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1 Energy Security and Sustainability: An Overview
embargoes, and price fluctuations. India’s GDP per person remained abysmally low,
below USD 450 till the end of twentieth century. At the turn of twenty-first century,
India was a low-income country with per capita GDP of USD 462 in comparison
with USD 911 for China, USD 1,270 for the developing countries, USD 22,149 for
OECD countries, and USD 35,277 for the USA. Despite the recent rise in incomes,
the average per-capita GDP of India in 2015 was 1606 USD (http://www.worldb
ank.org). There is stark difference in per capita income across the country. For
example, a person in Bihar, the poorest state, earns about a tenth of that in Goa,
the richest state. Under the circumstances it will be irrational to expect magical rise
in per capita GDP of India.
At the current rate of population growth, India is projected to be the most populous
country of the world by 2030 with 1.5 billion people spread over inhabitable areas of
the country’s 328 million square kilometers. Most of the population among the young
and middle age group will move from rural areas to peri-urban and urban areas. And
more and more peri-urban areas will be carved out of agricultural land of 640,000
villages. Over 70% of the population lives is linked to over 640,000 villages in the
country, contributing 50% to India’s GDP. 18% of population lives in 7,834 towns
contributing 25% to GDP. 12% of population lives in 44 cities (Registrar General,
India 2011). The iconic pyramid has expanded in its middle, creating a ‘diamond’ by
the increasing ‘climbers’ entering the lower/middle classes in both urban and rural
areas.
Unprecedented population growth will outstrip the demand for oil and gas (and
modest reserves) to fuel transport and power generation and insufficient domestic
production will ensure import dependency. India has and will continue to rely on
Middle East for its oil supply, the reason being comparative cheapness, ease of
transport through sea, and geographic nearness. By 2030, India is expected to import
6–7 million barrels a day mostly from Middle East countries. In the medium term,
at least, most of the Middle Eastern oil shipped to India will continue to transit the
Straits of Hormuz at the mouth of the Persian Gulf—the world’s busiest oil-shipping
lane. India’s gas requirement will be between 61 and 112 billion cubic meters by
2030 depending on economic growth and renewable energy potential with almost
complete import from Middle East. India imported 12% of its total coal needs of
36 Mtce in 2005 and the same is expected to grow between 244 and 282 Mtce.
Coal is relatively more expensive to transport, and mining invites sharp criticism
from conservationists. Future coal demand and import will be proportional to use of
clean technology and switchover renewables in the overall energy basket (Fig. 1.13).
Besides several constraints in power generation, the country also faces transmission
and distribution losses for a variety of reasons, viz., substantial energy sold at low
voltage, sparsely distributed loads over large rural areas, inadequate investment in
distribution system, improper billing, and high pilferage. India’s average transmission
and distribution losses exceed 25% of total power generation which is almost 2.5
times the world average.
India has adopted some measures to reduce its vulnerability to oil supply disruptions. In 1998, a new exploration licensing policy aimed at encouraging investment
in the upstream oil and gas sectors was adopted. The government has also decided to
1 Energy Security and Sustainability: An Overview
embargoes, and price fluctuations. India’s GDP per person remained abysmally low,
below USD 450 till the end of twentieth century. At the turn of twenty-first century,
India was a low-income country with per capita GDP of USD 462 in comparison
with USD 911 for China, USD 1,270 for the developing countries, USD 22,149 for
OECD countries, and USD 35,277 for the USA. Despite the recent rise in incomes,
the average per-capita GDP of India in 2015 was 1606 USD (http://www.worldb
ank.org). There is stark difference in per capita income across the country. For
example, a person in Bihar, the poorest state, earns about a tenth of that in Goa,
the richest state. Under the circumstances it will be irrational to expect magical rise
in per capita GDP of India.
At the current rate of population growth, India is projected to be the most populous
country of the world by 2030 with 1.5 billion people spread over inhabitable areas of
the country’s 328 million square kilometers. Most of the population among the young
and middle age group will move from rural areas to peri-urban and urban areas. And
more and more peri-urban areas will be carved out of agricultural land of 640,000
villages. Over 70% of the population lives is linked to over 640,000 villages in the
country, contributing 50% to India’s GDP. 18% of population lives in 7,834 towns
contributing 25% to GDP. 12% of population lives in 44 cities (Registrar General,
India 2011). The iconic pyramid has expanded in its middle, creating a ‘diamond’ by
the increasing ‘climbers’ entering the lower/middle classes in both urban and rural
areas.
Unprecedented population growth will outstrip the demand for oil and gas (and
modest reserves) to fuel transport and power generation and insufficient domestic
production will ensure import dependency. India has and will continue to rely on
Middle East for its oil supply, the reason being comparative cheapness, ease of
transport through sea, and geographic nearness. By 2030, India is expected to import
6–7 million barrels a day mostly from Middle East countries. In the medium term,
at least, most of the Middle Eastern oil shipped to India will continue to transit the
Straits of Hormuz at the mouth of the Persian Gulf—the world’s busiest oil-shipping
lane. India’s gas requirement will be between 61 and 112 billion cubic meters by
2030 depending on economic growth and renewable energy potential with almost
complete import from Middle East. India imported 12% of its total coal needs of
36 Mtce in 2005 and the same is expected to grow between 244 and 282 Mtce.
Coal is relatively more expensive to transport, and mining invites sharp criticism
from conservationists. Future coal demand and import will be proportional to use of
clean technology and switchover renewables in the overall energy basket (Fig. 1.13).
Besides several constraints in power generation, the country also faces transmission
and distribution losses for a variety of reasons, viz., substantial energy sold at low
voltage, sparsely distributed loads over large rural areas, inadequate investment in
distribution system, improper billing, and high pilferage. India’s average transmission
and distribution losses exceed 25% of total power generation which is almost 2.5
times the world average.
India has adopted some measures to reduce its vulnerability to oil supply disruptions. In 1998, a new exploration licensing policy aimed at encouraging investment
in the upstream oil and gas sectors was adopted. The government has also decided to