport 18 25 28 29 30 31 31
156 National Energy Map for India: Technology Vision 2030
Figure 5.9 Trends in sectoral shares in
commercial energy consumption
the table show that the percentage share of
industrial sector in commercial energy con-
sumption is maximum throughout the mod-
elling time frame, accounting for more than
50% of the total commercial energy con-
sumption. Furthermore, the share of the
transport sector in total commercial energy
consumption is observed to increase from
18% in 2001 to 30% in 2031.
5.2.3.1 Supply and consumption
of coal in the business-as-usual
scenario
Table 5.7 presents the supply and consump-
tion of coal in the BAU scenario from 2001
to 2031. The coal consumption increases
from 353 to 2057 MT (million tonnes) dur-
ing the modelling time frame
(200131). The share of
power generation in total coal
consumption is the highest
over the modelling time
frame. However, its share ex-
hibits a decline from 70% in
2001 to 58% in 2031. This de-
cline is due to the preference
of natural gas for power gen-
eration due to its better eco-
nomics. While the share of the
process heating in coal con-
sumption increases from 14%
in 2001 to 24% in 2031, the
percentage share of iron ore
reduction and captive power
generation in coal consump-
tion remains almost constant
during the modelling time
frame.
5.2.3.2 Supply and consumption
of oil in the business-as-usual
scenario
Table 5.8 gives the supply and consumption
of petroleum and petroleum products in the
five end-use sectors in the BAU scenario
over the modelling time frame, from 2001 to
2031. The supply of petroleum products in-
creases from 104 to 767 MT during the
modelling period. Similarly, their consump-
tion increases from 91 to 686 MT during the
same period. The difference in the supply
and consumption is primarily due to fuel
and oil losses in the refinery processes. Figure
5.10 gives a graphical representation of the
sectoral consumption of petroleum products.
The total consumption of petroleum
products increases at the rate of 7% during
 Model results and analyses 157

Table 5.7 Supply and consumption of coal (million tonnes) in the business-as-usual scenario

2001/02 2006/07 2011/12 2016/17 2021/22 2026/27 2031/32

Supply (A) A=B+C 353 440 532 708 913 1385 2057
Production (B)

Coking coal 30 31 37 42 47 52 57
Non-coking coal 289 336 372 408 443 479 515
Lignite 25 28 32 36 39 43 46

Total production 343 396 440 485 530 574 619

Net import (C)
Coking coal 10 19 32 51 78 117 173

Non-coking coal 0 26 61 172 306 693 1265

Total net import 10 45 92 223 384 811 1438
Consumption

(D)
Industry
(process heating) 49 71 109 157 234 337 498

Captive power 27 32 37 52 82 114 160

Ore reduction 31 42 58 81 112 155 214
Power 246 296 328 418 485 779 1185

Total consumption 353 440 532 708 913 1385 2057

Table 5.8 Supply and consumption of petroleum products (million tonnes) in the business-
as-usual scenario

2001/02 2006/07 2011/12 2016/17 2021/22 2025/26 2031/32

Supply (A) A=B+C 104 152 211 300 409 563 767

Production (B) 33 40 55 79 79 79 79
Net import (C) 71 112 156 222 330 484 688
Consumption (D)
Agriculture 8 8 9 9 10 10 11
Commercial 3 3 4 5 7 8 11
Domestic 17 19 25 30 34 37 39
Industry 31 41 53 70 93 131 184
Transport 32 64 101 153 220 313 441
Total 91 136 192 268 364 500 686
158 National Energy Map for India: Technology Vision 2030
200131. It grows fastest in the transport
sector at the rate of about 9.1% during the
same time period. The share of the transport
sector in total petroleum product consump-
tion increases from 36% in 2001 to 64% in
2031. This points towards the fact that the
transport sector has limited options for
switching to efficient options that reduce the
consumption of petroleum products unlike
the industry and other oil-consuming sec-
tors. This explains the continuously increas-
ing percentage share of transport sector in
the consumption of petroleum products over
the modelling time frame.
Traditional fuels are used mainly in the
residential sector and to a very small extent frame in the BAU scenario. The gas supply
in the commercial sector. Given that these
Figure 5.10 Sectoral consumption of petroleum
products in the business-as-usual scenario
fuels get increasingly replaced with modern
energy options such as kerosene and LPG
(liquefied petroleum gas), the final energy
use in the residential sector does not seem to
increase significantly due to the higher effi-
ciency of the commercial energy forms.
5.2.3.3 Supply and consumption
of natural gas in the business-as-
usual scenario
Table 5.9 gives the net supply and consump-
tion of natural gas over the modelling time
increases from 26 BCM (billion cubic
metres) in 2001 to 139 BCM in 2031. These
estimates are based on the as-
sumption that the natural gas
has a calorific value of 10 000
kcal (kilocalories)/standard
cubic metre.
As already stated, due to
economic reasons, natural gas
is preferred in the fertilizer
sector, followed by the power
sector. The consumption in
the fertilizer sector is re-
stricted to a certain extent be-
cause of the continued use of
other feedstocks like naphtha
and fuel oil.
 Model results and analyses 159

Table 5.9 Supply and consumption of natural gas (billion cubic metres) in the business-as-
usual scenario

2001/02 2006/07 2011/12 2016/17 2021/22 2026/27 2031/32

Supply (A) A=B+C 26 36 52 75 135 139 139

Production (B) 26 31 45 46 46 46 46
Net import (C) 0 6 7 29 89 93 93
Consumption (D)

Industry (process) 5 5 5 6 6 6 7
Industry (captive) 3 4 7 9 6 8 13
Fertilizer 8 10 11 11 11 12 12

Power 10 17 28 49 112 113 107

Transport 0.16 0.15 0.15 0.15 0.15 0.15 0.15
Total 26 36 52 75 135 139 139

5.2.4 Sectoral electricity total electricity consumption as compared

with 63% in 2001. The consumption in the
consumption in the
domestic sector increases by 12.6 times dur-
business-as-usual scenario ing the modelling time frame.

Figure 5.11 and

Table 5.10 present
sector-wise electric-
Figure 5.11 Trend in the sectoral electricity
ity consumption in
consumption in the business-as-usual scenario
the BAU scenario
over the modelling
time frame (2001
31). The total elec-
tricity consumption
increases by 8.9
times over the mod-
elling time frame.
This increase is
mostly in the indus-
try and residential
sectors, and by
2031, these two sec-
tors account for
nearly 80% of the
160 National Energy Map for India: Technology Vision 2030

Table 5.10 Trend in the sectoral electricity consumption in the business-as-usual scenario
(in terawatt hours)

Sector 2001/02 2006/07 2011/12 2016/17 2021/22 2026/27 2031/32

Agriculture 87 99 111 124 138 152 167
Commercial 48 63 91 132 191 276 399
Domestic 82 134 222 365 573 786 1034
Industry 163 237 369 571 874 1212 1748
Transport 9 17 27 40 56 79 112

Figure 5.12 shows the trends in percent- narios is presented in this section. It also
age distribution of electricity consumption provides a deeper insight into the variations
in the BAU scenario over the modelling time in the final energy and end-use consumption
frame. The percentage share of the industrial mix under alternative sets of assumptions. A
sector in total electricity consumption in- detailed examination of these trends and in-
creases from 42% in 2001 to 51% by 2031. vestment requirements would be used to
During the same period, the percentage frame policies.
share of domestic sector in the electricity
consumption increases from
21% to 30%. However, there
Figure 5.12 Trends in percentage distribution of
has been a decline in the per-
electricity consumption in the business-as-usual scenario
centage share of the agricul-
ture sector in total electricity
consumption, from 22% to
5% over the modelling time
frame. The share of the com-
mercial and transport sectors
in electricity consumption
has remained constant over
the 30-year modelling time
frame.

5.3 Inter-scenario
comparisons

A comparative analysis of the

key results across all the sce-
 Model results and analyses 161

Table 5.11 Variations in commercial energy consumption across various scenarios (in Mtoe)

Scenario 2001/02 2006/07 2011/12 2016/17 2021/22 2026/27 2031/32

LG 285 361 456 605 816 1134 1579
BAU 285 391 527 749 1046 1497 2123
REN 285 391 524 740 1033 1479 2097
NUC 285 391 527 749 1030 1455 2061
EFF 285 379 479 623 838 1131 1542
HG 285 435 638 962 1438 2186 3351
LG low growth; BAU business-as-usual; REN aggressive renewable energy; NUC high nuclear capacity;
EFF high efficiency; HG high growth; Mtoe million tonnes of oil equivalent

5.3.1 Total and fuel-wise energy
requirements across different
scenarios
Table 5.11 presents the variations in com-
mercial energy consumption across various
scenarios. These are pictorially represented
in Figure 5.13. In the BAU scenario, the to-
tal commercial energy consumption in-
creases by 6.9% during the period 200131.
However, it increases by 5.9% and 8.6% in
the LG and HG scenarios, respectively. It
has been observed that in the EFF scenario,

Figure 5.13 Total commercial energy consumption across various scenarios

162 National Energy Map for India: Technology Vision 2030

characterized by the most probable growth 5.3.2 Electricity requirement

rate (8% GDP), the total commercial energy
across different scenarios
consumption increases only by 5.8%.
The difference in energy consumption In the BAU (8% GDP growth), electricity
between the EFF scenario and the BAU sce- consumption increases at an average growth
nario in 2031 is 581 Mtoe (the saving in en- rate of 7.6% over the period 200131, while
ergy consumption in the EFF scenario is the rate of growth is 6.8%, 9.1%, and 6.9%,
twice the consumption in 2031). This differ- respectively, in the LG (6.7% GDP), HG
ence is mainly on account of the reduction in (10% GDP), and EFF scenarios (Figure
consumption of coal by 337 Mtoe and that 5.15).
of oil by 244 Mtoe for the period 200131. In the agriculture sector, electricity con-
This reduction in consumption of coal and sumption increases by about 2.2% over the
oil can be attributed to the adoption of en- 30-year period in the BAU scenario. How-
ergy-efficient technologies by the power, in- ever, the EFF scenario indicates that elec-
dustrial, and transport sectors. tricity consumption increases only by 1.2%
The diagrammatic representation of the during the same period on account of effi-
detailed energy balance across various sce- cient pump sets and judicious water utiliza-
narios for 2001 and 2031 is provided tion as well as the water table remaining
through the Sankey diagrams in Appendix 5 nearly constant.
and the decadal energy balance are shown in
Appendix 6.
Figure 5.14 provides a com-
parison of the fuel costs across Figure 5.14 Average annual fuel
various scenarios. It can be ob- cost across various scenarios
served that the cost reduces by
30% in the EFF scenario as com-
pared to that in the BAU in 2031.
In the REN scenario, although
consumption of coal and oil re-
duces by 31 and 28 Mtoe, respec-
tively, in 2031 as compared to the
BAU, the fuel cost increases mar-
ginally by 5000 crore rupees due
to the higher cost of bio-diesel. In
the NUC scenario, the fuel cost is
marginally higher when compared
to the BAU scenario.

Figure 5.15 Comparison of electricity
consumption across various scenarios
In the industrial sector, the growth rate of
electricity consumption comes down from
8.2% in the BAU scenario to 7.6% in the
EFF scenario. This reduction is primarily
due to the adoption of energy- efficient tech-
nologies in the various industrial sub-sectors.
The electricity consumption increases by
8.8% in the residential sector in the BAU
scenario during the 30-year period. How-
ever, in the EFF scenario, it reduces by 7.9%,
with a reduction by 23% in absolute levels in
2031. This is primarily due to the adoption
of efficient lighting systems, refrigerators, air
conditioners, and other appliances.
Electricity consumption in the transport
sector in the BAU scenario exhibits a growth
Model results and analyses 163
rate of 8.7% over the 30-year period, while
in the EFF scenario it exhibits a growth rate
of 10.9% over the same time period. This is
on account of the increase in the share of
rail-based movement for passengers and
freight as well as higher electrification of rail.
5.3.2.1 Projected generation
capacity across scenarios
Figure 5.16 presents a comparison of
electricity generation capacity mix across
various scenarios. In the BAU scenario, the
total generating capacity increases from
125 GW in 2001 to 795 GW in 2031
164 National Energy Map for India: Technology Vision 2030

Figure 5.16 Comparison of power generation capacity

mix (including decentralized) across various scenarios

(6.3 times). The coal-based capacity de-
creases from 466 GW in 2031 in the BAU
scenario to 349 GW in the EFF scenario.
Gas-based capacity increases from 137 GW
in the BAU scenario in 2031 to 141 GW in
the EFF scenario.
The total power generating capacity re-
mains almost constant in the BAU, NUC,
and REN scenarios. However, there exists
variation in the technology deployment for
power generation across various scenarios.
In the NUC scenario, the nuclear power
generation replaces coal-based generation.
Same happens in the REN scenario in which
renewable-energy-based generation replaces
gas-based generation that is already at its
maximum because of the non-availability of
infrastructure to import additional gas.
Figure 5.17 presents a comparison of the
average annualized investment costs across
various scenarios for 2011, 2021, and 2031.
During the past five-year period of model-
ling time frame (202631), a reduction of
18 000 crore rupees per annum is effected
by way of reduction in annualized capital costs
of coal-based power plants (centralized).
 Model results and analyses 165

Figure 5.17 Average annualized investment cost in the

centralized power generation across various scenarios

However, there is an increase in the annual- 5.3.2.2 Technology deployment

ized cost of gas-based power plants (central-
ized) by 5000 crores vis--vis the BAU
scenario. The increase in the cost of gas-
based power plants is due to increased ca-
pacity of gas-based generation as well as
penetration of H-frame combined cycle gas
turbine that has higher capital cost.
In the NUC scenario, although the annu-
alized costs for coal-based capacity decrease
by 29 000 crore rupees as compared to the
BAU scenario, the increase in the annualized
cost of nuclear power capacity (43 crore ru-
pees) is more than the cost reduction.
in the power sector across the
business-as-usual and high-
efficiency scenarios
Table 5.12 presents the technology deploy-
ment in the power sector in 2021 and
2031 for the BAU and EFF scenarios. Picto-
rial representation of the same is given in
Figure 5.18.
The total installed capacity for power
generation from both centralized and decen-
tralized technologies decreases from
166 National Energy Map for India: Technology Vision 2030

Table 5.12 Comparison of technology deployment for centralized and decentralized

power generation in the BAU and EFF scenarios for 2021 and 2031 (in GW)

Year 2021 Year 2031

Technology BAU EFF BAU EFF
Coal sub-critical 170 92 456 135
Coal-efficient 5 0 10 1
Coal IGCC 0 47 0 213
Gas-based 118 95 137 89
CCGT (H-frame GT) 0 10 0 53
Diesel 7 7 8 8
Hydro power (large and small) 116 116 158 158
Nuclear energy 21 21 21 21
Renewable energy 4 4 4 4
Total 441 392 795 681
BAU business-as-usual; EFF high efficiency; IGCC integrated gasification combined cycle;
CCGT combined cycle gas turbine; GW gigawatts

441 GW in the BAU scenario to 392 GW in
the EFF scenario in 2021, which is about
11% reduction to meet the required de-
mand. Similarly, in 2031, the power generat-
ing capacity reduces from 795 to 681 GW,
which amounts to 14% reduction. This is
primarily due to the improvement in effi-
ciency in the various end-use sectors.
The model results indicate that IGCC
(integrated gasification combined cycle) is
preferred to super-critical- and ultra-
supercritical-based power generating tech-
nologies. In the BAU scenario, IGCC
technologies were not introduced in the
model. These were introduced in the EFF
scenario; due to better economics, the model
preferred IGCC to other coal-based tech-
nologies.
In the BAU scenario, gas-based power
generation hits the upper limits based on the
availability of natural gas in 2021 and 2031,
replacing sub-critical coal-based power gen-
eration. This is primarily due to the higher
efficiency of the CCGT (combined cycle gas
turbine) compared to rankine cycle power
generation in coal-based power generation.
IGCC and H-frame CCGT are almost
equally preferred options for power genera-
tion in the EFF scenario. IGCC based on
imported coal has better economics (lower
cost of generation) and, hence, is a preferred
option as against the IGCC based on indig-
enous coal. In the EFF scenario, the in-
stalled capacity based on H-frame CCGT
technology hits the upper bound based on
the limits of gas availability.
In the BAU scenario, for 2021, the sub-
critical coal-based generation capacity is
175 GW, whereas the power generation ca-
pacity of natural-gas-based CCGT is 118
GW. However, in the EFF scenario, the sub-
critical coal-based generation capacity is

