Crisis to opportunity and innovation India power needs are immense Supply Continuously falls short of demand Govt

and private sectors are increasingly truing to hydropower over coal The 150 dams planned for Arunachal Pradesh threaten to wipe out swathes of forests, dozens of tribal cultures, and some of the worlds best white-waters. An energy crisis could choke growth
On July 30 and 31, the electric power grid in north and eastern India crashed twice, leaving half of the South Asian nation literally in the dark. In what was the largest power outage in world history, 18 states and two territories lost electricity. An estimated 670 million people were affected. Railways, including the Delhi Metro (subway), screeched to a halt. Traffic lights went dark, creating massive traffic jams. Factories and hospitals switched to diesel-powered backup generators, and resourceful Indians turned to other power sources or just endured the sweltering summer night. In eastern India, more than 200 miners were stranded below ground for several hours when elevators stopped functioning. All were later rescued. The western and southern parts of India were unaffected, and power was about 80 percent restored by late on the 31st. However, the outage caused financial losses to Indian businesses estimated in the hundreds of millions of dollarsand significant embarrassment for Asias third-largest economy. Indias government undertook an investigation of what caused the grids collapse. The recent outages resulted when parts of the grid were shut down for upgrading, and other circuits became overloaded. The complex network of electric transmission systems requires coordination and discipline on the part of all members. The underlying cause was obvious enough: the countrys aging electrical infrastructure and shortage of power generation capacity. Not all Indians enjoy reliable access to electricity, and many are used to regularly scheduled blackouts. Many villages in rural areas have no electricity. But demand is outstripping supply as economic growth makes electricity consumers of an ever-growing share of the countrys 1.2 billion people. Some experts say that massive investment will be needed in Indias power infrastructure to avoid similar p ower failures in the future.

It has become a common sight that angry citizens take to the streets in protesting against the abysmal power situation. Some of the are as receive only an hour of electricity every day. Police has to control the law and order situation on account of peoples agitation.
State governments blame Centre for not allocating enough electricity to their states. The Governments try to blame its predecessor. The people do not buy this excuse. Who is to blame for the abysmal power situation this summer?

Those in Government find it easiest to pass the buck. The states blame the Centre. The Centre blames the states. Power is on the Concurrent List of the Constitution. Both the Centre

and

states must share the blame.

The Centre must take the rap for the shortage in generation of power. The peak power deficit-the gap between demand and supply in the summer of 2010-according to the Government's own calculations was 10.8 per cent. The responsibility for distributing available power inefficiently falls on the states. Losses in distribution average over 30 per cent across India.
At the Centre, the power, environment, coal and heavy industries ministries have in various ways acted as obstacles to the addition of capacity. In the states, populist governments and spineless electricity regulators have done little to reform ailing distribution networks. The situation is expected to get worse before it gets

better.

The Central Electricity Authority (CEA), the main advisory body to the Union power minister, has set a target of 100,000 mw of additional power generation in the period of the 12th five-year plan between 2012 and 2017. That is what is needed to meet the power demand of an economy forecast to grow at 9 per cent per annum. The Planning Commission accepts this target but Environment Ministry does not which says that the target is "ecologically unsustainable".
Environment Ministry is worried about the impact this additional generation will have on climate change. Seventy per cent of this additional capacity is to be added through coal-based thermal power. Given the dismal record over the past 20 years, Environment Ministry need not worry about the

Government m

eeting its target. According to

Planning Commission estimates, only an average of 50.5 per cent of overall targets were met in the eighth, ninth and tenth five-year plans between 1992 and 2007. Every major political formation has governed the country in that period none has much to be proud of in terms of performance in the power sector. The target for the 11th plan (2007-2012) has already been revised downwards from 78,700 mw to 62,374 mw. With a year and a half to go until the end of 2012, only around 50 per cent of that revised target has been achieved. Realistically speaking, the Government will do well to hit 60 per cent of its original target by the end of 2012.

The most serious bottleneck in generation is the shortage of coal. At the end of 2007, the gap between the demand and supply of coal was 35 million tonnes. It is expected to be around 83 million tonnes at the end of 2012. Says the mid-term appraisal document of the Planning Commission: "The shortage would have been even more had all the planned coal-based power plants been commissioned on time." By 2017, the shortage is forecast to be 200 million tonnes.
As per the government the shortage of domestic/imported coal affected thermal generation. Some of the blame for the shortage can be laid at the door of the environment minister whose controversial 'no-go' policy announced in 2009 imposed a ban on mining in heavily forested areas. It declared 35 per cent of forest area in nine major coal-mining zones as 'no-go' zones. That led to an immediate halt of mining activity in 203 blocks which had a potential capacity of over 600 million tonnes.

Coal Ministery argued that this ban could affect power generation to the tune of 1,30,000 mw. The matter is now before a Group of Ministers (GOM) on mining.

The fallout of the nuclear accident in Japan means that thermal power is back at the forefront.

Hydro pow of concerns over rehabilitation and resettlement.

er continues to flounder because

Another serious bottleneck to generation is the shortage of equipment. According to a 2010 report prepared by consulting firm

KPMG on the power sector, equipment shortages have been

a significant reason for India missing its capacity addition targets for the 10th fiveyear plan. The shortage has been primarily in the core components of boilers, turbines and generators.
What may also deter private investors in the future is the inability of state electricity boards (SEB) to buy power at commercially viable rates. When India's largest thermal power generator, the Government-owned National Thermal Power Corporation (NTPC) recorded a mere 1 per cent growth in net profits in 2010-11, NTPC

made the power stations available, but the SEBs did not

draw power from those projects. This led to less generation of power and therefore less revenue. The drawdown in generation by NTPC led to a loss of 13 billion units (bu) of electricity in 2010-11. India's annual generation of power is estimated at around 800 billion units. NTPC's drawdown is 1.6 per cent of this total. If selling power to SEBs is a problem for NTPC, it is likely to be a problem for everyone else.
The combined losses of SEBs currently stands at Rs 70,000 crore. The 13th Finance Commission has forecast this

figure rising to over Rs 1 lakh crore by 2014.

We cannot sustain the improvement in the quality of power supply unless tariffs are revised. Delhi's distribution companies lose Rs 1.79-1.93 per unit of power supplied to consumers. Planning Commission calculations of the financial performance of distribution companies in 20 major states (excluding Delhi and Orissa) shows that the average loss per unit supplied to the consumer was 90 paise in 2009-10. The loss per unit sold has hovered steadily between 80 paise and Re 1 between 2005 and 2010. Contrary to popular perception, Indian consumers on average pay much

less for a unit of electricity than countries which are richer, both in terms of income and resources. In India, the average tariff charged is eight US cents per unit compared to 12-15 cents in Canada, South Africa and the US and 19-20 cents in much of Europe and the developing world.
India will have to start thinking like a developed country. It is imperative that tariffs are regularized.

A committee headed by former Comptroller and Auditor General V.K. Shunglu is working to recommend ways to reduce losses suffered by distribution companies. On top of the list of recommendations is reportedly the need to take action against inactive state electricity regulatory authorities which actually set the tariff. The regulatory authorities have statutory independence but usually act under pressure from state governments. In Tamil Nadu, for example, tariffs have not been revised for seven years. In Delhi, they have not been revised for three years. That needs to change. Politicians, regulators and citizens need to recognize the need for viable tariffs. The transmission network needs to be strengthened to encourage private investors is the principle of "open access" where they are not captive to any one SEB for sales. SEBs are also free to look outside their state to buy electricity.
posted by srijan at 3:34 am 1 comment: links to this post email thisblogthis!share to twittershare to facebook

wednesday, may 25, 2011

ROLE OF ESCO IN ENERGY CONSERVAION

Seeing the huge scope of energy conservation the GoI with state governments is promoting investments through public-private partnerships in tapping renewable energy resources from mini hydro, solar, biomass, urban/industrial waste, cogeneration, etc. For this purpose the State Governments are notifying nodal agencies for carbon credits under the Clean Development Mechanism (CDM). All project developers (private as well as Government) can have assistance of these designated agencies in terms of seeking carbon credits under CDM for both supply new and renewable sources of energy as well as demand (energy efficiency) side projects. With a view to intensifying efforts towards Energy Conservation Action Plan to pursue a harmonious growth in energy efficiency different state government has nominated different organization to act as nodal agency the purpose of these is to implement energy efficiency programmes as per guide lines of BEE. The major objectives of the Energy Conservation Action Plan are to: Raise the profile of energy conservation movement with the active participation of the stakeholders, in consonance with the national objectives of reducing the energy intensity of the economy. Identify and implement cost-effective energy efficiency programs through a sustainable mechanism; Encourage energy efficiency activities by drawing upon the prevailing best practices relevant to the state and keeping in mind the national programs and activities being launched by BEE. These include the concerns of state electricity regulator in the domain of energy end-use efficiencies and focused demand-side man agement (DSM) initiatives. Encourage a spurt towards professional activities with adequate emphasis on self regulation and market principles, and monitoring and evaluation of programs through quantitative metrics (performance indicators). Create consumer awareness vis--vis energy conservation and energy efficiency consumer information and provide training opportunities for key professionals such as energy managers and auditors, building designers, government officials, and facility managers. Protect and enhance the local, national and global environment. Towards the implementation of the Energy Efficiency Program the different states are taking up Governmental Buildings to begin with. The governmental building sector offers substantial energy saving potential in both new and existing building constructions. One of the major drivers for energy efficiency will come from the Energy Conservation Building Code (ECBC) launched by BEE in May 2007. The Governments are announcing the mandatory following measures applicable to the governmental sector: Issuing notifications regarding the mandatory use of solar water heating systems, Use of compact fluorescent lamps, Use of BIS marked pump sets in government and private buildings, including industries and

