energy policies for sustainable developmentrb/professional activities/energy policy15.pdf · energy...
TRANSCRIPT
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Energy Policies for Sustainable Development
Rangan Banerjee Forbes Marshall Chair Professor
Department of Energy Science and Engineering IIT Bombay
Talk at VJTI, Mumbai, January 1, 2015
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What is an energy policy?
2
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What is a policy?
A policy is a principle or protocol to guide decisions and achieve rational outcomes(Wiki)
3
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4
What are the policies related to engineering / science education?
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Engineering policies
Regulated/Market
Admissions –Intake
Accredition
Examinations/ Attendance
Pricing- Fees
IP
Research
Promotions/ Salaries
5
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Classification of policy Instruments
Regulating instruments
Rationing – emission quotas, mandatory technology
Performance standards, benchmarks
Implied Deregulation-
Emission Permit Trading, Green Certificates
Voluntary Agreements
Fiscal and Financial Instruments- Taxes, subsidies or grants
Supportive Actions
Improvement knowledge, market transparency
Dissemination
Reduce Transaction costs
6
Perrels, IPCC, 2001
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Impact of Policy Instruments
7
Perrels, IPCC, 2001
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Deciding Energy Policies
Scope
IIT Campus
Powai
Mumbai
Maharashtra
India
Elements
Decide Goals
List out Policy instruments
List out challenges
Existing Institutions and roles
Time Horizon
Analytical framework
8
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India -Policy Documents
Five Year Plans
Integrated Energy Policy, 2008
National Action Plan on Climate Change – JNNSM and NMEEE
Electricity Regulation Commission Act 1998
Electricity Act 2003
UMPP 2005
Rural Electrification Policy 2006
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Energy Policies
Building Codes
Standards and Labelling
Preferential Tariffs
Subsidies, Soft Loans
Carbon Tax
Renewable Energy Certificates, CERs, Certificates and Trading
10
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What is sustainable Development?
11
Development that meets the needs of the present without compromising the ability of future generations to meet their own needs. Brundtlant Report WCED 1987 Development without cheating our children
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Stages of Technology Development
12
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Consumer/ Producer Surplus
Source: Kolstad, 1999
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14
Human Development Index
Life expectancy at birth
Education – adult literacy, enrolment
Real GDP per capita (purchasing power
parity)
Index = (Actual – Min)/(Max-Min)
HDI = Average of above indices
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HDI and Electricity use
15
Source: Pasternak, 2000
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HDI vs Primary Energy supply
16 Source: Steinberger, Roberts, 2009
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HDI vs Per capita Carbon emissions
17 Source: Steinberger, Roberts, 2009
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Energy consumption vs HDI
18 Dias et al, 2006
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2013 HDI calculation
19
Technical notes Human Development Report 2013
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Impact of Subsidy
20
Source: UNEP, 2008
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21
Soonee et al, 2010
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22
Soonee et al, 2010
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REC Mechanism
23 Soonee et al, 2010
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JNNSM Steps
24
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25
Source: CEEW, NRDC, 2012
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Phase 1 – Successful bids
26
Source: Prayas report, 2012
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Phase 1 – Successful bids
27
Source: Prayas report, 2012
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NVVN
28
Source: CEEW, NRDC, 2012
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JNNSM by Source
29
Source: CEEW, NRDC, 2012
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30 Source: PAT consultation Document, 2011
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GEA, Chapter 2
31
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Global Poverty
GEA, Chapter 2
32
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Historical Household Electrification Rates
GEA, Chapter 19
33
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Electrification Of States
34 Greenpeace Report, 2008
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Mechanical Power Ladder
GEA, Chapter 19
35
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Average Household Energy Use - India
GEA, Chapter 19
36
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Energy and Equity
37 Source: GEA, 2012
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Residential Electricity Gini (Select countries)
38 Source: Jacobsen, Energy Policy , 2005
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Electricity Lorenz Curves India
Urban
Year Rural
GINI Urban
GINI 1999 0.60 0.45
2009 0.43 0.27
2011 0.36 0.23
39
Source: K.Mehta 2014
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DSM: Financing through Utility Bill
40 Source: BESCOM, 2006
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41 Source: BEE web site
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Bachat lamp yojana
Dependence on the carbon market ($12/ tonne initial CER price – reduced to 5$/ tonne)
Payments to CFL manufacturers and/or utilities take 3-4 years
Kerala, Andhra Pradesh, Karnataka, Punjab and Delhi
Target 400 million bulbs
Actual about 25 million bulbs
Lack of investors
42
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Lorentz Curve - Inequality
43
A B
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44
Decentralized
Renewable
Energy: Biomass
and Small Hydro
Solar Home
Systems
Solar Lanterns Energy-Efficient
Cookstoves
Potential Market
/yr
Rs 94.06 billion Rs 1.26 billion Rs 855 million Rs 1.11 billion
Avg Price
IRs 8 to 13 /kWh
(B)
INR 2 to 2.5 /kWh
(H)
Rs 7,000 - 20,000 Rs500 -1,600 Rs 150 -1,100
Competitive
Advantage
operational
reliability , low
upfront cost.
