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ENERGY INFRASTRUCTURE FOR HUMAN DEVELOPMENT AND LOW CARBON

FUTURE

Mr. AJIT SHRIVASTAVA

Department of chemical Engineering

Jiwaji University, Gwalior M.P.

* orrespon!ing a"thor #Email$%ajitlife&'11(gmail.com

)*stract

Presently +n!ia is facing the twin challenge of energy "niversaliation as well as emission

re!"ction. -early '. illion people in +n!ia/ mostly resi!ing in r"ral areas/ !o not have accessto electricity an! more than '.0 illion people !o not "se mo!ern cooing f"els. Provision of

energy services however nee!s to tae into acco"nt the gloal temperat"res rise, which if to e

limite! to &2 more from its pre3in!"strial val"e, Green 4o"se Gas #G4G$ emissions m"st ehalve! y &'5' from its 166' level. Energy infrastr"ct"re plays a ey role to meet this !"al

challenge of "niversaliation of energy services an! re!"ction of energy3in!"ce! emissions.

)ssessing +n!ia7s infrastr"ct"re, this st"!y presents the high h"mane #Energy "niversaliation$an! low caron scenarios an! !isc"sses investment nee!s, financing mechanisms an! the ey

 policy iss"es.

Keywords: Energy climate ne8"s, Energy "niversaliation, +nfrastr"ct"re +nvestments,

9inancing mechanisms, Energy efficiency.

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1. Introduction

)sia is !riving the worl! energy marets, largely propelle! y !eman! in hina an! +n!ia. )s

 per +nternational Energy )gency #+E), &''0$ estimates, the worl! energy cons"mption will

increase y 5: in &';' from its &''< level, an! +n!ia will acco"nt for 1;.5: of that growth.

+n!ia7s high energy !eman! is !riven y its high growth path.1

+n!ia is also characterie! y a

large pop"lace who is !eprive! of mo!ern energy services= 5: r"ral ho"sehol!s an! >.0:

"ran ho"sehol!s !o not have access to electricity an! 6': r"ral ho"sehol!s an! ;;: of "ran

ho"sehol!s !o not "se clean cooing f"el #-??@, &''>$. Ao attain energy "niversaliation an!

s"stain growth, +n!ia nee!s to step "p its energy "se. 4owever, lie other !eveloping co"ntries,

+n!ia is constraine! y the environmental conseB"ences of energy "se.&

Energy, which acco"nts

for ao"t <': of Green 4o"se Gas #G4G$ emissions, has a strong linage with climate.

Gloally, since the eginning of in!"strial revol"tion, there has een an increase of ;': aron

Dio8i!e #@&$, 15: -itro"s @8i!e #-&@$ an! 15: methane #4$ #Environment ana!a,

1666$. to limit the gloal temperat"re to &2 more from its pre3in!"strial val"e, the gloal G4G

Emissions m"st e halve! y &'5' from its 166' level #EU, &''0$. +n!ia7s heavy reliance

on coal, which is relatively "nclean, compare! to other fossil f"els,  ;

an! very low share in

ero3 caron f"els #only 1:$ ma!e energy relate! @& emission more profo"n!. )!!itionally, the

 iomass cons"mption, which satisfies >&: of the !omestic energy an! 6': of all r"ral energy

nee!s in +n!ia #AEC+, &''<$, contri"tes to climate change thro"gh its lac caron emission.

)ppropriate energy infrastr"ct"re is the answer to +n!ia7s twin challenge of energy

"niversaliation an! climate mitigation.

Provision of sec"re, a!eB"ate, low3cost energy of

B"ality an! convenience in an environmentally enign manner is core to energy infrastr"ct"re.

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Energy infrastr"ct"re infl"ences choice of f"els, efficiency of "se, choice of en! "se !evices, an!

conservation practices. Ahese are critical aspects of the +n!ia7s energy f"t"re consi!ering the

challenges to "niversalie energy services an! at the same time c"t !own on emissions.

)fter intro!"cing the relevance of energy infrastr"ct"re this st"!y presents the energy !eman!

o"tloo "n!er low caron scenario vis33vis aseline. Ahe low caron scenario is characterie!

 y increase! "se of renewale thro"gh solar, win!, geothermal, iomass an! hy!ro / which will

re!"ce fossil3f"el !eman!. )nother important shift will e more "sage of n"clear energy. )lso,

"se of efficient an! clean en! "se !evices in all the sectors will m"ltiply savings. Ahen the st"!y

 presents the high h"mane scenario, which correspon!s to energy "nivrsaliation for !omestic

sector / i.e. provi!ing all ho"sehol!s with electricity for lighting an! PG an! iogas for

cooing. Ahe st"!y will also i!entify the actors an! analye their roles in achieving the low

caron energy infrastr"ct"re goals. Ahe financial mo!el to attain the reB"ire! infrastr"ct"re

investment will e o"tline! with emphasis on arriers an! !rivers. Ahe st"!y concl"!es with

!isc"ssion on ey policy iss"es.

2. Energy Infrastructure

Energy infrastr"ct"re stan!s for infrastr"ct"res associate! with all energy relate! processes= i.e.

e8traction, generation, processing an! !istri"tion. Depen!ing "pon the stage of energy system,

energy infrastr"ct"re can e primarily classifie! into following categories% infrastr"ct"re reB"ire!

for #+$ e8ploration, !evelopment an! e8traction of energy so"rces #e8ample% mining

infrastr"ct"re, !ams$ #ii$ transportation of raw nat"ral reso"rces to the generation "nit #e8ample%

coal carrying trains$ #iii$ transformation of energy that t"rn raw material into "sef"l energy

 pro!"cts #e8ample% power plants, oil refining "nits$ #iv$ transmission an! !istri"tion of energy

to cons"mers #e8ample% networ of pipes for oil an! nat"ral gas, electricity transmission lines$.

)lso storage of energy pro!"cts an! transportation networ for waste !isposal are part of energy

infrastr"ct"re. ertain infrastr"ct"re lie ocean taners, oil an! gas pipelines an! specialie!

tr"cs for oil an! refine! pro!"cts, s"ch as PG, gasoline an! f"el oil are exclusive infrastr"ct"re

for energy system, whereas for other infrastr"ct"res lie the waterways, highways, an! railroa!s

are incl"sive to goo!s an! services other than energy. )gain, energy infrastr"ct"re can e

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lassifie! as #+$  standing type #e8ample% power plant, hy!ro3electric !am$ #ii$ locomotion type

#E8ample% pipelines, transmission lines, locomotives$.