 Use of solar water heating systems made mandatory in buildings having an area of more than 500 sq yard. Towards the beginning the state governments are going ahead with replacement of incandescent bulbs with compact fluorescent lights (CFLs) in all government buildings and offices, including government guest houses, offices of board, corporations, cooperative organizations and municipalities. Further the SDAs are adopting strategies related to existing buildings in addition to ECBC to tap the energy saving potential in new construction/ existing buildings SDAs play an important role in developing better guidance on conducting building energy audits and developing commercial building energy use benchmarks (kWh/sq. m.) that would help in screening potential retrofit projects and help organizations set performance targets against peer benchmarks. There is a vast scope to improve energy efficiency in office buildings, hospitals, schools and universities. Several studies have shown that avenues to curtail energy use to the extent of 30-50% in end uses such as lighting, cooling, ventilation, refrigeration, etc. The potential is largely untapped partly because of lack of an effective delivery mechanism. Performance contracting through ESCOs is an innovative process. An energy service company (acronym: ESCO or ESCo) is a commercial business providing a broad range of comprehensive energy solutions including designs and implementation of energy savings projects, energy conservation, energy infrastructure outsourcing, power generation and energy supply, and risk management. The ESCO performs an in-depth analysis of the property, designs an energy efficient solution, installs the required elements, and maintains the system to ensure energy savings during the payback period. The savings in energy costs is often used to pay back the capital investment of the project over a five- to twenty-year period, or reinvested into the building to allow for capital upgrades that may otherwise be unfeasible. If the project does not provide returns on the investment, the ESCO is often responsible to pay the difference. There is a draw back in this concept particularly to energy sector in India as in most of the cases the base line data of energy consumption is not available, for example if the ESCO is appointed say for replacement of all agriculture pumps with energy efficient pump sets (EEPS), investment is to be made by ESCO, it has to replace all inefficient pumps and then also it has to take care of their replacement within specified payback period, the saving thus achieved is to be distributed between ESCO and the employing agency. But here comes the main problem who will tell the saving? How the saving can be calculated as the base line data is not available. Most of the supply in agriculture sector is un-metered at consumer end even the sub station meters of secondary substation are not having proper metering. Even if the meter is working properly then there is no maintenance of records. Further most of the feeders has a mixed load so there is no method to calculate the net saving in

energy after energy efficient device is installed by the ESCO. Same is the case with street lights where lies a huge potential by replacing sodium vapor lamps with LED, here again base line data is not available for the purpose of evaluation. posted by srijan at 6:42 am 1 comment: links to this post email thisblogthis!share to twittershare to facebook

monday, april 18, 2011

Energy Efficiency In SME Sector

As per the energy policy of GoI power to be made available to all by 2012. One of the strategies to improve power scenario includes promotion of energy efficiency and its conservation in the country, this is found to be the most cost effective option to augment the gap between demand and supply. Nearly 25,000 MW of capacity creation through energy efficiency in the electricity sector alone has been estimated in India. National Productivity Council (NPC), an autonomous organization under the Ministry of Commerce, Government of India, was asked by BEE to undertake the study of energy saving potential in all 35 states / UTs. The study focused only on estimation of the total electricity consumption and saving potential in different sectors of each state / UT. The potential for savings is about 15% of the electricity consumption. The sector wise aggregated potential at the national level is as under:

S.No. Sector 1. 2. Agriculture Pumping Commercial Buildings/ Establishments with connected load > 500 KW

Consumption (Billion KWh) 92.33 9.92

Saving Potential (Billion KWh) 27.79 1.98

3. 4. 5.

Municipalities Domestic Industry (Including SMEs) Total

12.45 120.92 265.38 501.00

2.88 24.16 18.57 75.36

The BEE study pertaining to SME revealed the overall saving potential of the clusters is about 72,432 TOE (Tonnes of oil equivalents) which is 27.4 per cent of the total energy consumption in SMEs. Though, large numbers of SMEs, located in clusters in various states of the countries, have large potential for energy savings, there is not much authentic information and data available with respect to their energy consumption and energy saving opportunities. Energy Efficiency in the SME sector assumes importance because of the prevailing high costs of energy and supply related concerns. Bureau of Energy Efficiency (BEE) is implementing a program (BEEs SME Program) to improve the energy performance in selected SME clusters. The project will conduct situation assessment of 35 (maximum) clusters in the country to assess the situation vis--vis the number of operating units, energy usage, potential for saving energy and probable impact of intervention. This will lead to identification of clusters for intervention. A Technology and Energy Use Analysis in identified clusters will be carried out that will identify in detail the prevalent technologies in the sector, audits them for energy use on a sample basis and identify opportunities for energy saving through either changes in technology or through best practices. This study will also identify possible sources of technology and/or expertise in different clusters as the case may be. Because of the similar characteristics like geographical location, markets, products manufactured, technology, development issues and common pool of resources, cluster based approach has been undertaken while working with SMEs. Generally this has been found to be resource efficient and effective.

The project will pool available resources as those from WB and UNDP which have already shown interest in partnerships with BEE for undertaking work on EE with the MSME sector in India. Thus the project will limit drawing of GoI to such levels as may be required after financing from WB UNDP-GEF has been made available Ministry of Micro, Small and Medium Enterprises (MoMSME) has agreed in principal to capitalise on the DPRs prepared under the BEEs SME program. MoMSME proposes to provide financial support for implementation of the technologies identified in these DPRs. Small Industries Development Bank of India (SIDBI) will also act on similar lines and will provide subsidized finance for implementation of energy efficiency technologies as identified in the DPRs. A MoU in this regard has already been signed. BEE is also the Implementing Agency for GEF (Global Environment

Facility) Programmatic Framework for Energy Efficiency in India in which World Bank & UNIDO are the GEF agencies working on Energy Efficiency in SME clusters. World Bank would work in 5 clusters & UNIDO in 12 clusters. Bureau of Energy efficiency has taken a nationwide energy efficiency program covering 25 SME clusters. Which include Cold Storage, Carpet, Pottery, Brass, Foundry and Glass Clusters. Stake Holders for implementing EE in SME are Government. Development Agencies. Energy Consultants. ESCOs. Manufacturing Companies Lenders.

Role of the Government is to encourage the SME to adapt EE measures, educate them, give them incentives for taking up energy efficiency, encourage them to identify EE projects The role of ESCO is also very important as it has to adopt modern technology for implementation of the EE project it has to educate the SME by telling him the benefits of the EE project. ESCO has to prepare the DPR with simple calculation for the payback and debt serving feasibility. The DPR should be

easily understood by SME and the lender. The most important stake holder is the SME, as he is the ultimate beneficiary. Therefore he must have the orientation to implement the EE program and motivation and inclination towards EE program, he must understand the project. It is therefore important to motivate the SME. motivate other stakeholders.

posted by srijan at 7:12 am 1 comment: links to this post email thisblogthis!share to twittershare to facebook

sunday, march 27, 2011

Agriculture Demand Side Management (Ag DSM)

Bureau of Energy Efficiency (BEE) is a statutory body under Ministry of Power, Government of India. The mission of BEE is to institutionalize energy efficiency services, enable delivery mechanism in the country and provide leadership to energy efficiency in all the sectors. The primary goal of the Bureau is to reduce the energy intensity in the Indian economy. Seeing the supply and demand gap the DSM has become the need of the hour. Maharastra State Electricity Distribution Co. Ltd (MSEDCL), called Mahadiscom or Mahavitran in short has taken a lead towards DSM, the company started taking measures towards load management in 2005 by increasing the tariff for increased consumption and decrease in tariff for reduced consumption compared to the last year. The Maharastra Electricity Regulatory Commission has provided for a Charge as well as a Rebate, consumers were incentivised to reduce demand through better planning and utilization of electricity, rather than by fiat. Since then the MSEDCL has a provision of LMC (Load Management Charges) in its tariff. It has been observed that rural areas has a tremendous scope in load management as the pump sets used for irrigation purpose are highly inefficient and since the tariff applicable for them is flat rate tariff the farmers have least interest in efficiency of the equipments hence there is a need of Agriculture DSM. State of UP has yet to incorporate LMC.. UPERC in its tariff order has emphasized the need of DSM, as per ERC The effect of Demand Side Management should reflect in lesser purchase of costly power due to effective energy conservation measures. This shall reduce the revenue

requirement of the DISCOMS. The cost of such DSM projects would be offset by the savings in power purchase cost due to reduction in demand. This should be represented as a separate cost element which shall be allowed by the Commission as a part of the Annual Revenue Requirement of the DISCOMS. In order to accelerate energy efficiency measures in agriculture sector, BEE has initiated an Agriculture Demand Side Management (Ag DSM) programme in which pump set efficiency upgradation would be carried out through Public Private Partnership (PPP) mode. The objective of the program is to create appropriate framework for market based interventions in agricultural pumping sector by facilitating conducive policy environment to promote Public Private Partnership (PPP) to implement the projects. Under this scheme of BEE, first Pilot Ag DSM project was launched at Mangalwedha subdivision of Solapur Circle in Maharashtra. This first pilot Ag DSM project covers 3530 agricultural pumps connected on five feeders (Bramhapuri, Nandeshwar, Borale, Bhose & Kharatwadi) in Mangalwedha & Pandharpur subdivisions. (All the five feeders are segregated agricultural feeders, feeding power to mostly agriculture pumps under the service areas) The Detailed Project Report (DPR) is prepared after an exhaustive survey and detailed energy audit study of the pump sets in the pilot area. During the energy audit study detailed information (about all the agricultural consumers) such as details about pumps (number, Type, make, age and rating), water requirements / consumption, status of meter installation, number of harvesting cycles, cropping pattern, underground water level in different seasons, power supply pattern and socio-economic conditions etc. is collected and analyzed. This detailed project report provides an insight to Pump manufacturers / Energy Service Company for making investments in implementing energy efficiency measures on rural pump set feeders. The intervention would lead to lower energy supply on the feeder, and hence, could result in lower subsidized energy sale by utilities and lessen the subsidy to be paid by the State Government. The salient features of the DPR are as below Most of the pump motors (60-70%) have been rewound one or two times. Low voltage up to 290 V at consumer end is observed for few DTR. The workmanship quality for pump set installation was poor. No capacitors Connected to agricultural pumps. Even though the power availability is for 10 to 12 hours, intermittent power failures are observed frequently. It is also observed that most of the DTRs are overloaded leading to frequent transformer failures.

