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1 10-01-2020 1 Bottom-up analysis of electricity demand: How much, by when and under what conditions? Mohd. Sahil Ali [email protected] Nov 3, 2019
110-01-2020
1
Bottom-up analysis of electricity demand: How much, by when and under what conditions?
Mohd. Sahil [email protected]
Nov 3, 2019
22
Context and Significance
3
Electricity’s emissions share is rising
228366
719820
1083
29%
36%
42%44%
47%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
0
200
400
600
800
1000
1200
1994* 2000* 2007 2010 2014
Shar
e of
tota
l em
issio
ns (%
)
Pow
er S
ecto
r Em
issio
ns (M
tO2e
)
Electricty Emissions Share in National Inventory
Source: UNFCCC and MoEF/MoEFCC* For years 1994 and 2000, emissions of ‘energy industries’ is available, which includes electricity generation and production of other fossil fuels.
4
RE is dwarfed by coal
1,401,37
0,47 0,52
1,28 1,29
1,02 1,04
0,00
0,50
1,00
1,50
2,00
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Emiss
ion
Inte
nsity
(kg
CO2/
kWh) Coal Gas Total (Thermal) Total
-0.30%
1.63%
0.15%
0.21%
10
28
10
59
0
10
20
30
40
50
60
70
0
5
10
15
20
25
30
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Net
gen
erat
ion
(BU
)
RE in
stal
led
capa
city
(GW
) Installed capacityGeneration
1
34%
New Landscape in Power: 2013-14- to 17-18- Coal and RE added ~8GW and ~7 GW annually- Coal capacity grew by 9%, gen. by 6%, but elec. demand by
only 5.7% CAGR- EI still at 06-07 levels & RE share<10%- Stranded assets ~USD 100 billion in power sector and coal
PLFs ~60%- Emerging power surplus situation at certain times of day
Emission Intensity of generation FY 07 to FY 13
RE growth FY 07 to FY 13998 1.002
1.0691.114
1.143
911960
1.0311.091
1.1358,71%
4,23%3,57%
2,11%
0,66%500
600
700
800
900
1000
1100
1200
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
TWh
Defic
it (%
)
Requirement (BU) Avalability (BU) Deficit (%)
Trends in Energy Deficit (FY 13 to FY18)
5
Electrification of DD and EE are key planks of India’s decarbonisation policy
CO2 𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒
𝐺𝐺𝐺𝐺𝐺𝐺=
CO2 Energy
𝐺𝐺𝑃𝑃𝐺𝐺𝑃𝑃𝐺𝐺𝐺𝐺𝐺𝐺
Fuel Mix Energy Efficiency
- Despite high RE targets in power (450 GW by 2030), TPES’ EI may grow, mainly due to - Shift from unaccounted non-commercial biomass (~30% TPES at present) to LPG (Byravan, Ali et al 2017)
- Two interrelated strategies working in opposite directions— Energy efficiency, and electrification of demands:- EVs, electric cooking, railways, industrial and irrigation fuel switch, etc.