Figure 5.18 Comparison of fuel-wise technology
deployment in the business-as-usual and
high-efficiency scenarios in the power sector
reduced to 92 GW, and IGCC is preferred to
the extent of 47 GW and efficient CCGT
(H-frame) to the extent of 10 GW. In 2031,
IGCC is the preferred option in the EFF
scenario among the coal-based technologies,
with the generation capacity of 213 GW that
is much more than the sub-critical coal-
based generation capacity of 135 GW. In
2031, efficient CCGT generation capacity
increases to 53 GW compared to negligible
generation capacity in the BAU scenario.
The nuclear-energy-based generation capac-
ity remains constant at 21 GW throughout
the decade (202131). The hydro capacity
remains at 116 GW (in 2021) and 158 GW
(in 2031) in both the scenarios.
Model results and analyses 167
5.3.3 Coal require-
ment across various
scenarios
Figure 5.19 shows the sec-
tor-wise coal consump-
tion across various
scenarios. The rate of coal
consumption grew at
7.1% in the BAU scenario
during the modelling time
frame. In contrast, it grew
at a rate of only 6% in the
EFF scenario over the
modelling time frame. In
the NUC and the REN
scenarios, the consump-
tion growth was only mar-
ginally lower at 6.8% and
7.0%, respectively. The
HG scenario (based on a
GDP growth rate of 10%)
exhibits the highest
growth rate of coal con-
sumption at 9%.
The coal consumption in 2031 in the
EFF scenario is only 839 Mtoe, which is
lower than the BAU scenario by 337 Mtoe.
The power sector has the maximum share
in coal consumption across all scenarios, fol-
lowed by the industrial sector for process
heating and captive power generation. The
coal consumption for process heating and
captive power generation is the least in the
EFF scenario due to the adoption of effi-
cient technologies by the end-use sectors. It
is about 34% lower than that in the BAU
scenario in 2031. Coking coal is used for ore
reduction in the blast furnace for making
iron. The coking coal consumption is the
highest in the EFF scenario because of
168 National Energy Map for India: Technology Vision 2030
Figure 5.19 Sector-wise coal consumption across
different scenarios for 2011, 2021, and 2031
increased iron making through the blast
furnace route, which is environmentally
preferred to the direct reduction route.
The coking coal consumption in 2031
is about 1.6 times higher in the EFF
scenario than the BAU scenario.
5.3.3.1 Import dependency
of coal across different
scenarios
Figure 5.20 shows the import depen-
dency of coking coal across various sce-
narios for 2011 and 2031. Because of
the non-availability of high-grade cok-
ing coal, India is highly dependent on
coking coal for iron making. This de-
pendency is the highest in the EFF sce-
nario because of the adoption of blast
furnace route for iron making in inte-
grated steel plants.
India is highly dependent on coal for
its energy requirement. However, due
to growing energy demands and con-
straints on the coal-mining capacity,
India will have to resort to imports.
Other additional factors responsible for
increased dependency on imports are:
(a) location of mines predominantly in
the eastern part of the country and (b)
location of load centres of coal prima-
rily in the south and west. The Indian
government already has a policy to lo-
cate thermal power plants based on im-
ported coal in coastal locations.
The import dependency of non-cok-
ing coal is the highest at 82% in the HG
scenario as compared to 71% in the
BAU scenario in 2031 (Figure 5.21). In
2011, it is 3% in the EFF scenario and
 Model results and analyses 169

Figure 5.20 Comparison of import dependency zero in the LG scenario,

of coking coal across various scenarios and it is the highest for the
HG scenario at 27% in the
same year.

5.3.3.2 Average
annual cost of coal
across various
scenarios

The average annual cost of

coal in each of the decadal
years (2011, 2021, and
2031) in all the sectors of
the economy is shown in
Figure 5.22.
In the BAU scenario, the
annual cost nearly doubles
from 2011 to 2021, and in-
creases further by 2.6 times
Figure 5.21 Import dependency of non-coking from 2021 to 2031. The
coal across various scenarios coal cost is minimal in the
LG scenario (GDP 6.7%),
334 000 crore rupees in
2031. However, in the EFF
scenario, the coal cost is
367 000 crore rupees in
2031, even when the energy
demand is much higher
than the LG scenario. In
the EFF scenario, the coal
cost increases by only 1.7
times from 2011 to 2021
and by 2.5 times for the pe-
riod 202131. In 2031, the
coal cost is 25% lower in
the EFF scenario than the
BAU scenario. Corre-
spondingly, the cost of coal
is 7.6% lower in the NUC
170 National Energy Map for India: Technology Vision 2030

scenario than the BAU sce- Figure 5.22 Comparison of average annual
nario as nuclear power re- cost of coal across various scenarios
places coal-based power
generation in 2031. The
coal cost is only marginally
lower (in 2031) in the REN
scenario when compared
with the BAU scenario.

5.3.4 Petroleum
product requirement
across various
scenarios

Total petroleum consump-

tion increases by 7.6 times
during the 30-year period in
the BAU scenario. In the
EFF scenario, the corre-
sponding increase is only
Figure 5.23 Production, import, and import dependency
5.1 timesthe decrease be-
of petroleum products across various scenarios in 2011
ing accounted for mainly by
the transport sector.
The oil imports remain
high in all the scenarios due
to constant production of
domestic crude. In the BAU
scenario, the import depen-
dency is 74% and 90%, re-
spectively, in 2011 and
2031. In the EFF scenario,
it is 71% and 85%, respec-
tively, and 78% and 90% in
the NUC scenario for 2011
and 2031, respectively. Fig-
ures 5.23 and 5.24 and their
corresponding tables
(Tables 5.13 and 5.14)
present domestic produc-
tion, net import, and import
 Model results and analyses 171

Figure 5.24 Production, import, and import dependency of dependency of petroleum

petroleum products across various scenarios in 2031 products across different
scenarios for 2011 and
2031.
This has implications
with respect to energy secu-
ritythe EFF scenario is
the best for the economy in
terms of energy security
and monetary savings due
to reduced petroleum im-
ports.
Figure 5.25 presents the
average annual cost of oil
and oil products across
various scenarios for 2011,
2021, and 2031. It is ob-
served to be doubling every
decade in the BAU sce-
nario. Compared to this,
the increase is only by about
1.6 times in the EFF sce-
nario over the two decades.

5.3.4.1 Sectoral
petroleum consump-
Table 5.13 Production, import, and import dependency of
tion trends across
petroleum products across various scenarios in 2011
scenarios
Production Net import Import dependency
Scenario (Mtoe) (Mtoe) (%) The petroleum consump-
BAU 55 156 74 tion in the transport sector
increases by about 13.6
EFF 55 137 71
times in the BAU scenario
REN 55 190 77
over the 30-year time pe-
NUC 55 194 78 riod as compared to an in-
LG 55 133 71 crease by 7.8 times in the
HG 55 204 79 EFF scenario. This indi-
BAU business-as-usual; EFF high efficiency; REN aggressive cates that the magnitude of
renewable energy; NUC high nuclear capacity; LG low growth; increase in the petroleum
HG high growth; Mtoe million tonnes of oil equivalent consumption in the trans-
172 National Energy Map for India: Technology Vision 2030

Table 5.14 Production, import, and import dependency of sumption of petroleum

products is attributed to
petroleum products across various scenarios in 2031
the efficient modes for
Production Net import Import dependency road-based passenger and
Scenario (Mtoe) (Mtoe) (%) freight vehicles, along
with a shift in the share of
BAU 79 688 90
rail-based movement and
EFF 79 443 85
higher utilization of pub-
REN 79 687 90 lic transport. In the case
NUC 79 742 90 of renewable energy, this
LG 79 506 87 decrease is due to the
HG 79 1079 93 availability of bio-diesel.
BAU business-as-usual; EFF high efficiency; REN aggressive
In the industry sector,
renewable energy; NUC high nuclear capacity; LG low growth; total petroleum consump-
HG high growth; Mtoe million tonnes of oil equivalent tion increases by six times
in the BAU scenario and
by 4.7 times in the EFF
Figure 5.25 Average annual cost of oil and oil scenario. Naphtha con-
products across various scenarios sumption decreases by
about 26% in the EFF
scenario as compared to
the BAU scenario in
2031. This is due to the
shift towards natural-gas-
based fertilizer produc-
tion.
In the commercial sec-
tor, the EFF scenario in-
dicates a slight increase in
the consumption of petro-
leum products as com-
pared to the BAU
scenario, as there is a shift
from traditional fuels to
kerosene and LPG.
In the residential sec-
tor, the consumption of
port sector declined by almost 50% in the petroleum products increases in the EFF
EFF scenario vis--vis the BAU scenario scenario compared to the BAU scenario due
over the 30-year time frame (200131). In to the displacement of traditional fuels at a
the EFF scenario, the decline in the con- relatively faster rate.
 Model results and analyses 173

Figure 5.26 Comparison of petroleum Figure 5.26 presents a comparison of

product consumption across various the sectoral consumption of petroleum
scenarios in the end-use sectors products across various scenarios for
2011, 2021, and 2031.

5.3.4.2 Capacity and

investments in the oil refinery

As observed in Figure 5.27, only the

EFF scenario has the potential to re-
duce refinery capacity, which decreases
by 19% and 26%, respectively, by 2021
and 2031 when compared with the BAU
scenario. Annualized refinery costs for
the same years decrease by 29% and
40%, respectively (Figure 5.28).

5.3.5 Natural gas requirement

across various scenarios

Natural gas production in the country is

estimated to increase from 26 BCM in
2001 to 45 BCM in 2011 and 46 BCM
by 2021 and 2031.
In 2011, imports of natural gas de-
crease marginally in the EFF scenario as
compared to the BAU scenario (as well
as other scenarios). However, in 2021, a
decrease in gas imports is observed only
in the NUC scenario. This is due to the
replacement of gas-based power gener-
ating capacity by nuclear capacity. Gas
is a preferred option, especially for
power generation as well as in the fertil-
izer sector. However, its offtake through
imports in the model is similar across all
the scenarios and reaches its maximum
infrastructural constraint by 2011 (Fig-
ure 5.29). Similar trends are indicated
with regard to cost of natural gas supply
as seen in Figure 5.30.
174 National Energy Map for India: Technology Vision 2030

Figure 5.27 Refinery capacity 5.4 Comparison of

across various scenarios hybrid scenarios

A comparative analysis of
the impacts of two hybrid
scenarios (namely, HYB
and HHYB, explained in
detail in Chapter 4) on the
energy system is presented
in this section.

5.4.1 Commercial
energy consumption

Table 5.15 gives the com-

mercial energy consump-
tion over the modelling
period across four sce-
narios, namely, BAU, HYB,
Figure 5.28 Refinery investment
HG, and HHYB. The en-
cost across various scenarios
ergy consumption grows
from 285 Mtoe in 2001 to
1503 Mtoe in 2031 in the
HYB scenario. In the
HHYB scenario, the energy
consumption grows from
285 Mtoe in 2001 to 2320
Mtoe in 2031. The com-
mercial energy consump-
tion in 2031 is lower by
29.2% in the HYB scenario
when compared with BAU
scenario. The consumption
in the HHYB scenario is
higher by about 9.3% com-
pared to the BAU scenario
in 2031.
However, the consump-
tion in the HHYB scenario

Figure 5.29 Import of natural gas
across various scenarios
Figure 5.30 Average annual cost of
natural gas across various scenarios
is about 1.5 times higher than the consump-
tion in the HYB scenario in 2031.
The commercial energy supply in 2011,
2021, and 2031 is shown in Figure 5.31.
Model results and analyses 175
5.4.2 Generation
capacity mix
Figure 5.32 shows the
power generation capacity
mix in the BAU, HYB, HG,
and HHYB scenarios for
2011, 2021, and 2031. It
can be seen that the coal
power generation is the
highest in the HG scenario
in all the years. In the HYB
scenario, nuclear power
generation displaces coal-
and gas-based power gen-
eration but hydro-based
power generation capacity
increases marginally. The
renewable energy genera-
tion capacity reaches its
maximum potential of 26
GW in the HYB and
HHYB scenarios in 2031.
Hydro- and nuclear-based
power generation is ex-
ploited to its maximum po-
tential of 160 and 70 GW,
respectively, in 2031. How-
ever, coal-based generation
capacity accounts for over
59% of the total power gen-
eration capacity in the
HHYB scenario and about
42% of the total power gen-
eration capacity in the
HYB scenario. Technology
deployment for power gen-
eration for 2021 and 2031 across the BAU,
HYB, HG, and HHYB scenarios is pre-
sented in Table 5.16 and Figures 5.33 and
5.34.
176 National Energy Map for India: Technology Vision 2030

Table 5.15 Comparison of commercial energy consumption across various scenarios (in Mtoe)

Scenario 2001/02 2006/07 2011/12 2016/17 2021/22 2026/27 2031/32

BAU 285 391 527 749 1046 1497 2123
HYB 285 379 478 619 823 1101 1503
HG 285 435 638 962 1438 2186 3351
HHYB 285 405 544 760 1087 1576 2320
BAU business-as-usual; HYB hybrid; HG high growth; HHYB high-growth hybrid; Mtoe million tonnes of oil
equivalent

5.4.3 Electricity consumption in 5.4.5 Import dependency of coal

the end-use sectors
Figure 5.35 shows the electricity consump-
tion in the BAU, HYB, HG, and HHYB sce-
narios for 2011, 2021, and 2031. It is seen
that the industry and domestic sectors are
the largest consumers of electricity, account-
ing for almost three-fourth of the total elec-
tricity consumption across all scenarios
during the entire modelling time frame.
Figures 5.36 and 5.37 show the import de-
pendency of coking and non-coking coal re-
spectively, in 2011 and 2031 across various
scenarios. The coking coal import depen-
dency in the HYB and HHYB scenarios is
higher than that in the BAU scenario. For
non-coking coal, the import dependency is
the lowest in the HYB scenario but similar in
the HHYB and the BAU scenarios.

5.4.4 Coal consumption in the 5.4.6 Import, import

end-use sectors
The coal consumption in the various end-
use sectors in the HYB scenario in 2011,
2021, and 2031 is shown in Tables 5.17
5.19. The coal consumption in 2031 is 1.7
times higher in the HG scenario compared
to the BAU scenario. The coal consumption
reduces by 35% in the HYB scenario when
compared to the BAU scenario and by 32%
in the HHYB scenario when compared to
HG scenario in 2031. However, the con-
sumption in ore reduction increases in the
HHYB scenario when compared to the HG
scenario due to higher production of iron
and steel from the blast furnace route in
2031.
dependency, and production of
petroleum products
Figures 5.38 and 5.39 and Tables 5.20 and
5.21 show the net import, import depen-
dency, and production of the petroleum
products in the BAU, HG, and their respec-
tive HYB scenarios for 2021 and 2031. The
import dependency is lowest in the HYB
scenario and highest in the HG scenario for
all the years. This is primarily due to the fuel
demand in the transport sector, details of
which are explained under the transport sce-
nario.
 Model results and analyses 177

Figure 5.31 Commercial energy supply in Figure 5.32 Generation capacity mix for
2011, 2021, and 2031 2011, 2021, and 2031 (centralized and
decentralized)
178 National Energy Map for India: Technology Vision 2030

Table 5.16 Technology deployment (including decentralized) during 2021 and 2031 in the
business-as-usual and high growth and their respective hybrid scenarios (in GW)

Year 2021 Year 2031

Technology BAU HYB HG HHYB BAU HYB HG HHYB
Coal sub-critical 170 88 264 107 456 131 728 171
Coal-efficient 5 0 5 0 10 1 10 1
Coal IGCC 0 32 0 96 0 160 0 387
Gas 118 89 114 90 137 91 125 90
Gas-efficient 0 10 10 10 0 53 23 23
Diesel 7 7 7 7 8 8 8 8
Hydro power (large and small) 116 118 116 118 158 160 158 160
Nuclear energy 21 40 21 40 21 70 21 70
Renewable energy 4 12 4 12 4 26 4 26
Total 441 395 541 480 795 700 1076 935
BAU business-as-usual; HYB hybrid; HG high growth; HHYB high-growth hybrid; IGCC integrated gasification
combined cycle; GW gigawatts

Figure 5.33 Comparison of fuel-wise technology deployment 5.4.7 Consumption of

for power generation across various scenarios for 2021
natural gas

Figure 5.40 shows the im-

port of natural gas in the
BAU, HG, and their respec-
tive hybrid scenarios for
2011, 2021, and 2031. It can
be seen that the imports in
the BAU and the HG sce-
narios for 2021 and 2031 are
the same. The consumption
of natural gas in 2031 in the
BAU, HHYB, and HG sce-
narios hits the upper bound.
However, in the HYB sce-
nario, the natural gas con-
sumption for the same
period is below the upper
bound. This is due to the
 Model results and analyses 179

Figure 5.34 Comparison of fuel-wise technology deployment

for power generation across various scenarios for 2031

Table 5.17 Coal consumption in various end-use sectors in 2011 (in Mtoe)

Sector BAU HYB HG HHYB

Industry (process heating) 48 40 57 46
Industry (captive power generation) 16 16 19 18
Power 141 116 180 143
Ore reduction 37 42 44 49
Total 242 215 300 256
BAU business-as-usual; HYB hybrid; HG high growth; HHYB high-growth hybrid

Table 5.18 Coal consumption in various end-use sectors in 2021 (in Mtoe)

Sector BAU HYB HG HHYB

Industry (process heating) 118 76 167 108
Industry (captive power generation) 41 42 51 58
Power 235 115 405 217
Ore reduction 71 95 100 134
Total 466 329 723 517
BAU business-as-usual; HYB hybrid; HG high growth; HHYB high-growth hybrid;
Mtoe million tonnes of oil equivalent
180 National Energy Map for India: Technology Vision 2030

Figure 5.35 Sectoral electricity Table 5.19 Coal consumption in various

consumption for 2011, 2021, and 2031 end-use sectors in 2031 (in Mtoe)

Sector BAU HYB HG HHYB

Industry
(process heating) 285 146 490 253

Industry (captive
power generation) 91 106 139 160
Power 663 296 1148 581

Ore reduction 137 219 231 370

Total 1176 767 2008 1364

BAU business-as-usual; HYB hybrid;

HG high growth; HHYB high-growth hybrid;
Mtoe million tonnes of oil equivalent

preference of coal-based IGCC-based power

generation to the power generation by im-
ported natural gas.