 The major reasons for pump set failure and lower discharge output was erratic power supply and cases of extreme low voltage. Due to huge gap in the demand supply situation of the state power grid, the agriculture feeders are faced with severe load shedding. Thus, whenever power is available most of the pump sets are automatically switched ON to supply water for irrigation. The farmers have made provisions for automatic starting of pumps . This is carried out either by auto-starter or starter is kept in on condition, continuously during the season, defeating interlocks. Actual Pump set rating higher than name plate rating: It is also been observed that even though sanctioned demand is 3 HP or 5 HP, power rating of most of the pump sets is higher than sanctioned demand. The reason for measured power consumption rating higher than sanctioned demand is that most of the farmers have rewound the pump sets suitably to draw more power and deliver higher water discharge. Since farmers are charged on flat HP basis this results in potential revenue loss to DISCOM. This is the major reason for no encouragement for deployment of more efficient pumps. It is difficult to make the farmers agree to have their pumps replaced, as it requires repeated efforts to make the farmers fully conversant to the objectives of the project. Hence social opposition is expected for metering of power supply at pump level. But there will not be that much opposition for metering at transformer level. The farmers have reported extreme low voltage as the major cause for motor burnouts and lower pump output. The pump set selection by farmers is mainly driven by voltage constraint (Voltage imbalance) and water level variations. Pump set Installations: The pump sets installation is inappropriate with lack of proper foundation and footings. The ground surface water pump sets are merely placed on wooden planks and not properly anchored to the ground. The pump sets are observed with high vibration levels, which also contribute to lower operating efficiency. The efficiency measured for these pumps is in the range of 15 % to 30 %. Only a small fraction of pump sets have efficiency below 10 % and above 55%. Pumps with efficiency below 10% are due to a combination of several factors like use of frequently rewound motors, non standard pumps, no maintenance, poor selection of pump, extremely low water depth, low voltage supply leading to lower output and higher power consumption. Pumps with higher efficiency than 55 % are due to recent installations and are very few in numbers. Parameters Affecting Pump Set Efficiency Performance There are various parameters that could affect the pump set efficiency performance. Parameters identified that could affect the pump performance are listed below Energy Inefficient Pump Sets Improper pump selection and usage. Undersized pipes.

 Suction head Variations and large discharge lengths. Inefficient foot valves and piping system. Motor rewinding and low voltage profile Water table variations Other common causes Energy Inefficient Pump Sets Due to lack of awareness about energy efficiency and flat HP based tariff structure for agricultural sector, energy aspect is overlooked by the farmers while selecting the pump sets. For conventional pump sets the efficiency variation with respect to change in flow and head is very high. At both the extreme ends of the pump curves (head Vs flow) the efficiency of the pump set is low. However better designed Energy Efficient Pump Sets (EEPS) have a flat top efficiency characteristic, so that any reduction in efficiency away from the Best Efficiency Point (BEP) is small. As guaranteed by energy efficient pump manufacturers the difference in best efficiency of a good design is marginal and at the most up to 3% to 4%. The energy efficient pump sets could be selected to match the capacity and head requirements and to operate at BEP during the normal operating conditions. This will result in maximum energy savings, as compared to present inefficient pumps. Improper Pump Selection and Usage The educational level of the Indian farmers is not adequate to understand the technological aspects of pump operation. This leads to lack of awareness on pump selection, operation & maintenance. The improper selection and operation leads to poor efficiencies and wastage of energy. Field study has indicated that average overall efficiency of the pump sets is around 28%. The lower efficiency is also due to improper selection of pumps and mismatching prime movers and due to inferior quality of the pumps being marketed. The selection of the pumps should be governed by the characteristic curves i.e. the efficiencies in the various ranges of flow and head valves and for normal operating condition, the efficiency should be maximum. Baseline Energy Consumption For implementing the Ag DSM it is most important to know the base line energy consumption (BEC) of specified pump sets connected on pilot project feeder. The BEC was estimated for FY 2009 (Base year) by two different approaches specified below. One approach is based on past consumption data whereas other approach will be based on the detailed audit study undertaken in the region. 1. Approach 1: Here baseline energy consumption of existing pump sets connected on pilot project feeder lines is estimated based on last three year annual

consumption data and monthly consumption data of metered consumers in the region (Mangalvedha sub division). In this approach the average consumption norms for metered consumers are applied to the non metered consumers in pilot project to arrive at their monthly consumption. This approach is also approved by MERC in determining the tariff of agricultural consumers. The baseline energy consumption for 2221 agriculture pumps operating under the 4 feeders has been arrived based on data available from MSEDCL. The metered consumers are categorized on the basis of sanctioned HP load and their monthly average consumption is taken as representative for that particular HP category pump consumption norms to arrive at the total consumption of 2221 pump sets considered under the pilot project. For the purpose, 2221 pump sets are segregated based on their sanctioned demand on HP basis. The baseline energy consumption arrived at Approach 1 is cross verified based on last three year annual energy consumption by project feeder lines. The four pilot project feeders are segregated agricultural feeders supplying power to agriculture consumers. However there are few residential consumers that are also connected on these feeders. The annual energy consumption for all the four project feeder lines for last 3 years is provided by MSEDCL. The last three year average energy consumption and average distribution loss levels for Maharashtra state is used for estimating the baseline energy consumption, the annual average energy consumption for all four project feeder lines is 21.16 MU at the MSEDCL substation end which also includes distribution losses. MSEDCL average distribution losses are 26.2 %. The baseline consumption attributable for 2221 pump sets is arrived at after deducting the losses from last three year annual energy consumption. Thus the baseline consumption is about 15.62 MU. 2. Approach 2: As per this approach, baseline energy consumption of existing pump sets of pilot Ag DSM project is estimated based on detailed audit study. The average operating efficiency and average input power in kW, for existing pump sets of different types such as monoblock, submersible and flexible coupling and for different HP ratings are estimated after analyzing the field study measurements. This average energy efficiency and average input power norms along with assumptions of average operating hours has been applied to total no of pump sets categorized as per their ratings and types to arrive at baseline energy consumption by total 2221 number of pumps sets connected on project feeder lines. As discussed in earlier sections, even though the supply isavailable for 8 to 10 hours on daily basis, not all the pump sets operate continuously. The reasons identified for not all the pump sets operating continuously are, varying irrigation requirements, non availability of water in the well, non availability of farmer to switch the pump set on and pump sets

under repairs. Hence annual average operating hours are used to estimate the baseline energy consumption of all the pump sets connected on project feeder lines. Based on last 3 years annual average energy consumption of 21.16 MU recorded at the substation end of project feeder lines and MSEDCL distribution losses of 26.2% the energy consumption for 2221 pump sets is arrived at 15.62 MU. Where as baseline energy consumption as per approach 1 is 16.49 MU. The sum of average input power for all the pump sets is around 9523 kW based on energy audit study. Average operating hours for all the pump sets is estimated based on this information as provided below, Annual Average Operating Hours=Energy Consumption ,15.62 MU *10^6 = 1640 Sum of average input power for all the pump sets, 9523 kW Annual Average Operating Hours =Energy Consumption ,16.49 MU * 10^6= 1732 Sum of average input power for all the pump sets, 9523 kW Thus the annual average operating hours for all the pump sets connected on project feeder lines are estimated as 1640 and 1732. However, to be on conservative side average operating hours are assumed to be 1640. The annual average operating hours of 1640 are multiplied by the average input power per pump set and total number of pump sets for each categorized based on rating and type to estimate the baseline energy consumption. As per load shedding protocol electricity supply hours of MSEDCL can not be less than 8 hours per day i.e. 2920 hrs per annum. In addition analysis of historical data for past several years with regards to water availability, seasonal variation and cropping pattern, indicate that the water availability and seasonal variation will remain the same in future years and will not have any impact on pump set operating hours. Hence the assumption of 1640 annual average operating hours stands appropriately. Thus the baseline energy consumption based on approach 2 is 15.23 MU. Since the baseline consumption estimate based on approach 2 is on very conservative side it is used in the preceding sections to estimate energy saving potential. Estimates of Energy Saving Potential 1. The energy could be saved by improving the overall system efficiency either by partial rectification or by complete replacement. 2. The partial rectification covers the options other than replacement of pump sets (Motor & Pump) as listed below, Replacement of inefficient foot valves Removal of unnecessary pipe lengths

