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Will India’s Power and Transport take that big leap forward?

December 29, 2008

A Special Report in a recent issue of The Economist hammered home the point that India cannot progress without a major step forward in infrastructure development. Well, the positive thing is that our government knows what to do, even if it is going about it very slowly. While red tape is a major hindrance, so is funding. Funding that has taken even a bigger hit with the slowing down of the economy.

The government’s plans are on track. There are plans to double infrastructure investment to $475 billion in the next five years, which amounts to about 8% of GDP a year. But the downside is that this year the expenditure was only 4.6%.

Here are a few of the government’s plans to boost infrastructure:

  • A $100 billion plan to build a 1,500km road and rail network between Delhi and Mumbai by 2013 as well as plans to build improve road network across India
  • Plans to modernize airports, a plan well on its way to completion. The cities of Hyderabad and Bangalore have opened new airports and the airport modernisation of Delhi and Mumbai will end by 2010.
  • Metro rail services planned in about a dozen or so major cities
  • Power projects

Transport Infrastructure
Metro
All phases of the Delhi Metro (Phase 1 is already complete) to be ready by 2020. Mumbai Metro’s first phase to be completed by 2010 and other Phases by 2021. (Kolkata and Delhi have a functioning metro rail, four city metro projects are in the pipeline, and about five more are planned.)

The worry isn’t the planning, but the delays that could come about as private parties behind these projects could develop cold feet due to the slowing down of the economy.

Delhi being the capital got considerable funding from the centre and will continue to get it and there is no reason to believe that Delhi Metro will not go as planned. Mumbai has been refused funds from the centre although the Delhi Metro Rail Corporation (DMRC) managing director E Sreedharan has openly said that Metro projects should be funded by the government to ensure that they are financially viable (reasonable fares for the masses) In fact Sreedharan doesn’t feel comfortable with even the state government being involved, whether in financing mass transport systems like the Metro or managing bidding by private parties, as there is a fear of “local manipulation and interference.” He has criticised the Hyderabad metro model, saying that the bidding by the state government was not transparent and also that it was a mistake to lease 269 acres of prime land to a private party.

And then the greater worry – will private parties bid for the new phases? One can only hope that the banks continue to lend money to the private parties and the private parties continue to work and bid in the hope that the project is financially viable.

In any case whether private parties should build mass transport systems or not seems to me a hypothetical question in India as the Indian government is not willing to fund them in toto. Apparently it has no money.

Water Transport
What shouldn‘t happen is what happened with the water transport project which the government had planned in Mumbai. 10 parties had shown interest in bidding, but now none of them seem interested! The last date to submit bids is over and the government agency had received none!! Now there will have to be a re-tendering.

Roads
When it comes to the road network, roads in the big cities are being rapidly concretised and major cities are well connected today, but country roads need a lot of investment. The Indian Road network (3.3m km) may be the second largest in the world, but to put things in perspective, the much admired national highways are a mere 2% of the total road infrastructure. And out of this, only 12% (8,000km) are dual carriageways.

China is way ahead of us. 2007 figures say that China had some 53,600km of highways with four lanes or more.

Power:
There is a severe shortage of power in India and there are plans to increase generating capacity by an annual 14%, or 90,000MW in the next five years. But just to compare with China, that country added 100,000MW in just one year, in 2007! India added only about 7,000MW in that year. McKinsey consultants have said that India needs to up its power generation targets.

Right now what we have are the Ultra Mega Power projects (UMPP’s), (Eleventh Plan 2007-2012). Nine power projects, each to cost Rs. 15,000 crores, will come up in the states of Karnataka, Chattisgarh, Madhya Pradesh, Andhra Pradesh, Maharashtra, Orissa, Tamil Nadu, Gujarat and Jharkhand.

Here again, the government expects private investors to participate but there are reports that red tape is putting off potential private investors, as well as fears of government interference once the project is completed. The power sector is controlled by the state governments and governments have this habit of giving power away free, or giving subsidies. Worse, any private party working with the state government has to allow for power theft, which happens most often with the connivance of state officials and linemen belonging to government bodies.

There are some successes though. Tata Power in Mumbai for example. At 2.4% the company’s transmission & distribution losses are the lowest in the country. Tata Power has a distribution joint venture with the Government of Delhi (the “North Delhi Power Limited” NDPL), and here too, as distribution has been privatised, the theft rate has dropped from 51% to 28% in span of five years. Now it is at 18%.