- Pitfalls in electricity projections and planning:- CEA has consistently over-projected demand by 1-2 percent points, leading to stranded assets- Each sector heavily influenced by specific drivers, policy bets and exogenous uncertainties (eg. rainfall, heat)- Often not amenable to model using least cost logic—widely varying discount rates and regulated fuel pricing
- rural vs urban, tier I vs tier 2, manufacturing vs SMEs, agricultural supply highly subsidised- behavioural (non-price) factors, supply (reliability issues tech costs often second or third order determinants of demand:
- Demand aggregationmarket certainty on supply side scale economies faster diffusion
India’s NDC:
6
Econometric and top down measures of demand fail to capture sectoral drivers
Source: Prayas Energy Group
77
Approach and salient features
8
Salient Features
• Assess plausible levels in a modular fashion with greater granularity• Impact on sector-wise application-wise service demands based on hitherto unseen/unforseen
demand/growth, and macro growth and sectoral policy drivers • Complete characterization and calibration with historical (2010-15) end use demands• Inclusion of captive power (~15% of total consumption)
• Good (new electrification) vs bad (inefficiency) demand case-based bounding approach instead of narrative scenarios
• Policy bets, institutional change and behavioural shifts• Demand aggregation: 310/LED to 38/LED in <3 years; USD 1400/hp to 850/ hp in solar pumps• Farming cooperatives and AgDSM scheme on uptake of efficient pump-sets and solar+MI• Institutionalisation of building codes, behavioural impact of visible certifications• National cooling action plan, adaptive thermal comfort and AC use• Basic electricity access sophisticated uses such as electric cooking• Make in India/ National Manufacturing Policy and cap and trade (PAT) scheme and industrial EE and fuel/proces shift• Fleet shift to EV as first mover, followed by private vehicular segment
9
Understanding structural factors
0,00%
2,00%
4,00%
6,00%
8,00%
10,00%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Gro
wth
(5)
GDP and Population Growth (01-16)
GDP @2011-12 prices (RBI) Population(Million) GDP/capita('000 INR)
10 0%
-5,0%
0,0%
5,0%
10,0%
15,0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Grow
th
Structure of Growth (01-015)Agriculture
Industry
Services
0
100000
200000
300000
400000
500000
600000
700000
800000
900000
1000000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
GWh
Sector-wise Electricity Consumption Growth (01-15)MiscellaneousTractionAgricultureIndustrialCommercial
8.0%
9.7%
6.7%
5.2%
5.2%
7.5%
23,6%
8,8%
42,2%
18,5%
1,8%
5,2%
Consumption Share 2015
Domestic
Commercial
Industrial
Agriculture
Traction
Miscellaneous
10
Demographics and GDP Scenarios
Demographics
2012 2015 2030 Growth (15-30)Population (million) 1262 1311 1528 1.0%
Urbanisation 31.4% 32.3% 40.0% 1.4%HH Size Urban 4.52 4.36 3.54 -1.4%HH Size Rural 5.06 4.96 4.45 -0.7%
#Households Urban 88 97 173 3.9%# Households Rural 171 179 206 0.9%# Households Total 259 276 379 2.1%
GDP Growth Scenarios (2015-2030)
CAG
R
GDP 6.5% 7.0% 7.5% 8.0%
Agriculture 2.2% 2.7% 3.2% 3.6%
Industry 8.0% 8.5% 9.0% 9.5%
Services 6.5% 7.0% 7.5% 8.0%
• B/w 2015 and 2030 approx. 100 million new HH expected
• Driven by urbanisation and shrinking HH size• 75% of new HH in urban areas will have
profound impact on housing demand
• For manufacturing ~25% of GDP by 2030 (~16% presently), industry must grow 1.5% points higher than overall GDP (assuming services retains its share at 60%)
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Sectoral Drivers of Future Electricity Consumption
Sector DriversAgriculture Net sown area, cropping intensity, surface and micro irrigation coverage/schemes, cropping pattern and water
requirements, solar pumping, pump-set characteristics (size, head, discharge)
Buildings Floor space area, urbanisation and household sizes (rural and urban), affordable housing provision, service demand in low income households, appliance types, technologies, ownership and use, building shell design efficiency and electrical controls
Industry Manufacturing Policy, Make in India, Perform Achieve and Trade (PAT), infrastructure/development related demand, sub-sectoral policies and targets (eg. Steel target, NG switching in fertiliser production), alternate fuels and raw material, waste/scrap recycling, thermal substitution).
Transport Railway track growth, route kms. electrified, EV urban passenger demand (PKM demand, vehicle ownership and use, EV sales targets, EV technologies, duty cycles and charging provisions)
Others Historical rates of growth and urbanisation.