 Removal of unnecessary bends Reduction in height of pipe above the ground Replacement of GI pipes with HDPE/PVC pipes Installation of capacitor banks for improving power factor 3. With partial replacement, farmers benefit in terms of more water discharge from the existing pumping system. However the reduction in energy requirement is marginal. 4. The complete replacement also covers the replacement of existing pump set with energy efficient pump set along with the options covered under partial rectification. Even though the complete rectification requires huge investment it leads to significant energy savings and reduced line loadings. In the DPR the option of replacement of exiting pump sets with energy efficient pump sets along with the replacement of foot valves is considered. 5. The rating of energy efficient pump sets for the replacement of existing pump sets is arrived at after analyzing the maximum possible head and current water discharge requirement. With the help of pump set manufacturers each pump set data is analyzed to propose energy efficient pump set along with its efficiency value. The energy efficient pump sets are selected in a way so as to operate in the range where the pump set efficiency curve is almost flat. As per the pump manufacturers, the maximum variation in the efficiency of these new pump sets will not be more than 3% to 4 %. The overall weighted average operating efficiency for energy efficient pump sets is arrived at 48.9%. However, to be on conservative side overall average operating efficiency for energy efficient pump sets is considered as 45 % (whereas that of non standard pump set is only 28%) to estimate the energy saving potential by replacement of all 2221 pump sets. The assumption of 45 % of overall average operating efficiency which is 4 % less than the actual, provides enough margin for the actual efficiency variation due to water level variations. 6. The overall average operating efficiency of 45% is used to arrive at revised average input power rating for energy efficient pump sets. The energy saving potential is estimated only for improvement in the system efficiency due to replacement of existing pump sets with energy efficient pump sets. The detail estimates of energy saving potential shows that the Overall consumption of existing pump sets is work out to be 15,617,923 units, where as with energy efficient pump sets the consumption will go down to 9,487,825 units for same average operating hours. This leads to the savings of 6,130,098 units i.e. 6.13 MU, The replacement of existing pump sets with energy efficient pump sets would lead to energy saving. The percentage energy saving is calculated based on estimatesPercentage Energy Savings= [(Energy Consumption by Existing Pump sets Energy Consumption by Energy Efficient Pump Sets ) * 100]/(Energy Consumption by Existing Pump sets)= 40%

Thus implementations of Ag DSM projects offer opportunity to reduce overall energy consumption, cut down energy bill to the farmers, reduces subsidy burdens on then distribution companies and state governments and mitigate the energy short situation while improving the water extraction efficiency. However for sustainable investment in Ag DSM projects it is required to develop business models to assure sustainability of the savings for loan repayments and to provide adequate incentives to the investors. MSEDCL utilizes a part of Load Management Charge (LMC) Fund collected under a tariff regulation for replacement of old inefficient pumps with new higher energy efficiency pump sets and contract out repair and maintenance of pumps and certain aspects of project works to a project contractor (DISCOM Mode). 7. With the above-noted background in mind and after taken in to account the possible financing options, different business models have been developed and categorized as DISCOM Mode, ESCO Mode and HYBRID Mode as described below, MSEDCL utilizes a part of Load Management Charge (LMC) Fund collected under a tariff regulation for replacement of old inefficient pumps with new higher energy efficiency pump sets and contract out repair and maintenance of pumps and certain aspects of project works to a project contractor (DISCOM Mode). (100% investment by the DISCOM) An ESCO which has a contract with MSEDCL finances and implements the project; the ESCO would borrow the project debt and repay it from project revenues (ESCO Mode). (100% investment by the ESCO). In this model benefit savings to be retained by ESCO is 95%. ESCO provides part of project funds through debt & equity and sign a contract with MSEDCL, whereas part of the project fund would be contributed by MSEDCL through LMC fund (HYBRID Mode). (67% investment by the DISCOM, 33% investment by the ESCO). In this model benefit savings to be retained by ESCO is 55%. Since HVDS has not been implemented on the selected feeders, electric motors may burn out frequently due to poor voltage profile. Therefore, the risks involved for ESCOs/Project Contractors in the above discussed business models (DISCOM Mode and ESCO Mode) are high, which may lead to low participation from the interested bidders (ESCOs) for project implementation. 8. In order to motivate ESCOs to undertake the project, a hybrid solution has been proposed in which MSEDCL will be required to contribute upfront a portion of total investment from the LMC fund so that ESCOs and their lenders risks are minimized. This would be a significant amount and may be an important factor for an ESCO to get loan from the lender. Monetary Savings/ Benefit to MSEDCL 1. The major benefit of pump set efficiency improvement is to farmers by way of either increased water discharge output per unit of power consumed or same water discharge with lower power consumption.

2. Replacement of existing pump sets with correctly selected, better designed energy efficient pumps having higher efficiency for the same head range will give same water output and consumes lesser power. Benefits to MSEDCL due to lower power consumption by energy efficient agriculture pumps are estimated for sale of energy to all consumers at an average cost of supply. 3. MSEDCL revenue billed per unit is used as a proxy to average tariff. Average Cost of Supply for FY 08 is estimated from actual revenue from sale of power and actual energy sales to all consumers as provided comes out to be Rs 3.62 / kWh. Agricultural consumers are supplied at subsidized metered tariff of Rs 1.10 per kWh whereas average power tariff is Rs 3.62 / kWh. Hence MSEDCL is benefited due to reduction in agricultural energy consumption. In addition to this the revenue realization or collection efficiency from agricultural consumers in Mangalvedha sub division is only 18 %, which also leads to additional financial losses to MSEDCL, and could be avoided due to saved energy. Thus the saved energy could be sold to other consumers at an average rate of Rs. 3.62 per kWh (FY 08 Actual). The benefit analysis from MSEDCLs perspectives, considering the benefits of sale of saved energy to other consumers and reduction in financial losses pertaining to lower collection efficiency from agricultural consumers is provided in Table 31 below. However, at conservative side the collection efficiency of 60 % is assumed to estimate revenue collection loss due to saved energy. As per calculations in the DPR the total investment needed for replacement of 2,221 existing pump sets will be Rs 432.8 Lakh, whereas MSEDCLs revenue from sale of saved energy to other consumers at Rs 3.62 / kWh is Rs. 221.91 Lakh. However there is reduction in MSEDCLs revenue at collection efficiency of 60 %, due to reduction in energy sale to agricultural consumers due to energy saved. At unit rate of Rs 1.10 /kWh for agricultural consumers and at collection efficiency of 60 % revenue from agricultural consumers comes out to be Rs. 40.46 Lakh. In addition to this, to ensure sustainable savings MSEDCL has to ensure proper R&M. The annual R&M cost is Rs 35.72 Lakhs, employee cost is Rs 6.6 Lakh and annual testing cost is Rs. 1.1 Lakh. Thus the net annual benefit to MSEDCL is Rs. 138.02 Lakh. This work out to be a simple payback period of 3 years. PILOT AG-DSM PROJECT AT SOLAPUR Based on these estimates, the detailed project financial analysis for a period of 10 years is carried out for project implementation through ESCO Mode and DISCOM Mode, whereas for HYBRID Mode financial analysis is carried out for 5 years. The project cash flows and summary benefits for all the three business models is provided in sections below. 1. The financial model indicates the economic viability for implementation of Ag DSM pilot project through ESCO Mode with Project IRR of 19.21% for a project cycle of 10 years(Simple payback Period 5 years). Where as project implementation through DISCOM Mode by MSEDCL utilising LMC fund, the Project IRR is 33.5% for a project cycle of 10 years (Simple Pay Back Period 3 years).

2. Implementation of project through HYBRID Mode, where ESCO invests 33% of total investment (Rs. 4.33 Crores) and retains 55% of net savings, the project IRR is 27.27% for ESCO where as for MSEDCL the project IRR is 12.83% for a project cycle of 5 years (Simple Pay Back Period 4 years). 3. 1 The cash flow statements over a ten year period for ESCO Mode & DISCOM Mode business model have been worked out. Where as for HYBRID Mode business model the cash flow statements are worked out for five year period . 4. For all the three business models, provision of tax on profits has been considered at the rate of 33.99%. Project implementation through HYBRIDE Mode business model provides a reasonable IRR of 27.27 % for ESCO & 12.83 % for DISCOM for project cycle period of five years. Where as for other business models the project cycle is 10 years. Hence HYBRIDE Mode business model indicate good financial viability and ensures minimum risk for project investors. 5. In the context of the agricultural DSM project, energy consumption in the baseline and project scenarios and consequently energy savings can be determined under two different approaches: One is the project monitoring and verification (M&V) approachthat determines energy savings based on monitored values of efficiency parameters like head, flow and energy consumption. Other approach uses standard values of pumping efficiency (baseline and project pumps) and usage hours to arrive at energy savings called the deemed savings approachContractually; ESCOs must stand behind technical performance and specific efficiency of the systems and equipment they install. These are key values in the M&V savings calculation. Other values in the savings equation, i.e., operating hours can be estimated using baseline energy consumption data and then stipulated in the project contract. In this way, the ESCO is not exposed to uncontrollable risks, but does assume responsibility for system efficiency. The Discom and State Government in effect, assume the uncontrollable risks. If the ESCO is paid based on the agreed value of its capital investment and delivered services, this formulation can produce equitable results. For this reason, from the point of view of the ESCO and its lender, a Deemed savings approach may be appropriate. This would involve pre- and post performance demonstration of a sample of pumps by a third-party firm to estimate savings per pump set basis. This information is then be used to stipulate savings based on the operating hours estimated using baseline energy consumption data for the entire project area. Periodic sampling of pump set efficiencies during the course of the contract period is important to account for any deterioration of savings and to confirm that the ESCO is meeting its warranty obligations. Even if a Deemed savings approach is used to determine payments to the ESCO, the Discom can implement a monitoring and verification savings approach for all feeders and pump sets to gather the most accurate information. Carbon Credit Benefits

a. The responsibility of registering the pilot project for availing carbon credits will be with the ESCO. b. The ESCO shall prepare the Project Design Document and obtain required approval from the United Nations Framework Convention on Climate Change (UNFCCC). c. All required and relevant data, technical support and necessary documents will be provided to the ESCO by MSEDCL on a timely basis to support the ESCOs application for carbon credit. d. The benefits of carbon credits as applicable can be solely availed by the ESCO. Based on above DPR the MSEDCL invited RFP for implementing Ag DSM in the state of Maharastra. Proposed structure of the project Hybrid Business Model has been proposed with AgIA (Agriculture Implementing Agency) providing the initial capital investment through debt & equity, whereas MSEDCL would be providing the support through annual payment from LMC fund and energy savings.( MSEDCL utilizes a part of Load Management Charge (LMC) Fund collected under a tariff regulation for replacement of old inefficient pumps with new higher energy efficiency pump sets and contract out repair and maintenance of pumps and certain aspects of project works to a project contractor (DISCOM Mode). Brief Roles and Responsibilities of the AgIA
1. The AgIA shall be responsible for dismantling the existing pump sets, procurement of new EEPS. (Electricity Efficient Pumps) 2. Installation, maintenance and repair/replacement. AgIA shall also be responsible for financing, implementing and operating the Project. The AgIA shall procure EEPS and install them with following minimum specifications:-

BEE Star rated Pump sets - 4star & above as per the existing available models in the Market
Wide-voltage (should be operating at low voltage) Monoblock , open well submersible and bore well Submersible pump sets. The discharge rate of the EEPS shall not be lower than the existing pump sets of the farmers. EEPS installed shall be of the same type (Monoblock / Open well Submersible /Bore well Submersible) as the existing pump sets. Low-friction foot valves conforming to relevant ISI Standard & specification and 3. The AgIA shall install EEPS with capacitor banks of relevant ratings as per the pump set requirement.

