India’s Energy Challenge:
Lessons from Japan
Japan – India Symposium
Tokyo, Japan
13th December 2012

Key Messages••India and China will define future global energy challenges
Japan & India: Roughly same aggregate energy consumption: India’s quantity& Japan’s quality– Japan: Universal access to modern energy (equity), highly efficient (economicallyand ecologically)– India: Half the population without access to modern energy (inequitable);inefficient (economically & ecologically)•

Regional cooperation & integration need to rely on or work in accordancewith global rules and standards– Japan’s coping strategy (portfolio approach & efficiency): With almost 100 percent
energy import dependence Japan is more energy secure than India which imports
only 33 of its primary energy• Market mechanism for pricing, penalty for environmental degradation & carbon emission• Self reliance principles inapplicable in the energy sector

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India: Primary Energy Demand:
Dominated by Fossil fuels
2010: 691 mtoe

2035: 1680 mtoe

Hydro
1%
Nuclear3%

Biomass
25%

Coal
41%

Hydro
1%
Nuclear
1% Gas8%

Biomass12%

Gas
8%
Coal
52%
Oil
24%

Oil
24%

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The ‘Chindia’ Energy Challenge
Chindia share in net increase in global primaryenergy demand

By 2020 India will––

By 2030-35 India will–––•But even by 2035 India’s energy demand
will only be 57 % of China’s–

Per capita energy consumption in India will hit 1
toe only in 2035

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Match China in population numbers & overtake
China as the world’s fastest growing energy region
Overtake Japan/China/EU to become the largest
coal importer
Occupy coal space vacated by China (China’s coal
imports expected to peak in 2015)
Overtake USA to become the 2nd largest energy
consumer
Overtake oil & gas import bill of Japan initially andlater USA

By 2035 India & China will occupy oil spacevacated by USA & EU––––

Together import 19.2 mbpd of oil
OECD imports will fall to 12.5 mbpd
China will off-set entire savings in EU
India will off-set savings realized by USA

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India & Japan: Quantity meets Quality
Natural Gas Demand GrowthNatural gas demand & growth 2010-2035––

Japan: CAGR 0.7 % 130 BCM
India: CAGR 4.2% 170 BCM

Oil demand current & futureOil demand growth––

Japan: Declines from 4.3 mbpd to 3.1 mbpd
India: Increases from 2.5 mbpd to 6.9 mbpd

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5Quality Vs Quantity
Energy Consumption per unit GDP and per capita

Energy Consumption per 1000 USD GDP(2010-2035)––Japan: Fall from 0.08 toe to 0.06 toe
India: Fall from 0.44 toe to 0.22 toe

Energy consumption per capita 20102035)––

Japan: 4 toe to 3.8 toe
India: 0.6 toe to 1 toe
Cumulative carbon emissions

Cumulative carbon emissions 1900-2035––

Japan: 80 GT
India: 100 GT

A USD 45,000 per capita country and an
USD 1400 per capita country have roughly
the same cumulative emissions––

Quality - Japan: Technology & Efficiency
Quantity - India: Energy poverty, inequality &inefficiency

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Energy Security: Japan’s coping strategy•2011: Year of energy supply disruptions andhigh prices––––•

All fossil fuel disruptions were substituted byfossil fuels through the market mechanism–––•

Political upheavals in hydrocarbon producing
regions reduced hydrocarbon supply by 1.3 %Natural disasters (tsunami) and its reverberations
reduced world nuclear power by 7 %Annual average price of oil was highest ever
above USD 100/bbl
Floods in Australia reduced global coal availability

Increase in OPEC oil production (Arabianpeninsula and Iraq)
Increase in coal and gas based electricity in Japan
Increased coal supply from USA, Russia, Columbiaand Indonesia

Gas supplies to Japan and China increased asthey had open liquid markets–Follow a portfolio approach to energy security

Source: BP, Brian Dodson at ORF-IEF conference

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Oil Import Cost – Highest for India•

Oil import bill
Exports to oil producers– All except USA are importing less oiland exporting more goods & services– USA is decreasing imports on accountof domestic production

Net cost

6%

4%

•2%

•USA

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EUChina

Relative risk of exposure to highoil prices increasing for India anddecreasing for all OECD countriesJapan imports almost all its
energy and spends less than 3 %of GDP on oil imports
India imports 33 % of energy andspends more than 6% of GDP on
imports (7.5 % last year)

