Friday, 24 August 2012

India's Energy Crisis:Some thoughts on Economic Growth,Energy, Environment , Ecological Intelligence and Leadership


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     On August 23 , 2012 , I got an opportunity to chair the inaugural Session of SN Tripathi Memorial  Lectures  2012, on the subject of "Climate Change , Water & Energy Crisis"  organized  jointly by  Swayam Siddha ( A reputed NGO), in collaboration with Indian Railways Institute of Transport Management(IRITM) and Lucknow Management Association  at Lucknow , UP , India.While Sri Nitya Jacob, Environmental Journalist and Programme Director( Water ), Centre for Science and Environment , New Delhi gave the Key Note address on water pollution under the heading :Shades of Blue" , Professor Shyam R. Asolekar of Centre for Environment Science & Engineering, Indian Institute of Technology , Mumbai gave the second Key Note address on "Water Crisis:What is in it for a Common Person".Sri Prem Ji Bhai, Veteran Social  Activist, Vruksh Prem Sewa Ashram , Rajkot , Gujrat gave his address as Chief Guest on "Redefining Green:New Models:One Man Sows Billion Seeds of Hope".I chaired the session and also spoke on "Climate Change &Energy Crisis.In what follows , are my thoughts on energy crisis and climate change , which I shared  during the talk .
                While we must accept that there is scarcity , depletion of ground water and pollution of both surface and ground water , the perception  is that water problem has yet to take the shape of a crisis , while energy crisis has already knocked at our door .The fact that there was recently a  complete blackout in 15 states of India due to failure of grid , is enough to prove that there is a crisis of energy in India.When we heard the Minister of Power saying that Chief Secretaries of States  will be arrested if any state is found to be overdrawing power from the grid , it revealed a deep  crisis of governance  and a crisis of  leadership crisis.Our  electricity supply , our gas supply , our oil supply is highly  inadequate. As a nation ,we have low energy security .
                           On a somewhat different note, a large number of Genes commonly found in people with Autism reflect vulnerability to environmental stress and inflammation .For kids with Autism and with spectrum of Autistic disorders, it takes less environmental stress to reach a tipping point into illness.   Diseases of Civilization like Auto Immune disorder, multiple Sclerosis, Cancer , diabetes are on the rise due to toxic and industrial chemicals.                  
             Where does the solution to energy crisis and climate crisis lie?

With present strategy of economic growth , higher growth requires higher energy consumption .So there is a need to evolve growth strategies which require lower energy consumption .At present , global energy demand is growing @ 2.2% per annum .Every village in India wants to have electricity supply .We must bear in mind  the fact that nearly 300 million persons   in  India are trying to survive each day on what we spend for a cup of Cappuccino.We need electricity to improve the living conditions of these people .There is every reason to believe that we need more energy , as the aspirations of people grow.
                    Not only energy consumption is increasing , it is  mainly fossil fuel based , increasing  carbon foot print , pollution and contributing to global warming . This is a catch 22 situation Energy efficiency in domestic consumption can be achieved by use of LED, CFL, rated fans , AC's , refrigerators, geysers and washing machines .People need to be made aware and ecologically Intelligent .Ecological Intelligence is just like  any of the multiple Intelligences  put forward by  Howard Gardner , says Daniel Goleman.We need to  correct the information assymetry of market .This needs more information and eco -transparency  to the consumers.This will make markets efficient  and will also help the  sale of ecologically intelligent products. By using our ecological intelligence,we need to incentivize business to make positive changes by voting with our dollars .We  should consume and purchase only those products which are produced by eco friendly industry , even if these are a little costlier .
                     Energy star ratings on appliances can be deceptive.An energy star rating on a Lap Top may show it highly energy efficient .But if we go deep , the overall impact of a laptop can be different."90% of the environmental impact comes during manufacture and disposal and not use."A Lap Top made in China  from a factory which used electricity from coal, can have a high negative energy impact, even if its use is rated highly energy efficient.
Not only that our energy supply is inadequate .Our fossil fuel  supply is also low and depleting .India has the world's fourth largest coal reserves but the demand supply gap has been consistently increasing, with domestic production unable to keep pace with demand .We have been unable to exploit our coal reserves due to governance problems.
         India holds just 0.7% of the world's proven oil reserves but accounts for 3.9% of the global oil consumption thus importing nearly 75-80% of its oil consumed .
              Similarly India has 0.8% of the world's proven gas reserves but accounts for 1.9% of the world wide gas consumption, thus importing nearly 20% of its natural gas consumed through LNG.