4. Farmers shall be provided EEPS free of cost. They will also be provided with free installation of the EEPS. The EEPS shall be procured with a minimum warranty of 12 months (1 year) by pump set manufactures. The total R&M of 60 months shall be provided with no cost to the farmers by the AgIA. 5. The AgIA shall dismantle the existing pumps and keep an inventory of old pumps (with proper tagging of consumer ID) for one year. Disposal of old pumps should then be undertaken in a manner that precludes their use or reinstallation in any form anywhere in India. The AgIA shall provide a written assurance to MSEDCL describing the manner of disposal. MSEDCL shall have the right to audit or hire a third-party auditor to confirm the appropriate disposal of all old pumps. The disposal of old pumps shall be carried\ out in the following manner:

Photograph of old and new pump-set with consumer details shall be taken Before disposal of old pump sets, a hole of appropriate size shall be made in the pump set in the presence of Third Party Request for Proposal Ag DSM Pilot Project MSEDCL
6. The term of the project shall be for a period of five years from the Effective Date of completion of replacement of all the existing pumps with EEPS. The start date shall be when all EEPS have been commissioned by AgIA. 7. The AgIA shall be responsible for dismantling the existing pump sets, planning the procurement, installation and initial testing of new EEPS within six months from the date of signing of the contract with MSEDCL. 8. A Third Party agency in the presence of AgIA and MSEDCL shall test all the existing pump sets as well as the new EEPS at the time of replacement. The base-line and energy savings for the first six months shall be estimated based on this initial testing & average annual hours of operation of pump sets - 1640 Hrs (deemed savings approach). 9. For subsequent period of the project, a stratified random sampling technique shall be used to select the pump sets to be tested. Stratification criteria shall be the type and the rating of the pump sets. An estimated size of 10% of the total no. of pump sets shall be tested randomly every year. 10. The sample pump sets shall be tested by Third Party in the presence of MSEDCL and AgIA annually for demonstrating the savings. The pump sets shall be selected randomly every year based on the approach mentioned in above clause. 11. This information is then be used to stipulate annual savings based on the estimate of the average operating hours / annum (1640 Hrs) (Deemed Saving Approach) 12. Third party monitoring and verification agency could be a local NGO / Technical Institute etc.

Support given by MSEDCL 1. MSEDCL shall provide to the AgIA the data and support necessary for implementing the tasks stated above. 2. MSEDCL shall install meters on all pump sets connected on five project Feeders. 3. MSEDCL shall make payments on quarterly basis to the AgIA based on guaranteed savings demonstrated/achieved as per following-

a. Energy savings sharing %

The percentage sharing between MSEDCL andAgIA shall be as follow, Draft Contract/Agreement Ag DSM Pilot Project 1. % retained with MSEDCL: .........70%................. 2. % shared with AgIA: 30%..
b. Base level energy consumption

Baseline energy consumption is estimated based on KW measured at the motor input terminal of all the pumps prior to the replacement of the existing Pump sets multiplied by operating hours of 1640 Hrs per annum as specified in bidding documents / DPR. The baseline established remains same for 5 years of the project. Energy consumption by EEPS For first six months of the term - based on the initial testing & average annual hours of operation of pump sets of 1640 Hrs. For subsequent period of the project based on the testing of sample of 10% of EEPS selected randomly every year & average annual hours of operation of pump sets ofb1640 Hrs. Quantum of energy saved or guaranteed annual energy savings Base level energy consumption minus the Energy Consumption by EEPS (Item no.5-Item no.6) c. Periods for Demonstration of guaranteed annual energy savings i. Initially, at the time of replacement of all the old pumps by EEPS ii. After a period of six months from the start date of the project iii. Then every year from the second demonstration for the balanced project period
d. Pricing of energy savings

i. "Energy savings shall be priced at Rs 2.70 / kWh for a project period of five years 4. MSEDCL shall ensure good power supply quality and load management system in pilot area. 5. MSEDCL shall provide necessary support to the AgIA at the field level, as may be required by AgIA from time to time, including, amongst others, regarding access to consumer premises, replacement of existing pump sets, recovering old pump sets and signing ownership agreement with the farmer/consumer.

Implementation of Ag DSM in Other States

About 50% of Indian populations are farmers. About 20% of the farmers have electric pumps. Hence, only 10% of population directly benefit from agricultural electricity use. Lack of perennial rivers made ground water tapping a prerequisite in irrigation in south India. This has led to an increase in consumption of electricity by agricultural sector. 73% of Indian population depends directly or indirectly on agriculture.. In most of the states, agricultural consumption is un-metered. Consumers pay a flat rate tariff which is also

highly subsidized. As a result there is further wastage of electricity by using sub standard pump sets. On the basis of the DPR prepared by Mahrastra for implementing Ag DSM the potential of energy saving is upto 40% and as per estimation of BEE Overall electricity savings(from 20 million pumps) all over India is estimated at 62.1 billion units annually. Taking the case of state of Uttar Pradesh ( For the basis of calculation to apply for all India for analysis purpose) based on the approved ARR, the average cost of supply for FY 2009-10 works out to Rs. 4.17/kWh (Rs 17,791 cr/ 42,661 MUs). Thus earning by sale of this saved energy to other consumers can be calculated as followingACS= Rs 4.17/unit Cost of supply to Ag= Rs 1.10 /unit Cost saving =4.17-1.10=Rs 3.07/unit Total revenue earning by sale to other consumer = 62.1*10^9*3.07/10^7 = Rs.19065 Cr For above saving the following investment shall be required towards implementing Ag DSMAs per the DPR of Mahavitran for connected pumping load of 9523 kW investment required = Rs 583.2 Lakh Taking the above to be true for India scenario the investment required may be to the tune of 1,00,000 Cr. In case the project is implemented through an ESCO mode, the energy savings would be shared between ESCO and Discom. Assuming 95% of the proposed energy savings is shared with ESCO for 10 years. The financial model indicates the economic viability for implementation of Ag DSM pilot project throughESCO Mode with Project IRR of 19.21% for a project cycle of 10 years(Simple payback Period 5 years). With CDM Benefits taken in to account the project IRR improves to 22.8%.
posted by srijan at 7:51 am 1 comment: links to this post

An energy crisis could choke growth Over the last two decades, growth

in domestic energy production has failed to keep pace with Indias exploding energy needs. As a result of inadequate mining and refinery capacity, India has yet to unleash the full potential of its domestic coal endowmentthe third largest in the worldand its estimated that insufficient coal production continued to contribute to a third of the countrys total power deficit over the last fiscal year 4 . But Indias energy challenges are not limited to production shortfalls. Poor distribution infrastructure also constrains supplyside growth. Not only does India lack the infrastructural capacity to deliver more energy to meet rising demand, inefficiencies in existing distribution infrastructure has resulted in an average of 30 percent energy loss during transmission and distribution one of the highest rates in the world 5 . The demand-side picture is not

much better, with Indias industrial sectorone of the worlds most energy-intensivecontinuing to push domestic energy consumption upward (industrial output contributes to 16 percent of Indias GDP while consuming 45 percent of commercial energy). The result is a rapidly yawning gap between domestic energy supply and demand that is being filled by increasing energy imports (the annual value of oil imports alone is expected to rise nearly 18 percent in 2012) 6 . In 2012, weakness in the rupee (the rupee depreciated almost 20 percent against the US dollar in the last five months of 2011) will magnify the negative impact of foreign energy dependence on business risk and profits in India 7 . Though depressed global consumption may lead to a slight moderation of global energy

prices, the rupees weakness is likely to result in a price hike on energy imports and a higher debt service burden in rupee terms that would squeeze domestic profit margins in 2012 8 . Curbing energy prices and Indias dependence on energy imports requires policy support and reform to address the countrys supply-side energy shortcomings. To this end, the government needs to accelerate the overhaul in the countrys energy distribution infrastructure with investment in technologies such as the smart grids while supporting the expansion of new alternative energy sources. The National Solar Mission (which aims to generate 20,000 MW of solar power by 2020) and the National Mission on Enhanced Energy Efficiency (which has targeted to deliver annual fuel savings of about 23 million tons oil equivalent) offer hope if implementation and funding