Customised
solution.
Kerosene
replacement
Reduced fuel
costs; health
benefits
Business Model
B: Company-
owned minigrids;
electricity priced to
existing fuel
expenditure levels.
H:using existing
grid infrastructure;
paid at
government-
tariffs.
Sold on credit, in
partnership with
local banks. Users
typically pay 10 to
25 percent upfront
and the rest in
installments.
Bulk sales to
corporate, NGO,
and (MFI)
partners; sold
directly to
consumers
through local
retailers.
Sold through
multiproducts rural
distributors and
retailers;
partnerships with
MFIs and NGOs.
Source:IFMR- WRI, 2010
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Lonarwadi
Dissoli
Rajmachi
Maharashtra
INDIA
Affordable Access
45
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5 kWp Solar PV power plant at Rajmachi Village, Maharashtra
No. of house holds: 29 Connected load : 1.4 kW
46
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Measurements
0
200
400
600
800
1000
1200
0:00 2:24 4:48 7:12 9:36 12:00 14:24 16:48 19:12 21:36 0:00
Time (hrs)
Pow
er(
Watt
s)
and V
oltage (
Volts)
VOLTAGE POWER
47
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Name of the
plant
Connecte
d
Load
(kW)
Plant
Capacity
Distribution loss
(%)
Plant capacity
factor (%)
Energy cost
Rs / kWh
Existing Designe
d Existing
Designe
d Existing
Designe
d Existing Designed
Solar PV,
Rajmachi 1.4 5 kWp 4 kWp 4.6 0.5 8.3 11.5 32 25
Biomass
gasifier,
Dissoli
6.9 10 kW 10 kW 12.3 2.0 8.8 12 29-37 21-25
Biomass
gasifier,
Lonarwadi
10.7 20 kW 10 kW 14.6 2.7 5.6 14 43-54 16-25
Integrated design-Summary
48
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Issues- Low plant capacity factor
Name of the plant
PV Capacity ( kWp)
Inverter capacity
(kVA)
Charge controller
(kW)
Battery capacity
(Ah)
Battery Voltage (Volts)
Distribution Voltage (Volts)
Connected Load (kW)
Plant Capacity
factor (%)
Dound II, Chattisgargh
1 1.5 2 400 48 230 0.3 5.8
Latdadar, Chattisgargh
2 3 3 500 48 230 0.7 7.1
Chatal,Chattisgargh 3 5 5 800 48 230 0.7 4.4
Gudagarh, Chattisgargh
4 5 5 800 48 230 1.2 6.3
Rajmachi, Maharashtra
5 7.5 5 800 120 230 1.4 8.2
Sura, Udaipur, Rajasthan
17.25 15 20 1200 120 230 5.0 7.3
Nurda village, Jharkhand
28 20 25 1200 120 230 9.5 8.5
Anandgarh, Bikaner, Rajasthan.
