Building a Sustainable Energy Future 1/2

China, India and some of the emerging economies have bounced back from the global recession faster than the developed countries. This is obviously a good thing. This shows that increasing internal demand, and not the global economy, has been the major engine driving India’s growth. The anemic pace of growth in the economically developed countries also provides India a breather when it comes to energy prices. The peak oil prices of $147/barrel are a distant memory, as we resume our petrol consumption binge. We also have 20% of our people to bring into the electricity age, and another 50% into the age of reasonably reliable electricity. Without sufficient energy, our economy will sputter along, and will never match the Chinese economic engine. Also, as the developed countries resume their economic growth, the upward pressures on petroleum prices will resume, and a dangerous cycle could be initiated.

One way to meet imminent energy needs is to continue to expand the infrastructure in the current paradigm: more cars to meet the demand, more coal, natural gas and hydro generation, and some lip service to renewable energy. While this will better satisfy pent-up near-term demand, this is also a recipe for a long-term problem. Electricity generation requires massive capital investments – ranging from $600 - $6,000 per kilowatt (Rs 27,000 crores for 1000 MW additional capacity). These investments last for 50-60 years, and can be further extended through proper maintenance. Further, fuel costs of over Rs 1000/MW-Hr delivered show a long term operating cost burden. If India makes the massive investments needed to add 100,000 MW of new capacity, sufficient to power 100,000 villages with bare minimal energy requirements, this will create a long-term legacy that future generations will have to live with. This will also make the transformation to a sustainable carbon-neutral energy infrastructure very difficult.