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Don't lump it

India won't be able to sustain energy requirements with current levels of fossil fuel usage, writes DV Kapur.

india Updated: Aug 31, 2006 03:39 IST

Reading Sitaram Yechury's column, Left-Hand Drive, titled Wheeling dealing (HT, August 17), one got the feeling that someone had fed him with data on coal and power generating capacities that seem to be based on wrong assumptions and projections. The extent of errors in the assumptions is so vast that the conclusion is far removed from reality.

First, development of power and its demand projections in a fast growing economy need to be worked out not in terms of nine years, i.e. till 2015, but at least for the next Five Plan periods, i.e. till 2031. Yechury mentions that "at the present rate of consumption, coal is expected to last for another 250 years or so". For future planning in a growing economy, it would be wrong to make conclusions on the basis of "the present rate of consumption". The data available from as many as seven studies of different governmental and non-governmental agencies on India's coal reserves and projections of demand and capacity till 2031 is as follows:

• India's proven reserves of coal amount to 92 billion tonnes, out of which extractable coal is only 52 billion tonnes, since the coal lying below a depth of 600 metres is not considered extractible and viable.

• Against 473 million tonnes of coal production in 2006-07, the 2024-25 projections vary from 1,126 million tonnes to 1,402 million tonnes. The projections for 2031 would be even more, despite this being projected by the Planning Commission on a conservative basis at 1,417 million tonnes for 2031-32.

• A simple exercise could, therefore, indicate that domestic coal is not likely to last more than 50 years or so, and not 250 years. In fact, most specialists feel that domestic coal resource is expected to be fully exhausted by 2045.

• As per the latest projections of the Ministry of Power for electricity requirement, the installed capacity at the end of the next five Five Year Plans (i.e. 2031-32) shall reach 962,210 MW corresponding to a GDP growth rate of 8 per cent. These projections, though reduced to 778,000 MW by the Planning Commission, will, however, be significantly higher for an economic growth rate of 9-10 per cent.

• As far as untapped potential for hydel power is concerned, the 50,000 MW projected by the National Hydro Power Corporation sounds right. However, with regard to the 83,000 MW potential of Nepal, while everyone is aware of this potential, only some of this can be harnessed economically provided inter-governmental issues are resolved and funds at the rate of, say, Rs 6 crore per MW are made available. We can still hope that some of this potential will be developed over the next two-three decades.

Yechury states: "By all estimates, nuclear electricity generation is the most expensive. Should India, therefore, have a preference for this option? That too, at the expense of abandoning the cheapest source of electricity production through the Iran gas pipeline?" Yechury may be aware that Iran has quoted a price of $ 7-plus per mmBtu at the Pakistan border. Adding the transportation cost, electricity generation from Iran gas is likely to cost twice as much as gas sold by public and private companies in India recently as well as when compared to the cost of power from Indian or imported coal.

Yechury further states that "in the face of these facts, the overt anxiety to develop nuclear power generation capacities naturally raises apprehensions". This statement should be analysed on the consideration of maximum power that can be sustained in the future from Indian coal, from the large scale import of coal, from tapping maximum hydro potential in India and Nepal, and from adding some capacity based on domestic natural gas and other alternative sources:

• As per efficient coal consumption in NTPC plants, 1,000 million tonnes out of about 1,400 million tonnes produced in 2031 of coal per year can sustain 170,000 MW of generation capacity. Let us accept a higher figure of 200,000 MW. (China has increased their coal production from 1.3 billion tonnes in 1998 to 2.4 billion tonnes this year, but similar reserves do not exist in India.)

• Though over-optimistic, we may assume a figure of 80,000 MW additional hydel potential to be exploited in India and Nepal for 2031.

• Additional 20,000 MW power generation capacity may happen from gas and other alternatives.

• Capacities to be installed with imported coal on liberal basis amounts to 50,000 MW.

• Even if cost issues of the Iran gas are resolved, this can produce, at the most, 20,000 MW of power capacity, provided it is not made available at all to any other process industry like fertiliser sector, etc.

The total power from coal, therefore, works out to 350,000 MW, which is not even half of the 962,210 MW projected by the Ministry of Power or the 778,000 MW projected by the Planning Commission. So how does the country bridge this gap? The possible answer is to plan to augment capacities with nuclear generation. This also implies induction of state-of-the-art technology. France, Japan and some other countries could be our models in this regard.

The writer is Founder Chairman & Managing Director, NTPC, and former Secretary to the Govt. of India, Dept of Power & Heavy Industry.

First Published: Aug 31, 2006 03:39 IST