Energy Conservation and Renewable Energy in India

Energy conservation received greater attention in India since the mid 1970s. Structural changes in the economy during the last few years have led to the expansion of the industrial base and infrastructure in the country, and subsequently to increase in demand for energy. Any effort to enhance energy generation brings issues of available energy sources and systems. India recognizes, as anywhere else, a need to reduce the dependence on fossil fuels and transition to an era where many cost-effective and efficient energy choices are available. There has been a vigorous search during the last three decades for alternatives to fossil fuels that would ensure energy security and eco-friendly sustainable development.

This has brought the focus on new and renewable sources of energy that have emerged as a viable option to supplement energy demand in various sectors. The Government of India has been making concerted efforts to develop and promote renewable energy applications, ranging from power generation to meeting cooking energy needs of the people through biogas plants.

The energy conservation efforts in India have to be viewed in terms of coal and lignite being the long-term sustainable local energy resources. Small resources of petroleum and natural gas may be exhausted shortly and in the medium and long term, the import of oil will increase. We look briefly at the energy scene first.

The Indian energy sector has been regulated and owned by Government agencies and organizations. The apex body for the power sector is the MoP (Ministry of Power) in the Government of India. The ministry is concerned with perspective planning, policy formulation, processing of projects for investment decision, monitoring of the implementation of power projects, training and manpower development, and the administration and enactment of legislation in regard to thermal and hydro power generation, transmission, and distribution. The Ministry is assisted by the Central Electricity Authority (CEA) in all technical and economic matters, and many Public Sector Undertakings, Statutory Corporations, and Autonomous Bodies are functioning under the Ministry.

Energy consumption by different economic sectors—agriculture, industry, transport, and residential—reveals the composition of fuels used in meeting energy needs in these sectors (Figure 2.4) [1].

The industrial sector continues to be the single largest commercial energy-consuming sector using up about 50% of the total commercial energy in the country, although its share is declining gradually.

Nonenergy uses

Other energy 11% uses


FIGURE 2.4 Commercial energy balance. (From Annual report of the Ministry of Nonconventional Energy Sources, Government of India,

The commercial energy intensity of this sector has declined over the past due largely to a relatively rapid expansion of nonenergy intensive industries, adoption of modern energy efficient technologies and successful implementation of energy conservation measures. Sufficient energy savings are being achieved in energy intensive aluminum, iron and steel, textiles, chemicals, and paper and pulp industries through better housekeeping, improved capacity utilization, development of cogeneration facilities, industrial heat and waste management, and arrangements for improving the quality of electric supply.

Transport infrastructure has expanded considerably and its energy intensity has grown gradually. Rapid urbanization along with the conglomeration of industrial and commercial activities has consequently increased the demand for transport. Uncontrolled expansion of cities coupled with inadequate public transport has contributed to a phenomenal growth in the number of private enterprises (providing transport facilities) leading to energy inefficiency and severe pollution problem. The strategies to check vehicular pollution, lately in a couple of metros, are now showing significantly positive results. Strategies for pollution control in other sectors are also being worked out.

The domestic sector is the largest consumer of energy in India accounting for 40-50% of the total energy consumption, but the bulk of it consists of traditional fuels in the rural household. The commercial sector is not a major energy consumer, but energy intensity has been increasing possibly due to the growth of this sector. The electricity consumption in various sectors (only utilities) shown in Figure 2.5 indicates highest consumption of electricity in industrial and agricultural sectors.

The Government of India has set up an agenda of electrifying all villages by 2007 and providing power to all by 2012. It is following a comprehensive and holistic approach to power sector development envisaging a six level intervention strategy at the National, State, Electricity Boards, Feeder, and Consumer levels. It is proposed to electrify all the unelectrified villages through grid connectivity and the remaining 25,000 remote villages through the use of renewable energy technologies. The importance of optimum and economic utilization of power has been realized lately, and the present capacity of 8,000 MW for interregional transfer is being enhanced to 23,500 MW by the end of 2007 [2].

The new electricity bill of 2003 (Electricity Act 2003) has paved the way for delicensing of generation, nondiscriminatory open access in transmission, power trading, rural electrification, mandatory requirements of State Electricity Regulatory Commissions, mandatory metering, and stringent provisions against theft of power and so on. The trading activities of the Power Trading Corporation have already commenced from surplus to deficit regions.

In the process of tariff setting, transparency has been brought into tariff fixation, which was traditionally a closed-door exercise. The State Electricity Regulatory Commissions have instituted

Others 5% Domestic


Others 5% Domestic


Commercial 6%

FIGURE 2.5 Electricity consumption in various sectors (utilities). (From Annual reports of the Planning Commission, India,

measures to allocate revenue requirement in an economically efficient manner by reducing the extent of cross-subsidies. This has primarily been achieved by increasing the low-tension tariff1 to a greater extent as compared to high-tension tariff2. The increase in the agricultural tariff is a bold measure initiated by a number of state commissions. The commissions have issued suitable directions to the utilities along with the tariff orders in response to various issues such as quality of supply, energy auditing, and transformer failure that were faced during the process of tariff setting.

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