Leading Voices

Energy efficiency will improve faster than global economic growth

Interview with Murhari Kele, Director (Technical) – M.P.Paschim Kshetra Vidyuat Vitaran Co.Ltd, India

How is the future Energy World shaping in your opinion?

Considering development of biggest countries like India & China during next 15-20 years, Global energy demand will plateau from 2030, oil demand will flatten from 2020 and continue to decline significantly thereafter, the shift to renewable energy will be quicker and more massive than most people realize. While renewable energy usage is increasing rapidly, OPEC forecasts its share of the market will not be as large as oil and gas combined. OPEC predicts coal usage will peak in 2035, before beginning its decline. This is due to the much lower base renewable are growing from, compared with the more-established fossil fuel industries, rather than issues around adoption. The most growth in renewable will be in solar, wind, and geothermal energy. Fossil fuels will retain a dominant role in the global energy mix, although with a declining overall share. Hydro power is also projected to grow from 6.8 mboe a day in 2015 to 10.3 mboe a day in 2040, but OPEC was unclear on whether this includes pumped storage facilities. Nuclear energy will grow at an average rate of 2.3 per cent annually, from 13.5 mboe a day in 2015 to a modest 23.8 mboe a day in 2040.

Energy efficiency will improve faster than global economic growth due to the rapid electrification of the world’s energy system, leading to a plateau in energy demand from 2030. Renewable energy sources will continue to rise, making up nearly half of global energy supply by 2050, cutting energy-related CO2 emissions in half by that time. Gas supply will peak in 2035, coal use has already peaked. Oil supply will flatten out in 2020 and then fall significantly to be surpassed by gas in 2034. The world will manage the shift to a renewable future without increasing overall annual energy expenditure, meaning that the future energy system will require a smaller share of GDP.

Electricity consumption increases by 140% by 2050, becoming the largest energy carrier. Other energy carriers, such as coal and oil, experience significant reductions or only slight increases in consumption. 85% of global electricity production in 2050 comes from renewable sources ‒ Solar PV will provide around a third of the world’s electricity by 2050, followed by onshore wind, hydropower and offshore wind, in that order. Electric vehicles will achieve cost parity with internal combustion vehicles in 2022 and, by 2033; half of new light vehicle sales globally will be electric.

Despite greater efficiency and reduced reliance on fossil fuels, the Energy Transition Outlook indicates that the planet is set to warm by 2.5˚C, failing to achieve the 2015 Paris Agreement target. Even with energy demand flattening and emissions halving, our model still points to a significant overshoot of the 2°C carbon budget. This should be a wake-up call to governments and decision-makers within the energy industry. The industry has taken bold steps before, but now needs to take even bigger strides. To achieve the target of a low-carbon world, there is no single solution. Instead, multiple achievable actions must be taken both locally and globally, involving collaboration within the energy sector and across industries.

Challengers that Power Distribution utilities are facing these days in Madhya Pradesh & Maharashtra?

As I have worked 25 Yrs in Maharashtra & presently working as Director (Technical) in Madhya Pradesh, I want to focus the challenges in Power Distribution in these states. Financial health of power distribution companies (Discoms) is a major worry for the whole country & also Discoms are having more than 25% AT&C losses even after taking over majority of loan part by States through UDAY scheme.

Presently both states are power surplus states & there is major challenge of increase in demand by reducing losses. It is not happening due to  Lack of professionalism in employees, non availability of credible information like consumer database for proper billing and collection of revenues, Last mile connectivity to consumers, Non execution of infrastructure projects viz. RGGVVY, RAPDRP, DDUGJY & IPDS etc, maintenance of network, failure to arrest theft, use of advanced technology like smart metering, GIS indexing, AMI, SCADA, FPI, Autoreclosures, proper MIS & dashboard for monitoring progress, etc.

Political interference in tariff fixation, Open access consumers, Subsidy & Cross subsidy for Agricultural & BPL consumers in regulatory regime also affecting health of Discoms. Both states is having more than 25 % of subsidized agricultural consumers, which needs to be tackled very tactfully. Due to mix feeders & non indexing of Ag consumption, there is dispute in calculation of accurate AT&C losses through energy Audit.

What is your vision for the future of the energy systems in your region?

As there is power surplus in states of MP & Maharashtra & also as per target set by GoI for renewable energy, Roof top Solar consumption will definitely increase like anything, also storage facility through big batteries will change the load curve. Grid stability may be another issue due to increase in Renewable energy which is of unscheduled nature. Electric motor vehicle will be a revolution in nearby future & charging stations & their requirement will be a challenge before utilities.

Regarding Discoms complete privatization will be resisted by employees as well as political front. So slow insertion of PPP models like franchisee, management operators, outsourcing of metering, billing activities, etc is required. Thereafter segregation across business elements i.e. wires business & supply business can be next step. Then multilicencing model like in Mumbai may increase competition in Discoms & its ultimate beneficiary will be end consumer. Subsidy part can be reduced or can be implemented to paying consumers only within range of guidelines given in act & regulations.

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