This needs steps towards energy efficiency as well as production and consumption of clean energy.   
                   Energy efficiency  implies consuming less energy for the same  level of output or services.This is  achieved by technology,materials and intelligent designs.In day to day business , executives put profit as the primary driver of strategy.("The social responsibility of business is to increase its profits").this is now replaced by the Triple Bottom Line concept.These three are Planet(Environment) , People(Social Responsibilty) and Profits.Though not everything green is profitable business, we need to find sustainable business solutions which are green as well as profitable.This requires innovation, entrepreneurial genius and smart strategic planning to create wealth.This is eco tranparency and ecologically intelligent  solutions.This also brings in the need for firm enforcement of government regulation related to environment .                 
                  Energy efficiency in commercial buildings , office buildings  can be achieved by LEED certification system.LEED means Leadership in Energy and Environment Design.LEED certificate has become gold standard for green(energy efficient) buildings.LEED standards use new design and materials which can lower costs as well as  energy consumption , thereby upgrading impact on environment .We can also retrofit older buildings with LEED standards.
Adobe Systems retrofitted its headquarters to LEED standards and saved 1.4 million dollars in costs within ten months.Such initial savings lead to a search for more ways to find such gains , creating a virtuous cycle.
                           To maximize their profits , builders/developers set their budgets for building's costs as low as possible.The system provides incentives for bidders in turn to find ways to cut their costs to fatten their profits.The sub contractor for the heating and cooling system has every reason to install the cheapest he can  find that will do the job and just meet building codes, rather than a higher priced one that will save energy and money over long haul for the real customers of the building .LEED creates transparency by revealing the hidden costs.Market forces will drive the LEED movement but people's understanding has to develop that there were better ways to build buildings now.No regulation can be as powerful as the understanding  of the market forces.
                  Energy efficiency in agriculture and irrigation  by using rated pumps , especially solar water pumps.Energy efficiency in industry also can be achieved by using green technology.
                            Clean power can be obtained  in the form of:
a)Nuclear power.
b)Bio-mass based power.
c)Wind power.
d)Solar power.
e)Tidal power.
            
                                    There is  a need to encourage production and distribution  green and clean energy.This requires three fold action:
1)Proper pricing policy  and metering .
20.Quick approvals .
3).Insulation from policy uncertainty due to political changes.
We have become used to management by crisis.
We need 60 different approvals from eight different ministries for undertaking oil and gas exploration .There is no assurance of reasonable returns .Administered price mechanism does not ensure adequate returns to investors.In fact , in oil and gas sector , prices should be largely left to the market forces and and every effort must be made to ensure that there is no cartelization and monopoly pricing .
                  Wind power , solar power and tidal power are not yet scalable while the nuclear power  technology will evolve over time . In France, where electricity comes predominantly from nuclear power, it is cheaper than in England where it comes predominantly from oil and gas.
                      I am inclined to suggest that the solution to energy crisis in India , like in France , lies in producing and distributing Nuclear power. This  is likely to  help us control  and mitigate the intensity  of the climate crisis.We also need to make our people ecologically intelligent and our markets ecologically transparent.Rather than threatening our chief secretaries with arrests , we need leadership which works seriously towards  meeting the challenge of  our energy crisis .