Energy infrastr"ct"re positively affects the economy of a co"ntry. iterat"res say energy

infrastr"ct"re tho"gh alone is not e8pecte! to precipitate economic growth an! re!"ce poverty=

the availaility of mo!ern energy together with other enaling factors can accelerate economic

welfare #E?M)P, &'''= )DF, &''5$. Energy infrastr"ct"re is highly capital3intensive an! not

always affor!ale y every co"ntry. 9or instance, tho"gh having gas reserves, the projects co"l!

not e realie! in !eveloping economies as the co"ntries co"l! not affor! e8pensive

infrastr"ct"re involving foreign e8change #E?M)P, &'';$. )lso, the importance of energy

infrastr"ct"re stems from its comple8ity, an! interlining nat"re. )ny ina!eB"acy or

incompleteness in infrastr"ct"re at any stage of energy system maes the final "sers !eprive!

from the service. +n!ia7s electricity in r"ral area is an e8ample in this regar!, where the asence

of electric connection to ho"sehol!s !eprives people from electricity for lighting an! other

appliance "se. Aho"gh close to 0': of the +n!ian villages are electrifie! #as on March &''<$=

only 55: of the r"ral ho"sehol!s have electricity connections #E), &''<, -??@, &''>$. Ahe

c"rrent energy infrastr"ct"re in +n!ia is grossly ina!eB"ate from oth energy "niversaliation an!

low caron point of views. +t necessitates imme!iate attention not only to a!! new infrastr"ct"re

 "t also to mo!ernie an! improve the systems for ringing ao"t efficiency in pro!"ction,

 processing, transmission an! !istri"tion an! re!"ce the gap etween s"pply an! !eman!.

9inancing of energy infrastr"ct"re remains a major concern as e8perience shows that finance

from tra!itional so"rces of f"n!ing wo"l! e ins"fficient to meet the !eman! an! there wo"l! e

nee! for innovative options s"ch as caron finance, fossil f"el s"si!y re3orientation, streamline!

Gloal Environment 9acility #GE9$ an! lean Development Mechanism #DM$ f"n!s.

. Energy de!and "ut#oo$ 

Aale 1 gives the energy cons"mption in +n!ia met y !ifferent primary energy so"rces

#Energy ?tatistics &'1&$. Ahey lea! off with an energy map of n"clear power generation/an! +n!ia

has 5& plants with <,>0' M capacity either "p an! r"nning or "n!er constr"ction. -"clear power

capacity grew .0: in &'11.

hen the report covers renewale energy/win! an! solar/it concentrates on potential, referring to an

estimate! win! power potential of 61;& M #55:$, ?4P #small3hy!ro power$ potential of 15,;05

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M #1>:$, Fiomass power potential of 1>,5;0 M#&':$ an! 5''' M #<:$ from agasse3ase!

cogeneration in s"gar mills. Ahat7s eca"se act"al renewale pro!"ction is fairly low. +n!ia is 1'th in

the worl! for solar, "t it amo"nts to ao"t <'' M installe! last year. hen it comes to c"rrent

capacity, HAhe total installe! capacity of gri! interactive renewale power, which was 1<01> M as

on ;1.';.&'1' ha! gone "p to 166>1 M as on ;1.';.&'11 in!icating growth of 10.>5: !"ring the

 perio!. @"t of the total installe! generation capacity of renewale power as on ;13';3&'11, win! power acco"nte! for ao"t >1:, followe! y small hy!ro power #15.&:$ an! Fiomass power

#1;.;:$.

9or electricity generation, the report says, HAhe total installe! capacity for electricity generation in the

co"ntry has increase! from 1<,&>1 M as on ;1.';.16>1 to &'<,5&< M as on ;1.';.&'11,

registering a compo"n! ann"al growth rate #)GC$ of <.: . Ahere has een an increase in

generating capacity of 10<5 M over the last one year, which is 1%& !ore t'an t'e ca(acity of

#ast year.I #My ol!.$

Ahe sa! tale of the tape is ne8t/+n!ia !reams of n"clear an! renewales, "t their feet are firmly plante! in coal. H)t the en! of March &'11, thermal power plants acco"nte! for an overwhelming

<: of the total installe! capacity in the co"ntry, with an installe! capacity of 1;1.& tho"san! M.

4y!ro power plants come ne8t with an installe! capacity of ;>.< tho"san! M, acco"nting for

10.&: of the total installe! apacity. Fesi!es, non3"tilities acco"nte! for 15.6: #;&.6 Aho"san!

M$ of the total installe! generation capacity. Ahe share of -"clear energy was only &.;1: #.>0

M$.I

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.1 )uture Energy Scenario – Baseline versus Low carbon

Ahe two scenarios presente! here are baseline #no specific policies to re!"ce !eman!= coinci!es

with the reference scenario7 of +E)$, an! low carbon future #efficiency improvements, f"el

switching, innovative financing for infrastr"ct"re !evelopment, implementation of energy policies

of the government, etc., coinci!es with the )P? i.e. alternative policy scenario of +E)$.0

Aale &

gives the projecte! energy !eman! met thro"gh !ifferent carriers an! @& emissions thereof for

these scenarios. +n the aseline scenario the coal will progressively increase its share in total

!eman! from ;0.>: in &''5 to >.>: in &';'. oal is pre!ominantly "se! in power generation

acco"nting >': share. +f a"n!ance an! in!igeno"s pro!"ction favor coal, its high ash content

an! @& emission act to its !isa!vantage. @il an! nat"ral gas also follow their respective tren!.

+n the asence of any ra!ical policy !isfavoring fossil f"els= these f"els together !ominate the

energy scene acco"nting for more than 0': of energy !eman! in &';'. Ahe !eman! for other

renewale #iomass, hy!ro, etc.$ is liely to e relatively flat. -"clear power is clearly an

@ption tho"gh plant location an! waste management are iss"es that restrict its

growth.

+n the low caron scenario, n"clear, hy!ro, iomass an! other renewale increase their share in

the total energy !eman!. )mong fossil f"els, coal loses its share y almost 1' percentage points.

Ahe increase in coal !eman! halve! compare! to aseline. Ahis saving is e8plaine! y lower

electricity3!eman! growth, f"el3switching an! higher power generation efficiency !"e to clean

coal technologies #As$.6 -at"ral gas increases its share eing the cleanest fossil f"el.

1'@il

ten!s to maintain its share eca"se of lac of alternative to oil as transportation f"el. Foth

n"clear an! hy!ro recor! increase! share "n!er low caron scenario, however their "se is limite!

 eca"se of the socio3environmental concern s"rro"n!ing n"clear waste !isposal an!