5.4.8 Sectoral end-use

consumption of the petroleum
products

Figure 5.41 shows that the transport and in-

dustrial sectors accounted for more than
80% in the total petroleum product con-
sumption in 2011. Their share increases to
more than 90% by 2031. The petroleum
product consumption in the transport sector
accounted for more than 50% in all the sce-
narios in all the years.

5.5 Comparison of energy

intensity across different scenarios

Energy intensity indicates the extent to

which energy is efficiently utilized in gener-
ating a unit of income/output (GDP) for the
economy. Table 5.22 presents a comparison
 Model results and analyses 181

Figure 5.36 Import dependency of coking coal
across various scenarios for 2011 and 2031
of energy intensity of GDP across the eight
economy-wide scenarios over the modelling
time frame.
Figure 5.42 presents the trends of energy
intensity for various scenarios over the mod-
elling time frame. The figure clearly depicts
that the energy intensity exhibits
a declining trend from 0.022
kgoe (kilogram of oil equivalent)
per rupee of GDP in 2001 to
0.017 kgoe per rupee of GDP in
2031 (a decrease of 23%) in the
BAU scenario. It can be inferred
that owing to the GDP growth
rate of 8% and adoption of gov-
ernment plans and policies, the
economy is progressing along an
energy-efficient path in the BAU
scenario. However, the scenario
takes a conservative view with re-
spect to the technology deploy-
ment by way of limited
penetration of clean-coal tech-
nologies, H-frame combined
cycle gas turbine, the timing of
penetration of efficient power
generation technologies, a low
degree of penetration of nuclear
energy and renewable energy, and so on.
In the EFF scenario, there is a decline in
energy intensity from 0.022 kgoe per rupee
of GDP in 2001 to 0.012 kgoe per rupee of
GDP in 2031. Thus, there is a decline by
27% in the energy intensity when compared

Table 5.20 Domestic production, net Table 5.21 Domestic production, net
import, and import dependency of import, and import dependency of
petroleum products in 2021 petroleum products in 2031

Net Import Net Import

Production import dependency Production import dependency
Scenario (Mtoe) (Mtoe) (%) Scenario (Mtoe) (Mtoe) (%)
BAU 79 330 81 BAU 79 688 90

HYB 79 223 74 HYB 79 415 84

HG 79 566 88 HG 79 1079 93
HHYB 79 299 79 HHYB 79 641 89

BAU business-as-usual; HYB hybrid; HG high BAU business-as-usual; HYB hybrid; HG high
growth; HHYB high-growth hybrid; Mtoe million growth; HHYB high-growth hybrid; Mtoe million
tonnes of oil equivalent tonnes of oil equivalent
182 National Energy Map for India: Technology Vision 2030

Figure 5.37 Import dependency of

non-coking coal across various
scenarios in 2011 and 2031

Figure 5.38 Domestic production, net import, and

import dependency of petroleum products for 2021
 Model results and analyses 183

Figure 5.39 Domestic production, net import, and import

dependency of petroleum products for 2031

Figure 5.40 Import of natural gas across various

scenarios for 2011, 2021, and 2031
184 National Energy Map for India: Technology Vision 2030
Figure 5.41 Sectoral consumption of petroleum
products in 2011, 2021, and 2031
with the BAU scenario. In the HYB
scenario (that includes all plausible
energy-efficient measures consid-
ered in the EFF scenario coupled
with enhanced nuclear capacity and
accelerated penetration of renewable
energy), the energy intensity steadily
declines from 0.022 kgoe per rupee
of GDP in 2001 to 0.012 kgoe per
rupee of GDP in 2031. The extent of
decline is about 29% when com-
pared with the BAU.
Thus, it can be inferred that there
exists a considerable scope for bring-
ing about reduction in energy inten-
sity, if policies are formulated to
promote clean-coal technologies (in
view of the economys continuous
dependence on coal) and barriers to
the uptake of more energy-efficient
technology options are removed.
With time-bound targets and con-
certed action plans towards
strengthening indigenous research
and development facilities, there is a
possibility of further reduction in
energy intensity, as highlighted in
the HYB scenario.
However, the HG and HHYB
scenarios also exhibit a declining
trend in energy intensity; reducing
from 0.022 kgoe per rupee of GDP
in 2001 to 0.016 kgoe per rupee of
GDP in 2031 in the HG scenario
and further to 0.011 kgoe per rupee
of GDP in the HHYB scenario in the
same year. This implies that even
with a high growth rate of 10% GDP
over the period 200131, leading to
growth in commercial energy con-
sumption, the economy can still
move along a declining energy-in-
 Model results and analyses 185

Table 5.22 Energy intensity (kgoe/Rs of GDP) for various scenarios

Scenario 2001 2006 2011 2016 2021 2026 2031

LG 0.022 0.022 0.020 0.020 0.019 0.019 0.018
BAU 0.022 0.022 0.020 0.019 0.018 0.018 0.017
REN 0.022 0.022 0.020 0.019 0.018 0.018 0.017
NUC 0.022 0.022 0.020 0.019 0.018 0.017 0.017
EFF 0.022 0.021 0.018 0.016 0.015 0.013 0.012
HYB 0.022 0.021 0.018 0.016 0.014 0.013 0.012
HG 0.022 0.023 0.021 0.019 0.018 0.017 0.016
HHYB 0.022 0.021 0.018 0.015 0.014 0.012 0.011
LG low growth; BAU business-as-usual; REN aggressive renewable energy; NUC high nuclear capacity;
EFF high efficiency; HYB hybrid; HG high growth; HHYB high-growth hybrid; kgoe kilogram of oil
equivalent; GDP gross domestic product

Figure 5.42 Trends in energy intensity across

various scenarios, from 2001 to 2031
186 National Energy Map for India: Technology Vision 2030

tensity path if energy-efficient measures are of these scenarios, the figures for projected
pursued aggressively. energy consumption in the transport sector
are obtained. The optimal fuel technology
mix in each of these scenarios is modified
5.6 Transport sector scenarios based on the assumptions relating to various
parameters such as inter-modal mix in total
A comparative analysis of the results is pre- transport demand, share of publicprivate
sented in detail for the five alternative trans- modes in transport demand, fuel economy,
port sector scenarios described in Chapter 4. and so on. This explains the difference in total
The nomenclature used for the transport energy consumption across these scenarios
sector scenarios in the graphical representa- over the modelling time frame.
tion are: RAIL-ROAD (characterized by in- The total energy consumption in the
creased share of rail vis--vis road in transport sector has increased by 14 times,
passenger and freight transport demand), from 34 Mtoe in 2001 to 461 Mtoe in 2031,
PUB-PVT (characterized by enhanced share registering an average annual growth rate of
of public transport vis--vis personalized 9.1%. However, as shown in Figure 5.43,
mode of transport), FUEL EFF (fuel there exists a possibility of achieving a re-
economy improvements), BIODSL (pen- duction in energy consumption to a maxi-
etration of bio-diesel), and TPT-HYB (com- mum level of about 35% in 2031 in the
bination of RAIL-ROAD, PUB-PVT, TPT-HYB scenario vis--vis the BAU
FUELEFF, BIODSL, and BAU).
Table 5.23 presents the figures
for the projected commercial en-
ergy consumption in the transport Figure 5.43 Comparison of energy consumption
sector in transport sector across various scenarios
Figure 5.43 gives the compari-
son of total commercial energy
consumption (including electric-
ity) in the transport sector across
various scenarios. The figure
clearly indicates that the projected
energy consumption (including
electricity) in the transport sector
exhibits a consistent upward trend
in all the five scenarios, including
the BAU, over the 30-year time
frame (200131). In all the trans-
port sector scenarios, the freight
and passenger transport demand
exhibits an upward trend. Consid-
ering the optimal fuel technology
mix in the transport sector in each
 Model results and analyses 187

Table 5.23 Total commercial energy consumption in transport sector (in Mtoe) across
various scenarios

Scenario 2001 2006 2011 2016 2021 2026 2031

BAU 34 67 106 161 231 328 461
RAIL-ROAD 34 67 105 158 223 312 430
PUB-PVT 34 68 107 154 219 310 436
FUEL EFF 34 63 94 135 184 249 336
BIODSL 34 67 104 157 222 310 433
TPT-HYB 34 64 94 126 171 228 302
BAU business-as-usual; Mtoe million tonnes of oil equivalent

scenario. In absolute terms, the energy con-
sumption in the TPT-HYB scenario declines
by 125 Mtoe for 2031 vis--vis the BAU
scenario.
Tables 5.245.26 present the results for
the projected fuel mix in the transport sector
across various scenarios for 2011, 2021, and
2031.
The inter-scenario comparison of fuel
mix in the transport sector is presented pic-
torially in Figure 5.44.
Diesel consumption accounts for maxi-
mum share (more than three-fourth) in the
total energy consumption throughout the
period 200131 in the BAU. However, its
predominance as a major transport fuel
fades away due to substitution by electricity,
as a result of the enhanced share of electric
traction, and substitution by bio-diesel.
Other fuels like CNG (compressed natural
gas), electricity, and bio-diesel account for a
miniscule share in the total energy consump-
tion, although the extent of their penetration
across various scenarios differs.
In absolute terms, the gasoline consump-
tion has increased from about 7 Mtoe in
2001 to 40, 74, and 107 Mtoe in 2011, 2021,
and 2031, respectively, in the BAU, at an av-
erage annual growth rate of 10% during the
period 200131. This is because of the

Table 5.24 Projected fuel mix in transport sector (in Mtoe) across scenarios for 2011

Fuel BAU RAIL-ROAD PUB-PVT FUEL EFF BIODSL TPT-HYB

Gasoline 40.00 40.00 40.00 35.00 40.00 35.00
Diesel 60.00 58.00 60.00 53.00 58.00 50.00
Compressed natural gas 2.00 3.00 2.00 2.00 2.00 3.00
Electricity 0.15 0.15 0.15 0.13 0.15 0.15
Bio-diesel 0.00 0.00 0.00 0.00 2.00 2.00
Others 4.00 4.00 4.00 4.00 4.00 4.00
Mtoe million tonnes of oil equivalent; BAU business-as-usual
188 National Energy Map for India: Technology Vision 2030

Table 5.25 Projected fuel mix in transport sector (in Mtoe) for various scenarios for 2021

Fuel BAU RAIL-ROAD PUB-PVT FUEL EFF BIODSL TPT-HYB

Gasoline 74.00 74.00 74.00 57.00 74.00 57.00
Diesel 144.00 135.00 132.00 114.00 135.00 79.00
Compressed natural gas 5.00 6.00 5.00 5.00 5.00 7.00
Electricity 0.15 0.15 0.15 0.11 0.15 9.42
Bio-diesel 0.00 0.00 0.00 0.00 9.00 9.00
Others 9.00 9.00 9.00 9.00 9.00 9.00
Mtoe million tonnes of oil equivalent; BAU business-as-usual

Table 5.26 Projected fuel mix in transport sector (in Mtoe) for various scenarios for 2031

Fuel BAU RAIL-ROAD PUB-PVT FUEL EFF BIODSL TPT-HYB

Gasoline 107.00 107.00 107.00 75.00 107.00 75.00
Diesel 325.00 290.00 300.00 232.00 297.00 138.00
Compressed natural gas 9.00 13.00 9.00 9.00 9.00 17.00
Electricity 0.15 0.15 0.15 0.10 0.15 24.19
Bio-diesel 0.00 0.00 0.00 0.00 28.00 28.00
Others 19.00 19.00 19.00 19.00 19.00 19.00
Mtoe million tonnes of oil equivalent; BAU business-as-usual

higher share of the road-based movement in highlighted by various policy documents, is

total passenger transport demand. Further-
more, the share of personalized modes of
road transport in the total passenger trans-
port exhibits that majority of the road-based
passenger transport vehicles are gasoline-
based.
Similarly, the diesel consumption in the
transport sector has multiplied 14-fold dur-
ing the period 200131, increasing at an av-
erage annual growth rate of about 10%. This
rise is mainly because the share of the road-
based freight transport demand is projected
to increase to 73% till 2036 from 37% in
2001. The massive growth displayed by the
road-based freight transport demand, as
on account of the movement of bulk and fin-
ished products for both long and short dis-
tances. Earlier, railways displayed strength
in the movement of bulk goods including
movement for very short distances. Finished
goods requiring higher flexibility handling
and better transit times have gradually been
moving to the roads with continued increase
in freight tariffs. Thus, the shift from rail to
road in freight transport demand has be-
come clearly apparent in the BAU scenario
in the form of rising energy consumption.
Figure 5.44 clearly indicates that there is
a decline in diesel consumption to the extent
of 10, 65, and 187 Mtoe for 2011, 2021, and

Figure 5.44 Comparison of fuel mix in transport
sector across scenarios for 2011, 2021, and 2031
Model results and analyses 189
2031 when the BAU scenario is
compared with the TPT-HYB
scenario that combines all pos-
sible energy-efficient measures
induced by policy interventions
by the government.
If the railways are able to win
back their market share to the
extent of 50% in freight move-
ment and 35% in passenger
movement vis--vis road over the
period 200136, as mentioned in
various policy documents of the
Government of India, reduction
in diesel consumption by 3%,
6%, and 11% can be achieved for
2011, 2021, and 2031. In abso-
lute terms, the diesel consump-
tion declines by 2, 9, and 35
Mtoe for 2011, 2021, and 2031
in RAIL-ROAD scenario when
compared to the BAU scenario.
Similarly, by enhancing the
share of public transport in total
passenger transport demand to a
maximum of 60% by 2036, the
consumption of diesel exhibits a
decline by 12 and 25 Mtoe for
2021 and 2031, respectively.
This is mainly because of the fact
that with the enhanced share of
public transport in transport de-
mand, the spiralling passenger
transport demand would be ca-
tered to a greater extent by en-
ergy-efficient public transport
modes vis--vis the personalized
modes of transport that consume
more energy per passenger
kilometre.
In the BIODSL scenario, die-
sel is substituted with bio-diesel
190 National Energy Map for India: Technology Vision 2030
to the extent of 2, 9 and, 28 Mtoe in 2011,
2021, and 2031, respectively.
Finally, in the TPT-HYB scenario, maxi-
mum possible savings in diesel consumption
to the extent of about 190 Mtoe can be
achieved if all the possible policies aimed at
oil conservation are promoted. Electricity
consumption in the transport sector in-
creases from 2, 5, and 9 Mtoe in the BAU
scenario to 3, 7, and 17 Mtoe in the TPT-
HYB scenario in 2011, 2021, and 2031, re-
spectively. This is mainly due to the
accelerated electrification of railway tracks
(that is, a higher share of electric traction
vis--vis diesel traction) both in passenger
and freight transport demand.
Moreover, in the TPT-HYB scenario, the
CNG consumption is also higher vis--vis
other scenarios because the CNG hybrid ve-
hicles in this particular scenario start pen-
etrating from 2021. However, it may be
noted that it is the inter-sectoral substitution
of natural gas in power generation and trans-
port sectors that is dictating the quantum of
CNG availability to the transport sector.
Figure 5.45 presents the comparison of
the net import and import dependency of
petroleum products across various scenarios
for 2011, 2021, and 2031. The figure clearly
indicates that if thrust is provided on pro-
moting energy efficiency thus reducing en-
ergy consumption in the transport sector,
the import dependency of petroleum prod-
ucts declines from about 74%, 81%, and
90% in the BAU scenario for 2011, 2021,
and 2031, respectively, to 72%, 76%, and 85%
in the TPT-HYB for the same time period.
Figure 5.46 presents a comparison of ex-
penditure incurred by the economy on the
net import of products across various sce-
narios. As depicted in the figure, the net ex-
penditure on import of petroleum products
has increased to 15 226 billion rupees in the
BAU scenario, 14 644 billion rupees in the
PUB-PVT scenario, 14 423 billion rupees in
the RAIL-ROAD scenario, 14 568 billion
rupees in the BIODSL scenario, 12 333 bil-
lion rupees in the FUEL EFF scenario, and
to 10 193 billion rupees in the TPT-HYB
scenario in 2031. Thus, a decline to the ex-
tent of 33% (that is, by more than one-third)
in the import bill of petroleum products can
be achieved if all possible energy-efficient
measures are undertaken.
5.7 Cumulative carbon dioxide
emissions
The cumulative CO2 emissions for the pe-
riod 200136 in each of the scenarios are
given in Table 5.27. These emissions are sig-
nificantly lower in the EFF and HYB sce-
narios: 25% and 29% lower than the
emissions in the BAU scenario, respectively.
In the HHYB scenario, the CO 2 emissions
are higher by only 8% compared to those of
the BAU scenario. The emissions are also
represented in Figure 5.47 to show the mag-
nitude of variations across various scenarios.
CO2 emissions are the least in the EFF
scenario.
 Model results and analyses 191

