Letters

The technology menu for efficient energy use in India

Eric D. Larson and Anand Subbiah
Center for Energy and Environmental Studies Princeton, New Jersey, 08544, USA

TOTAL ELECTRICITY GENERATION in India has grown at a compound rate of over 9% per year. Even with such rapid growth, generation has not kept up with demand, and blackouts and brownouts are contributing to lost industrial and agricultural output as well as unmet residential and commercial sector needs. The requirement for electricity generation is projected by Indias Central Electricity Authority to grow by a factor of 3 between 1991 and 2010 (CEA, 1991), corresponding to a requirement of 150-200 million kW of new baseload generating capacity. Average capital investments of more than 220 billion rupees (Rs.) ($7.1 billion) per year would be needed to support such growth through new power plant construction. The allocation of public financing for the electricity sector has accounted for a large percentage (1719%) of total public spending over the past few years. In 1993, spending allocated to the electricity sector was Rs. 150 billion ($4.9 billion) (Planning Commission, 1991). Public resources to finance generating facilities are not expected to be adequate to meet the projected need. In this context, cost-effective strategies for reducing the requirement for new capacity are needed. Improving the efficiency with which electricity is used in India has the potential to significantly reduce demand through cost-effective and environmentally benign means, while providing a level of electricity services comparable to what could be achieved through expanding electricity supply. To implement efficiency improvement strategies requires at a minimum that good information relating to energyefficient end-use technologies be available to the relevant decision-makers in India -- electricity users, suppliers, equipment manufacturers, policy-makers, and others. This article has two interwoven objectives. One is to report on an information resource being developed to aid in the design and implementation of energy projects, programs, and policies in India. The second is to present analysis drawn from this resource that indicates the potential for cost-effective electricity efficiency improvements in India. 1. The technology menu The Technology Menu for Efficient Energy Use has been developed collaboratively by engineers at the National Productivity Council (India) and researchers at the Center for Energy and Environmental Studies at Princeton University (USA)(Mahajan et al, 1993). The Menu, presently a paper document, is intended to be a concise, userfriendly, first-stop source of reliable data and analysis relating to the performance and cost of energy-using technologies in India. 36

Electricity-using technologies and systems were selected for the initial focus of the Menu, given the electricity supply crisis India faces today. The scope of the Menu was also limited to the industrial and agricultural sectors, since these account for nearly 70% of all electricity used in India today (Fig. 1). The design of the Menu has evolved through initial discussions with energy managers of major industries, electric utility analysts, energy consultants, equipment manufacturers, and government planners. These discussions were followed by a data collection and synthesis effort aimed at developing a database on technology status, standards, efficiencies, costs, and experiences. Extensive interactions were undertaken with industries, and hundreds of energy audit and other studies from the files of the National Productivity Council were reviewed. Since motors account for over half of all electricity used in India, three-fourths of industrial electricity use, and essentially all of agricultural electricity use (Fig. 1), motor drive systems were selected for the focus of the first volume of the Menu. This volume, Motor Drive Systems,

Fig. 1. Estimated electricity consumption by sector and primary end-uses in 1990. Motor drive applications account for 75% of the total.
(Source: Trends in All-India Electricity Supply and Use in Mahajan et al., 1993)

(Mahajan et al., 1993), contains three categories of entries, each 10 to 12 pages long. (1) Component entries, of which there are five, provide basic performance, cost, and operational data for electric motors, pumps, fans, compressors, and variable speed drives that are available in India. Figure 2, taken from the electric motors entry, illustrates some of the type of information included in these entries. (2) Systems entries, of which there are four, discuss system design approaches and operating considerations to improve efficiency of pumping systems, fan systems, air compressor systems, and refrigerant compression systems. Illustrative case studies are discussed, including the economics. For example, Table 1 is from the entry on pumping systems.
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Fig. 2. Full-load efficiencies and list prices (inclusive of excise duty) of standard and energy-efficient motors in India based on data provided by several major motor manufacturers.
Notes : 1. Two efficiencies are shown for standard motors. One is the average of quoted values in vendor catalogs. The lower curve for standard motor efficiencies modifies the catalog values to reflect the negative tolerance in motor efficiency specification permitted by the Bureau of Indian Standards (BIS). This curve (marked corrected for tolerance) was calculated as per BIS standards: corrected efficiency is -0.15(1-) for motors < 50-kW and -0.1(1-) for motors> 50-kW, where is the catalog value of efficiency. 2. For energy-efficient motors, the BIS requires minimum guaranteed values to be quoted. Minimum guaranteed values are indicated above for motors up to 15-kW. Only nominal values are reported for higher ratings as minimum guaranteed values were not available from manufacturers for higher ratings. The unit costs of energy-efficient motors are estimated to be 45-50% higher than for standard motors based on discussions with manufacturers. Source: Electric Motors in Mahajan et al., 1993

(3) National Perspectives entries, of which there are three, address institutional, policy, and financing issues, and provide national-level synthesis analysis. The entries in this category are Trends in All-India Electricity Supply and Use, All-India Conservation Potential in Motor-Drive Systems, and Barriers to Energy Efficiency and Policy Measures. Fig. 1 is taken from the first of the National Perspectives entries. 2. An estimate of electricity savings potential in India Figure 3, which has been developed from results presented in the second of the National Perspectives entries listed above, summarizes the potential for cost-effectively improving electricity use efficiency in Indian industry and agriculture through application of measures addressed in the Menu. The potential kWh savings in 2010 are in excess of 20% of the demand projected by the Central Electricity Authority under business-as-usual conditions, i.e. where efficiency improvement efforts are not pursued aggressively. (Savings would be higher if measures in addition to those indicated in Fig. 3 were considered.) The cost of saved electricity (CSE) shown in Fig. 3 reflects the extra capital cost required for a high-efficiency measure compared to a standard-efficiency measure. For all measures, the estimated CSEs are lower than the long-run marginal cost of new electricity supply in India. Figure 3 also shows that the CSEs are lower than

