Myth of Per Capita Energy Consumption

Syndrome of Per Capita Consumption

As per conventional thinking, the GDP of developed nations is closely linked with per capita consumption of energy. The per capita energy consumption of primary energy in India is one of the lowest in the world. India consumed only 439 kg of oil equivalent (kgoe) per person in 2003, compared to 7835 of USA, 4210 of Germany,4052 of Japan,3906 of UK, 1090 of China and 1688 of World average. If we get caught in the syndrome of per capita consumption, India, with its population explosion and its limited natural and financial resources, can never even dream of reaching the development levels of the developed countries.

High Energy Intensity is Symptomatic of Inefficiency

India's energy intensity (energy consumption per unit of GDP), is higher by 7% to 25% than that of Japan, UK, Denmark, Brazil etc. This indicates inefficient use of energy and cheap and abundant power supply will further encourage inefficiency and willful wastage, resulting in increased consumption not related with productivity or GDP growth.India must get out of the myth, that economic vitality requires steadily increasing energy consumption. In today's competitive global market, the country's energy programmes should focus on lower energy intensity, conservation of resources and protection of environment. The ultimate Goal for the Nation should be an "Industrial Ecosystem" which means an industrial process that minimizes both inputs of Energy and Materials and outputs of Waste Products and Pollutants.

Decouple Energy Supply from Consumption

But the planners & policy/decision makers, having been overtaken by the events and used to crisis management, tend to create more generating capacities to meet ever increasing demand and tide over the crisis situation. It is of utmost importance & urgency, to decouple the energy supply from consumption and link it with realistic demand based on efficient utilization and not on consumption. This approach alone can maximize India's economic competitiveness.

The oil shocks & sharp price hikes of the 1970s led America to promote energy efficiency & renewable energy sources. It was also realized that energy consumption and hence energy supply, need not rise in lockstep with economic growth & they could be decoupled. The real GNP grew at an average of 2.5% a year from 1973 to 1986, but energy use did not grow at all, avoiding an additional 150 billion dollars a year in higher energy bills. From 1979 to 1986 the United States was estimated to have got seven times as much energy from savings, as it did from net capacity expansions.

The Sweden is already among the world's most energy efficient countries, even though it is cold, cloudy and heavily industrialized. By doubling its electric efficiency and switching over power generation to natural gas and biomass fuels, it is planned to support a 54% increase in real GNP from 1987 to 2010, while phasing out all nuclear power plants. The costs of electrical services are expected to fall by nearly one billion dollars per year.

Potential for Electrical Energy Efficiency

The Electric Power Research Institute (EPRI), the utilities' think-tank of USA, estimated in early 1990s, that electricity use in USA could be reduced as much as 55%, through cost-effective means, at an average cost of three cents per kilowatt-hour (unit). It was also estimated that as much as four-fifths of all energy then being used for lighting and half of all energy used to run motors, could be saved by technical improvements. Thus better lighting and motor systems could save nearly half of all U.S electric power generation. What would be the potential for energy saving in India?

Indian Power Sector Scenario

India, with installed capacity of about 160,000 MW, is reported to have recorded per capita consumption of 533 units, against 13,066 of USA, 7816 of Japan, 6898 of Germany, 1379 of China etc. It is planned to increase the installed capacity to 800,000 MW by 2031-32, to cope with the growth rate of 8% The talk of increasing the per capita consumption and increasing the Installed capacities alone may prove to be expensive and counter productive for Indian economy.

Supply Side Management (SSM) Measures

Before planning any more additional capacities, the optimum utilization of the new capacities as well as the existing capacities, need to be given the highest priority by adopting the following SSM Measures:

a) Gross Fuel Conversion Efficiency of Coal Thermal Plants to be aimed more than 40%, by adopting advanced technologies

b) Plant Load Factor of Coal Thermal Plants be aimed beyond 75% against the present National average of about 68%

c) In many States the metered and billed energy is reported to be less than 50% of the energy purchased and supplied by the Utilities, incurring heavy losses. All Services, including those offered free power, should be metered, in accordance with Section 55(1) of The Electricity Act, 2003.

d) Transmission and Distribution (Technical) Losses be brought down to below 20%, by making Energy Accounting and Audit mandatory and bringing in accountability at all levels as per Section 55(2) of The Electricity Act, 2003.

Energy Conservation - DSM Measures

It is more than 7 years since The Energy Conservation Act, 2001, has come into force on 1 st March 2002, with avowed object to provide for efficient use of energy and its conservation. But, unfortunately, the impact of Energy Conservation has not been felt so far in suppressing the demand, at least to cope with the shortages of power. Neglecting this cheap and readily available source of power, the thrust seems to be on expensive and time consuming capacity additions alone. The emphasis seems to be more on "Conversation" than on "Conservation".
Hope the National Mission Plan for "Enhanced Energy Efficiency" will have some tangible impact?

The focus will have to be on, right energy policies, for implementation of SSM and DSM measures, for ensuring optimum utilization of the resources and the energy generated and to suppress the demand. The missing link is Efficiency and Sensible Energy Policy. The obsession of higher per capita consumption adds to the problem.

Extracts from Prime Minister's Speech
-On NEC Day, December 14, 2004

"Without an Economic Pricing Policy, albeit one that is sensitive to social inequalities and income disparities, it will not be possible for us to sincerely address, the challenge of Energy Conservation"

"Theft of Power is not getting captured and is instead being reported as 'Transmission & Distribution Losses' or as "Free Power" being supplied to Rural Areas---"

"The free supply of power in rural areas, has the effect not only on encouraging excessive use of power, when it is on offer, but also encouraging the wasteful use of Ground Water"

Dr.Man Mohan Singh

Prime Minister of India