Figure 5.45 Comparison of net import and import

dependency of petroleum products across various
scenarios for 2011, 2021, and 2031
192 National Energy Map for India: Technology Vision 2030

Figure 5.46 Expenditure incurred

on import of petroleum products

Table 5.27 Cumulative carbon Figure 5.47 Cumulative carbon dioxide

dioxide emissions for different emissions across various scenarios (200136)
scenarios (from 2001 to 2036)

Cumulative CO2
emissions
Scenario (million tonnes)
LG 12 172
BAU 16 223
REN 15 805
NUC 15 678
EFF 12 113
HYB 11 501
HG 25 004
HHYB 17 533
LG low growth; BAU business-as-usual;
REN aggressive renewable energy;
NUC high nuclear capacity;
EFF high efficiency; HYB hybrid;
HG high growth; HHYB high-growth
hybrid; CO2 carbon dioxide
Key observations and
recommendations
6.1 Key observations from the
model runs
The analysis of results in Chapter 5 provides
various key observations for Indias energy
sector over the next couple of decades.
In the BAU (business-as-usual) scenario,
total commercial energy consumption in-
creases by 7.5 times, from 285 Mtoe (million
tonnes of oil equivalent) in 2001/02 to 2123
Mtoe in 2031/32. Furthermore, the BAU
exhibits a decline in energy intensity to the
extent of 23%, from 0.022 kgoe (kilograms
of oil equivalent) per rupee of GDP (gross
domestic product) in 2001/02 to 0.017 kgoe
per rupee of GDP in 2031/32. The HYB
(hybrid) scenario is representative of a
highly optimistic scenario that incorporates
all possible energy-efficient measures span-
ning across the entire Indian energy sector.
This scenario is also characterized by declin-
ing energy intensity, from 0.022 kgoe per
rupee of GDP in 2001/02 to 0.012 kgoe per
rupee of GDP in 2031/32. The decline in
energy intensity in this scenario is 29% from
the corresponding level in the BAU for
2031/32.
Interestingly, in the HHYB (high-growth
hybrid) scenario at 10% GDP growth, the
energy intensity is exactly halved from
0.022 kgoe per rupee of GDP in 2001/02 to
0.011 kgoe per rupee of GDP in 2031/32.
6
But due to the structural changes in the
economy, the rate of decline is lower in the
initial period as compared to the HYB sce-
nario at 8% GDP growth rate. It may be
noted further that energy intensity in the
HHYB scenario is 8% lower compared to
that in the HYB scenario. Thus, it is evident
that even with the optimistic rate of GDP
growth of 10%, causing total commercial
energy consumption to rise from 285 Mtoe
in 2001/02 to 2320 Mtoe in 2031/32, the In-
dian economy can still progress along an en-
ergy-efficient path through a host of
energy-efficient technological options pen-
etrating into the system, both on the demand
as well as the supply side.
The reduction in the final energy require-
ments in the NUC (high nuclear capacity)
and REN (aggressive renewable energy) sce-
narios is minimal. The final energy require-
ment in the NUC scenario in 2031 is 2061
Mtoe, and in the REN scenario is 2097
Mtoe.
On the supply side, coal still remains the
predominant fuel, accounting for 50% of the
total fuel mix, followed by oil contributing to
about 35%40% of the commercial energy
supply over the entire modelling period in
the BAU scenario. Natural gas is the pre-
ferred choice of fuel for power generation
and as a feedstock for fertilizer production.
The model results indicate that the overall
economics of using natural gas for fertilizer
194 National Energy Map for India: Technology Vision 2030
production is better than using it for power
generation. The current level of natural gas
utilization in the overall energy mix suffers
due to infrastructural constraints on the im-
port of natural gas.
The model run indicates that clean coal
technologies for power generation are the
preferred options for the economy at large. If
commercially available clean coal technolo-
gies such as the ultra-supercritical boilers
and IGCC (integrated gasification com-
bined cycle) are allowed to compete with the
sub-critical boilers and CCGTs (combined
cycle gas turbines), IGCC plants are the pre-
ferred choice and would compete with high
efficiency H-frame CCGT plants. The im-
pact of the NUC scenario is primarily on the
power sector as it displaces coal-based gen-
eration. Similarly, the impact of REN is on
the power sector due to the introduction of
decentralized power generating technologies
like photovoltaic, wind, biomass-based
power, and small hydro. The impact of pen-
etration of bio-diesel is felt only in the trans-
port sector. Large hydro is a preferred
option across all the modelling scenarios,
reaching its full potential of 150 GW (giga-
watts) by 2031. However, its contribution to
total energy supply is very small due to the
low plant load factor of about 30%.
Total investments in supply technologies
and fuels are the least in the EEF (high effi-
ciency) scenario. For instance, the refinery
capacity requirements in the EEF scenario
decrease by 19% and 26%, respectively, by
2021 and 2031, when compared to the BAU
scenario. The corresponding annualized re-
finery costs also decrease by 29% and 40%,
respectively, for the same period in the EEF
scenario vis--vis the BAU.
Import dependency of all fossil fuels is
likely to increase significantly by 2031. For
coal, it is increasing from the negligibly low
level of 3% in 2001 to a staggering level of
70%, and for coking coal, it was thrice the
level in 2001 in the BAU in 2031. This rise in
import dependency of coking coal is prima-
rily due to the increased demand of steel. In
2001/02, more than 60% of the total oil sup-
ply demand was met by imports. In the BAU,
it is expected that by 2031/32, only 10% of
the supply demand could be met by indig-
enously available oil, the remaining 90%
would be met by oil imports. From the view-
point of energy security, the transport sector
has the largest capacity for reducing the use
of petroleum fuels. The final energy con-
sumption of petroleum fuels in the transport
sector increases from 34 Mtoe in 2001 to
441 Mtoe (64% of total petroleum products)
in 2031 in the BAU scenario. Total
energy consumption is 461 Mtoe, which
includes electricity, primarily for rail
transportation.
In the HYB scenario of the transport sec-
tor, the consumption of petroleum products
is 232 Mtoe in 2031 and total energy is 302
Mtoe, which is about 34% lower than that in
the BAU scenario. Furthermore, bio-diesel
can play an important role in decreasing the
petroleum requirements in the transport
sector. This is clearly evident from the model
results which indicate that if the complete
potential of bio-diesel is exploited based on
the availability of degraded land in the coun-
try, as considered in the BIODSL (bio-die-
sel) scenario of the transport sector, 28
Mtoe of diesel can be displaced in the 2031
when compared with the BAU scenario.
6.2 Policy recommendations
emerging from the model runs
It can be observed from the key results
mentioned in the previous sections that even

under the HG scenario, the countrys energy
requirements would increase only by 15% if
it were to pursue a multi-pronged strategy of
adopting not only the policies of energy effi-
ciency but also aggressive nuclear and ag-
gressive renewable energy.
In order to address the earlier-mentioned
points, the following policies/measures are
suggested.
6.2.1 Providing thrust to
exploration and production of coal
Clearly, coal continues to be the mainstay of
energy production, accounting for about
45%55% of the commercial energy mix
throughout the modelling time frame.
By 2031, imports of coal in the BAU sce-
nario are expected to be about 1176 Mtoe.
Even at the current price of 60 dollars per
tonne for imported coal, this would translate
to a foreign exchange outflow of about 4000
billion rupees.
With coal demand expected to increase in
the Asian market, the price of coal may also
increase rapidly, imposing an even higher
pressure on the economy in the future.
Therefore, it is extremely important to re-
duce the import dependency of coal by gear-
ing up the exploration and production
activities in this sector with a view to in-
creasing the extractable coal reserves. For
this, a multi-pronged approach would be
needed that would

bring about technological upgrading of
mining technologies;

open up the coal sector to private inves-
tors (a policy similar to the new explora-
tion policy of the Ministry of Petroleum
and Natural Gas may be adopted after
modifications to suit the coal sector re-
quirements);
Key observations and recommendations 195

enable the CMPDIL (Central Mine Plan-
ning and Design Institute Ltd) to under-
take more intensive R&D (research and
development) and scale-up its efforts to
improve coal extraction technology and
methods, especially beyond the depth of
300 metres;

undertake joint ventures for the extrac-
tion of coal from deep coal seams with a
view to upgrade technology and improve
productivity; and

adopt advanced exploration and produc-
tion technologies to identify and produce
coal from seams beyond 300 metres.
6.2.2 Involving private sector in
exploration and production of
hydrocarbons
Initiatives taken by the DGH (Directorate
General of Hydrocarbons) are already pro-
ducing results in the exploration and pro-
duction area. The recent findings of the
Reliance Industries Ltd and other joint ven-
ture operations indicate possibilities of
much greater findings in the oil and gas sec-
tor. The NELPV (New Exploration Licens-
ing PolicyPhase V) is a step in the right
direction, but it is important to continue
pursuing exploratory efforts for tapping in-
digenous oil and gas.
6.2.3 Steps towards energy
security in hydrocarbons
The efficiency improvement on the demand
side has implications on the supply of petro-
leum products. Since there is an upper limit
on the domestic availability of crude oil at
77.3 MT by 2031/32, it becomes imperative
196 National Energy Map for India: Technology Vision 2030

for the Indian economy to meet the bur- 6.2.3.1 Intensive exploration and
geoning oil demand through imports to
production
bridge the demandsupply gap. However,
the anticipated rise in oil demand is making
The Government of India has initiated many
the Indian economy increasingly dependent
steps to ensure oil security for the country.
on oil imports, creating an additional finan-
One such step was to intensify domestic ex-
cial burden on the Indian economy. This
ploration and development efforts to explore
makes the economy more prone to oil supply
new fields and increase the reserve base of
shocks emanating from external factors such
the country. Hydrocarbon vision 2025 laid
as wars and political instability due to geo-
down a phased programme for reappraising
political situations. Another concern is that
100% of sedimentary basins of the country
of market risks arising from sudden in-
by 2025 (Planning Commission 1999). It in-
creases in oil prices. The price rise adversely
cludes intensive exploration in producing
hampers the process of economic growth
basins to upgrade yet-to-find hydrocarbon
due to the inflationary impact caused by
resource and promotion of exploration in
northward bound oil prices.
non-producing, poorly explored, and new
Furthermore, since the bulk of oil con-
frontier basins like the Himalayan foothold.
sumption is in the transport sector, this sec-
To meet these objectives, the DGH has con-
tor presents the maximum potential for
ducted a number of studies to upgrade infor-
oil-use efficiency, conservation, and substi-
mation on the unexplored or the less
tution with alternative forms of energy from
explored regions of the country. About 1.96
the viewpoint of energy security.
million km2 (square kilometres) of the region
The model results in the transport sce-
has already been covered under these efforts,
narios clearly indicate that if thrust is pro-
of which 86% is offshore and the rest on-
vided on promoting energy efficiency in the
land. These surveys have given information
transport sector, the import dependency of
about the structure, tectonics, and sedimen-
petroleum products would decline from
tary thickness of these areas.
about 74%, 81%, and 90% in the BAU to
Overseas acquisition of equity oil is an-
72%, 76%, and 85% in the HYB scenario for
other major strategy adopted to enhance the
2011, 2021, and 2031, respectively. This de-
oil security of the country. The Government
cline in import dependency is mostly due to
of India aims to produce 20 MTPA (million
the reduction in the quantities of petroleum
tonnes per annum) of equity oil and gas
products imported mainly because of reduc-
abroad by 2010. Under the Tenth Five Year
tion in the energy consumption due to en-
Plan, the target for oil and gas equity abroad
ergy efficiency.
was 5.2 MT and 4.88 BCM (billion cubic
In the following section, the steps taken
metres), respectively. The likely achievement
by the Government of India towards meet-
under the plan period is expected to be
ing the energy security objectives are briefly
about 16.45 MT for oil and 4.41 BCM in
reviewed. The model results support these
the case of natural gas. The potential in-
policies.
place reserves for the block have been esti-
mated to be more than 600 million barrels.
 Key observations and recommendations
6.2.3.2 Strategic reserves
In a major move aimed at enhancing energy
security for the country, on 7 January 2004,
the Union Cabinet approved the setting up
of strategic storage facilities for 5 MT of
crude oil, sufficient to meet 15 days of con-
sumption at three locations on the east and
west coasts. The construction of an under-
ground rock cavern has been proposed at
Mangalore (1.5 MT), Vizag (1 MT), and at
a suitable location south of Mangalore
(2.5 MT). This strategic storage will be in
addition to the existing storage facilities for
crude and petroleum products and will pro-
vide an emergency response mechanism in
case of short-term disruptions. Currently,
the total crude oil storage capacity with do-
mestic refineries is 19 days (5.7 MT).
With increased availability of natural gas
in the country, the Government of India is
also considering the building of under-
ground natural gas storage facilities in India
for strategic use. The government has recog-
nized that with the growing importance of
natural gas as fuel/feedstock for several key
sectors like power, fertilizer, steel, and trans-
port and domestic, creation of strategic gas
storage systems would be imperative for as-
suring security for uninterrupted supplies.
Initial investment estimates for creating an
underground gas storage facility have been
pegged at 100 million dollars. Detailed feasi-
bility studies have been proposed to be car-
ried out for development of underground
gas storage facilities in the country, which
may be funded by the OIDB (Oil Industry
Development Board) through an initial grant.
197
6.2.4 Reduce coal requirements
It is observed that coal would continue to
account for 50% of the energy mix, with
about 70% being used by the power sector.
Therefore, it is important to accelerate the
transition to the more efficient coal-based
power generation technologiesspecifically
the IGCC and the ultra-supercritical
technologies.
For this purpose, demonstration plants
using IGCC should be set up. Faster learn-
ing can be achieved by outright purchase of
technology. A relentless effort is required in
this direction to achieve continuous adop-
tion of the emerging technologies. For ex-
ample, in case of the indigenous
development of the supercritical boilers,
technology development was adopted in a
phased manner.
Apart from the power sector, the possibil-
ity for reducing coal exists in the steel re-
heating furnaces, the ceramic industry, brick
units, through adoption of improved tech-
nology in coal-based captive power genera-
tion units, and through the increased
adoption of blended cements. Appropriate
pricing of energy would play a crucial role in
this regard.
6.2.5 Reduce consumption of
petroleum products
Since the transport sector accounts for nearly
70% of the total petroleum consumption, the
following measures are recommended to re-
duce the consumption of petroleum products
and thereby their imports.

Enhancing the share of public transporta-
tion, promoting MRTS (Mass Rapid
198 National Energy Map for India: Technology Vision 2030
Transit System), ensuring better connec-
tivity of trains to urban areas of the cities,
introducing high-capacity buses, etc.