!isplacement !"e to large !ams. Ahe increase share in iomass an! waste in low caron scenario

s"ggests increase! pro!"ction of io3power an! energy from in!"strial an! m"nicipal waste.11

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>

Ahe other renewale energies e8perience the highest growth rate an! get a share close to &: of

total energy y &';', m"ch higher than the meager '.>: share "n!er aseline. )mong the

renewale so"rces, win! registers a significant growth with its share of electricity generation

rising from j"st "n!er 1: to &.5: #+E), &''>$.

Ta*#e 2: Energy de!and+ and ,"2 e!ission under -ase#ine and ow car*on scenarios

?o"rce &''5 Faseline ?cenario ow caron ?cenario ?aving

&'&' &';' &'&' &';' &'&' &';'

Aotal primary energy !eman! #MA@E$

oal &'0 #;0.>$ &> #5.1$ <&' #>.>$ ;;' #;6.;$ 11 #;0.'$ 6> &'6

@il 1&6 #&.'$ &;5 #&.0$ ;&0 #&5.;$ &'< #&.5$ &>& #&5.1$ &6 5<

Gas &6 #5.$ <; #<.>$ 6; #>.&$ <1 #>.;$ 06 #0.&$   &

 -"clear 5 #'.6$ && #&.;$ ;; #&.5$ &0 #;.;$ > #.;$ 3> 31

4y!ro 6 #1.>$ 1< #1.>$ && #1.>$ && #&.<$ ;& #;.'$ 3< 31'

Fiomass

an! waste150 #&6.$ 1>6 #10.6$ 16 #1.6$ 10& #&1.>$ &11 #16.5$ 3 31>

@ther

renewale1 #'.&$ < #'.<$ 6 #'.>$ 11 #1.;$ &1 #1.6$ 35 31&

A@A) 5;> 6< 1&66 0' 1'0& 1'< &1>

@& emissions #Mt$

oal >> #<>.5$ 15>6 #<0.$ &&0 #<0.6$ 1&&> #<5.$ 15 #<;.6$ ;51 >'

@il ;1& #&>.&$ 56; #&5.>$ 0&6 #&5.'$ 51> #&>.<$ <>0 #&0.1$ >< 151

Gas <& #5.$ 1;< #5.6$ &'1 #<.1$ 1;& #>.'$ 16; #0.'$   0

A@A) 11> &;'> ;;1 10>< &15 ;1 066

?o"rce% +E) #&''>$

K-ote% n"mer in parenthesis gives the share in the totalL

Aale & also gives savings "n!er low caron scenario vis33vis aseline. +n &';', the ann"al

energy saving t"rns o"t to e &'> MA@E i.e. one3si8th of the total energy !eman!. +t is worth

noting here that re!"ction in the low caron scenario !oes not mean c"t !own on energy services,

rather it in!icates f"el s"stit"tion an! efficient "se of f"el. Ahe monetary enefit can e from

 oth the saving thro"gh energy ill an! ertifie! Emission Ce!"ctions #ECs$ otaine! for 6''

Mt @& emission re!"ction, which together can e Cs ;.15 Arillion in &';'.1&,1;

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ear C"ral Ur*an

Aarget for provision of services #percent$

ooing ighting ooing ighting

&'1'311 to &'1531<   ;5 0' 05   1''

&'1531< to &'&'3&1   <' 6' 65   1''

&'&'3&1 to &'&53&<   6' 1'' 1''   1''

&'&53&< to &';'3;1 1''   1'' 1''   1''?hare of PG an! iogas for the ho"sehol!s

PG Fiogas PG* Fiogas

&'1'311 to &'1531<   5' 55 6<   15

&'1531< to &'&'3&1   5' <' 05   15

&'&'3&1 to &';'3;1   ;' >' 05   15

?hare of entralie! an! options for the ho"sehol!s

entralie!N

Decentralie!O entralie! Decentralie!

&'1'311 to &';'3;1   1'' 1' 1''   '

0

.2 Energy for /'ig' 'u!ane0 Scenario

Ahis scenario presents the case of energy "niversaliation for resi!ential sector. +n a recent wor

Ce!!y et al #&'1&$ has !evelope! a scheme for provision of mo!ern energy services #gaseo"s

f"els, s"ch as liB"efie! petrole"m gas #PG$ an! iogas for cooing an! electricity for lighting$

to all +n!ian ho"sehol!s #Aale ;$. Ahe strategy !evelope! was to incl"!e ho"sehol!s !eprive! of

mo!ern energy services in a phase wise manner for every five3year perio! into the

"niversaliation program to attain energy for all y &';'. Ahe regions where there is no access to

PG an! electricity, the services are provi!e! thro"gh renewale energy technologies #CEAs$

s"ch as iogas for cooing, an! electricity generate! thro"gh micro3hy!ro, solar P or iomass

com"stionQgasifier for lighting. 9or the regions, where mo!ern services availale, the propose!

scheme followe! a j"!icio"s mi8 of the centralie! an! !ecentralie! options.

Ta*#e : Energy niersa#i3ation Sc'edu#e

N

?o"rce% Ce!!y et al #&'1&$

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aron apt"re an! ?torage #?$ is only one tool availale for re!"cing greenho"se gas

emissions. Ahe easiest an! fastest approach is to "se less f"el thro"gh conservation an! efficiency.

Cenewales s"ch as geothermal, hy!ro an! win! are also important, partic"larly for -ew Realan!.

?"stit"ting gas for coal in power stations #an e8ample of Hf"el switchingI$ can halve emissions,

even witho"t ?, an! has helpe! the U?) to recently re!"ce their national emissions. Many

metho!s will e nee!e! in concert to help re!"ce gloal warming. Man3ma!e emissions m"st ere!"ce! !rastically over the ne8t few years if we want to re!"ce the ris of having e8treme climates

an! large rises in sea level. 

+n the !iagram to the right, the top of the orange we!ge mars the level of a wi!ely "se! scenario of

e8pecte! gloal man3ma!e @& emissions thro"gh to &'5'= the ottom of the green we!ge show

the level nee!e! if we are to limit gloal warming to only &2 y &1''. Ahe colo"rs in3etween

!enote the hope!3for proportions of the si8 main options we can "se to re!"ce emissions to the

reB"ire! level, while still meeting liely energy !eman!s. )ll options will e nee!e! if we are to

s"ccee!.