Nuclear Power
21 nuclear power projects are also being planned and these reactors could well give India what it needs. Each of these reactors is estimated to cost at least 2 billion dollars and all together will produce 30,000 MW of nuclear energy. The idea is to fulfill 25% of all electricity demand in India via nuclear power (by 2050).

Solar power for Gujarat
A $5 billion solar power project (world’s largest) is being planned in Gujarat and total power generation capacity is expected to reach 5 gigawatts. In fact, the U.S.-based Clinton Foundation is hoping to establish an “Integrated Solar City” which will produce the raw materials needed for solar-based power generation, including glass and solar panels.

All in all grand plans. I do believe they are going to happen but as everything in India seems to get delayed, these projects could get delayed too.  There is no doubt however that unless we get these projects up and going our India is not going to shine as much as we want it to. What is critical is leadership at the state level. Without that projects will certainly flounder and/or get mired in corruption and red tape. In fact it is expected that some states will surge ahead and others will stumble along.

(Photograph of the Delhi Metro is from the Delhi metro site and the second photo is by me and copyrighted)

Related Reading: A comparison of city bus services and their websites
BRT in India – how great concepts can get ruined
Stealing power is getting tougher
A shining railway Budget 2008 – but at what cost?
Fame or money for Tata Nano?
Controversy over whether to use Broad Gauge or Standard Gauge in Mumbai Metro
India to refurbish railway stations
Projects planned for Mumbai
Read all posts on Development

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41 Comments leave one →
  1. December 29, 2008 11:22 am

    Interesting post :)

    There is another Metro going to come in Chennai and the old MRTS is going to be extended.They are planning a new airport and the old one is being renovated.

    Of course a lot of more needs to be done,you here of the Chinese and how fast they can build,we do need to something about “getting things done effectively and efficiently”(quote from my B.S. book :P )

  2. December 29, 2008 11:40 am

    Thanks for the info… a good read indeed!

    In Ahmedabad the work of flyovers and BRTS is in full swing, oops, the wrong phrase… in swing which is somehow never in a “full” mode!

    And i don’t understand why Govt. has taken up BRTS when it has already failed in Delhi as well as Surat!! Metro or monorail is the need of the day but Govt. officials migh have their own “reasons”

  3. December 29, 2008 12:40 pm

    @ Nita : How funny I was thinking of Indian ‘infrastructure’ this morning. One thing that differentiates India with other more developed countries and even developing countries is the lack of pride that Indian people take in common infrastructure. When the Chinese were busy building their blasted train line to Lhasa the Chinese media was harping about it forever. Although I have noticed some enthusiasm about the Delhi Metro I do not still feel much excitement about it.

    I agree that public projects of a large scale should be funded by the government if they are to be viable. In fact private companies are always involved even if its a government managed and run project. I believe the Delhi Metro has a large involvement of the Mitsubishi corporation and other companies. The infrastructure issue if not solved quickly and with great enthusiasm in India will lead to a rapid decline of the Indian economy in the near future. Real economy can only sustain on solid and well maintained infrastructure. However along with infrastructure we also need to manage our ‘teeming’ masses and that still remains a question of ‘who is going to bell the cat?’.

    East Asian countries all went through a period of ‘discipline’ if those are to be our role model than Indian government needs to show that it has the proverbial balls. It needs to take some hard measures and enforce discipline among the public. I am sorry to say but it means basically changing how people act and behave and think about their surroundings.

  4. deveshkayal permalink
    December 29, 2008 1:01 pm

    Just a small correction. India plans to add 78,577 MW additional power capacity in the eleventh five year plan (2007-12). I guess taking into consideration the execution problems, our country might end up with around 60,000MW.

    For the Haji Ali-Worli link, only two bidders turned up (Reliance Infrastructure and HCC). It seems like only Ambanis have the money!

  5. December 29, 2008 1:37 pm

    Nita:

    I read this report recently in the Economist too and since I work with India investors, I often wonder about external investments into infrastructure.

    If we set the funding question aside for a second, the next major question in planning would be of capacity. It would require considerable planning skills – and money – to serve our burgeoning population which needs to be controlled else nothing will ever suffice. Delays may render some projects meaningless and must be unacceptable!