Electrification of railway tracks to the
maximum extent possible.

Increasing the share of rail in freight
movement and enhancing container
movement, while introducing door-to-
door delivery systems.

Introducing BharatIII norms across the
country for road-based personal vehicles.

Introducing cleaner fuels such as low sul-
phur diesel, ethanol blending, and bio-
diesel.
In the industry sector, given the ineffi-
ciency of diesel consumption by the DG
(diesel generator) sets for captive power gen-
eration, phasing out the use of diesel recom-
mended. The provision of reliable power
supply is imperative to achieve this. This rec-
ommendation applies to the sectors as well
as agriculture.
The use of naphtha for fertilizer produc-
tion and power generation should be avoided
to make it available for the petrochemicals
sector. Natural gas should therefore be made
available in adequate quantities for off-take
by the fertilizer industry and power plants.
6.2.6 Natural gas to be the
preferred fuel for the country
Natural gas availability needs to be facili-
tated by removing infrastructural con-
straints. It is the preferred option for power
generation as well as for nitrogenous fertil-
izer production. Besides its high end-use ef-
ficiency, it is a cleaner fuel and relatively
much easier to handle than coal. It is there-
fore important to enhance natural gas explo-
ration and production from deep-sea. More-
over, we should source gas from within the
Asian region (including Turkmenistan,
Bangladesh, Iran, and Myanmar).
In general, the resource needs to be
tapped to a greater extentsince the use of
natural gas has implications in several sec-
tors such as fertilizers, cement, sponge iron,
power, and transport.
6.2.7 Make renewables
competitive and target their use in
remote areas and decentralized
power generation
Renewable-energy-based power generation
is not a preferred option due to the high
upfront costs and low capacity utilization of
these technologies. Apart from continuing
the schemes to provide support, large-scale
deployment of these technologies would
serve to bring down the costs further. The
governments policies in this regard are al-
ready on the right track but need to be
implemented aggressively, especially if the
target of providing electricity to all has to be
met by 2012.
Decentralized power generation, espe-
cially in remote locations where the grid
cannot be extended, should necessarily be
based on renewable energy forms to provide
these regions with access to clean and reli-
able energy.
6.2.8 Hydro power
Despite its low capacity utilization factor,
hydro power is a cheap option as indicated
by the model. Accordingly, investments in
 Key observations and recommendations
hydropower should be accelerated to tap this
perennial source of power.
6.2.9 Nuclear power
Since additional nuclear-based capacity dis-
places coal, it is important to enhance the
penetration of this option to the extent pos-
sible. Efforts should be directed to step up
nuclear capacity to about 70 GW during the
modelling time frame, from 2001 to 2031.
However, if the modelling time frame is ex-
tended to 2050 and beyond, the positive im-
pacts of nuclear energy can be captured. The
benefits become quite evident because of the
three-stage nuclear policy adopted by the
Government of India, especially with the in-
troduction of the fast breeder reactors with
thorium as fuel. The estimated potential of
these reactors is about 530 GW.
6.2.10 Recommendations for the
industry sector
Energy efficiency in the various industry
sub-sectors can be achieved through the fol-
lowing measures.

Ban import of second-hand machinery in,
for example, sponge iron plants and paper
mills.

Use of cleaner fuels.

Facilitate shifts towards cogeneration,
tapping waste heat for process heat.

Provide support to large-, medium-, and
small-scale industry.

Adopt sub-sectoral technology options
that will result in large-scale energy sav-
ings including
introducing blast furnace with top re-
covery turbine in integrated steel
199
plants, BOF (basic oxygen furnace) for
steel making, and continuous casting
for finished steel;
adopting and improvising COREX
process for integrated steel plants;
setting up new cement plants to adopt
six-stage preheating and use of blend-
ing materials like slag and fly ash;
moving towards larger integrated paper
mills with continuous digesters, black li-
quor boilers, and cogeneration; and
adopting efficient pre-baked elec-
trodes in the aluminium manufactur-
ing process.
6.2.11 Recommendations for the
residential and commercial sectors
The majority of energy consumed in the
residential and commercial sectors is
through lighting, space-conditioning, and
cooking. The measures that can have a major
impact on energy consumption in these sec-
tors are enumerated below.

Lighting is the major electricity consum-
ing end-use in the residential sector. The
replacement of light bulbs with tube
lights and CFLs (compact fluorescent
lamps) can bring about huge energy sav-
ings. Towards this end, the cost of CFLs
needs to be reduced by promoting its
large-scale manufacturing.

Even with a conservative estimate of effi-
ciency improvement possibilities, there
exists tremendous scope for savings in
residential and commercial space-condi-
tioning. For this, it is necessary to make
available efficient motors as against local
makes, provide incentives to buy from
government-certified outlets, and create
awareness among consumers.
200 National Energy Map for India: Technology Vision 2030

Although traditional fuels such as dung,
firewood, and crop residue are freely
available, their low efficiencies, highly
polluting nature, and other social and en-
vironmental impacts associated with their
use do not make them a sustainable op-
tion in the long-term. Although govern-
ment initiatives would ensure that the
majority of the population would be pro-
vided with access to modern fuels (city
gas and LPG [liquefied petroleum gas]),
some of the rural poor are expected to
continue supplementing their energy
needs with freely available traditional fu-
els. Hence, replacement of traditional fu-
els with cleaner fossil fuels is
recommended. For the population that
has not shifted to cleaner options,
programmes for improved cook stoves,
etc. should be introduced.
6.2.12 Rationalize agricultural
power tariffs
Power tariffs for the agricultural sector
should be at least at a level where the cost of
generation can be recovered.
6.3 Technology pathways
The model results indicate that maximum
reduction in the energy consumption in In-
dia can be achieved by carrying out interven-
tions in the power sector on the supply side
and in the transport and residential sectors
on the end-use side.
The model results also indicate that if all
power generation technologies were allowed
to compete for new capacity additions, the
preferred choice of technologies in the order
of economic merit would be (1) large hydro;
(2) refinery-residue-based IGCC; (3) im-
ported-coal-based IGCC; (4) high-effi-
ciency CCGT (H-frame has turbine);
(5) indigenous coal-based IGCC; (6) nor-
mal CCGT; (7) ultra-super critical boiler;
(8) super-critical boiler.
Therefore, the Government of India
should pursue policies to accelerate the pen-
etration of hydro-based power generation, as
this is a mature technology. However, there
are technical and non-technical barriers in
the adoption of other power generation tech-
nologies mentioned above.
The analyses of the model results at the
end-use side indicate that the maximum im-
pact on final energy demand can be achieved
by the adoption of energy-efficient technolo-
gies in the end-use sectors like the transport
and residential.
In addition, the results indicate that
Indias commercial energy demand will grow
by 7.5 times during the next 30 years. Fur-
ther, Indias energy import dependency will
increase significantly over the next 30 years,
with import dependency of coal expected to
increase from 3% to 70% and that of oil
from 68% to 90% during the same period.
Therefore, it becomes imperative to increase
the supply of indigenous energy resources.
Hence, India should plan to enhance efforts
in R&D in the exploration and production of
energy resourceespecially in the area of
deep-sea natural gas exploration, technolo-
gies to exploit coal from seams that are over
300 metres deep, in-situ coal gasification,
and gas hydrates.
A brief status of various technologies
and recommendations for their deployment
are indicated below. Also, Tables 6.1,
6.2, and 6.3 show the pathways that are
 Key observations and recommendations 201

Table 6.1 Suggested technology deployment programme

200611 201121 202131

Power generation technologies

Hydro power generation Commercialize IGCC Demonstration

of commercial-
Supercritical boilers/ultra-supercritical boilers Ultra-supercritical boiler to be scale thorium-
commercialized based reactors
Advanced gas turbines (for example, H-frame demonstrated
turbine)

Refinery-residue-based IGCC

Demonstration of commercial scale IGCC

plants using indigenous and imported coals

Fast breeder nuclear reactor

End-use technologies

Cogeneration State-of-the-art industrial pro- State-of-the-art

cesses to be adopted industrial pro-
Use of waste recovery in industrial processes cesses to be
adopted
Lighting technologies: CFL, LED

Energy-efficient white goods: refrigerators,

alternating current

T&D loss reduction: HVDC, HVAC, and amor-

phous core transformer

R&D in exploration and production of fuels

Natural gas from gas hydrates In-situ coal gasification to be Natural gas
commercialized from gas hy-
In-situ coal gasification drates to be
Deep-sea natural gas com- commercial-
Deep-sea natural gas mercially available ized

CBM CBM production to be com-

mercialized
Mining of coal from seams greater than 300
metres Commercial mining of coal
from seams greater than 300
metres

CBM coal bed methane; CFL compact fluorescent lamp; LED light emitting diode;
HVDC high voltage direct current; HVAC high voltage alternating current;
IGCC integrated gasification combined cycle; T&D transmission and distribution;
R&D research and development
Table 6.2 Suggested technology deployment pathway for power generation
Table 6.3 Suggested technology deployment pathway for end-use sectors
204 National Energy Map for India: Technology Vision 2030
apparent to achieve these goals over the
next 30 years.
6.3.1 Power generation
technologies
6.3.1.1 Nuclear
Keeping the long-term time frame of 50
years or more, nuclear-based power genera-
tion would emerge as the clear winner in
terms of sustainable and energy-efficient
power generation. The three-phase
programme proposed by the Department of
Atomic Energy, using fast breeder reactors
in the second phase and subsequently tho-
rium-based reactors for power generation in
the third phase, is well conceived.
6.3.1.2 Integrated gasification
combined cycle
Because of the technical barrier to the adop-
tion of Indian high-ash coals, it is recom-
mended that commercial-scale coal-based
IGCC demonstration projects be set up on
indigenous and imported coal. This will fa-
cilitate familiarization with technology and
cost reduction of IGCC-based power plants.
With increased refining capacity, refinery
residue such as vacuum residue and petro-
leum coke will be available on large scale. It
is recommended that refinery-residue-based
IGCC power generation plants also be set
up. International experience in this technol-
ogy is already available. Handling refining
residue is comparatively easier than han-
dling high-ash coal for gasification for pro-
duction of syn (synthetic) gas and use in
gas turbines for power generation. The gov-
ernment should adopt this technology as
soon as possible.
6.3.1.3 Advanced gas turbines
Adoption of aero derivative advanced gas
turbines like H-frame for power generation
should be aggressively promoted. In the fu-
ture, it is possible that natural gas reserves
will increase especially due to the efforts of
the Government of India in deep-sea explo-
ration and due to the viability of extracting
natural gas from gas hydrates. Therefore,
aggressive adoption of advanced gas tur-
bines will also help in enhancing the efficien-
cies of IGCC plants. It will also be useful if
the Government of India can adopt a
research programme on advanced gas
turbines in national research institutions or
laboratories like National Aeronautics Ltd
and Hindustan Aeronautics Ltd.
6.3.1.4 Supercritical/ultra-
supercritical boiler
Supercritical steam properties require once
through or Benson boilers, which are dif-
ferent from the drum-type boilers used for
power generation based on sub-critical con-
ditions of steam. Since coal-based power
generation will continue to play a critical
role in the next 3050 years, it becomes es-
sential to adopt well-proven technologies
like super-critical and ultra-supercritical
boilers in the immediate future, that is, in
the Eleventh Five Year Plan, instead of using
 Key observations and recommendations
sub-critical technology. The Benson boiler
was first designed in 1924,1 and ever since
these boilers are being designed and oper-
ated at higher steam properties (for example,
pressures of 300 bar and temperatures
greater than 600 oC). It is strongly recom-
mended that India adopt this technology
immediately. Experience worldwide has
shown that Benson boilers become cost ef-
fective if the unit size is around 1000 MW
(megawatts) or more.
6.3.2 Transmission and
distribution loss
It is also possible to reduce technical T&D
(transmission and distribution) losses to
8%12% as against 16%19% in the coun-
try. The technologies for these would be to
adopt very high voltage AC (alternating cur-
rent) transmission and HVDC (high voltage
direct current) transmission. Distribution
losses can be reduced by adoption of an
energy-efficient transformer, which uses
high-grade steel in the transformer core.
6.3.3 End-use technologies
The adoption of energy-efficient technolo-
gies in the end-use energy-consuming sec-
tors can have a major impact on the final
energy demand, primarily in transport and
residential sectors. In addition, there is a
possibility of technical loss reduction in the
transmission and distribution of power.
1
Siemens Power Generation (1995)
205
6.3.3.1 Industrial sector
Although commercial energy consumption
is the highest in the industrial sector, major
energy-intensive industries are already mov-
ing towards energy-efficient technologies.
The cement and the iron and steel sectors
are already adopting state-of-the-art tech-
nologies, barring a few old plants. However,
there are sectors where the energy-efficient
technologies can be penetrated at a faster
rate, especially for technologies which are
well proven; for example, cogeneration in
the industrial sector and use of waste heat in
the industrial processes. These technologies
are well known and can be promoted by the
Bureau of Energy Efficiency by proper dis-
semination of information.
6.3.3.2 Residential sector
Electricity consumption in the residential
sector will increase at the rate of 8.8%,
which is primarily due to increased utiliza-
tion and the policies of the Government of
India to provide electricity to all. Promotion
of energy-efficient lighting like CFL and en-
ergy-efficient white goods like refrigerators
and air-conditioners can achieve a reduction
of about 23% in 2030. Although these
technologies are well known, the Govern-
ment of India needs a policy to promote
these technologies.
206 National Energy Map for India: Technology Vision 2030

6.3.3.3 Transport sector automobile technologies, which are continu-

The transport sector requires planning to
incorporate integrated transport systems in
urban areas so that public transport systems
are easily accessible to the public at large.
Apart from the shift to a public transport
system and the use of rail, energy-efficient
ously improving in the OECD (Organization
for Economic Co-operation and Develop-
ment) countries, should be adopted. The
technological features are wide ranging
(from fuel injection improvements to effi-
cient combustion and efficient control due
to electronic governance).
APPENDIX 1
Description of energy sector models
A1.1 Introduction
Energy models can be developed using the
bottom-up approach or the top-down ap-
proach. The bottom-up energy models are
developed from engineering data applied to
specific technologies whereas the top-down
energy models are based on statistical analy-
sis of past data. Both can be useful in under-
standing the effects of policy on energy
markets. However, the bottom-up models
often neglect certain costs that reduce re-
turns on investment below what is predicted,
resulting in unrealistic estimates of what will
occur if energy markets are shocked. On the
other hand, the top-down models are based
on the technology and institutions existing
at the time their data applies to, and hence
may underestimate the ability of markets to
adapt.
Within these two approaches, energy
models can be categorized into four broad
categories: (i) optimization models, (ii)
simulation models (bottom-up), (iii) energy
sector equilibrium models, and (iv) input
output models (top-down). The characteris-
tic features of these models are summarized
below.
A
1
A1.2 Energy optimization models
These technology-oriented models mini-
mize the total costs of the energy system, in-
cluding all end-use sectors, over a 4050
year horizon. The costs include investment
and operation costs of all sectors based on a
detailed representation of factor costs. The
recent versions of these models allow de-
mand to respond to prices. A link has also
been established between aggregate macro-
economic demand and energy demand. Pro-
jections of future development are often
implemented with a model generator via the
optimization algorithms based on linear pro-
gramming. Given below are some examples
of these models.
A1.2.1 Model for Energy Supply
Systems Analysis and General
Environment
MESSAGE (Model for Energy Supply
Systems Analysis and General Environment)
is generally used for the optimization of en-
ergy supply systems. However, other systems
208 Appendix 1
supplying specified demands of goods,
which have to be processed before delivery
to the final consumer, could be optimized.
MESSAGE is an instrument for medium- to
long-term dynamic planning of the opera-
tion and expansion of energy systems. The
objectives include resource extraction analy-
sis, estimation of import/export of energy,
energy conversion analysis, energy transport
and distribution analysis, final energy utili-
zation by consumer analysis, recommenda-
tions for environmental protection policy
and investment policy, and analysis of op-
portunity costs (shadow prices and marginal
costs).
A1.2.2 AsiaPacific Integrated
Model
AIM (AsiaPacific Integrated Model) is a
technology selection framework for analysis
of country-level policies related to GHG
(greenhouse gas) emissions mitigation and
local air pollution control. It can also assist
in energy policy analysis. It simulates flows
of energy and materials in an economy, from
supply of primary energy and materials,
through conversion and supply of secondary
energy materials, to satisfaction of end-use
services. AIM/ENDUSE models these flows
of energy and materials through detailed
representation of technologies. Selection of
technologies takes place in a linear optimiza-
tion framework where system cost is mini-
mized under several constraints like
satisfaction of service demands, availability
of energy and material supplies, and so on.
Various scenarios including policy counter-
measures can be analysed in AIM/
ENDUSE.
A1.2.3 Energy Flow Optimization
Models
EFOM-ENV (Energy Flow Optimization
Models) are national dynamic optimization
models (employing linear programming),
representing the energy producing and con-
suming sectors in each state/province. They
optimize the development of these sectors
under given fuel import prices and useful
energy demand over a pre-defined time hori-
zon. The development of national energy
systems can be subject to energy and envi-
ronment constraints like availability of fuel,
penetration rates of certain technologies,
emission standards, and emission ceilings.
The model databases contain a wide range of
conversion and end-use technologies such as
conventional technologies, renewable energy
technologies, efficient fossil fuel burning
technologies, combined heat and power
technologies, and energy conservation tech-
nologies in the demand sectors. The main
objective of EFOM-ENV is energy and
environment policy analysis and planning,
particularly cost-effectiveness analysis of
energy policy options for reducing pollutant
emissions.
A1.2.4 Modular Energy System
Analysis and Planning software
MESAP (Modular Energy System Analysis
and Planning software) is a modular
energy planning package developed with the
specific needs of developing countries in
mind. It is designed as a flexible planning
package providing energy analysts and plan-
ners with tools to perform complex energy

