Lowering the forecast for electricity because of the expected impact of energy efficiency

India’s power ministry has revised its forecast for demand thanks to new energy efficiency targets and power-saving devices. Gireesh Chandra Prasad gives a good account of this on the LiveMint website from India. Interestingly, it reminds EiD of the recent post by Andrew Warren where he criticised the UK government of repeatedly failing to understand the dynamics of changes in energy consumption.

 

Power demand forecast cut to adjust for energy efficiency

The Union power ministry estimates India’s electricity demand in the 2017-22 period to be 20% less than what was originally estimated, thanks to new energy efficiency targets and power-saving devices.

A 2011 survey had estimated India’s power demand to grow from 140-150 gigawatt (GW) to 298 GW by 2022, while the new estimate sees demand at 239 GW. The new projections were made after several meetings between the Union power ministry and states and analysing the latter’s domestic and commercial requirements.

Ujwal Discom Assurance Yojana—a turnaround scheme for debt-ridden state power distributors passed by the Union cabinet on 5 November—sets targets for utilities to cut their transmission losses, while the efficient lighting programme using LEDs is expected to reduce peak electricity demand by 20 GW. The government is also working on popularizing energy-efficient agriculture pumps, fans and air-conditioners through power distributors.

The revised projection still assumes an 8% economic growth rate in the 2017-22 period, during which electricity generation is expected to grow annually at 7.2%, said a power ministry official, who asked not to be identified.

“The revised projections take into account improvements in energy efficiency and corrections for the slight overestimation made in the 18th Electric Power Survey (EPS) conducted by the Central Electricity Authority. Always the initial estimation is a ballpark figure and the final estimate the result of detailed analysis with state authorities,” said the official quoted above.

Energy intensity, or the units of energy required to produce one unit of GDP, is presently recorded at 0.91 by the 12th Five Year Plan document. A figure of less than one indicates efficiency.

The 18th EPS made the forecast for the 2017-22 period based on the demand projection for the 12th Five Year Plan period of 2012-17, which is now revised with more inputs from states. The official said capacity expansion in the last five years has satisfied the unmet power demand, and in the absence of pent-up demand, only the actual demand growth needs to be taken care of by further capacity expansion.

At present, the country has 289 GW of power generation capacity, and power plants operate at less than full capacity to cater to a power demand of 140-150 GW. Ongoing efforts to electrify all villages and provide uninterrupted electricity for all by 2019, the expected electrification of more railway lines and the emphasis on usage of electric vehicles for transportation are expected to drive future electricity demand.

The expected 175 GW of renewable power capacity expected by 2022 in addition to the existing generation capacity of 289 GW will mean that by 2022, the system will have more than adequate generation units to take care of 238 GW requirement, assuming a sustained 8% economic growth. “Even if the economy grows better than this, generation plants will still have some extra room to serve that demand,” said the official.

An industry executive said power consumption by households and the industry needs to go up for achieving a meaningful difference in economic growth and standard of living. “Improving per capita power consumption, which is at present 1,000 units, way below the world average of 3,000 units is important for turning around the power sector as well as for boosting the economy,” said Anil Sardana, chief executive and managing director of Tata Power Co. Ltd.

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