    Segueing from it, the question of future sustainability and scaling must be answered today. Specifically it brings me to wonder about India’s plans for electricity generation. Nuclear power – while cleaner and more sustainable – comes with a huge problem of waste disposal. The countries that do nuclear power well have good democractic institutions in place and the public understands, even if not always accepts, the risks etc. Nuclear waste disposal however remains a major issue which has not been resolved cleanly anywhere in the world.

    Much as we love comparing with China, I would rather offer Pakistan as an example! They despite their problems have fantastic multi-lane highways.

    I agree with Odzer in part about change in attitude required but my experiences make me more optimistic. My view is that we need to give people something to aspire to and rise to. As long as our lives remain on the basic level, we will behave like animals. It is almost Pavlovian. The ordinary Calcuttan would jostle and push on Chowringhee but Calcutta Metro used to be a clean place where you only drop a wrapper, e.g. if you wish to be decked by a Bengali. Delhi Metro too is clean, people pay to travel and the only time I have ever been said ‘sorry’ to in Delhi was in Delhi Metro on my last visit.

    Thanks.

    • December 29, 2008 2:14 pm

      Vishesh, thanks. Lots going on in metro cities and hopefully the projects are completed on time. Mumbai for example seems to be completely dug up, at least the road from my place to south mumbai.

      Sakhi, thanks. BRTS is a great concept actually but it has to be seen whether it is suitable to the city in which it is being implemented. I had written on this subject here and as to why it had probably failed in Delhi. It is possible that it might be right for Ahmedabad. However as I do not the facts of Ahmedabad I can’t say whether it will be good or bad.

      Odzer, I wonder if our national character is going to change. What we have to depend upon are a few people who have the guts and the will to push through infrastructure projects and change this country. Your comment reminded me of a remark by a commentator that in Korea even if a person is corrupt he will never take a bribe when it comes to bridgebuilding and similar project because he knows that one day one of his kin will be on that bridge. This is not directly connected to what you are saying, but what it does is show is a kind of selfish mentality and short term thinking of the average citizen here in India and worse, his inability to see things holistically and his inability to understand what is national interest. In India what determines your patriotism are things like language (English not patriotic enough), dress (jeans not patriotic), taste in music and cinema etc. Perhaps we should run a public interest campaign to tell people what patriotism really means.

      devesh, thanks for those figures. And btw, it’s the Ambanis who are probably going to be doing the second phase of Metro project, although there were as many as 7 bidders initially!

      Shefaly, thanks. That nuclear waste point is bang on and frankly it sends shivers down my spine! We cannot even handle ordinary garbage! And what’s more, other countries love to send their garbage to India and we take it in! But I think in India we think too much short term, in terms of achieving power targets and pleasing the vote bank. Also as you said unless we control the population no amount of infrastructure building will ever be enough for this country, we will never be able to keep pace. About comparing with China, at least we get an idea that we have a long way to go! And that’s an interesting point about giving people something to aspire to. Well, in Mumbai, where there is so much filth, traffic jams and crowds that at present there isn’t much to aspire to! :(

  6. December 29, 2008 3:12 pm

    Very informative post as usual! It has been somewhere in the mid-90s that the Central Government felt the need to “allow” private players into infrastructure projects. Though they were “allowed” because of paucity of funds which they themselves could allocate for the ever-growing needs of our nation. Private players however are conscious of their bottom-lines, unlike the state-owned projects and hence development gets skewed in favour of urban and paying sectors. Power seems to be the key infrastructure area that is woefully lagging behind and hope we do some catching up in the near future.

  7. December 29, 2008 4:35 pm

    Nita:

    International conventions prevent nuclear waste from being transported from one country to another, as well as from being dumped into water. The experience of various countries have been highly variable when it comes to public consultation, building public confidence about nuclear power plants as well as their nuclear waste management issue.

    Also globally speaking, Friedman in his latest book ‘Hot Flat and Crowded’ suggests that if we wish to keep carbon emissions stable at today’s levels until 2050, we will need to build 13,000 new nuclear reactors around the world. Roughly one new nuclear reactor every day for the next four decades. Seeing that India and China have aggressive growth predicted, the actual demand may be far more. These are capital intensive projects, where delays cost dear. Once operational they require extremely high standards of maintenance and upkeep. And there is no guarantee that nuclear fuel is available in endless supplies.