4.Energy infrastructure and inest!ent needs

4.1 ,a(acity 5ee#o(!ent and I!(ort 6eeds

Ahe total !eman! an! !omestic pro!"ction of !ifferent fossil f"els an! electricity generation in

the low caron scenario is presente! in Aale 5. Ahe !ifference gives the import. Ahe coal

 pro!"ction is liely to increase y >': in &';' over its level in &''5, mainly !riven y the

 power !eman!. Ahe increasing import of coal necessitates improvement of import infrastr"ct"re.

)lso, imports of thermal coal will p"t competitive press"re on the !omestic coal in!"stry to e

more efficient #Planning ommission, &''< an! hiat"r, &''0$, hence mo!erniation of plants

get triggere!.

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Ta*#e 7: Energy 5e!and and 8roduction in ow ,ar*on scenario

Pro!"ction Unit  &''5

*&'&' &';'

A P + A P + A P +

oal   Mt &60 &<& ;< >; ;<< 1'> 56' ; 1>

@il #mQ!$ &.>1 '.01 1.6 .1' '.>' ;. 5. '.5 .6

Gas FM ;5.; &6.;   < >;.; <.< &> 1'5.> 6.>   5<

Electricity

generationAh   0'' 1>0< &><5

  9or oil the val"es are given for year &'1&.

Ahe s"pply of petrole"m pro!"cts !epen!s on the availaility of cr"!e oil an! refining capacity.

+n +n!ia, the total pro!"ction capacity in &''< is '.01 million arrels per !ay. Fy &';', the

 pro!"ction capacity progressively !eclines y one3thir! in &';' !"e to relatively low CQP ratiofor oil. Ahe high oil !eman! is going to e satisfie! with imports, which cannot e s"stit"te!

"n!er low caron scenario #the import shares in oil in aseline an! low caron scenario are 6&

an! 6': respectively$. ith increasing import, new refinery a!!itions will str"ggle to eep pace

with !eman! growth in the f"t"re. Moreover, saving in oil !eman! in low caron scenario #1>:

in &';'$ partly comes from mo!al shift an! f"el mi8. Mo!al shift re!"ces the !eman! for two3

wheelers an! cars. 4ence, from infrastr"ct"re point of view, the !evelopment of rapi! mass

transit system #CPA?$ has to e high on agen!a. Ahe f"el mi8 in transportation is on acco"nt of

ethanol an! io!iesel len!ing in petrol an! !iesel respectively. Ethanol pro!"ction reB"ires

 processing of molasses an! io!iesel reB"ires increase! c"ltivation of jatropha. -at"ral gas share

increases from 5: in &''5 to 0: in &';' in low caron scenario on acco"nt higher "se in power

generation for its high B"ality, convenience of "se an! environmental enefits. 9or this the

 pro!"ction, transmission an! !istri"tion networs will have to e consi!eraly e8pan!e!. Fy

&';', nat"ral gas pro!"ction will increase y >': from its level in &''5, whereas the import

increases manifol! !"ring the same perio! with a compo"n! ann"al growth rate of 6.;:. Ahe

gross electricity generation in +n!ia is at >''Ah in &''5, which will reach &;'5Ah y the

ear &';', an increase of nearly ;.; fol!s #+E),&''>$.

1

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AypeQ4ea!s Mining   E8plorationan!

!evelopment

Cefinery Generation   Aransmissionan!

!istri*"tion

iB"ef yaction

Port!evelop

ment

Aotal

*

oal15'5

#6.0$

0;

#5.&$

1500 #;.&$

@il15&<

#&&.'$

51'

#>0.'$

<6;< #1;.0$

 -at"ral gas1;<6

#51.'$

1'<'

#;6.5$

&55

#6.5$

&<0 #5.$

Electricity165

#5;.&$

1>1;5

#<.0$

;<506 #>;.'$

Deman! si!e &;16 #.<$

Aotal 5'11<

11

Energy infrastr"ct"re is partic"larly important not only eca"se of the varie! geography of the

co"ntry, "t also the large !istances etween import locations an! !eman! centers. )s +n!ia will

 e importing more cr"!e oil, coal, an! nat"ral gas in the f"t"re, it will nee! improve! pipelines

an! ports, which are alrea!y str"ggling to cope with c"rrent vol"mes an! a!!itional imports will

impose f"rther strain #U?)+D, &''6$.

4.2 Inest!ent

Aale < gives the investment nee!s in low caron scenario "n!er !ifferent hea!s for the perio! of 

&'1'3&';'.15

Ahe investment for coal is Cs 1500 illion which incl"!es mining an! port

!evelopment, with former having almost 65: share.1<

+n mining, there nee!s to e a tra!eoff

 etween opencast an! "n!ergro"n! types of mining as the former more pro!"ctive yet is

!amaging to environment an! lea!s to !isplacement of villages at times. Ahe investment in coal

!oes not loo as an attractive option !"e to restricte! maret,  1>

reg"late! price an! lac of

commercial !iscipline. +n low caron scenario the investment in coal is less y ;5: compare! to

Faseline. Ahis is primarily eca"se of pro3policies for renewale energy an! n"clear

 power.

Ta*#e 9: Inest!ents needs Rs *i##ion; under !a<or 'eads in ow ,ar*on Scenario for t'e

(eriod 2%1%=2%%

*Ahe val"es in parenthesis for this col"mn give the share of investment of each type= the val"es in

 parenthesis for other col"mns give the share of investment of each hea! for a partic"lar type.

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@n acco"nt of large share of imports, refinery t"rns o"t to e the major hea! acco"nting for more

than three3fo"rths of total investment y &';', which is aro"n! Cs <6;< illion, which is 6': of

the aseline investment. Ahe re!"ce! investment in low caron scenario is !"e to fall in vol"me

of oil reB"ire! on acco"nt of f"el mi8, mo!al shift an! improvement in technology an!

stan!ar!s. +n case of nat"ral gas, investment remains same "n!er oth the scenarios. +nvestment

is reB"ire! oth for !eveloping "pstream capacities an! transmission an! !istri"tion #ASD$

infrastr"ct"re. Ahe large share of ASD is eca"se of the fact that most of this gas has to e

importe! involving long !istances pipelines. )ppro8imately one3tenth of the investment goes

"n!er liB"efaction an! regasification p"rpose.