improve in 2012. Business implications: Invest in energy saving technologies and processes and develop alternative sources of energy supply Diversify sources of supply by forging strategic alliances and key partnerships with suppliers and to secure resource supply in the long term Utilize free trade agreements as a platform to cost-effectively source clean and smarter energy technologies Shape pro-growth approaches to regulation by working c
INTRODUCTION TO ENERGY CRISIS Imagine this scenario: One morning you wake up, yawn, scratch yourself, and sit up. Wearily, you stumble out of bed. You go to your refrigerator for a glass of milk only to discover that the light inside does not turn on and everything inside it has been sitting at room temperature overnight and is quickly beginning to spoil. "That's funny, "you think to yourself. When you try to brew a cup of coffee the coffee maker does not seem to want to start. Your gas stove won't turn on, so it looks like there'll be no bacon and eggs this morning. As you sit down with your bowl of dry cereal, you glance out the window and wonder why there is no newspaper. You pick up your cordless phone to call the newspaper and complain, but it doesn't turn on either. You begin to panic and you run out to the car. It won't start. "What's going on?" you think to yourself. "Why doesn't anything work?" Does this sound like the beginning to some strange science fiction novel? Well, the scenario we just illustrated could be very real indeed. Together, fossil fuels (coal, petroleum, natural gas, and their derivatives) provide more than 85% of the energy used by mankind today. Unfortunately, the reserves of those fuels are not infinite. Scientists predict that within the next two centuries we will run out of those valuable energy sources. This is you experience energy crisis. Clearly, something must be done. But what? Before the Industrial Revolution of the 1890s, human beings had only a moderate need for energy. Man mostly relied on the energy from brute animal strength to do work. Man first learn to control fire around 1 million BC. Man has used fire to cook food and to warm his shelters ever since. Fire also served as protection against animals. Thousands of years ago, human beings also learned how to use wind as an energy source. Wind is produced by an uneven heating by the sun on the surface of the earth because of the different specific heats of land and water. Hot air has lower pressure than cold air and since high pressure tries to equalize with low pressure the current called wind is produced. Around 1200 BC, in

Polynesia, people learned to use this wind energy as a propulsive force for their boats by using a sail. About 5 thousand years ago, magnetic energy was discovered in China. Magnetic force pulled iron objects and it also provided useful information to navigators since it always pointed North because of the Earth's magnetic field. Electric energy was discovered by a Greek philosopher named Thales, about 2500 years ago. Thales found that, when rubbing fur against a piece of amber, a static force that would attract dust and other particles to the amber was produced which now we know as the "electrostatic force". Around 1000 BC, the Chinese found coal and started using it as a fuel. An energy crisis is any great shortfall (or price rise) in the supply of energy resources to an economy. It usually refers to the shortage of oil and additionally to electricity or other natural resources. The crisis often has effects on the rest of the economy, with many recessions being caused by an energy crisis in some form. In particular, the production costs of electricity rise, which raises manufacturing costs. For the consumer, the price of gasoline (petrol) and diesel for cars and other vehicles rises, leading to reduced consumer confidence and spending, higher transportation costs and general price rising. Webster defines crisis as a decisive moment or turning point. We are now at an extremely critical stage of using energy beyond a practical limit. We have increased our usage enormously, especially oil, in the past decade. The consequence is we are quickly exhausting our finite supplies of oil and natural gas. As a result, we are becoming more dependent on foreign sources of oil to keep our country functioning. In 1977 the United States with only 6 percent of the worlds population consumed approximately 30 percent of the energy produced in the world. These statistics are startling reminders of our insatiable energy appetite. Some people may ask do we have an energy crisis. The answer is a definite yes. Our next step is to realize we are at a crucial time if we are to reverse our terrible trip towards energy starvation. We will have to recognize our mounting trouble and act decisively to stem the tide. About 60% of all the energy used in the world today comes from burning oil and natural gas. Despite massive exploration program, very few large outfields have been found in recent years. This could well mean that most of the world's oil has been already discovered, and that, in the future oil can be run out faster than anticipated. Today, the world is producing enough oil to meet its present needs. If only we could use oil at its present rate then world's reverse could last for over 100 years. Unfortunately world's energy demand has been growing steadily over the past 50 years, and most experts believe that this trend will continue. No one can exactly tell that how much the energy will cost in the future and no one can exactly tell that how much the energy will needed in the future. The problem about the world's future energy supplies is called the worlds energy crisis.

TYPES OF ENERGY CRISIS 1. NUCLEAR POWER

Even in the heady days of the 1950s, problems with nuclear power were beginning to arise. For one, early nuclear technologies were developed in a sort of hothouse that was insulated from commercial realities. When these technologies were transferred to civilian power sectors, they could not compete economically with conventional power sources. However, the equipment manufacturers and utilities believed that additional experience would bring decreases in cost. One of the main sources of opposition to nuclear power was based on the assumption that it was inherently unsafe. Many engineers argued that the plants were safe, and that built-in safety features could prevent and had prevented accidents. The possibility of accidents caused mainly by operator errors had been repeatedly. The immediate result was long lines at gas pumps, high heating bills, and a worldwide economic downturn. Many power utilities had acted in the postwar period as Promoters of increased electric usage among consumers, through publicity campaigns and the direct sale of electric appliances. 2. HYDROELECTRIC POWER Man has utilized the power of water for years. Much of the growth of early colonial American industry can be attributed to hydropower. Because fuel such as coal and wood were not readily available to inland cities, American settlers were forced to turn to other alternatives. Falling water was ideal for powering sawmills and grist mills. As coal became a better-developed source of fuel, however, the importance of hydropower decreased. When canals began to be built off of the Mississippi River, inland cities became linked to mainstream commerce. This opened the flow of coal to most areas of America, dealing the final blow to hydropower in early America. Water power really didn't stage a major comeback until the 20th century. The development of an electric generator helped increase hydropower's importance. In the mid-20th century, as Americans began to move out of the cities and into "suburbia," the demand for electricity increased, as did the role of hydroelectricity. Hydroelectric power plants were built near large cities to supplement power production. The problems included frequent floods, erosion, and deforestation. The TVA provided for the building of several hydroelectric dams. Not only were the dams successful in controlling the flooding, they also provide electricity to the region. The TVA is an example of successful implementation of hydroelectric power. 3. FUEL CELLS The fuel cell is one example of a government-sponsored technology which has, after several decades of research and development effort, produced a viable technology. The fuel cell is a chemical method of producing electricity, somewhat analogous to an ordinary battery. The difference is that the fuel cell must be continuously supplied with chemical reagents in order to function. It does not hold a charge like a battery. The fuel cell derives current from a chemical reaction using oxygen from air and hydrogen from a fuel source (usually petroleum, synthetic fuels derived from coal, or natural gas, but renewable fuels such as methanol have been tried). In operation, fuel cells are silent and produce only water and carbon dioxide as waste products. The electrochemical process used in a fuel cell was discovered in the early 19th century, although it was not proposed for commercial purposes until the 1930s. In the 1950s, Westinghouse Electric developed commercial versions of these devices, but found only niche markets for them. In the 1960s, fuel cells designed for NASA provided power for the Apollo spacecraft. Early NASA fuel cells supplied by General Electric Company used an unusual electrolyte composed of a polymer material in the form of a membrane. The resulting fuel cells were quite expensive. By the 1990s, fuel cells using less expensive materials and solid fuels were available and put into operation experimentally as part of utility company power networks. Unfortunately, the U.S. Department of Energy has had difficulty transferring the financial responsibility for commercializing this technology to the private sector. Additionally, many utilities remain unconvinced that fuel cells represent an economical alternative to other medium-scale power sources, especially gas turbines leading to energy crisis. 4. SOLAR POWER The history of solar energy conversion is another example of a technology that is inextricably linked to government policy and financial support. While solar cells were developed by the 1950s which could generate enough electricity directly from sunlight to operate electronic circuits, the amount of current was small and the price was high. Nonetheless, solar cells found niche applications by the 1960s. The most famous application was in

space: from the 1960s on, many satellites were powered by solar cells. A second important application was developed by telephone companies to operate remote repeaters and other equipment. Solar cells remained inefficient and expensive compared to other methods, and were suitable only where no other energy source could be used or where cost was not a major consideration.

Solar power for utility applications was given a temporary boost through the government funding of applied research on solar cells and the construction of experimental solar stations. Not all of these solar stations used solar cells; several large systems used computer-controlled, movable mirrors to focus light on a boiler, which produced steam to drive a turbine. However, these large-scale plants remained experimental, and funding eventually dried up. 5. WIND POWER By far the most successful alternative energy technology has been the exploitation of wind. This form of small- to medium-scale generation was repeatedly passed over by American utility companies before the 1970s because it was considered unreliable and unsuitable for large scale exploitation. But in time, due to changes both in the technology and in the business environment, wind power became a part of established electrical networks. The use of wind energy to serve various industrial purposes is quite old, dating at least to the 12th century. Unlike other power sources such as water or steam, wind power was for the most part left behind in the late 19th century by electric companies looking for ways to drive generators. It was seen as unreliable and unavailable in sufficient quantities to power larger machines. The energy crisis of the early 1970s revived interest in wind-powered electric generation, and a number of European firms quickly moved to the forefront in providing updated versions of this ancient technology. Early emphasis in America was on the development of multi-megawatt wind turbines, although such designs did not see much commercial success. The turning point for alternative energy utilization in the United States, including wind power technology, was national legislation which in 1978 forced utilities to purchase the power generated by independent producers. This act, called the Public Utilities Regulatory Policies Act (PURPA), was intended to advance deregulation in the industry, but also to encourage experimentation with new energy technologies. Others: Biomass Geothermal Fusion 6. OIL CRISIS The world at large and India in particular have moved towards a serious energy crisis in the 1980s .Of occurs this crisis first cropped up the 70s when the open countries suddenly raised the priories of oil .The oil price like was coupled with the inefficient supply of conventional flues and the rapid rise in the demand of energy. While the demand of energy has significantly increased due to rapid industrialization urbanization transportation and communication development modernization of agriculture and due to heavy population pressure; the supply position has deteriorated owing to heavy depletion of fissile fuel reserves and to technological inefficiencies associated with exportation of those reserves. Hence now we find and unabridged gap between demand and of conventional fuel, which is in, turn worsening the energy crisis. Though there is turn stability in the oil market at the moment it is deceptive. World Crude Oil Prices $ Per barrel September 90 39.00 November 98 10.00 March 00 34.13 December 02 27.86 July 04 48.00 October 04 55.57 January 05 42.55 June 52.48 July 60.70 August 67.00

