50
2 Energy Sector Progression in India
Unfortunately, implementation of third five-year plan suffered huge setbacks. The
outbreak of hostilities in 1962 and 1965 and other factors delayed the implementation
of many projects including those of power generation that had a shortfall of 2.52
million kilowatt. The actual capacity commissioned was 10.17 million kilowatts
against the target of 12.69 million kilowatts. Rural electrification was worst hit with
only 20,000 villages electrified, most of them having population less than 5000.
There was a gap of three years between third and fourth plan during which period
three annual plans were prepared and implemented. Priority was accorded for the
completion of old projects and about 4.12 million kilowatts of generating capacity
were added between 1966 and 1969. By the end of March 1969 some 71,280 villages
were electrified and 1,087,567 irrigation pumps were energized for improving farm
production.
The year 1974 was a defining moment and will be remembered as the year of ‘black
outs’ and industrial shutdowns. In fact, India had made great strides by enhancing
its energy requirement from 30 to 54% through commercial energy (oil, coal, hydro,
thermal power, and nuclear) between 1954 and 1974. But a sudden and sharp increase
in the price of crude oil by OPEC in 1974 made the cost of imported oil prohibitive
for India. India’s bill for crude and petroleum products went up from Rs. 2040
million in 1972–1973 to Rs. 5600 million in 1973–1974 and thereafter to Rs. 11,300
million in 1974–1975 (the price of crude went up from USD 3 per barrel to USD
14 per barrel). This was exacerbated by failure of monsoon and inadequate coal
availability. Food insecurity compelled the government to divert energy to agriculture
sector resulting in massive shortfall to the industry. India topped the UN list of 30
developing countries that were most seriously affected by the global energy crisis.
Such a massive increase in oil prices in three years forced India to cut down its oil
consumption from the estimated 25 million tons in 1974–1975 to 21.5 million tons.
Almost 42% of all foreign exchange earned by the country from its exports had to
be used to pay for its oil and oil product imports. India had no option but to increase
indigenous coal production and the fifth plan envisaged an increase of 57 million tons
in coal production by 1978–1979 from the 78 million tons production in 1973–1974.
Anticipating India’s energy insecurity in mind, the scientists and planners in India
had started its nuclear energy program in 1948 with the establishment of Atomic
Energy Commission. The first atomic energy establishment set up in Trombay in
1954 processed thorium uranium cake and produced thorium nitrate and uranium
whose fuel value was equivalent to 10,000 tons of coal per one ton of uranium
(Planning Commission 1961). Subsequently, other plants/projects such as extraction
of uranium ore, uranium purification, heavy water, and atomically pure graphite
production were undertaken as well. Since India had one of the largest deposits of
thorium in the world, the nuclear energy program was divided into three phases, viz.:
Stage 1—Utilize natural uranium as fuel for power generation and production of
plutonium.
Stage 2—Install reactors for using plutonium as fuel and convert thorium to
uranium-233.
Stage 3—Use uranium-233 with thorium in breeder reactors.
2 Energy Sector Progression in India
Unfortunately, implementation of third five-year plan suffered huge setbacks. The
outbreak of hostilities in 1962 and 1965 and other factors delayed the implementation
of many projects including those of power generation that had a shortfall of 2.52
million kilowatt. The actual capacity commissioned was 10.17 million kilowatts
against the target of 12.69 million kilowatts. Rural electrification was worst hit with
only 20,000 villages electrified, most of them having population less than 5000.
There was a gap of three years between third and fourth plan during which period
three annual plans were prepared and implemented. Priority was accorded for the
completion of old projects and about 4.12 million kilowatts of generating capacity
were added between 1966 and 1969. By the end of March 1969 some 71,280 villages
were electrified and 1,087,567 irrigation pumps were energized for improving farm
production.
The year 1974 was a defining moment and will be remembered as the year of ‘black
outs’ and industrial shutdowns. In fact, India had made great strides by enhancing
its energy requirement from 30 to 54% through commercial energy (oil, coal, hydro,
thermal power, and nuclear) between 1954 and 1974. But a sudden and sharp increase
in the price of crude oil by OPEC in 1974 made the cost of imported oil prohibitive
for India. India’s bill for crude and petroleum products went up from Rs. 2040
million in 1972–1973 to Rs. 5600 million in 1973–1974 and thereafter to Rs. 11,300
million in 1974–1975 (the price of crude went up from USD 3 per barrel to USD
14 per barrel). This was exacerbated by failure of monsoon and inadequate coal
availability. Food insecurity compelled the government to divert energy to agriculture
sector resulting in massive shortfall to the industry. India topped the UN list of 30
developing countries that were most seriously affected by the global energy crisis.
Such a massive increase in oil prices in three years forced India to cut down its oil
consumption from the estimated 25 million tons in 1974–1975 to 21.5 million tons.
Almost 42% of all foreign exchange earned by the country from its exports had to
be used to pay for its oil and oil product imports. India had no option but to increase
indigenous coal production and the fifth plan envisaged an increase of 57 million tons
in coal production by 1978–1979 from the 78 million tons production in 1973–1974.
Anticipating India’s energy insecurity in mind, the scientists and planners in India
had started its nuclear energy program in 1948 with the establishment of Atomic
Energy Commission. The first atomic energy establishment set up in Trombay in
1954 processed thorium uranium cake and produced thorium nitrate and uranium
whose fuel value was equivalent to 10,000 tons of coal per one ton of uranium
(Planning Commission 1961). Subsequently, other plants/projects such as extraction
of uranium ore, uranium purification, heavy water, and atomically pure graphite
production were undertaken as well. Since India had one of the largest deposits of
thorium in the world, the nuclear energy program was divided into three phases, viz.:
Stage 1—Utilize natural uranium as fuel for power generation and production of
plutonium.
Stage 2—Install reactors for using plutonium as fuel and convert thorium to
uranium-233.
Stage 3—Use uranium-233 with thorium in breeder reactors.