Ahe cost of generating electricity incl"!e% #+$ capital e8pen!it"re, i.e. the initial level of

investment reB"ire! to engineer, proc"re an! constr"ct the plant, #ii$ fi8e! costs of operation an!

maintenance, e.g. staff salaries, ins"rance, rates an! other costs= #iii$ variale costs which

incl"!e cost of f"el cons"me! in generating electricity an! other operation an! maintenance

costs. Ahe other costs incl"!e% power gri! of long3!istance transmission lines that move

electricity from one region to other, as well as the local !istri"tion lines that carry electricity to

cons"mers. Powere! plants reB"ire a !epen!ale transportation infrastr"ct"re to !eliver the f"els

necessary for the pro!"ction of electricity. ) transportation networ for waste !isposal is also

necessary for power plants that create y pro!"cts. Ahe targets for electricity generation in +n!ia"n!er low caron scenario wo"l! see the installe! capacity of electricity having an a!!itional

;;1G !"ring &''<3&';', which is 5G less than the aseline #+E), &''>$. Ahe investments

reB"ire! to install this a!!itional capacity wo"l! e Cs ;<506 illion acco"nting for >;: of the

total investment. +t is worth noting that investment in power generation is more in low caron

scenario compare! to aseline eca"se of the investments nee!e! for mo!erniing power plants

an! !eveloping generation "nits ase! on renewale so"rces. Ahe win! power capacity increases

from to <G in &''53&';' "n!er low caron scenario. ?imilarly, iomass ase! an! solar

 power !evelops !"ring this perio! to attain generation capacity of 1& G an! 6 G respectively.

Ahe ASD investment, which forms <: share in total electricity investment, registers a !ecline

 y &;: compare! to aseline. Ahe re!"ction in ASD investment is !"e to partial s"stit"tion of

conventional fossil f"el ase! power generation with !ecentralie! power generation thro"gh

renewale so"rces.

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Deman! si!e investment is the most critical component "n!er low caron scenario. Ahese

investments incl"!e a!vance! technologies to promote energy efficiency an! f"el shifts. 9or

in!"strial sector, this incl"!es energy efficiency improvement in the 15 energy intensive

in!"stries i!entifie! "n!er Electricity )ct, &''1 #Mop, &''6$. +n transportation front, heavy

investment is nee!e! in !evelop "ran rail services an! rapi! transit "s system an!

infrastr"ct"re to enhance "se of alternative f"els lie ompresse! -at"ral Gas #-G$ an!

 efo"ls. Ahe infrastr"ct"re investment for resi!ential sector incl"!es energy efficient

commercial an! large resi!ential "il!ings, an! the infrastr"ct"re to promote energy efficient

appliances lie improve! cooing stoves, efficient lighting !evices lie 9 #ompact

9l"orescent amps$ an! solar water heaters. +t is worth noting that the !eman! si!e investments

are !iffic"lt to e realie! in +n!ian conte8t eca"se of large payac perio! !"e to heavy

s"si!iation of fossil f"els, an! in t"rn electricity. -evertheless these infrastr"ct"ral investments

form the cornerstone to the goal of low caron.

Ahe low caron scenario reB"ires total energy infrastr"ct"re investments amo"nting to Cs 5'.;

trillion in the perio! &'1'3&';'.10

this investment is <.&5: less than correspon!ing fig"re "n!er

 aseline scenario. +n fact, the s"pply si!e investment is 1'.5<: less in low caron scenario=

however the same has een offset !"e to increase in !eman! si!e investment to improve

efficiency of "tiliation, which amo"nts .5: of investments.

7. Energy Infrastructure 8o#icy Strategies

Ahe energy infrastr"ct"re sector has een characterie! y large economies of scale which has

res"lte! in h"ge investment reB"irements, partic"larly in large capacity reB"ire! in fossil f"els

an! electric power sector. Ahe f"n!ing of s"ch a large l"mpy investment has ecome a major

 prolem for many !eveloping co"ntries incl"!ing +n!ia. Ahe Hfail"reI of the p"lic instit"tions

has ma!e the m"ltilateral instit"tions s"ch as or! Fan to elieve that the energy sector nee!e!

to e reforme! to attract large scale private capital. Ahe c"rrent renewe! interest in energy

infrastr"ct"re financing stems in part from the recognition that the earlier approach of

government !riven investment has largely faile! an! the private sector is "nintereste! or

"nwilling to invest in many of the igger projects, e8cept in a few co"ntries. Ahere is also

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Cecognition that !evelopment will not occ"r witho"t a!eB"ate access to mo!ern energy services

an! there is a nee! to try an! test innovative approaches.

7.1 Reducing inefficiencies in Energy ,'ain

5.1.1 Generation and Transmission

Ahe core of the energy infrastr"ct"re iss"es lies with the ina!eB"acies lea!ing to inefficient

generation, transmission an! "tiliation of energy. +f energy is pro!"ce! inefficiently, transmitte!

with leas, an! "se! incompletely then the ojective of low caron an! "niversal access will

remain far from achieve!. Foth stan!ing an! locomotion types of energy infrastr"ct"re can have

in "ilt inefficiencies which m"st e i!entifie! an! minimie!. 9irst an! foremost concern here

is the efficiency of plants an! machineries which convert the nat"ral reso"rces #Primary energy$

to "sef"l energy pro!"cts #9inal energy$.16 the coal fire! power plants is an e8ample in this

regar!. Ahe average thermal efficiency of coal fire! power plants in +n!ia is &>:, whereas for

@ED co"ntries it is ;>:. Given the fact that >': of +n!ia7s power is from on coal fire! power

 plants an! coal is going to !ominate the f"t"re energy scene #Mishra, &'', +E), &''>$, effort to

remove the efficiency gap wo"l! rela8 the s"pply constraint to a great e8tent. +nvestment in

infrastr"ct"re relate! to plant mo!erniation an! !eveloping worl! class infrastr"ct"re for new

 plants can only give the !"e val"e the f"els !eserve.

Ahe energy loss !"ring transmission is lie carrying water in a leaing pot, which maes the

vessel half empty y the time it reaches its !estination. Ahe high transmission an! !istri"tion

#ASD$ losses in power system is a case in point. +n!ia with ASD loss at &0.<5: #E), &''0$ is

one among the highest losers in the worl!. ASD loss for !evelope! co"ntries is at >30:.

onsi!ering the +n!ian con!ition of remote r"ral areas an! system config"ration a reasonale

 permissile ASD loss co"l! e 1'315: #T"mar an! han!ra, &''0$. ?o, the ASD loss in +n!ia

can e ro"ght !own y 15 percentage points. Aale > gives the ?tate wise !eficit an! loss.&'

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?tate +nstalle!

apacity

CeB"irement

?"rpl"sQDeficit*

#:$

Pea ?"rpl"sQ

Deficit 

#:$

ASD ossN

#:$

Fihar 166'.66   31<.; 3&.' 50.<>

@rissa '5'.<<   31.0 3>.5 <.0<

Ma!hya Pra!esh >>51.0>   31.1 315.< ;6.&

Cajasthan <0''.05   3;.1 31&.> ;5.<'