34.5 2*15 2*20 2*1200 120 230 10 7.5
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Financing Basics: Risks and Returns
50
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Financing Sources
Debt – acquisition of funds by borrowing – corporate or project loans, leasing arrangement
Equity – selling shares for raising capital
Grants and Guarantees
51
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Risk- Return Profile
52
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Risks
Credit Risk – Creditworthiness
Construction and Development Risk
Operating/Commercial Risk
Political Risk
Financial Risk
Regulatory/Legal Risk
Environmental Risk
Force Majeure
53
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54
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Financing Instruments
55
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Funding Sources and Stages
56
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Renewable Energy Investors
57
Source: Nelson et al, 2012
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Cost Of Finance – India and US
58
Source: Nelson et al, 2012
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Returns on Debt and Equity
59
Source: Nelson et al, 2012
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Impact of Debt and Equity
60 Source: Nelson et al, 2012
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Selco Case study For profit company – Solar Home
systems – started 1996 – sold about 100,000 SHS
90% of products – credit schemes
Partnership with 9 banks – interest rates between 12-17%
Financing Institutions pay 85% of the amount- monthly payments of Rs 300- 400 over a period of 5 years
Financing/ repayment options – tailormade to end users – paddy farmers – repayment schedule based on crop cycle, street vendors – daily payments – Rs 10
Funding from REEP – meet margin amount for poor customers, reduce interest rate 61
Source: SELCO, 2011
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DESI Power
Biomass based power solutions – Bihar- 25 kW to 100 kW Local distributors – decide pricing Registered under CDM and sold CERs to Swiss buyer MNRE funds, Promoters Equity, ICICI Loan Monthly rate based on no of bulbs / loads, Circuit breaker to
limit consumption Irrigation pump users Rs 50/ hour, Household Rs 120- 150 per
month Underground trunk wiring-distribution Enabling micro-enterprises –battery charging station, flour
mill, workshop etc Tie up with Telecom towers – increasing capacity factor
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Husk Power
Initial funding – prize money 30-100 kW – biomass gasifiers- based on rice
husk Energy audit of households Focus on household demand for lighting Lower production, operating costs – use of
bamboo, asbestos Overhead pole wiring Directly reach end user
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Level Playing Field – “Externalities”
Energy Systems – Centralised (large grids)
Market distortions, “Hidden” Subsidies for fossil energy
Quantification of Environmental Costs – “Externalities”
Incorporate in Decision Making
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Decision Types / Perspectives
System selection Yes/No Best possible amongst options
System / Component Design
Decide Operating Strategy
Decide Policies
End Users
Manufacturers
Utility
Society / Government
Others
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Typical Energy Decisions
World- International agreements – GHG, CFC
Nation- Energy policy, pricing, technology development
State – Taxes/Incentives, fund allocation to districts
District – Fund Allocation to blocks, Mouza electrification, Industrial devpt., Coal – elect., fuel / ration shops Sanctions.
Block– Fund Allocation to GPs, Kerosene allocation, industry promotion, marketing support.
Gram Panchayat – Agriculture / irrigation schemes, Co-op industry, request for fuel/ration shop, electricity.
Household – Fuel choice, Device choice.
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Energy decisions for district
officials
District Magistrate
Ratifying departmental decisions
Zilla Parishad Sabadhipati
Sanctioning/selecting schemes
Manager, DIC
Sanctioning industries, biogas plant,
Priority list of industries.
DE,WBSEB/Addnl CE(Rural
Elec)
Mouza electrification
Controller food,civil supplies
Distribution of kerosene, coal.
Lead Bank Officer
Preparation of District credit plan
District forest Officer
(DFO, working plan)
Managing forest area
District Planning Officer
Prepares district plan
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SECONDARY
DATA
REMOTE SENSED
DATA
PRIMARY DATA
DIGITISED MAPS
D A T A B A S E
Identify
indicators/variables
affecting energy
Trends in indicators
ENERGY DSS
SUPPLY
MODULE
DEMAND
MODULE
FUTURE ENERGY
DEMANDS BY
SECTOR /END USE
FEASIBLE ENERGY
SUPPLY SCENARIOS
IMPACT ASSESSMENT /
EVALUATION
DEVELOPMENT
PROFILE
DSS FRAMEWORK
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Policy Instruments
Direct Subsidies – Investment subsidies, production subsidies
Taxes/ Duties/ Fiscal Incentives
Legislation
Standards and Labelling
R & D funding/ Demonstrations
Removal of market barriers/ entry barriers
Emissions trading
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References
Rockstrom et al, Nature, 2009
GEA, 2012 Chapter 3 & 19 : Global Energy Assessment - Toward a Sustainable Future, Cambridge University Press, Cambridge, UK and New York, NY, USA and the International Institute for Applied Systems Analysis, Laxenburg, Austria.
BEE web site: Bureau of Energy Efficiency (BEE), Government of India, Ministry of Power, New Delhi, http://www.beeindia.in/
Bloomberg, 2014: GLOBAL TRENDS IN RENEWABLE ENERGY INVESTMENT 2014, UNEP and Bloomberg New Energy Finance.
Brundtlant Report WCED 1987
http://cdiac.ornl.gov/trends/co2/graphics/lawdome.gif
http://www.iea.org/statistics/
blog.beliefnet.com
http://www.icicibank.com/html/en/go-green/Index.html
MNRE website: www.mnre.gov.in
TIFAC, 2013: TIFAC Energy Technology Vision 2035 – draft in progress
Ketav Mehta, Dual Degree Thesis, 2014, IIT Bombay
http://www.dilbert.com/
McKinsey, 2010: McKinsey Global Institute, India’s urban awakening: Building inclusive cities, sustaining economic growth, April 2010
BESCOM, 2006
http://www.indiaprwire.com/pressrelease/education/20140128287038.htm