analysis. It consists of basic techniques for
energy planning, a set of tested energy mod-
ules, and data management and processing
software. At the heart of MESAP is a net-
work-oriented database. Its objective is to
assist in energy and environmental policy
analysis and planning.
A1.3 Simulation models
These models involve a detailed representa-
tion of energy demand and supply technolo-
gies, which include end-use, conversion, and
production technologies. Demand and tech-
nology developments are driven by exog-
enous scenario assumptions often linked to
technology vintage models and econometric
forecasts. The demand sectors are generally
disaggregated for industrial sub-sectors and
processes, residential and service categories,
transport modes, and so on. This allows de-
velopment trends to be projected through
technology development scenarios. Quality
of the expert estimations is the decisive fac-
tor to ensure the quality of the simulation.
The main areas of application for simulation
models are research questions concerning
technologically oriented measures, where a
high level of detailed knowledge is necessary,
and where macro-economic interaction and
price are less important. Some of the simula-
tion models include the following.
A1.3.1 Prospective Outlook on
Long-term Energy Systems
POLES (Prospective Outlook on Long-term
Energy Systems) is a simulation model pro-
viding long-term energy supply and demand
Appendix 1 209
scenarios. It is based on a hierarchical sys-
tem of interconnected sub-models at the in-
ternational, regional, and national levels.
Simulation is carried out for the interna-
tional energy markets, national energy bal-
ances, and technical subsystems for final
energy consumption, energy transformation,
and production. Technological development
and diffusion of new technologies as well as
GHG emissions of the energy sector are
taken into account.
A1.3.2 Model of Power system
planning and Comprehensive
Assessment
This model is composed of two parts. The
first part compares and assesses comprehen-
sively the different development options of
the power system (decision-making analy-
sis). It uses the AHP (Analytic Hierarchy
Process) for comparing and ranking differ-
ent development options. The second part of
MOPCA (Model Of Power system planning
and Comprehensive Assessment) is a simu-
lation model of the power producing options
for power system development planning
with constraints regarding financing, re-
sources, and environment. In the first part,
the most important aspects of the power sys-
tem such as energy independence, economic
aspects, system reliability, environmental
and ecological impacts as well as social im-
pacts are taken into account. In the second
part, macro-economic analysis, power sys-
tem analysis, and environmental burdens
analysis are carried out for the purpose of
power system development planning. The
two parts of MOPCA can be used separately.
The model is designed to serve small coun-
210 Appendix 1
tries, especially developing countries, and
regions of large countries.
A1.3.3 Brundtland Scenario model
BRUS (Brundtland Scenario) is a long-term
simulation model for the energy demand
and supply system. Being a technicaleco-
nomic model, it allows for the calculation of
demand-driven scenarios for the total na-
tional energy system. The main purpose of
the model is to analyse cost-effective strate-
gies for the reduction of CO 2 (carbon
dioxide). Simultaneously, potential minimi-
zations of exhaustible resources are
analysed. The model is total (in contrast to
partial or marginal models), making it pos-
sible to introduce significant changes, for ex-
ample, on the demand side, and even then
get reliable results for the total energy sys-
tem. It is subdivided into different sectors of
energy demand and supply, which are inte-
grated to provide useful and comprehensive
tool.
A1.3.4 Long-range Energy
Alternatives Planning
LEAP (Long-range Energy Alternatives
Planning) is an energy planning model that
covers energy demand, transformation, and
supply. It uses a simulation approach to rep-
resent the current energy situation for a
given area and to develop forecasts for the
future under certain assumptions. LEAP is a
computer-based accounting and simulation
tool designed to assist policy-makers in
evaluating energy policies and developing
sound, sustainable energy plans. LEAP can
be used to project the energy supply and
demand situation in order to glimpse future
patterns, identify potential problems, and
assess the likely impacts of energy policies. It
can assist in examining a wide variety of
projects, programmes, technologies, and
other energy initiatives, and in arriving at
strategies that best address environmental
and energy problems.
A1.3.5 Multinational Integrated
Demand And Supply
MIDAS (Multinational Integrated Demand
And Supply) is a large-scale energy system
planning and forecasting model. It performs
dynamic simulation of the energy system,
which is represented by combining engi-
neering process analysis and econometric
formulations. The model is used for scenario
analysis and forecasting. MIDAS covers the
whole energy system and ensures, on an an-
nual basis, the consistent and simultaneous
projection of energy demand, supply, pric-
ing, and costing, so that the system is in both
quantity- and price-dependent balance. The
model output is a time-series of detailed
EUROSTAT energy balance sheets, lists of
costs and prices by sector and fuel, and a set
of capacity expansion plans including emis-
sion data.
A1.4 Energy sector equilibrium
models
These models are conceptually similar to the
economic equilibrium models that represent
decision-making processes of producers and
consumers. They typically simulate markets
for factors of production (such as labour,

capital, and energy), products, and foreign
exchange, with equations that specify supply
and demand behaviour. They offer a closed
theoretical approach of obtaining market
equilibrium that can increasingly be ad-
justed for imperfect market conditions. The
only difference is that the non-energy mar-
kets are not represented here. These models
require the energy demand as an exogenous
input, which is typically based on other eco-
nomic and demographic forecasts. These
models include the following.
A1.4.1 GEM-E3
The GEM-E3 model is an applied general
equilibrium model, simultaneously repre-
senting world regions or European coun-
tries, linked through endogenous bilateral
trade flows and environmental flows. GEM-
E3 aims at covering the interactions between
the economy, the energy system, and the en-
vironment. It is built in a modular way
around its central CGE (computable general
equilibrium) core. It supports defining sev-
eral alternative regimes and closure rules
without having to re-specify or re-calibrate
the model. Although global, the model ex-
hibits a sufficient degree of disaggregation
concerning sectors, structural features of en-
ergy/environment, and policy-oriented in-
struments (for example, taxation). The
model formulates production technologies
in an endogenous manner allowing for price-
driven derivation of all intermediate con-
sumption, and the services from capital and
labour. In the electricity sector, the choice of
production factors can be based on the ex-
plicit modelling of technologies. For the de-
mand side, the model formulates consumer
behaviour, and distinguishes between
Appendix 1 211
durable (equipment) and consumable goods
and services.
A1.4.2 PRIMES
The PRIMES model, used by the EU (Euro-
pean Union) environmental agencies, is de-
signed only for measuring sectoral effects
and not economy-wide effects. PRIMES, a
partial equilibrium model, is primarily de-
signed to show the effect of policy changes
on energy markets. It can calculate the direct
cost implications of reduced energy use, but
not the economy-wide impact on GDP
(gross domestic product), employment, and
investment.
A1.4.3 Energy and Power
Evaluation Program
ENPEP (Energy and Power Evaluation
Program) is a set of microcomputer-
based energy planning tools that are
designed to provide an integrated analysis
capability. ENPEP begins with a macro-
economic analysis, develops an energy
demand forecast based on this analysis,
carries out an integrated demand/supply
analysis for the entire energy system, evalu-
ates the electric system component of
the energy system in detail, and determines
the impacts of alternative configurations.
Also, it explicitly considers the impacts the
power system have on the rest of the energy
system and on the economy as a whole.
ENPEP is mainly employed for energy
policy analysis, energy tariff development,
energy project investment analysis, electric
system expansion planning, and environ-
mental policy analysis.
212 Appendix 1
A1.4.4 Canadian Integrated
Modelling System
CIMS (Canadian Integrated Modelling Sys-
tem) is a nearly full equilibrium system,
which tracks the flow of energy in the entire
economic system beginning with production
processes through to the eventual end-use
by individual technologies. It may incorpo-
rate demand-dependent energy supply costs,
price-driven demand feedbacks, second or-
der macro-economic effects, and energy
trade. CIMS is ideal for modelling policies
intended to affect energy efficiency, GHG
emissions, and air quality.
A1.4.5 National Energy Modelling
System
NEMS (National Energy Modelling System)
is a computer-based, energy economy mod-
elling system of the US energy markets for
the medium-term period through 2020. De-
signed and implemented by the US Depart-
ment of Energy, it represents domestic
energy markets by explicitly representing the
economic decision-making involved in the
production, conversion, and consumption of
energy products. NEMS provides a consis-
tent framework for representing the complex
interactions of the US energy system and its
response to a wide variety of alternative as-
sumptions and policies or policy initiatives.
As an annual model, it can also highlight the
impacts of transitions to new energy
programmes and policies.
A1.4.6 Inputoutput models
Inputoutput models are based on the time
series of the macro-economic interaction
matrices with their inputoutput tables, en-
ergy balances, and labour market statistics.
Activities are explained with respect to
sectoral development, energy carrier con-
sumption, and emission development. This
segment includes the following.
A1.4.6.1 Energy Scenario
Generator
The main purpose of the ESG (Energy Sce-
nario Generator) model is to generate con-
sistent scenarios of economic development,
which simultaneously determine energy de-
mand and supply as well as the major envi-
ronmental impacts. The feedback between
economic development, energy demand, and
energy supply is fully integrated into the
model, that is, an energy technology model is
linked with a macro-economic model. The
model aims at coordination of macro-eco-
nomic energy and environmental policies at
the national level. As inputs, this model re-
quires data such as (i) base year energy bal-
ances, (ii) base year economic data, (iii) base
year inputoutput table, (iv) time series of
major economic data (consumption, trade,
investment), (v) data on disaggregated capi-
tal stocks, (vi) capital market data (interest
rates, inflation), (vii) population data, and
(viii) energy technology data like efficiency
(actual and expected future), disaggregated
investments (actual and expected), emission
data (plus reduction potential), labour in-
put, and technology lifetime.

A1.4.6.2 MEGEVE-E3ME
This is a general energyenvironment
economy model, developed for Europe, ca-
pable of addressing issues that link
developments and policies in the areas of
energy, environment, and economy. The
main purpose of the model is to provide a
framework for evaluating different policies,
particularly those aimed at achieving sus-
tainable energy use over the long term.
MEGEVE-E3ME uses a neo-Keynesian
econometric inputoutput model in a gen-
eral equilibrium framework. It provides de-
tailed results for the economy, the energy
sector, and environmental emissions. Basic
input data are inputoutput tables; national
accounts; investment data; energy balances,
energy prices, and taxes; electricity station
data; and emissions into air.
Appendix 1 213
A1.4.6.3 MICRO-MELODIE
MELODIE is a French macro-economic
model with a detailed technological descrip-
tion of the energy sector, especially in the
electricity sector. The model also computes
polluting emissions such as NOx, SO2, and
CO2. The economy, energy, and environ-
ment are then described in a single frame-
work, but for each topic, a specific
methodology has been developed.
MELODIE is adapted to measure any en-
ergy policy modifying the cost structure of
electricity supply. Input/output tables at cur-
rent and constant prices, economic accounts
of the institutional sectors, and technologi-
cal and economic data on the electricity sec-
tor including fuel cycle, international
economic data energy balances in physical
and monetary units, and environmental data
(polluting emissions) are the main inputs re-
quired for this model.
APPENDIX 2 A
Sectoral reference energy system
(RES) 2
Figure A2.1 Reference energy system for the agriculture sector
216 Appendix 2

Figure A2.2 Reference energy system for the transport sector

 Appendix 2 217

Figure A2.3 Reference energy system for the residential sector

218 Appendix 2

Figure A2.4 Reference energy system for the industry sector

 Appendix 2 219

Figure A2.5 Reference energy system for the electricity sector

APPENDIX 3
Socio-economic drivers of energy
demand
A3.1 Methodology for estimating
income-wise household distribution
The overtime proportion of households in
each expenditure class depends on factors
such as rate of growth of population, share of
urban population to rural population,
household size, and rate of growth of GDP.
Given these parameters, distribution of
households in various expenditure classes is
generated using a lognormal distribution for
MPCE (monthly per capita consumption
expenditure) data for rural and urban avail-
able from NSSO (National Sample Survey
Organization) for consumer expenditure
rounds; 1993/94 and 1999/2000.
The lognormal distribution of MPCE has
probability density function
1 Therefore, increase in GDP implies an in-
e (ln x ) / 2 2
2
f ( x ; , ) =
x 2
where, x is the household consumption ex-
penditure for x > 0, where and are the
mean and standard deviation of the MPCEs
logarithm. The expected value is
E(X) = e+2/2
A
3
and the variance is
var (X) = (e2 1)e 2+2
The cumulative probability of population
below an expenditure level is given by
(ln (L) )/ (A-3.2)
where, L is the consumption expenditure
level.
In order to forecast the probability of
population in an expenditure class, the two
unknowns and for the above two
equations need to be estimated over the fore-
cast period.
has been assumed to follow the past
trend of decline during 1993/94 to 1999/
2000 for rural and urban areas. , mean ex-
penditure, has been determined by income
as per the Keynesian consumption theory.
crease in expenditure thereby implying a
rightward shift in the lognormal curve. Pri-
vate final consumption expenditure has been
used for consumption expenditure. There-
fore, forecast of growth rate of private final
consumption expenditure determines the
growth rate of MPCE. The growth rate of
private final consumption expenditure has
(A-3.1) been forecasted using the following equa-
tion.
222 Appendix 3
PFCE = 115 235 + 0.54 (Y) (A-3.3)
(-11.79) (20.83)
(Adjusted R2= 0.953)
where,
PFCE = private final consumption ex-
penditure
and Y = GDP
Coefficient of GDP is the MPC (marginal
propensity to consume). In other words, an
MPC of 0.54 implies that one rupee increase
in income leads to an increase of 0.54 rupee
in consumption.
MPCE = PFCE/P
where,
H = population
In India, the per capita income increased
from 5823 rupees in 1981 to 12 281 rupees
in 2001. Correspondingly, the per capita ex-
penditure increased from 5044 rupees to
8441 rupees during the same time period.
This increase in per capita expenditure was
at the annual rate of 2.48% during 1981
2001, when the per capita income growth
rate was 3.64%. The same is expected to in-
crease at the rate of 4.8%, 6.0%, and 7.8%
with the per capita income growing at the
rate of 5.5%, 6.7%, and 8.5% at a GDP
growth rate of 6.7%, 8%, and 10% respec-
tively during 200136.
The NSS (National Sample Survey) data
of per capita calorie intake by MPCE classes
has been used to find out the monetary cut
off corresponding to minimum calorie re-
quirement norm. The national-level official
poverty line corresponds to a basket of goods
and services, which satisfies the calorie norm
of per capita daily requirement of 2400 kcal
(kilocalories) in rural areas. Accordingly,
people below an MPCE of 525 rupees in
rural areas and 575 rupees in urban areas
have been considered to be below poverty
line (Table A3.1).
For simplifying the analysis, these expen-
diture classes have been categorized into six
expenditure groups namely BPL (below
poverty line), L (low), LM (lower middle),
M (middle), UM (upper middle), and H
(high) in rural and urban areas. MPCE less
than or equal to 525615 rupees is consid-
ered to be under the BPL group. For the ur-
ban low-income group, the figure is 575
665 rupees (Table A3.1).
Based on the probabilities computed for
rural and urban population under various
GDP growth rate scenarios (Tables A3.2
A3.7), the number of households in rural
and urban areas is estimated for six expendi-
ture classes.
 Appendix 3 223