Table 1: Results of analysis of a water pumping application at the Hindustan Aeronautics plant complex Power consumption after modification (kWh/day) 478 498 470 306 Annual savingsb (million Rs.) 91.0 84.5 91.0 98.9 Investment Simple cost payback (million Rs.) (yrs)

Casea

Case I Case II Case III Case IV

176.5 54.0 70.3 111.6

1.94 0.63 0.77 1.13

Notes : (a) The main water pumping system at the plant had a 1.8 km long 12" cast iron (CI) pipe supplying water from a lake to the pump house and a 0.7 km long CI pipe supplying water from the pump house to the filtration plant. Two pumps were normally used to supply an average water demand of 4418 m3/day. The pump inlet and outlet discharge pipe diameters were 6" and 4", respectively. To reduce pressure losses in the system and reduce operational costs, it was decided to replace this 15 year old pumping system. The different options considered to reduce power consumption were: (I) Replace the 0.7 km long 9" line and the inlet and discharge lines by 12" lines, and install new high-capacity, high-efficiency pumps; (II) Replace the entire 2.5 km of pipe, including the inlet and discharge pipes, with new 12" CI line; (III) install new high-capacity, high-efficiency pumps in addition to changes proposed in case II; (IV) Replace the entire 2.5 km pipeline with 18" concrete pipe, replace inlet and discharge lines with 12" lines, and install new high-capacity, high-efficiency pumps. The plant decided to implement the option considered in Case IV. (b) Savings based on former power consumption of 2366 kWh/day, and calculated for 300 days of operation per year at a tariff of 1.6 Re/kWh Source: Pumping Systems in Mahajan et al., 1993

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Fig. 3. Estimates of the cost of saved electricity (CSE) for efficiency measures in industry and agriculture versus the estimated electricity that could be saved by the measure in 2010.
Note : 1. The CSE is calculated assuming 4200 operating hours per year and a 12% real discount rate. These calculations assume that efficiency improvements begin to be made in 1995, with 2.5% per year of existing equipment retrofitted and 5% per year of existing equipment stock retired and replaced with efficient equipment. Requirements for new equipment capacity are estimated based on the assumption that total demand for electricity services grows 7.3% per year, the growth rate in electricity supply projected by the CEA (1991) for this period. (Adjustment factors are used to ensure no double counting of savings from overlapping measures.) 2. The long-run marginal cost is based on work at the Tata Energy Research Institute (New Delhi). 3. The short-run marginal value of electricity is an average of industrial tariffs in 1991. Source: Based on analysis presented in All India Conservation Potential in Motor-Drive Systems, in Mahajan et al., 1993.

the estimated short-run marginal value of electricity to utilities in India. The short-run marginal value of electricity is shown rather than the short-run marginal cost, because a kWh saved by improving efficiency would most likely be sold immediately by the utility to someone else, as a result of the chronic shortage of electricity supply in India. The short-run marginal value is assumed to be the revenue that would be collected by the utility by selling a kWh to the customer who pays the highest tariff -- an industrial customer in India. The average annual capital expenditures between 1991 and 2010 implied in Fig. 3 to achieve the indicated 109 TWh/year savings in 2010 is roughly Rs. five billion, or less than 20% of the average annual investment that would be needed to provide 109 TWh of electricity from new power plants instead. Figure 3 suggests that it would be economically favorable for electric utilities to invest in efficiency improvements in motor-drive systems. The calculations behind Fig. 3 consider retrofit improvements that would be made to systems operating today, as well as improvements that would be made as equipment reaches the end of its useful life and as new industrial and agricultural capacity is built. The distinction between retrofit and new installations is important from a policy perspective. For rapidly growing economies such as Indias the major part of electricity use in 2010 will be accounted for by new instal38

lations as a consequence of the turnover of existing equipment stocks and high rates of adding new industrial or agricultural capacity. For the results shown in Fig. 3, over 90% of the kWh savings would be from equipment installed as replacements or in entirely new installations. Thus, policies that emphasize improving efficiency in new installations will have the greatest impact in the long term on reducing Indias electricity supply requirements.
Notes 1. Financial support for Princeton Universitys participation has been provided by the Office of Energy and Infrastructure of the US Agency for International Development (Washington, DC), the Office of Policy, Planning and Evaluation of the US Environmental Protection Agency, and by the Rockefeller, Dodge, and W. Alton Jones Foundations. The National Productivity Council has provided financial support for its staffs participation. 2. A copy of the trial Volume 1 of the Menu may be requested from Mr. K.C. Mahajan, National Productivity Council, Lodi Road, New Delhi -110 003, India, or from Eric Larson, Center for Energy and Environmental Studies, Princeton University, Princeton, New Jersey, 08544, USA. 3. The long-run marginal cost of electricity is the cost to build and operate a new power plant in India. References CEA (Central Electricity Authority), Fourteenth Electric Power Survey of India, Department of Power, Ministry of Energy, New Delhi, March 1991. CMIE (Centre for Monitoring the Indian Economy), Current Energy Scene in India, Bombay, October 1991. K.C. Mahajan, K.K. Chakravarti, D. Pawan Kumar, E.D. Larson, and A. Subbiah, Technology Menu for Efficient Energy Use -Vol. 1: Motor Drive Systems, National Productivity Council (New Delhi, India) and Center for Energy and Environmental Studies, Princeton University (Princeton, New Jersey, USA), February 1993. Planning Commission, Eighth Five year Plan, Government of India, New Delhi, 1991.

Energy for Sustainable Development

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May 1994