March 1st 06 61.68 10th 60.73 31 66.57 April 3rd 67.19 17th 70.00 May 3rd 74.99 7. THE DEVELOPMENT OF ALTERNATIVE ENERGY SOURCES Nuclear power remained the only widely utilized, radically new generating technology from 1945 through the 1960s, but many other new sources of electricity waited in the wings. The Cold War and the resulting peacetime buildup of military might indirectly spawned not only nuclear energy, but also all sorts of energy-related research projects. Especially important in the long term were smaller-scale generating technologies, such as the solar panels used to provide power to satellites and other small pieces of electronic equipment. But it was the oil crisis that brought several formerly military or spacerelated energy technologies into the public light and made energy research part of the agenda of national governments worldwide. The year 1973, which saw a dramatic but short-lived jump in oil prices, marked a real turning point for electric power technologies. Many power utilities had acted in the postwar period as promoters of increased electric usage among consumers, through publicity campaigns and the direct sale of electric appliances. On the production side, there were widespread calls for greater efficiency and the development of new fuel sources, including a return to coal, which had fallen out of favor as a boiler fuel by 1945. Similarly, some industries began burning waste products (such as wood chips in paper manufacturing) to generate electricity locally. The fuel, environmental, and regulatory crises that power utilities countries experienced were not without their counterparts in other nations. In Russia and China, for example, fluctuations in fuel prices and the world economy drastically affected electrification programs. Where nuclear power seemed to be a key to future power production, it soon became evident that economical operation of nuclear plants remained problematical. Developing countries experienced economy wide setbacks during the oil crises, which retarded the growth of electric power industries. Western governments in the 1970s began pouring money into research and development efforts aimed at improving alternative energy sources and ending dependency on foreign oil. These programs experienced periodic cutbacks, and some were failures, but several resulted in technologies which are now widely used. Another interesting proposal was the use of storage batteries to bottle excess electricity generated during off-peak hours for use during periods of heavier load. Late 19th century dc power systems in the United States and Europe had sometimes used storage batteries for such purposes, but this system did not work with ac power. Battery storage survived in specialized applications, however. Telephone systems use battery storage to provide an extremely reliable source of energy to run telecommunications networks worldwide. The improvement of electronic ac-dc converters after 1945 revived interest in storage batteries, and one line of inquiry investigated the use of a new type of lithium-sulfur cell for this purpose.

HOW WE GOT WHERE WE ARE TODAY? In the aftermath of the 1973 and 1979 energy crises, which were arguably precipitated by international political actions that upset time-honored economic relationships, oil prices trended downward in real terms, and the public was lulled into complacency. Sure, they had to pay more for a gallon of gasoline, but at least they could obtain it readily without waiting in the lines seen during the crises. Producers of natural gas began to explore for gas in newer areas, often at higher cost than production in more traditional areas. Simultaneously, new technologies for the use of gas improved the efficiency of gas use. Environmental concerns increased interest in the use of gas, based on that fuel's "clean" image and its largely invisible delivery system. As gas became more popular and gas utilization became more efficient economically, electric utilities turned increasingly to gas as a fuel for power generation. New, highly efficient gas turbines were developed by major turbine manufacturers, and gas increased its penetration of the power generation market steadily. In the winter of 2000-2001, a number of factors have come together to magnify the problems facing the energy industries. Among these are a rapid increase in demand for energy commodities, a not-so-rapid increase in production of energy from new sources (given the lead times needed to develop new production), a rapid rise in the price of natural gas and petroleum (and a coming rapid escalation of residential consumer bills), a rapid and continuing increase in the popularity of new gas-fired electric power generating facilities, and a rapid proliferation of environmental rules affecting the use of some energy commodities and the relative importance of others. This combination of ingredients sets the stage for the next energy crisis. This winter has already seen critical shortages of electric power, followed by the first-ever Federal intervention to essentially force utilities to continue supplying energy even if they lose money by doing so. The Golden State's three major electric utilities have moved close to the edge of bankruptcy, caught between extraordinarily high costs and slow reaction by state regulators to the incipient crisis. Meanwhile, the costs of natural gas on the spot market have risen to record levels, just as more electric generators, both traditional utilities and newer independent power producers, turn increasingly to gas as a generating fuel.

CAUSES OF HISTORICAL CRISES 1973 oil crisis Cause: an OPEC oil export embargo by many of the major Arab oil-producing states, in response to western support of Israel during the Yom Kippur War.

1979 energy crisis Cause: the Iranian revolution 1990 spike in the price of oil Cause: the Gulf War California electricity crisis Cause: failed deregulation, and business corruption. UK fuel protest (of 2000) Cause: Rise in the price of crude oil combined with already high taxation on road fuel in the UK. Oil price increases of 2004-2006 Cause: Tight supply margins in the face of increasing demand, partly from China's demand. Power shortages Cutbacks in conservations. Cutbacks in renewables. Power plant outages.

OUR COMMENTS FOR SAVINGS IN ENERGY These types of energy are constantly being renewed or restored. But many of the other forms of energy we use in our homes and cars are not being replenished. Fossil fuels took millions of years to create. They cannot be made over night. And there are finite or limited amounts of these non-renewable energy sources. That means they cannot be renewed or replenished. Once they are gone they cannot be used again. So, we must all do our part in saving as much energy as we can. IN HOME: In the home, energy can be saved by turning off appliances, TVs and radios that are not being used, watched or listened to. The lights should be turned off when no one is in the room. By putting insulation in walls and attics, the amount of energy it takes to heat or cool our homes can be reduced. Insulating a home is like putting on a sweater or jacket when we're cold...instead of turning up the heat. The outer layers trap the heat inside, keeping it nice and warm. RECYCLING: To make all of our newspapers, aluminum cans, plastic bottles and other goods takes lots of energy. Recycling these items -- grinding them up and reusing the material again -- uses less energy than it takes to make them from brand new, raw material. So, we must all recycle as much as we can. TAKING CARE OF CARS AND TRUCKS We can also save energy in our cars and trucks. Make sure the tires are properly inflated. A car that is tuned up, has clean air and oil filters, and is running right will use less gasoline. Don't over-load a car. For every extra 100 pounds, one should cut mileage by one mile per gallon. When your parents buy a new car, tell them to compare. The fuel efficiency of different models and buys a car that gets higher miles per gallon. IN THE COLLEGE Energy can be saved in the college. Each week one can choose an energy monitor who will make sure energy is being used properly. The energy monitor will turn off the lights during break time and after class. "Turn It Off" signs should be made for hanging above the light switches as a reminder. Energy Patrol can be started in the college. One can make sure whether their classmates recycle all aluminum cans and plastic bottles, and make sure the library is recycling the newspapers and the college is recycling its paper. POWER GENERATION FACILITIES

New power generation facilities, principally gas-fired combustion turbines and combined-cycle units making more efficient use of gas, can be constructed more quickly than large-scale centralized power plants, but even they take as long as two years to site, obtain required permits, and build connecting transmission lines. And that assumes that the state regulatory commissions involved recognize the need for new construction and act favorably and expeditiously. NEW TECHNOLOGIES Development of new generation technologies to improve the utilization of energy has improved, but incrementally, with dramatic new efficiencies unlikely in the immediate future. The prospects for getting "more bang for the buck" are good in the long term, but not in the near term. By 2020 we could be dependent on imported energy for three-quarters of our total primary energy needs ... we may become potentially more vulnerable to price fluctuations and interruptions to supply caused by regulatory failures, political instability or conflict in other parts of the world.

SOLUTIONS FOR ENERGY CRISIS 1. DRILL DOMESTICALLY WHEREVER WE CAN TO PRODUCE MORE OIL Firstly, corral the environmentalists, and drill for oil on land we own, and control, where we KNOW there is oil. (Florida's west coast). As to our energy future, while innovation from new technology will take care of the long-term problem, the short term must be dealt with by ignoring environmentalists and moving ahead with drilling in Alaska as well as the various U.S. coasts where it is prohibited. There are vast amounts of oil (actually, bitumen, a precursor of oil) in oil shale in the United States, and new technology (exists) for extracting it with minimal environmental effects. 2. HYDROGEN: THE FUEL OF THE FUTURE Build a national network of hydrogen refueling stations (hydrogen gas stations). This should be easy. After all, Eisenhower was able to build the interstate highway system in the 1950s and 60s, which seems like a much more complex task. The plan to see being the best is hydrogen with water being the exhaust from the vehicles. With the use of solar panels, we can generate the hydrogen free well, almost free but without the need of oil. Some of BMW's new 2008 luxury cars will have the ability to run on hydrogen. Keep in mind that these are not fuel cells. Rather, these are conventional internal combustion engines that have been modified to burn hydrogen or (and this is key) gasoline. Since the hydrogen infrastructure is very spotty, these vehicles can use gasoline at the flick of a switch when hydrogen is not available. 3. ETHANOL -- IF THE BRAZILIANS CAN DO IT, WHY CAN'T WE? Brazil runs over 50% of its vehicles on ethanol. Ethanol can come from many sources. The production plants are being built now. (One in my home state of Georgia is purported to be producing ethanol from trees) Get sugar cane fields growing. Sugar cane requires less fertilizer than corn and is easier to make ethanol out of. Turn lawn grass, America's largest crop, into ethanol. There is no reason that ethanol cannot be our primary fuel. A gradual increase of ethanol/gasoline mixtures at the pump until the standard fuel is 80%-90% alcohol can be a real possibility within the next 8 to 10 years if someone would actually get it rolling now. 4. BIODIESEL -- PROVEN POWER FROM GARBAGE Why not use every bit of waste, i.e., paper sludge; slash piles, veggie by-products (carrot tops, potato skins, beet peelings, etc.) to make more fuel? Biodiesel can provide a major new energy source. If it is made with non-food crops, the yield is far higher than with soybeans. All we really need is car companies to increase the number of cars with diesel engines. The second part of this has to be biodiesel stations. Biodiesel fuel can easily be made at home, and it can be made from used vegetable oil. Currently someone who makes their own biodiesel 40-50 gallons at a time at a cost of $0.69 a gallon. Biodiesel -- There is no reason, other than distribution, why every ship, train, semi-truck, tractor, or piece of construction equipment with a diesel engine should be burning straight (petroleum-based)