)ssam 6''.;   30. 36.> ;0.<6

Uttar Pra!esh 6&00.<<   310.' 3&<.0 ;0.6

4aryana 56'.&6   31&.< 3&.> ;;.;5

Delhi ;<66.;   31.< 30.1 ;;.''

hhattisgarh ;1>0.&5   3<.0 3'.< ;1.>1Maharashtra 1650&.0   316.; 3;'. ;1.<

P"nja <5;'.'1   30. 315. &<.<1

Jharhan! &15&.5>   31;.; 36.' &0.&1

Tarnataa 00><.6&   30.> 315. &<.61

G"jarat 1><51.66   310.& 3&<.> &>.0>

est Fengal >;1.<6   3>.6 35.< &0.<

Aamil -a!" 1;5<;.1   35.0 315.6 &;.5

Terala ;65.15   3<. 3<. &;.11

)n!hra Pra!esh 1&0<<.01   3.1 30.0 10.<5

)ll3+n!ia 1;'<1.'1   36.6 31<.< &0.<5

15

Fihar tops the list with ASD loss aove alarmingly high at 5':. +t is followe! y @rissa an!

Ma!hya Pra!esh with losses aro"n! ':. +n general the northern ?tates have recor!e! a ASD

loss higher than national average whereas the so"thern region has registere! lower loss. Ahe high

ASD loss seems "nacceptale given the high overall reB"irement !eficit #6.6:$ an! pea

!eman! !eficit #1<.<:$. Ahe ASD losses can e attri"te! to high voltage networ losses,

Defective meters, an! theft.&1

Feca"se of the shortage of f"n!s, ASD loss investment gets

low

Priority than generation. 4owever, the ASD loss co"ple! with asence of acco"nting in certain

cases, are the reasons ehin! tremen!o"s financial loss of ?EFs an! !istri"tion companies.

Ta*#e >: ,a(acity+ 5eficit and T?5 osses for Indian States

*

?o"rce% E) #&'11$

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5.1.2 Energy End Use

Ahe inefficiency in the "tiliation refers to the conversion inefficiency of final energy to "sef"l

energy.&&

tho"gh these inefficiencies are associate! with the !evices an! eB"ipments, in most of

the cases poor infrastr"ct"re t"rns o"t to e the root ca"se. +n +n!ia, a relatively large share of

in!"strial o"tp"t comes from small3scale operations, often locate! in inner3city sl"ms. ?l"ms not

only s"ffer from civic infrastr"ct"re iss"es lie roa!s, water an! electricity, "t also ho"se

in!"stries which "se inefficient technologies an! practices reaching environmental norms. +n a

recent st"!y on +n!ian man"fact"ring sector, Cay #&''6$ concl"!es infrastr"ct"ral sol"tions to

energy inefficiencies in cement an! paper in!"stry. ) transportation infrastr"ct"re "ilt to mae

"se more slag in the cement in!"stry an! waste paper in paper in!"stry can !rastically improve

the efficiencies. ?imilar instance of mis"se of energy occ"r when a high3en! energy lie

electricity is "se! for low3en! p"rpose lie water heating. @ne g of coal availale in nat"re

loses 0>.&: of its energy as it goes thro"gh vario"s process of transformation to reach as

electricity to the cons"mers.&;

?o energy efficient en! "se, we nee! to have policies for

!emotion of geysers an! promotion of solar water heaters in !omestic an! commercial sector.

5.1.3 Te !inal "onnection

@ne of the fail"res in energy infrastr"ct"re management in +n!ia has een the final connection7.

Ahe typical characteristics of any energy infrastr"ct"re program res"lts in lower energy ills forf"t"re at the e8pense of higher initial f"n!ing, which act as ottlenec to f"ll realiation of the

 potential. C"ral electrification program is a case in point. Ahe whole effort to mae electricity

availale to r"ral ho"sehol!s goes in vain as the final electricity connection to the ho"sehol! is

not provi!e!. Ahis forces the r"ral ho"sehol!s to rely on inefficient f"el lie erosene for

lighting, which in t"rn !efeats the s"si!iation p"rpose of erosene #Mishra et al, &''5$.

Terosene is s"si!ie! as cooing f"el, "t finally "se! as lighting an! a!"lterate petrol= an!

ho"sehol!s contin"e !epen!ency on f"el woo! an! !"ng cae #Gangopa!hyay, et al, &''5,

 -)EC, &''5$. )!"lterate petrol a!!s to the air poll"tion.

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7.2 Ro#e of Actors

5.2.1 #tructure o$ te %ar&et 

Energy marets in +n!ia are vertically integrate! "tilities which facilitate centralie! !ecision

maing process. 4istorically, s"pply/ oth the generation an! transmission/ of electricity, oil

an! gas have een !ominate! y the p"lic "tilities within a reg"late! price regime. +n recent

years, it was recognie! that private ownership may provi!e efficiency premi"ms over

government owne! systems an! hence, +n!ia opene! "p its energy marets to competition.

Presently there are a n"mer of private companies that compete with the government owne!

"tilities in power generation as well as the import an! s"pply of oil an! gas an! s"pply to large

c"stomers an! !istri"tion companies. )lso, most of the non3conventional energy pro!"ction

an! !istri"tion is y regional private players. 4owever, for safety an! sec"rity n"clear energy

Pro!"ction is completely in the han!s of the government.

oal Mining

orporations+nterme!iate )gentsfor Aransportation

4y!ro

Ceserve UnitsElectricityUtilities

ocalDistri"tio

n n )gents

ons"mers

@ilQGas

orporationsDirect

collection

of iomass

Pvt. 9"el woo!

?"ppliers+nterme!iate )gents

for Aransportation

)igure 1: E@isting Energy Mar$et Structure

Different actors who have stae in provision of energy services are% "tilities, planners, financial

instit"tions, power companies, an! cons"mers. Ahe roles an! coor!ination of actors !escries the

socio3technical str"ct"re of the maret.