Table A3.1 Monthly per capita expenditure and calories intake

Rural Urban
Monthly per Calorie intake Monthly per Calorie intake
capita expenditure (in Rs) (kcal) capita expenditure (kcal)
0225 1383 0300 1398
225255 1609 300350 1654
255300 1733 350425 1729
300340 1868 425500 1912
340380 1957 500575 1968
F380420 2054 575665 2091
420470 2173 665775 2187
470525 2289 775915 2297
525615 2403 9151120 2467
615775 2581 11201500 2536
775950 2735 15001925 2736
Above 950 3178 Above 1925 2938

Source NSO (2000)

Table A3.2 Probability of households (rural) 6.7% GDP

MPCE (in Rs) 1993 1999 2001 2006 2011 2016 2121 2026 2031 2036
0225 0.101 0.057 0.044 0.016 0.005 0.001 0.000 0.000 0.000 0.000

225255 0.048 0.034 0.028 0.014 0.004 0.001 0.000 0.000 0.000 0.000
255300 0.083 0.065 0.056 0.031 0.014 0.004 0.001 0.000 0.000 0.000
300340 0.079 0.065 0.059 0.038 0.019 0.006 0.001 0.000 0.000 0.000

340380 0.077 0.071 0.065 0.046 0.026 0.010 0.002 0.000 0.000 0.000
380420 0.075 0.070 0.068 0.052 0.032 0.014 0.004 0.001 0.000 0.000
420470 0.084 0.086 0.084 0.070 0.049 0.024 0.007 0.001 0.000 0.000

470525 0.082 0.087 0.087 0.079 0.061 0.034 0.012 0.002 0.000 0.000
525615 0.106 0.120 0.124 0.126 0.108 0.073 0.031 0.008 0.001 0.000
615775 0.122 0.148 0.159 0.185 0.189 0.155 0.090 0.030 0.005 0.000

775950 0.070 0.092 0.102 0.138 0.167 0.172 0.131 0.062 0.015 0.002
9501200 0.044 0.061 0.072 0.109 0.154 0.196 0.198 0.134 0.051 0.009
12001500 0.019 0.028 0.033 0.057 0.094 0.148 0.196 0.186 0.105 0.029

15002000 0.008 0.013 0.015 0.030 0.057 0.109 0.191 0.260 0.230 0.111
20002800 0.001 0.002 0.003 0.008 0.018 0.044 0.104 0.213 0.311 0.271
> 2800 0.001 0.001 0.001 0.001 0.003 0.009 0.032 0.103 0.282 0.578

MPCE monthly per capita expenditure; GDP gross domestic product

224 Appendix 3

Table A3.3 Probability of households (urban) 6.7% GDP

MPCE (in Rs) 1993 1999 2001 2006 2011 2016 2021 2026 2031 2036
0300 0.094 0.047 0.035 0.012 0.003 0.000 0.000 0.000 0.000 0.000
300350 0.046 0.031 0.025 0.011 0.003 0.001 0.000 0.000 0.000 0.000
350425 0.076 0.058 0.050 0.028 0.011 0.002 0.000 0.000 0.000 0.000
425500 0.079 0.067 0.061 0.038 0.019 0.005 0.001 0.000 0.000 0.000
500575 0.077 0.071 0.067 0.049 0.026 0.010 0.001 0.000 0.000 0.000
575665 0.086 0.085 0.083 0.066 0.043 0.018 0.004 0.000 0.000 0.000
665775 0.093 0.098 0.098 0.088 0.065 0.034 0.010 0.001 0.000 0.000
775915 0.097 0.109 0.111 0.111 0.094 0.059 0.022 0.004 0.000 0.000
9151120 0.106 0.125 0.132 0.145 0.142 0.110 0.055 0.013 0.001 0.000
11201500 0.117 0.146 0.158 0.195 0.223 0.220 0.158 0.064 0.011 0.000
15001925 0.064 0.081 0.089 0.122 0.164 0.203 0.203 0.132 0.040 0.004
19252400 0.033 0.043 0.047 0.069 0.100 0.148 0.193 0.181 0.093 0.018
24003200 0.021 0.026 0.030 0.045 0.071 0.120 0.199 0.268 0.228 0.090
32004000 0.007 0.008 0.009 0.013 0.023 0.044 0.089 0.167 0.225 0.160
> 4000 0.004 0.005 0.005 0.008 0.013 0.026 0.065 0.170 0.402 0.728

MPCE monthly per capita expenditure; GDP gross domestic product

Table A3.4 Probability of households (rural) 8% GDP

MPCE (in Rs) 1993 1999 2001 2006 2011 2016 2121 2026 2031 2036
0225 0.101 0.057 0.044 0.012 0.002 0.000 0.000 0.000 0.000 0.000
225255 0.048 0.034 0.028 0.010 0.002 0.000 0.000 0.000 0.000 0.000
255300 0.083 0.065 0.056 0.025 0.006 0.001 0.000 0.000 0.000 0.000
300340 0.079 0.065 0.059 0.031 0.010 0.002 0.000 0.000 0.000 0.000
340380 0.077 0.071 0.065 0.038 0.014 0.003 0.000 0.000 0.000 0.000
380420 0.075 0.070 0.068 0.046 0.020 0.005 0.001 0.000 0.000 0.000
420470 0.084 0.086 0.084 0.063 0.031 0.009 0.001 0.000 0.000 0.000
470525 0.082 0.087 0.087 0.073 0.043 0.015 0.003 0.000 0.000 0.000
525615 0.106 0.120 0.124 0.121 0.084 0.037 0.009 0.001 0.000 0.000
615775 0.122 0.148 0.159 0.188 0.166 0.097 0.032 0.005 0.000 0.000
775950 0.070 0.092 0.102 0.148 0.171 0.135 0.064 0.016 0.001 0.000
9501200 0.044 0.061 0.072 0.124 0.183 0.195 0.133 0.048 0.009 0.001
12001500 0.019 0.028 0.033 0.069 0.130 0.188 0.181 0.100 0.026 0.002
15002000 0.008 0.013 0.015 0.039 0.094 0.181 0.252 0.218 0.099 0.020
20002800 0.001 0.002 0.003 0.011 0.036 0.100 0.212 0.304 0.250 0.101
> 2800 0.001 0.001 0.001 0.002 0.008 0.032 0.112 0.308 0.615 0.876

MPCE monthly per capita expenditure; GDP gross domestic product

 Appendix 3 225

Table A3.5 Probability of households (urban) 8% GDP

MPCE (in Rs) 1993 1999 2001 2006 2011 2016 2021 2026 2031 2036
0300 0.094 0.047 0.035 0.009 0.001 0.000 0.000 0.000 0.000 0.000
300350 0.046 0.031 0.025 0.009 0.002 0.000 0.000 0.000 0.000 0.000
350425 0.076 0.058 0.050 0.023 0.006 0.001 0.000 0.000 0.000 0.000
425500 0.079 0.067 0.061 0.033 0.010 0.002 0.000 0.000 0.000 0.000
500575 0.077 0.071 0.067 0.042 0.017 0.003 0.000 0.000 0.000 0.000
575665 0.086 0.085 0.083 0.059 0.028 0.008 0.001 0.000 0.000 0.000
665775 0.093 0.098 0.098 0.080 0.045 0.015 0.003 0.000 0.000 0.000
775915 0.097 0.109 0.111 0.104 0.071 0.030 0.006 0.001 0.000 0.000
9151120 0.106 0.125 0.132 0.142 0.119 0.065 0.019 0.002 0.000 0.000
11201500 0.117 0.146 0.158 0.200 0.213 0.164 0.075 0.016 0.001 0.000
15001925 0.064 0.081 0.089 0.134 0.181 0.191 0.131 0.047 0.007 0.000
19252400 0.033 0.043 0.047 0.080 0.130 0.174 0.168 0.092 0.022 0.002
24003200 0.021 0.026 0.030 0.053 0.107 0.183 0.243 0.207 0.088 0.014
32004000 0.007 0.008 0.009 0.021 0.041 0.088 0.158 0.201 0.143 0.042
> 4000 0.004 0.005 0.005 0.011 0.029 0.076 0.196 0.434 0.739 0.942

MPCE monthly per capita expenditure; GDP gross domestic product

Table A3.6 Probability of households (rural) 10% GDP

MPCE (in Rs) 1993 1999 2001 2006 2011 2016 2121 2026 2031 2036
0225 0.101 0.057 0.044 0.009 0.001 0.000 0.000 0.000 0.000 0.000
225255 0.048 0.034 0.028 0.008 0.001 0.000 0.000 0.000 0.000 0.000
255300 0.083 0.065 0.056 0.020 0.002 0.000 0.000 0.000 0.000 0.000
300340 0.079 0.065 0.059 0.027 0.005 0.000 0.000 0.000 0.000 0.000
340380 0.077 0.071 0.065 0.034 0.008 0.001 0.000 0.000 0.000 0.000
380420 0.075 0.070 0.068 0.040 0.012 0.002 0.000 0.000 0.000 0.000
420470 0.084 0.086 0.084 0.057 0.019 0.002 0.000 0.000 0.000 0.000
470525 0.082 0.087 0.087 0.069 0.029 0.005 0.001 0.000 0.000 0.000
525615 0.106 0.120 0.124 0.116 0.061 0.015 0.001 0.000 0.000 0.000
615775 0.122 0.148 0.159 0.187 0.136 0.047 0.006 0.000 0.000 0.000
775950 0.070 0.092 0.102 0.155 0.159 0.084 0.018 0.001 0.000 0.000
9501200 0.044 0.061 0.072 0.135 0.195 0.152 0.052 0.006 0.000 0.000
12001500 0.019 0.028 0.033 0.079 0.160 0.187 0.101 0.020 0.001 0.000
15002000 0.008 0.013 0.015 0.047 0.133 0.237 0.216 0.079 0.009 0.000
20002800 0.001 0.002 0.003 0.015 0.062 0.180 0.294 0.215 0.055 0.004
> 2800 0.001 0.001 0.001 0.002 0.017 0.088 0.311 0.679 0.935 0.996

MPCE monthly per capita expenditure; GDP gross domestic product

226 Appendix 3

Table A3.7 Probability of households (urban) 10% GDP

MPCE (in Rs) 1993 1999 2001 2006 2011 2016 2021 2026 2031 2036
0300 0.094 0.047 0.035 0.007 0.000 0.000 0.000 0.000 0.000 0.000
300350 0.046 0.031 0.025 0.008 0.001 0.000 0.000 0.000 0.000 0.000
350425 0.076 0.058 0.050 0.019 0.003 0.000 0.000 0.000 0.000 0.000
425500 0.079 0.067 0.061 0.028 0.006 0.001 0.000 0.000 0.000 0.000
500575 0.077 0.071 0.067 0.037 0.010 0.001 0.000 0.000 0.000 0.000
575665 0.086 0.085 0.083 0.054 0.017 0.002 0.000 0.000 0.000 0.000
665775 0.093 0.098 0.098 0.074 0.031 0.005 0.000 0.000 0.000 0.000
775915 0.097 0.109 0.111 0.099 0.052 0.012 0.001 0.000 0.000 0.000
9151120 0.106 0.125 0.132 0.139 0.094 0.032 0.004 0.000 0.000 0.000
11201500 0.117 0.146 0.158 0.204 0.194 0.100 0.021 0.001 0.000 0.000
15001925 0.064 0.081 0.089 0.143 0.188 0.149 0.053 0.006 0.000 0.000
19252400 0.033 0.043 0.047 0.088 0.151 0.170 0.095 0.018 0.001 0.000
24003200 0.021 0.026 0.030 0.064 0.141 0.224 0.201 0.073 0.007 0.000
32004000 0.007 0.008 0.009 0.022 0.062 0.137 0.190 0.119 0.024 0.001
> 4000 0.004 0.005 0.005 0.014 0.050 0.167 0.435 0.783 0.968 0.999

MPCE monthly per capita expenditure; GDP gross domestic product

A3.2 Rationale for choice of 8%
gross domestic product growth rate
The Tenth Five Year Plan covering the period
200207 prepared by the Planning Commis-
sion, GoI (Government of India) aims at
achieving an average growth rate of real
GDP of 8% per annum over the period
200207. The 8% average growth rate target
set for the Tenth Plan appears quite optimis-
tic when compared with the short-term
GDP growth rate forecasts of other organi-
zations. However, the rationale behind tar-
geting 8% GDP growth rate is doubling the
per capita incomes over the next decade with
a more equitable regional distribution. This
would bring about substantial improvement
in the welfare of the entire population.
Furthermore, the Tenth Five Year Plan
has been prepared against the backdrop of
the performance of the Indian economy dur-
ing the Eighth and the Ninth Plan periods.
During these plan periods many of the com-
monly held beliefs regarding the potentiali-
ties and constraints that govern the opera-
tion of the economic system have been ques-
tioned and highlighted.
There are three major experiences from
the previous plan periods, as highlighted in
the Tenth Five Year Plan that lay down the
guidelines for setting the growth targets for
the future.
Firstly, the growth rate of the Indian
economy is no longer constrained by the
availability of savings or investible resources.
The clearest evidence for this is given by the
persistent difference between the external
capital inflows and the CAD (current ac-
count deficit) that has existed through much
of the 1990s. CAD represents the excess of
total investment in the country over domes-

tic savings while external capital flows repre-
sent the inflow of potential savings from
abroad. The excess of external capital in-
flows over CAD is therefore an indication of
the failure of investment demand to absorb
foreign savings. Thus, it can be stated that
the availability of investible resources was
not the primary constraint to growth and in-
vestment in India.
Secondly, the growth rate of an economy
is not wholly determined by the level of in-
vestment activity. The Tenth Five Year Plan
highlights the fact that the rate of real invest-
ment as a percentage of GDP was higher
during the Ninth Five Year Plan as compared
to the previous plan period. The Ninth Five
Year Plan recorded a real investment rate of
26.3% of GDP as compared to 24.9% dur-
ing the Eighth Five Year Plan. However, the
economy registered an average annual GDP
growth rate of 6.7% per annum as against
5.3% during the Ninth Plan. This is ex-
plained by the fact that the investment rate
when measured in nominal terms has de-
clined from 24.8% in the Eighth Plan to
24.3% in the Ninth Plan period. Also, the
nominal investment rate has been at or be-
low the private savings rate. The Ninth Plan
period was characterized by a decline in the
levels of capacity utilization thereby explain-
ing a decline in the investment rate in nomi-
nal terms.
Thirdly, the growth of the agriculture sec-
tor is a key determinant of the overall eco-
nomic growth rate. Although the share of
agriculture in aggregate GDP has declined
to 26.9% of GDP reducing the sensitivity of
GDP growth rate to fluctuations in agricul-
1
Domestic savings comprise domestic public and domestic private savings. Domestic private savings are further sub-
divided into household savings and savings by the private corporate sector.
Appendix 3 227
tural performance, the agricultural incomes
play an important role in determining the
demand for non-agricultural commodities.
Therefore, growth of the agriculture sector
is a determinant of future growth rate.
The imperatives for achieving an 8% real
GDP growth rate given in the Tenth Five
Year Plan document of the Planning Com-
mission are as follows.
(a) The Planning Commission envisages
that the investment rate be accelerated
from 24.4% in 2001/02 to 32.6% in
2006/07 for achieving a target GDP
growth rate of 8%. This targeted in-
vestment rate differs from the invest-
ment rate projected by other organiza-
tions such as IEG (Institute of Eco-
nomic Growth).
In order to finance a gross capital
formation (investment) of this magni-
tude, the Tenth Five Year Plan targets a
domestic savings rate of 29.8% of
GDP and foreign savings rate of 2.8%.
That is, the domestic savings 1 rate
would have to rise by 6 percentage
points from the current levels over the
Tenth Five Year Plan period. Of this
6% increase in the domestic savings
rate, 2.11% is expected to be in the pri-
vate sector and the rest in the public
sector. In this context, it is mentioned
that the savings rate in the domestic
household sector is expected to decline
during the Tenth Plan period. This is
because, on the one hand, rapid in-
crease in personal disposal incomes (as
a result of rise in GDP) would raise the
savings rate and on the other, fiscal
228 Appendix 3
policy would necessitate significant
stepping up of tax/GDP ratio. This
stepping up would tend to reduce the
household savings. Furthermore, the
savings rate of the private corporate
sector is determined mainly by its
share in GDP, its profit rate, and capi-
tal intensity. It is envisaged that in the
Tenth Five Year Plan, the savings rate
of this sector will rise sharply with im-
proved capacity utilization thereby im-
proving both its profitability and GDP
share. The Tenth Five Year Plan re-
quires the government sector to reduce
its dissavings by nearly 2 percentage
points in order to meet the aggregate
domestic savings target.
(b) The Tenth Five Year Plan projects the
exports to grow at the rate of 12.4%
and invisibles to perform strongly. This
would further raise the real GDP
growth rate by creating demand abroad
for domestic goods and services.
(c) The Tenth Five Year Plan further rec-
ognizes four priority sectors that are
critical for generating high rate of eco-
nomic growth. These sectors are agri-
culture, construction, transport, and
other services. Public investment in
the agriculture sector would be in-
creased significantly to reduce the sen-
sitivity of this sector to weather-related
fluctuations. The construction sector is
considered as a potential sector for
growth given that the land-related sug-
gestions mentioned in the plan are
implemented judiciously. A faster
growth in other transport can be
achieved if required policy changes
permitting greater involvement of the
private sector are implemented. This,
coupled with high growth rates in the
information, communication, and en-
tertainment sectors would lead to ac-
celeration in growth of other services.
Thus, the 8% growth rate is considered
feasible in the Tenth Plan period since the
scope for realizing improvements in effi-
ciency is very large both in the public and
private sector assuming that the policy im-
peratives discussed above materialize.
For these aforementioned reasons, TERI
has adopted the GDP growth rate of 8% for
energy demand projections for the Tenth
Five Year Plan period consistent with the
plans of the GoI. Based on the assumption
that the 8% growth rate can be sustained for
a period extending beyond the Tenth Five
Year Plan period, TERI has projected GDP
to grow at an average annual rate of 8% per
annum through the entire modelling period
(200136).
A3.3 Methodology for GDP projec-
tions under 6.7% GDP growth rate
In a separate exercise to project GDP growth
for India, TERI has modified the model de-
veloped by Goldman Sachs (2003) for long-
term GDP projections in Brazil, Russia, In-
dia, and China popularly referred to as
BRICs countries. For this purpose, we have
used the growth accounting framework used
by Goldman Sachs, which was first devel-
oped by Solow in 1956. According to this
framework, growth in output can be broken
down into the following components.
(a) Growth in output due to measured
growth in labour input
(b) Growth in output due to measured
growth in capital input
(c) Technological progress