diesel. 5. SOLAR ENERGY COULD DO THE JOB JUST BY ITSELF The United States has thousands of miles of desert and plains that receive enormous amounts of sunlight every day, often even in winter. It has been said that approximately 100 square miles of solar panels or a modest multiple thereof (5-10X) could generate enough electricity to accommodate virtually all of the electric energy needs to the country. In Las Vegas the amount of solar energy there is amazing. We could make it mandatory that all new houses have solar roof tiles instead of regular tiles and give tax credits if people replace their tiles with solar tiles on their existing homes. Solar panels in the southern states, especially Florida and the like, could easily be used to run all the electricity a house needs. Furthermore, having lived in Florida, it's so sunny that the excess electricity could either be sold back to the electric companies or the solar package could come with a power supply to use in charging an electric-powered vehicle. 6. LETTING IN THE RIGHT AMOUNT OF SUN In a cold climate we welcome the sun's heat and light most of the time. And once we capture the heat, we don't want to give it up. In a warm climate, we don't want the heat, but we do want the light. Advances in window technology let us have it both ways. Less than half of the sun's energy is visible. Longer wavelengths--beyond the red part of the visible spectrum--are infrared, which is felt as heat. Shorter wavelengths, beyond purple, are ultraviolet (UV). When the sun's energy strikes a window, visible light, heat and UV are either reflected, absorbed or transmitted into the building.

7. DEVELOP WIND, SOLAR ENERGY TO MEET POWER CRISIS Alternative sources like wind and solar energy need to be developed to tide over the power crisis in rural India. To meet the power crisis of rural India, there is a desperate need to develop wind and solar energy for power generation. Commenting on the sick Public Sector Units, Centre had planned to make 25 sick units "economically viable" by bailing them out of crisis this fiscal. We have seen improvements after these units to increase their profitability or they would be shut down just the way we had closed two sick units in the recent past. 8. AS A WHOLE, ENERGY CRISIS Conservation is not the total Answer, but it would certainly improve our situation. This would have to be a conservation program that would encompass all of our consumers. The initial step would be less driving and more use of mass transportation system. In some parts of the country it would mean adding more buses and trains, in other parts, it would be modernizing the existing systems. Also it would include an educational program for the energy consumers to make them aware of how they can save energy daily. This has already begun and hopefully it will continue. In addition, the new car manufacturers will have to increase the fuel efficiency of all cars. Another solution will concern the industrial sector of our economy, to continue their cutbacks and their fuel efficiency programs without seriously affecting their production.

LONG TERM / FUTURE SOLUTIONS India needs approximately 100000MW of additional power by 2010 if it is to embark on a high growth trajectory and emerge as an economic giant by 2020.However, most projections state that at the current rate of capacity addition we will fall well short of achieving this target. To address this problem, it helps in understanding the issues involved, there are primarily three of them they are: 1. Finance

2. Technology 3. Structure of the power grid FINANCE As there is a glut of capital in the international markets to the tune of around USD 2 trillion, the power market in India is one of the few areas in which a part of this can be invested with the prospect of assured returns for investors (hopefully the government can facilitate this by giving counter-guarantees) .In addition, we need to move towards a public-private model where the government provides the grid and charges the private sector to use it and privatize the distribution and generation of energy and give them tax breaks or exemptions to pay for politically desirable (read unprofitable) ventures like subsidized power for farmers. TECHNOLOGY There are 3 technologies which are uniquely suited to the Indian market

1) GAS BASED POWER GENERATION Gas based power plants are ideal for India as we have recently discovered vast gas reserves in the Krishna-Godavari basin and other locations. In addition, Russia a non-OPEC Country and currently the worlds second largest oil producer in addition to being a long standing ally of India currently has about 50% of the worlds proven gas reserves, thus, shielding us against any unforeseen price fluctuations like has been seen in the case of oil due to rising tensions in the middle east. 2) NUCLEAR POWER GENERATION Nuclear power has a vast potential to fulfill our energy needs. Each nuclear generator generally produces around 1000MW of power and doesnt need to be refueled between 5-10 years (depending on the design). In addition, it produces no green house gases (one of the reasons the French are holier than thou on the Kyoto treaty is because they get 75% of their energy needs from nuclear power). The problem, of course, is the NPT which prevents companies like Frances Avera or Americas GE to build and/or operate Nuclear power plants in India. However, the Ministry of Atomic Energy, Russia has a holding company MINATOM which is eager not only to build power plants in India (which it is already doing) but, for a price, is willing to transfer it to BHEL and others so that we wouldnt be dependant on anyone for building and operating our power plants. Now these are water-cooled nuclear power plants which are as safe as any in the West at a fraction of the price not the Sodium cooled ones on which Chernobyl was based so we shouldnt be unduly worried about unsafe nuclear power in our backyards. As for the fuel the Russians have some 500 tonnes of U-235 (the byproduct of the former USSRs arms buildup) which could be effectively used for this. 3) HYDROELECTRIC This is the cheapest source of power but causes massive environmental problems like soil erosion and takes a long time to build, typically 10 years, without any litigation from the likes of Mrs. Medha Patkar & Arundhati Roy. However, once a study has conclusively proved the feasibility of a project if should be brought under an act which makes it immune to frivolous litigation. 4) STRUCTURE OF THE POWER GRID We, like, most other nations have a unidirectional power grid i.e. one way flow of electricity from the supplier to the consumer however in India most business houses have captive power generation due to the lack of reliable power, why not further encourage them to ramp up their captive power production and let them put the surplus for sale on the power grid? This will lead to reduced prices of power for the enterprise (economies of scale) and more power to our booming economy. The most logical today are atomic power by fusion, solar power, reusing waste, and further development of synthetic fuels. The atomic fusion power would be a great source if we were able to use hydrogen from the oceans as its source. There are numerous dangers that would have to be ironed out. And last, possibly the same Yankee ingenuity that has made this country flourish could take another step for mankind and came up with some entirely new and effective source of energy.

RECENT CASES OF ENERGY CRISIS 1. INDIA FACES MAJOR ENERGY CRISIS DUE TO CRUDE OIL REFINING CAPACITY AND COMPLIANCE TO ENVIRONMENTAL CLEAN UP STANDARDS

India faces more problems that just need for reliable energy supply. Even if the Government is able to acquire rights to Natural gas and Crude oil supplies all around the world, the problem does not end there. India faces a major shortage of refining capacity. As a result prices of diesel, Petrol and Kerosene can go through the roof even if the Crude oil price moves up slowly. The refineries all around India are old and mainly acquired from the Soviet Union many tears back. They need to be replaced soon. They operate at a much lower capacity die to maintenance needs and cause bad pollution all around. The refinery owned and operated by Reliance is the only one in the country that is of world class standard and is sophisticated. It was operational approximately 22 months back and is based on most advanced technologies in the world. The rest of the 18 refineries are in hopeless condition. Some of those Indias refineries cannot get rid of the high sulphur content to produce what is internationally known as sweet crude. Many of the refineries cannot effectively extract Kerosene through the secondary process, Kerosene is high demand since it lights up many homes sin India. Seven of these prehistoric 18 refineries can be modernized. But red tape and lack of operational control is taking the country to the brink of a major energy crisis. Raghunath Mashelkar, scientific adviser to the government recently submitted a report on the status of the refineries to the Government. Indias 115m-tonne refining capacity needs some major capital investment, the report clearly mentions about the need of substantial capital funding to upgrade or overhaul processes to meet global standards on quality petrol and diesel fuels. India needs US $6.5 Billion to upgrade these refineries to meet the Euro IV standard of emission by 2010. Stepping up to Euro III emission standards will also require hardship as required by next April. According to the New Delhi-based Energy and Resources Institute (Teri), fiscal incentives are required from the Government to move forward towards this capital investment.

2. ENERGY CRISIS FORCES INDIA TO FOCUS ON SHIFTING THE EMPHASIS FROM PERSONAL TRANSPORT TO PUBLIC TRANSPORT India has given its go-ahead to Metro Rail projects for Mumbai, Hyderabad and Bangalore and would provide viability gap funding for the projects in various states, Union Minister for Urban Development Jaipal Reddy said on Friday. The choice of deciding about the nature of gauge to be adopted in the metro rail projects has been given to state governments, Reddy said. In his inaugural address at ''Cityscapes 2006'', a meet on Urban infrastructure reforms with publicprivate linkages, being organized by the FICCI, Reddy said metro rail projects in Hyderabad, Mumbai and Bangalore can take off immediately. The project proposals were pending; following the stand of Indian Railways that broad gauge should be adopted for Metro Rail projects, while many state governments preferred standard gauge.--------------