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5.2.2 'ole o$ (ctors in Energy )n$rastructure !inancing 

Ahere is a growing recognition that the "s"al investment !ecisions s"ch as payac perio!, rate

of ret"rn on investment, net present val"e, etc, !o not acco"nt a!eB"ately in infrastr"ct"re

financing. +n conventional financing, there are only two main participants, that is, the

government an! the private player. +n the emerging energy marets, there are many actors s"ch

as the "tilities, state agencies, financial instit"tions, cons"mers, maret instit"tions, international

organiations, etc. ho play important roles Ahese can e classifie! roa!ly into, meta7,

Macro7, meso, an! micro7 levels. )t the HmetaI level are the international financial instit"tions

which provi!e financial as well information inp"ts. )t the macro level there are high3level7

instit"tions #stateQmaretQcivil society$ that !etermine the setting "n!er which the lower levels

have to operate #financial, information, training, s"pport y specialists, etc$. )t the meso level,

there are organiations s"ch as energy !evelopment agencies #ED)s$= energy service companies

#E?s$, private entreprene"rs, etc. )t the micro level, organiations s"ch as in!ivi!"als #thro"gh

!omestic savings$ operate. +nstit"tions at each level carry o"t a project at its own level an! wor

within e8isting e8ternal constraints7 given y higher3level7 instit"tions. 9ig.1 o"tlines the roles

of actors at !ifferent level in promoting energy infrastr"ct"re for "niversal access an! low caron

9"t"re.

MEA)

Generate finance, motivate co"ntries,

facilitate technology transfer, cross3or!er

tra!e, an! re!"ce energy poverty gloally

Ro#e of 

Actors

M)C@

ME?@

Electricity reform, phase3o"t s"si!ies,

enforce of stan!ar!s, laels, an! environment

ta8, promote ED)s, E?s an! entreprene"rs

+nnovate energy sol"tions, e aware ao"t

cons"mer nee!s, internalie environmental

cost, an! give maintenance a priority

M+C@

al"e energy, avoi! wastage, "se p"lic

transport, e aware ao"t energy options, an!

 prioritie nee!s over l"8"ries, an!

)ig 2: Ro#e of actors

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7. )inancing Mec'anis!s

5.3.1 *ublic vs.

 *rivate

9or many years energy infrastr"ct"re was f"n!e! almost e8cl"sively y the p"lic sector, an!

many projects were !esigne! an! implemente! y m"ltilateral instit"tions witho"t significant

 private participation. Feca"se of non participation of the s"stainale an! renewale Energy

Aechnologies #?EAs an! CEAs$ also s"ffere! as the ojective of s"ch programs was one time

!emonstration, not commercialiation #Falachan!ra et al, &'1'$. Presently, there is an increasing

involvement of cooperative arrangements etween governments, m"ltilateral instit"tions an!

 private investors. ) stage may come in f"t"re where the involvement of private sector is f"ll an!

Ahe role of governments an! m"ltilateral instit"tions is re!"ce! to a minimallevel.

Stage I Stage II Stage III

P"lic

?ector P"lic Private

?ector ?ector  

Private

?ector 

)ig : 8u*#ic 8riate 8artners'i( Eo#ution

?"ch an approach to s"ccee! a systemic competitiveness is essential.&

+nfrastr"ct"re 9inancial

orporation #+9$ of +n!ia is a case in point. +9, estalishe! y the Government of +n!ia, plays

a catalytic role in "il!ing worl!3class infrastr"ct"re. +t raises f"n!s from oth !omestic as well

as e8ternal marets on the strength of government g"arantees, which will e e8ten!e! as

necessary. +n the first year of its operation, a g"arantee limit of Cs.1'''' has een specifie! y

the government. +t is e8pecte! to provi!e the m"ch nee!e! long3term !et for financing projects.

?"ch p"lic3private partnerships #PPPs$ are fle8ile, an! are project specific tailor3ma!e

sol"tions. 4ence, it is !iffic"lt to eval"ate the e8act instr"ments an! i!entify the con!itions for

s"ccess. 9inally it is elieve! that if a !ialog"e etween !ifferent parties co"l! e organie!

 efore act"ally implementing PPP projects in the infrastr"ct"re sector, the chances of s"ccess

wo"l! e enhance!.

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5.3.2 Low "arbon !inance

Environmental 9inance Programmers #E9P$ are also lie the P"lic Private Partnership mo!el,

which provi!es creative approaches to f"n!ing infrastr"ct"re projects that enefit environmental

activities. Environmental ?trategy an! Policy "n!erscore the positive linages etween the

environment an! s"stainale !evelopment. Ahese linages often involve not j"st commo!ity an!

reso"rces marets, "t also financial marets an! innovative so"rces of finance. Awo ey

linages are Hcaron financeI an! the Gloal Environment 9acility. Ahese linages operate not

 j"st to increase financial flows "t also to stim"late innovation in the "se of nat"ral reso"rces

#Peso an! Rylic, 1660$. 4owever, a!eB"ate investments are not occ"rring at the rate

originally hope!. Ahis is !"e to a wea policy framewor an! limite! availaility of affor!ale

investment capital, an! lac of information an! sills in enterprises an! financial instit"tions to

!evelop an! implement projects. Ahe most important nee!s are to strengthen the !eman! for

 etter environmental performance y s"jecting enterprises to "!getary, policy an! other

incentives which promote the efficient "se of reso"rces an! to p"rs"e effective environmental

compliance.

5.3.3 !inancing $or Energy E$$iciency

+nvestment in energy efficiency #EE$ is har! to trac in its entirety as efficiency improvements

can e !one at !ifferent levels / generation, transmission an! !istri"tion #ASD$ an! en! "se!evices. +nvestments come into EE projects partic"larly to smartQgri! !istri"tion an! power

storage an! also in the estalishment of energy service companies #E?@s$. 9inancing thro"gh

commercial ans remains !iffic"lt in many cases eca"se energy efficiency #EE$ investments

often !o not meet the stan!ar! investment criteria, s"ch as collateral reB"irements. 4owever, a

growing n"mer of specialie! financing so"rces for energy efficiency are presently availale

 partic"larly thro"gh lean Development Mechanisms #DM$. Aho"gh !ifferent so"rces have

their own set of priorities an! criteria "se! to select projects for investment, all of the so"rces

have one thing in common= that is they want to invest in projects that will generate eno"gh EE

savings cash flow to repay their investment. )s more an! more EE projects prove themselves,

 oth the f"n! seeers an! investors will gain confi!ence an! the financing environment will

improve.