India

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8Challenge: Reducing Carbon Emissions from Coal
Combustion
Power Generation fuel shares by 2030 underaggressive nuclear capacity addition scenario•

Wind 2%

Biomass, solar thermal,
diesel etc ~ 1%

– Out of an inventory of 200 BT only 50 BT isthought to be economically extractible•Hydro 16 %•Nuclear 16 %Gas 14 %Coal 62%

Domestic coal reserves: not as abundant as
originally assumed?
Even if all coal reserves in India are used for
power generation, Indian emissions areunlikely to exceed 4.5 GT or 3 tonnes per capita
Increasing the efficiency of sub-critical
Pulverised Coal power plants by 1 percent will
decrease coal use by 3 percent
 Reduction in annual coal consumption by ~

100 Million Tonnes
Will lead to a reduction in annual CO2 Emissions> 170 Million Tonnes (equal to the total
emissions of Netherlands)
Japan has one of the most efficient coal based
power generation fleets in the worldJapan’s Contribution• Training activities aimed at transferring Clean
Coal Technology (CCT) have continued since 2001
– 136 Indians have been trained in Japan until 2011

• A successful model project was carried out by
Japan’s NEDO to reduce ash content in Indiancoal on a commercial scale– New technology is expected to be introduced on alarger scale in 2012

An undesired similarity?
Privatisation Vs Market Transformation•Privatisation progressing faster than market
transformation––Fukushima? A lesson for India in a hurry toprivatise and accelerate nuclear energy
produciton?
Privatisation of profits and socialization oflosses?

India’s nuclear Targets•

Before 1974 (first nuclear device tested): 43 GWby 2000 (33 GW from breeder reactors)
After 1984: 10 GW by 2000 (no breeder reactors)
After 1998 (second nuclear device tested) : 20
GW by 2020 (3.5 GW breeder reactors)–––•

Long term projections:––•

Pre-NSG waiver: 275 GW by 2050
Post NSG waiver: 455 GW by 2050 (35 % of1300 GW total generation) out of which 95% to come from breeder reactors

Questions–––

Capacity developed in 60 years: 4.1 GW
Capacity expected in next 40 years: 455 GW
100 fold increase in 40 years?

Ambitious even to the uninitiated ?
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Centre for Resources Management11Impact of Economic Crisis - Creating clean
energy or promoting industries (jobs) ?
• Climate Change & RE Policy: Mother of all Trade Wars?

– e.g. Crystalline Solar PV modules: Glut in the market on account ofovercapacity (50% in China) and slower demand from Europe (reduction insubsidies)– USA: Punitive duty of 250% on Chinese crystalline solar modules– China: Considering anti-dumping case against US dumping of poly-silicon– Germany: Hesitant on tariff barriers on Chinese modules as they are madeon German machines!

• What does all this mean for India’s JNNSM? 20 GW solar by 2020
– Capital cost of solar PV fell by 30 % in 2011 on account of importedmodules• Second round of Phase I bidding quoted prices pushd down to Rs 7.46/kwh!

– Domestic content requirement circumvented• Shift towards less expensive thin film as domestic content requirement does
not apply• US imports of thin film with low cost financing!

Bankability of solar projects questioned, Domestic PV manufacturing understrain

Millions yet to move from Carbohydrates toHydrocarbons !
Carbohydrates carrying Carbon?

•••

Carbohydrates carrying Hydrocarbons?

Over 300 million Indians do not have access to electricity 700 million use biomass as fuel forcooking
Without enabling the shift from Carbohydrates to Hydrocarbons, generation of surplus energy(essential for material progress) cannot be facilitated–

Carbohydrate – Hydrocarbon = Net energy deficit (gender bias!)––Reduces per capita energy consumption figures, reduces overall carbon emission figure
Underwrite India’s sustainability!

Unaccounted energy derived from the poor (women) and the migrant labourer and their net
negative energy consumption subsidizes energy consumption by the rich

These are India’s ‘green’ poor and the main sustainability challenge – If they become rich (energyconsumers) they will no longer be ‘green’ but if they remain poor they may become ‘red’ ?