A3.3.1 Assumptions
A3.3.1.1 Production function
The main point of departure from the
BRICs study16 is in our choice of a labour
augmenting Cobb Douglas production func-
tion. The production function exhibits con-
stant returns to scale, and the technological
progress is of the type that increases the effi-
ciency of the abundant factor of production,
which in the case of India is labour. Labour-
augmenting technical change can be mani-
fested in the adoption of technologies that lead
to the production of more labour-intensive
goods or in technologies that increase the effi-
ciency of the labour input (Acemoglu 2002).
We believe that this specification is more
relevant than the Goldman Sachs specifica-
tion, to the direction that Indian growth is
most likely to take.
Our production function is specified as
Y= (AL)1-K
where A= labour-augmenting technology
L = labour input
K = capital
= share of capital in income
A3.3.1.2 Convergence
One of the factors driving growth in the
model is the rate of growth of TFP (total
factor productivity). The difference between
the per capita income of the US and the per
capita income of India determines the po-
tential for technological catch up. The rate
of convergence would depend on the initial
income of the developing country. Under
these conditions, technological progress
could be expected to be faster in developing
Appendix 3 229
countries such as India than in the US. As
higher TFPG (total factor productivity
growth) rates and diminishing returns to
capital lead to higher output growth rates,
the potential for catch up decreases and the
developing country converges towards the
steady-state growth rate of technological
progress in the US.
Unconditional convergence would imply
that the steady-state balanced growth paths
for the developing and developed country
coincide (Islam 1998). This, however, need
not be the case when conditional conver-
gence is assumed. In this case, any one or
more of the parameters defining steady state
can differ among countries. This model as-
sumes the convergence of TFP growth rates
in steady state. The economies can, however,
differ in terms of steady-state growth rates of
population, savings rates, educational attain-
ment, depreciation, and TFP levels (Jones
1997). The growth rates that a country can
achieve in the steady state would depend on
country-specific factors such as technique
choice, geography, and institutional struc-
tures that affect saving and investment rates,
physical and social infrastructure, education
levels, and quality of governance. This would
imply that given the same initial levels of per
capita income, a country with an underde-
veloped infrastructure or lower levels of edu-
cational attainment would converge at
slower rates than a country with more
favourable conditions.
We use the same specification for the evo-
lution of TFPG as in the BRICs paper. The
growth rate of TFP in the developing coun-
try is given by the following relation.
Log (At/At-1) = (long-run TFPG for the
US) Log [(per capita GDPDC)/(per capita
GDPUS)]
230 Appendix 3
where At = TFP level at time t
At-1 = TFP level at time t-1
Log [(per capita GDPDC)/(per capita
GDP US)] = conditional convergence rate for
the developing country
This specification assumes that the TFPG
rates along the path to steady state in the
developing country are higher than the
steady state TFP growth rate in the US . The
higher the rate of convergence (), and the
larger the difference in per capita incomes,
the higher the rate of TFP growth in the de-
veloping country relative to the long-run
TFPG rate in the US. Conventional esti-
mates of the rates of convergence in per
capita income for developed countries to
their own steady states are about 2%
(Mankiew, Romer, and Weil 1992). We
would expect conditional convergence rates
in developing countries to be lower as a con-
sequence of retarding institutional factors.
The BRICs paper has assigned a conver-
gence rate of about 1.5% to developing
countries. It mentions that calculations for
long-term projections of GDP use lower ini-
tial convergence rates for Brazil and India.
These increase to 1.5% through the period
for which the projections are made. We have
assumed the conditional convergence rates
for India to be equal to 1.3% throughout our
analysis. We expect convergence rates for
India to be lower than those used for China
and Russia in the BRICs paper, because of
higher illiteracy levels, infrastructural
bottlenecks, and social constraints that af-
fect the participation of women in the
workforce and the large proportion of the
population employed in subsistence or unor-
ganized activities in both the agricultural
and urban sectors.
We have used long-term TFP growth rates
for the US to be consistent with those used
by the CBO (Congressional Budget Office)
of the Government of the US. The CBO
(2002) uses a TFP growth rate of 1.3% for
their long-term GDP projections. This was
revised upwards from 1% average annual
growth (CBO 1997). The CBO also uses
more conservative long-run US TFPG
(1.1%) rates for alternative projections.
The results from our analysis are very
sensitive to the assumptions made regarding
the convergence rates and long-run TFPG
rates. Changing long-term US TFPG rates
from 1.3% to a more pessimistic 1.1% would
change our results appreciably.
A3.3.1.3 Capital stock
The growth of net capital stock in the model
follows the equation given below.
Kt = Kt-1(1 ) + sYt-1
where Kt = net capital stock at time t
Kt-1 = net capital stock at time t-1
s = investment rate
Yt-1 = GDP at time t-1
From this specification we find that sY t-1
gives us the gross capital formation in time
t-1. This forms a part of the net capital stock
that is available for use in the following year.
To calculate the net capital stock for the ini-
tial year in our analysis, we have used data on
net capital stock and gross capital formation
from the National Accounts Statistics pub-
lished by the CSO (Central Statistical Orga-
nization), GoI. To calculate the subsequent
capital series we assume that the investment
rate in India will remain at 24% throughout
the period for which projections are made.
We also assume that the depreciation rate
will remain at 5% for the entire period. This

assumption is again a very stringent one and
the rates of capital attrition (a combination
of deterioration and technological obsoles-
cence) can be expected to change. In the In-
dian case we could expect rates of capital at-
trition to rise in the long term as capital in-
tensity and ICORs (incremental capital
output ratio) decline due to relocation of
capital from investment in infrastructure to
investment in production. Capital attrition
due to technological obsolescence could also
be expected to rise with changing market
structures favouring the increase in competi-
tion and a corresponding increase in the
share of R&D (research and development)
expenditures in total investment.
The share of capital in income, as com-
puted from data on operating surplus and
net national product from the National Ac-
counts Statistics, is approximately 60%. This
is on the higher side and we would expect
this share to decline in the long run with the
adoption of more labour-augmenting tech-
nologies, increased employment, and regula-
tion in the unorganized sector. The long-run
share of capital in income could be taken as
1/3, which is the share of capital in the in-
come of the US and several other developed
countries. For the purpose of our analysis we
keep the share of capital in GDP as 3/5.
A3.3.1.4 Demographics
We have used population figures given by the
PFI (Population Foundation of India). We
have projected population till 2030 assum-
ing growth rates to decrease from current
levels of 2003 to about 0.9% in 2030. We
have assumed a constant rate of increase of
1.07% in the Indian work force. Assuming a
shift in the age structure of the population in
favour of people above the age of 65, and a
Appendix 3 231
decline in population growth, a constant rate
of increase allows for future increases in the
rate of participation of women in the work
force. This is an expected consequence of in-
creased expenditures on social infrastruc-
ture and increased life expectancies.
A3.3.1.5 Other assumptions
As in the BRICs paper, we assume that the GoI
continues to pursue liberal economic and so-
cial policy with emphasis on the gradual with-
drawal of government intervention in industry
and trade, and increasing government expen-
ditures on health and education.
We have used the estimates of the US per
capita GDP calculated in the BRICs paper
to arrive at TFP growth rate figures for In-
dia. We have deflated these values to 1993/94
rupee values. We have taken 2003 as the ini-
tial year in our analysis, and have used avail-
able data on GDP and capital stock valued at
1993/94 prices. Labour force, work force,
and population figures are in millions and
the values for the initial year are obtained
from the PFI.
We have computed long-term GDP
growth rates for India for the base model
with investment rates at 24%, depreciation
at 5%, convergence rate at 1.3%, and long-
term US TFPG at 1.3%.
A3.3.2 Results
The results from the simulations in our base
model indicate that the long-term average
annual GDP growth rate for India is 6.7%
per annum for the modelling time frame
200136. TERI considers it be the low-
growth scenario relative to the 8% GDP
growth rate adopted in the baseline scenario.
232 Appendix 3
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APPENDIX 4 A
Region-wise hydrocarbon reserves
at the end of 2005 4
Figure A4.1 Distribution of proved reserves of
hydrocarbons in 1985, 1995, 2005
236 Appendix 4

Figure A4.2 Production of crude oil in

different regions (million barrels daily)
 Appendix 4 237

Figure A4.3 Reserves-to-production ratio and

reserves (in percentage) for crude oil

Figure A4.4 Proved reserves of gas at the

end of 2005 (trillion cubic metres)
238 Appendix 4

Figure A4.5 Distribution of proved

reserves in 1985, 1995, and 2005

Figure A4.6 Production of gas in different regions (billion cubic metres)

 Appendix 4 239

Figure A4.7 Reserves-to-production ratio

and reserves (in percentage) for gas
APPENDIX 5 A
Sankey diagrams
5
Figure A5.1 Sankey diagram for the business-as-usual scenario (2001)
Figure A5.2 Sankey diagram for the business-as-usual scenario (2031)
Figure A5.3 Sankey diagram for low-growth scenario (2031)
Figure A5.4 Sankey diagram for the high-growth scenario (2031)
Figure A5.5 Sankey diagram for high energy efficiency scenario (2031)
Figure A5.6 Sankey diagram for high nuclear capacity scenario (2031)
Figure A5.7 Sankey diagram for renewable energy scenario (2031)
APPENDIX 6 A
Balance sheets
6
Table A6.1 Energy balance in the business-as-usual scenario in 2011 (all figures are in Mtoe)

Oil and
natural Petroleum Hydro (large Nuclear Renewable Total
Supplydemand Coal gas products and small) energy energy power Total
Supply 242 51 211 18 4 1 527
Conversions
Power generation 45 14 82
Conversion losses and
auxiliary consumption
Power generation 96 14 110
Oil refining 12 12
Transmission and distribution 21 21
Consumption
Agriculture 9 9 18
Industry 102 23 54 23 202
Transport 104 2 106
Residential 27 19 46
Commercial 4 8 12
End-use consumption 102 23 199 61 384
Notes
Nil or negligible.
Figures may not add up to the total due to rounding off.
Energy supply from hydro and nuclear options are considered equal to the amount of electricity generated.
Energy consumption in industry includes energy use for process heating, captive power generation, and feedstock.
250 Appendix 6

Table A6.2 Energy balance in the business-as-usual scenario in 2021 (all figures are in Mtoe)

Oil and
natural Petroleum Hydro (large Nuclear Renewable Total
Supplydemand Coal gas products and small) energy energy power Total
Supply 466 132 405 30 13 1 1046
Conversions
Power generation 76 59 178
Conversion losses and
auxiliary consumption
Power generation 159 51 210
Oil refining 28 28
Transmission and distribution 40 40
Consumption
Agriculture 10 11 22
Industry 231 23 96 58 407
Transport 226 5 231
Residential 37 48 85
Commercial 7 16 23
End-use consumption 231 23 377 138 768
Notes
Nil or negligible.
Figures may not add up to the total due to rounding off.
Energy supply from hydro and nuclear options are considered equal to the amount of electricity generated.
Energy consumption in industry includes energy use for process heating, captive power generation, and feedstock.

Table A6.3 Energy balance in the business-as-usual scenario in 2031 (all figures are in Mtoe)

Oil and
natural Petroleum Hydro (large Nuclear Renewable Total
Supplydemand Coal gas products and small) energy energy power Total
Supply 1176 136 757 40 13 1 2123
Conversions
Power generation 215 56 325
Conversion losses and
auxiliary consumption
Power generation 448 49 497
Oil refining 50 50
Transmission and distribution 68 68
Consumption
Agriculture 11 14 25
Industry 513 31 190 114 848
Transport 452 9 461
Residential 42 86 129
Commercial 12 33 45
End-use consumption 513 31 708 256 1508
Notes
Nil or negligible.
Figures may not add up to the total due to rounding off.
Energy supply from hydro and nuclear options are considered equal to the amount of electricity generated.
Energy consumption in industry includes energy use for process heating, captive power generation, and feedstock.
 Appendix 6 251

Table A6.4 Energy balance in the hybrid scenario in 2011 (all figures are in Mtoe)

Oil and
natural Petroleum Hydro (large Nuclear Renewable Total
Supplydemand Coal gas products and small) energy energy power Total
Supply 215 49 189 18 4 3 478
Conversions
Power generation 38 12 74
Conversions losses and
auxiliary consumption
Power generation 79 12 90
Oil refining 12 12
Transmission and distribution 19 19
Consumption
Agriculture 8 8 17
Industry 98 24 48 21 191
Transport 89 2 3 93
Residential 27 17 44
Commercial 5 6 11
End-use consumption 98 24 177 55 356
Notes
Nil or negligible.
Figures may not add up to the total due to rounding off.
Energy supply from hydro and nuclear options are considered equal to the amount of electricity generated.
Energy consumption in industry includes energy use for process heating, captive power generation, and feedstock.

Table A6.5 Energy balance in the hybrid scenario in 2021 (all figures are in Mtoe)

Oil and
natural Petroleum Hydro (large Nuclear Renewable Total
Supplydemand Coal gas products and small) energy energy power Total
Supply 329 129 299 31 24 11 823
Conversions
Power generation 43 48 148
Conversions losses and
auxiliary consumption
Power generation 72 41 113
Oil refining 22 22
Transmission and distribution 33 33
Consumption
Agriculture 0 0 9 10 18
Industry 214 30 79 47 370
Transport 0 10 144 9 7 171
Residential 0 0 37 39 76
Commercial 0 0 8 12 20
End-use consumption 214 40 268 116 655
Notes
Nil or negligible.
Figures may not add up to the total due to rounding off.
Energy supply from hydro and nuclear options are considered equal to the amount of electricity generated.
Energy consumption in industry includes energy use for process heating, captive power generation, and feedstock.
252 Appendix 6

Table A6.6 Energy balance in the hybrid scenario in 2031 (all figures are in Mtoe)

Oil and
natural Petroleum Hydro (large Nuclear Renewable Total
Supplydemand Coal gas products and small) energy energy power Total
Supply 767 136 484 41 42 33 1503
Conversions
Power generation 126 42 254
Conversions losses and
auxiliary consumption
Power generation 170 32 202
Oil refining 41 41
T&D 51 51
Consumption
Agriculture 9 10 19
Industry 471 37 148 86 743
Transport 25 231 28 17 302
Residential 42 65 107
Commercial 13 25 38
End-use consumption 471 62 444 204 1209
Notes
Nil or negligible.
Figures may not add up to the total due to rounding off.
Energy supply from hydro and nuclear options are considered equal to the amount of electricity generated.
Energy consumption in industry includes energy use for process heating, captive power generation, and feedstock.
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