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5.3.+ !inancing $or Universalisation o$ %odern Energy #ervices

Micro financing for projects for Universalisation of Mo!ern energy services thro"gh energy

efficiency an! renewale energy technology is less risy. 9or e8ample, small3scale water power,

or micro3hy!ro #with capacity less than 1''$, can e a partic"larly attractive option for

electrification in many r"ral areas. Ahe +nternational Aechnology Development Gro"p #+ADG$

has !evelope! micro3hy!ro schemes with the involvement of comm"nities in co"ntries lie

Tenya, -epal, Per" an! ?ri ana #+ADG, &'1'$. Ahe +nter3)merican Development Fan

s"pporte! the project thro"gh a revolving fund where pay3ac of an original loan is "se! to

 provi!e f"n!ing for f"rther micro3hy!ro plants. Ahree major factors contri"te to the s"ccess of

s"ch projects% #+$ participation of the eneficiaries in project planning an! implementation, #ii$

!evelopment of a local man"fact"ring ase to pro!"ce low3cost eB"ipment, #iii$ capacity

 "il!ing at the comm"nity level to enale the replication of the technology.

-ased on !ar$et Privatecapital= E?@s= ocalfinancial instit"tions

9inancing

Mechanisms

5o!estic

E@terna#

Re#ying on (u*#ic su((ort

Governmental an! non3governmental

organiations an! associations

Filateral !onors= ?ponsors

M"ltilateral financing=

+nternational marets

)ig 4 )inancing !ec'anis! for Energy Efficiency and niersa#isation of !odern

energy serices

5.3.5 Build, o-erate and trans$er B/T0 arrangements

Ahere is a metho! which allows less restricte! or "nrestricte! investment in new power assets,

the in!epen!ent power project. )ccor!ing to this metho!, a foreign company "il!s a power "nit

an! operates the "nit for an agree!3"pon n"mer of years efore transferring ownership to the

host co"ntry. Ahis investment arrangement is commonly referre! to as a "il!, operate, transfer 

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)greement or F@A. +n several nations, rate reform has also playe! a critical role in enco"raging

s"ch non3"tility electric power investments. +n several cases privatiation has involve! foreign

"tilities p"rchasing one or more "tilities in other co"ntries. ?ome privatiation efforts have

involve! consorti"ms of foreign an! !omestic companies. Joint vent"res with host nation

companies have een another aven"e of privatiation. +n some cases, foreign companies or

investors have p"rchase! shares in newly privatie! electric "tilities. +n a few cases, recently

 privatie! companies have acB"ire! ownership interests in other recently privatie! companies

#E+), 166<$.

5.3. 'egional s-ecial -ur-ose veicle #*0

)nother instr"ment that is gaining pop"larity is the ?pecial P"rpose ehicle #?P$ for project

financing. )s the name itself in!icates, an ?P is a legal entity create! y a sponsor y

transferring assets to it, to carry o"t a specific p"rpose. +t has no other p"rpose other than that for

which it is create!. Ahe r"les governing an ?P are set in a!vance an! "ilt into its activities. )n

?P is a form of sec"ritiation, which offers higher B"ality assets to investors y virt"e of the

fact that the str"ct"res ins"late investors from the anr"ptcy ris of the sponsor or the originator

#CF+, 1666$. @ne a!vantage of this approach, partic"larly in the energy sector, is the limite!

e8pos"re to financing a viaility gap as most energy projects carry high economic ret"rns.

4owever, pricing of energy pro!"cts s"ch as electricity, gas an! f"el oil co"l! ecome a socialiss"e partic"larly when the gloal prices of f"el oil are high. o"ntries are reB"ire! to p"t in

 place transparent r"les an! reg"lations "n!er which the pricing of s"ch pro!"cts are "n!ertaen

to avoi! social "nrest witho"t compromising the operational viaility of energy sector projects.

9. ,onc#usions

+nvestment in energy infrastr"ct"re is the nee! of the ho"r to save climate an! re!"ce poverty.

Ahis investment will e8pan! energy s"pply capacity an! replace the e8isting an! f"t"re s"pplyfacilities that will e e8ha"ste! or ecome osolete in near f"t"re. Ahe total investment is aro"n!

Cs 5' trillion for the ne8t two !eca!es. Ahis investment is reB"ire! to e8pan! the s"pply capacity

an! to replace e8isting an! f"t"re s"pply facilities that will e e8ha"ste! or ecome osolete

!"ring this perio!. Ahe electricity sector !ominates the investment pict"re% power generation,

transmission an! !istri"tion asoring almost three fo"rths of the total energy investment. Ahis

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?hare is over 0': if investment in the f"el chain to meet power3station f"el reB"irements is

incl"!e!. Cenewale will capt"re a significant share in new power plants. .5: investment is

nee!e! to align the !eman! towar!s the more energy efficient sol"tions.

Ahe st"!y has investigate! !ifferent ways of moiliing the investment reB"ire! for energy sector

to transform the energy reso"rces into availale s"pplies an! "sale energy carriers. Ahis also

!epen!s on the aility of the energy sector to compete with other sectors of the economy for

capital. Ahe iss"es to e consi!ere! while !isc"ssing financing for energy infrastr"ct"re are #+$

safeg"ar!ing !et s"stainaility of the co"ntry= #ii$ nee! to manage socio3environmental impacts

#iii$ the aility to provi!e energy services an! achieve the Million Development Goals #MDGs$=

#iv$ the importance of regional integration in the promotion of cross3or!er tra!e= #v$ the nee! to

mainstream energy policies into national !evelopment strategies an! a!!ress the iss"es of

ina!eB"ate "!get allocations to the energy sector= an! #vi$ the nee! for a comprehensive

approach to the "il!ing of h"man capital. Unless these iss"es are a!!resse! in an integrate! an!

effective way the prevailing ina!eB"acies are e8pecte! to contin"e even in the f"t"re.

?ec"rity of energy infrastr"ct"re is important since it is v"lnerale to physical !isr"ption that

co"l! threaten its safety. Disr"ptions co"l! come from nat"ral events, lie earthB"aes, or co"l!

come from acci!ents. +n a!!ition, a nation7s transportation an! power infrastr"ct"res have grown

increasingly comple8 an! inter3!epen!ent. onseB"ently, any !isr"ption in one sector can have

significant conseB"ences for other sectors. Ahe growing reliance on comp"ter technologies,

a"tomate! monitoring an! control systems, an! electronic commerce maes the system more

efficient an! virant, "t also reB"ires a greater level of !iligence an! "se of safeg"ar!s.

Energy infrastr"ct"re is the ey to meet the challenge of energy "niversaliation an! climate

change mitigation. +nfrastr"ct"re can e s"staine! to remain effective if the leas in the energy

system are i!entifie! an! minimie!. )ll the staehol!ers in the system, the government,

international instit"tions, in!"stries, "siness associations, civil society, an! cons"mers have

responsiility in this regar!. ) high h"mane an! low caron energy infrastr"ct"re satisfies the

three principal goals of energy policy% improve! economic efficiency, more environmental

 protection, an! greater sec"rity.

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