Cross Sectoral GDP Sectoral Value Added Service Demands (Industrial Production, Residential and Commercial Floor-space Area, Appliance Stock and Ownership)
Cross Sectoral Demographics Household Stock, rural-urban share, household sizes service demand per capita inorganic demand from new households
12
Boundary Conditions
Bounding AssumptionsUpper Bound (low efficiency/high demand) Lower Bound (high efficiency/low demand)
Agriculture
2/3rd irrigated area by UG pumping Half irrigated area by MI+Surface Irrigation
20% Improvement in Pump-set Efficiency 40% Improvement in Pumpset Efficiency
Buildings
100% housing access by 2030 35% housing access by 2030
Medium Penetration of Efficient Appliances and ECBCHigh Penetration of Efficient and Super Efficient Appliances and ECBC
Cooking 15% rural and 7.5% urban HH use electric cooking 10% rural and 5% urban HH use electric cooking
Industry
Medium penetration of efficient technologies, processes and ARM High penetration of energy efficiency measuresHigh production growth due to NMP/MII Medium production growth
Transport 90% route kms electrified 75% route kms electrified
55-60% penetration of Evs in new sales since 2016 30-35% penetration
Others5% share of total electricity; 5% energy efficiency improvement 10% energy efficiency improvement
1313
Results
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Water- energy nexus in agriculture
Base-year situation:• 141 mha under cultivation (NSA) with cropping
intensity of 139% (GCA)• More than 50% rainfed—2/3rd irrigation is via
groundwater sources • Water requirement from 24 crops (foodgrains,
vegetables, pulses, fruits, oilseed, fibres and other crops (over 80% GCA) analysed
2030 Scenario:• Cropping pattern assumed to continue, 5-10%
diversion to non-food crops will not significantly affect demand
• 150% cropping intensity by 2030 based on past trends• Upto 60% coverage through enhanced application of
surface +MI schemes • Enhanced water and energy use efficiency can reduce
demand by over 1.5 percentage points.
15
Buildings- Floor-space and service- demand
9,415,2
64
74
0
10
20
30
40
50
60
70
80
90
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
EPI (
kWh/
sqm
/yea
r)
Historical EPIsResidential
Commercial
Commerical Service Demand Projections2015 2030 CAGR
HVAC Coverage % 8.5% 22.5% 6.7%Lighting (lumens/sq. m) 290 350 1.3%
Others 4.0%
- In 2015, only 8.5% of Indian commercial FSA air-conditioned- Potential to increase to 50 percent with increased urban concentration of services; modelled at 22.5% by 2030
Buildings Floor-space area projections (~7.0% GDP growth)
Residential Appliances growth in all connected HHStock (million) per HH
2012 2030 2012 2030 Stock GrowthOwnership
GrowthPoint Lighting 687 1312 2.66 3.47 3.7% 1.5%
TubularLighting 258 500 1.00 1.32 3.7% 1.6%Refrigerators 47 244 0.18 0.64 9.6% 7.3%
RAC 4 116 0.02 0.31 20.5% 18.0%CTV 123 396 0.48 1.05 6.7% 4.5%Fans 305 776 1.18 2.05 5.3% 3.1%
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Residential Demand from new HH under Affordable Housing (AH)
Housing Gap Urban Rural TotalMillion HH 18.78 43.67 62.45
Avg area/ HH (sq.ft) 422 431Avg area/person (sq.ft) 93 85
HH living in slums 18%Expected Deficit by 2022 34.1 78
FSA gap ( 2012 million m2) 751 1747 2498FSA gap ( 2022 million m2) 1364 1747 3111
Yearly Housing Stock Growth (01-11 Census) 5%
Affordable Housing (AH) floorspace Construction (million m2)AH target met Total Yearly Million Homes Yearly
Phase I (15-22)50% (UB) 1512 216 5.410% (LB) 268 38 1.0
Phase II (22-30)50% (UB) 1411 176 4.425% (LB) 633 79 2.0
Electricity Requirement from AH-based HHsHouses in Phase I Houses in Phase II
2022 2030 2022 2030
Electricity/HH (kWh) 500 700 500 600
EPI (kWh/m2) 12.50 17.5 12.5 15
Aggregate Electricity Requirement from AH in 2030 (TWh)Upper Bound Lower Bound48 14
- If the affordable housing deficit has to be met by 2030, nearly ~6 million new houses to be available annually till 2022 and ~5 million between 2002 and 2030
- Houses populated earlier will have a higher consumption profile than ones populated later (post 2022)- Even if the entire housing deficit is met, the resultant additional electricity demand will be less than 50 TWh
