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Fuel economics behind engine-less transport

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  29 Jan 2018 12:00 AM GMT

By Indrajit Borah

In a report released by Niti Aayog, it is projected that accelerated adoption of electric vehicles has a potential to save $60 billion in diesel and petrol costs while cutting down as much as 1 gigatonne (GT) of carbon emissions by 2030. With this roadmap, what are the fuel sources to cater to the demand for incremental electricity generation? As per the Union Ministry of Power, the power grid receives 66% of electricity from thermal sources, out of which coal contributes to 58% of total grid power, gas 8% and oil a minuscule 0.3% only. Of the rest, hydro, nuclear and renewable energy sources contribute 14%, 2% and 18% respectively.

Presently, with total installed generation capacity of 311 GW, India generated around 1,236 TWHR of electricity in 2016-17 with a peak power demand of only 153 GW. Even, India’s coal generation capacity alone is higher than this peak demand. Notwithstanding the installed capacity exceeding overall power demand, there are acute power shortages predomintly due to coal supply shortages, high level of transmission and distribution losses, and poor fincial health of utilities. Further, unlike domestic coal, the price of imported coal is unregulated; its price can be quite volatile. These fundamental problems in the power sector are impeding the efficient use of the existing system to meet even the grid-connected demand.

Now, what is the energy demand in the transport sector? During 2016-17, the consumption of diesel in the transport sector was around 55 million tonnes and petrol 25 million tonnes. With the prices of diesel and petrol at $1,274 and $1,522 respectively per metric tonne, total transport fuel cost is around $108 billion in a year. In India, transport sector is the major consumer of diesel accounting for 70% of the total diesel sales. The share of diesel consumption by cars, utility vehicles and 3-wheeler sector is highest at 28.48%. Out of this, private cars and utility vehicles account for 13.15%, commercial cars 8.94% and 3-wheelers 6.39% of the total diesel consumption. Again, trucks account for another 28.25% of the diesel consumption. Buses consume about 9.55% and railways about 3.24%.

On the other hand, petrol is almost entirely (99.6%) consumed by the transport sector. Two-wheelers account for 61.42% of total petrol sales while that by cars is 34.33%. Three-wheelers account for only 2.34%. The annual CO2 emission by diesel and petrol consumed in transport sector is about 265 million tonnes which includes 80 million tonnes from petrol vehicles and 185 million tonnes from diesel vehicles.

In terms of tank to wheel efficiency, petrol engines achieve an efficiency of 20%, whereas the diesel engines a little more up to 25% on road. Presently, total shaft energy required is 240 TWHR in a year. To meet this requirement, with efficiencies of electric vehicles and the T&D losses in the grid, the electricity demand from the power plants will be 402 TWHR, which is 33% of India’s electricity generation in 2016-17. As per various studies, this demand is expected to rise at a rate of 8% per year to sustain present economic growth.

Looking at the present fuel portfolio, two obvious thermal sources for this incremental demand are coal and gas. In a study, Centre for Science and Environment alyzed and rated 47 coal-based thermal power plants in India on nearly 60 environmental and energy parameters. As per the assessment, the average efficiency of the plants was 32.8 per cent, one of the lowest among major coal-based power producing countries. In line with these findings, we need 290 million tonnes of coal at a cost of $30 billion in a year to meet this additiol demand, which is 50% of current annual coal consumption in the power sector.

At present, out of 725 million tonnes of domestic coal production in India, 80% is used in power sector. However, the projected additiol coal consumption will yield prohibitively high CO2 emission of 440 million tonnes. However, upgrading the power generation to combined cycle can improve the efficiency up to 50% and correspondingly saving of 100 million tonnes of coal and 150 million tonnes of CO2 emission in a year. Again, considering combined cycle gas-fired power plant efficiency of around 55%, we need 68 BCM of gas at a cost of $6.7 billion in a year which is twice the domestic production in 2016-17 i.e. 32 BCM. This gas consumption will yield 81 million tonnes of CO2 to the atmosphere.

India imports coal up to around 200 million tonnes in a year based on needs. However, the expansion of coal fired power generation is prohibitive due to carbon emission. Again, the supply of tural gas is limited to developed projects till date and importing gas is also troubled with geopolitical risks. Therefore, the requirement of 68 BCM of gas over present annual gas production level of 32 BCM is a huge challenge. It’s true that renewable technologies have increased in cost effectiveness over time, but parallel improvements also in fossil fuel technologies so far, make it harder for the economics of renewables to expand by themselves. Again, turning carbon subsidy regime into carbon taxation regime with slump in oil prices has become a disincentive to renewable green energy for climate change targets.

Undeniably, a strong thrust towards the large scale deployment of electric vehicles can ideally complement renewable power supply by acting as storage buffers. As per the Ministry of Power, India’s solar potential is greater than 750 GW and its announced wind potential is 302 GW. The estimate shows a possibility of achieving a high of 410 GW of wind and 479 GW of solar power by 2047. The potential of biomass and small hydro is also significant. Developing domestic renewable resources could avoid revenue outflows for imported fuels. However, the fincing cost being 70% of renewable energy tariffs, fincing renewables is a big challenge. The bigger question is the ture of this fince. As per the recommendations by the Expert Group on 175 GW RE by 2022, the ecosystems should ensure that all direct and indirect incentives should get reflected in the tariff of renewables at the procurement end. It is also to be noted that fiscal or market driven monetary gain in net energy may not be sustaible in maintaining the current physical growth of the economy.

Electricity is not a primary energy source; rather a mode of energy consumption. However, in this process of shifting the combustion engines to distant power generators, apart from the perceptible benefit of moving the vehicular exhaust away from the polluted cities, the overall gain in terms of fuel efficiency and consequent reduction in CO2 emission are bound to promote this transition. At the same time, with this incremental demand, the altertive fuel portfolio for the power sector will be ruled by the palpable troika — technology, fiscal policy and market.

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