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Buildings (Electricity Demand)
0
20
40
60
80
100
120
2015 2030 UB 2030 LB
kWh/
sqm
Future Commercial EPIs (kWh/sq m)HVACLightingOthers
74
107
88
Aggregate Commercial Electricity Demand
Aggregate Residential Electricity Demand
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Buildings Electricity demand (growth areas)
Air Conditioning demand (TWh) 2015 2030 UB 2030 LB
Residential 25 280 209
Commercial 48 266 183
Total 72 546 392
Share 25% 54% 56%
By 2030, AC’s will be the dominant source of electricity consumption in buildings under different scenarios of GDP and efficiency
Electricity Demand from cooking
Upper bound: 15% rural and 10% urban HH completely switch to electric cookstovesLower bound: 2/3rd of above households use electricity as primary fuel, with other fuels (LPG/biomass)
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Industrial Production, processes and efficiency
2030 UB 2030 LB
20
Industrial Electricity Consumption
184
453 510169
444
504
0
200
400
600
800
1000
1200
2012 2030 BAU 2030 MII
Elec
tric
ity C
onsu
mpt
ion
(TW
h)
Impact of Make in India/ National Manufacturing Policy (~9% industrial growth)
PAT Non-PAT 897
1,004
333
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Railways
Upper Bound: 90 percent electrification by 2030Lower Bound: 75 percent electrification by 2030GoI Targets: 24,400 Rail Route kms to be electrified by 2021 (77 percent electrification)
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Passenger Electric Vehicles- Stock and miles (intra-city)
73%
14%
1%4%
8%
Share of registered vehicles in India (2015)2W
Cars,Jeeps andTaxisBuses
FreightVehicles
Total= 210 mn.
82
15 1 7
212
63
3 17
0
100
200
300
2W 4W Buses 3W
Active Vehicles/1000 persons
2015
2030
5,0
0,8 0,2
23,6
2,7
0,0
5,0
10,0
15,0
20,0
25,0
Cars Taxis Buses 2W 3W
Mill
ion
Vehi
cles
Avg. Annual Sales (2016-30)
3677
8432
4349
1995
6177
4908
12093
9040
4073
11175
0
2000
4000
6000
8000
10000
12000
14000
Cars Taxis Buses 2W 3W
Annual intra-city vkms/vehicle
2013
2030
276
79174
69 25
1041
551
704
459
306
46,0
0,9 0,7 1,3
2,2
35,1
1,5 0,5 2,3
3,1
0
10
20
30
40
50
0
200
400
600
800
1000
1200
Bus Car 2W 3W Taxi
Occ
upan
cy
BPKm
s
BPKMs and Occupancy RatesMode-Wise BPKMs 2013Mode-Wise BPKMs 2030Occupancy 2013Occupancy 2030
23
6%
4%
0%
9%
5%
1%0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
0
1
2
3
4
5
6
BEV 2W HEV (4W, Bus, LCV) Other BEV (3W, 4W, Bus, LCV)
% T
otal
Sal
es
Sale
s (M
illio
n Ve
hicl
es)
NEMMP 2020 EV Penetration
2020 LB
2020 UB
% Sales LB
% Sales UB
0,00
2,00
4,00
6,00
8,00
10,00
LB UB
TWh
Electricity Demand by EVs under NEMMP (2020)
BEV 2W
HEV (4W, Bus, LCV)
Future EV Sales (Cumulative 2017-30)
% Total Sales by 2030 Million Numbers33% of
2030 (LB)100% of
2030 (UB)33% of
2030 (LB)100% of
2030 (UB)Cars 20% 60% 14.1 42.2Taxis 25% 65% 2.6 6.8Buses 25% 65% 0.9 2.3
2W 20% 60% 65.9 197.83W 33% 65% 12.6 24.7
Total/ Wtd. Avg. 21% 61% 96 274
9
4
11
58
26
10
28
16 16
9,4 9,4
0,8
54,4
19,2
0
10
20
30
40
50
60
0
5
10
15
20
25
30
Cars Taxis Buses 2W 3W
Mile
age
(km
/kW
h)
Elec
tric
ity D
eman
d (T
Wh)
Electricity Demand by EVs in 2030
2030 LB
2030 UB
Mileage(km/kWh)
PEVs Electricity Demand NEMMP and 2030 scenarios
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Future Aggregate Load Capacity
456
1536
1999
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2200
Agriculture Commercial Domestic Industrial Transport Other Total
GW
Sector-wise Aggregate Load Capacity
2015
2030 LB
2030 UB
CAGR: 8.4-10.4%
Without EVs, Aggregate Loads grow by 6-7% CAGR
206
565 11 25
82
195
46 3660
3
107
47 35 15 12 6 14
221
10
748
60
0
100
200
300
400
500
600
700
800
GW
Application-wise Aggregate Load Capacity (2030)
2030 UB
2030 LB
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Electric Vehicles- Fuel Cost ArbitrageQ: ASSUMING capital cost (with battery replacement) parity by 2030, how much is tariff is consumer WTP for using EVs instead of ICEVs (i.e. identical INR/km)?
33% EV Sales by 2030
Kms Shifted Fuel Offset Fuel CostsFuel Arbitrage
ThresholdMVKms Mn Lts INR billion INR/km INR/kWh
Cars(P) 68,983 4,311 345 5.0 40
Taxis(P) 31,745 2,267 181 5.7 46
2W (P) 2,68,576 4,476 358 1.3 65
Buses (D) 7,901 2,258 169 21.4 16
3W(D) 1,40,342 3,898 292 2.1 36
Total/ Wtd Avg 5,17,548 17,211 1,346 2.6 36
- Tariff Threshold seems high, but so will be the infra costs
- Even at 33% EV sales by 2030 and slow charging, EVs 100 GW in peak demand (w/o captive charging capacity or battery swapping)
Research by Mohd. Sahil Ali, Brookings IndiaWork in Progress: Please do not cite
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Electric Vehicles- GHG Abatement Potential
10
5
10
6
10
141 161
38
752
730
100
200
300
400
500
600
700
800
0
2
4
6
8
10
12
Cars Taxis 2W Buses 3W
g CO
2/km
Mt
CO2
GHG Emissions of displaced ICVs
CO2 Emissions
Emission Factor
At 33% EV sales, GHG emissions from oil avoided:
- 15 Mt CO2 at current grid emission factors- 41 Mt CO2 if all charging is from zero emission sources.
This is less than 2% of 2014 net GHG Emissions as per BUR.
Research by Mohd. Sahil Ali, Brookings IndiaWork in Progress: Please do not cite
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Summary Results: Past vs Future
GDP CAGR by 2030 6.5% 7.0% 7.5%
2015 LB Mid UB LB Mid UB LB Mid UB
Electricity Demand (TWh) 949 2075 2251 2587 2156 2338 2665 2253 2432 2785Growth (CAGR) 5.4% 5.9% 6.9% 5.6% 6.2% 7.1% 5.9% 6.5% 7.4%Elasticity 0.95 0.82 0.91 1.06 0.80 0.89 1.02 0.79 0.86 0.99Per Capita Consumption (kWh)
724 1358 1473 1693 1411 1531 1745 1475 1592 1823
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Key Takeaways- As per capita growth increases, capacity to invest in EE and potential for decoupling also does (see elasticities)
- India does not need to reach world average consumption levels (~2,500 kWh/capita) for high GDP growth
- Agricultural will grow at less than historical; commercial to grow fastest; industry remains largest consumer with untapped EE potential- HVAC share in buildings to rise from nearly a quarter to 60% by 2030
- Urban demand will constitute the bulk of electricity demand, but universal rural ‘energisation’ will continue to be a challenge (<10% of electrified villages have 100% HH electrification)
- EVs likely to be not a problem in BU but in GW terms; several enabling factors on tech and policy missing at present (range and power, duty cycles and solar coincidence, charging infra, battery standardization and costs)
- May partially solve local pollution issues but will not help much with GHG abatement.
- Policy bets on EE like bulk procurement will continue to pay off in unleashing large scale diffusion
- Overall demand will likely grow a percentage point less than the past (since 2000)- New (good) demands that improve quality of life indicators and facilitate energy security (fuel switching) and low-carbon growth (electrification
in industry, cooking, etc.) add ~280 TWh to electricity demand (~12% of mid demand)- Pricing, regulatory and behavioural interventions needed to curtail ‘bad’ growth in load and consumption