    Which brings us to alternative, so-called clean energies. To compete with the current methods of power generation, solar power requires far more investment making it a very inefficient kilowatt-per-dollar choice. Wind power is worse.

    Sorry, the reason why I am dwelling so much on power is because almost everything else is predicated on it.

    India requires some very tough and well-informed political decisions of the kind that the current team of MMS/ PC etc seem intellectually capable of making but they are politically hamstrung; politicians like Behen Mayawati will be incapable of such decisions.

    Gopinath:

    The privatisation experience of British electricity, gas and water networks holds good lessons for utilities regulators in other countries. Especially the consumer price controls are worth paying attention to.

  8. Naveen permalink
    December 29, 2008 5:08 pm

    Government? No..No..

    World-over, through centuries, Governments got nothing right,
    A Country is too big for the handful elite to keep it bright.

    But Government(s) want to get a piece of everything thats handy;
    Religion to Business, they change the course to nowhere and bendy.

    Why does a government need to build every road, every airport?
    What is the trust -if only 5 paise in a rupee reaches the effort?

    Into nepotism, they drag it through the long roads of red-tape,
    the minister and officer always looking for their sweet grape,

    ‘The Man in blue’, let loose our shackles and cut down the regulation,
    Milton says -like Nature, Free market will lead us all to evolution.

    Kick the License-Raj out of where it don’t belong,
    Let you concentrate on securing us all year-long.

    By Naveen

  9. December 29, 2008 7:19 pm

    @ Nita : Oh Nita! It was I who said the Korean thing earlier! :-)

  10. December 29, 2008 8:19 pm

    That was a nice and a responsible post Nita. As usual. There are certain projects, which I feel is better handled by the Government. I don’t know what is the reason for so many of your readers to assume that there is no corruption in the private segment! I challenge any of your readers to say that the private enterprise in India is not corrupt. The Government is ‘seen’ to be corrupt because people in this country in general are corrupt. And corruption is not limited to any segment. And corruption exists in other ‘advanced’ countries too. But we hopelessly don’t know where to make the distinction. And if more people of a nation believe in corruption, it is natural that their Government would be corrupt!!

    The Government, in spite of the higher perception of being corrupt, has the ability to complete projects at a lower cost and take that to the people at a lower cost too. Even though the efficiency of private enterprises are better, do you think the end user price would come down because of that, if a project is totally managed by a private enterprise? I think it makes more sense, for us as citizens, to demand more from the Government bodies. How to do that effectively, is our responsibility to work out. We have a shining example in France, where the Government is omni present, and still has an excellent economy. How could we forget the Enron’s and the Sub-prime crises so soon?

    Destination Infinity

  11. December 29, 2008 8:39 pm

    Everybody recognises the paucity of infrastructure and yet we find the government pussy footing on this issue. We need to tackle the problem of poor infrastructure on a war footing.

    Let me comment on some of the major areas you have discussed

    Urban Transport:

    Metro / BRTS / Monorail are critical and should be appropriately structured for various urban agglomerations and atleast the top 25 cities should have fast and efficient transport systems.

    This keeps private cars away from roads. There is saving on petrol consumption (adds up to a big amount on oil imports). Helps control pollution (eg Delhi – where contract buses were dispensed with) and saves time in urban commuting.

    Roads:

    The Golden Quadrilateral project was about 94% complete when the UPA govt came to power. This has inched up to 96%. No new projects were sanctioned in 2006, 2007 and the first half of 2008. The NSEW project has’nt even started. Funds were never a problem. Dual carriageway is similarly languishing.

    Highways are great multipliers of economic activity. We have to regain substantial lost ground.

    Power:

    This sector is in a sorry state.

    UMPP are non-starters. Except for the Tata project at Mundhra(Guj), all others have not achieved financial closure mainly because promoters do not money to contribute as their equity capital..

    T&D losses are at 35% – 45% in most states except Guj, AP and TN. No new project has been initiated in Maharashtra for the last eight years.

    This sector will spoil the party in India. I wonder if 80,000 – 1,00,000 MW can be installed in the next two – three years……..it is a must though.

    We are in a desperate situation. This calls for desperate measures.

  12. December 29, 2008 8:40 pm

    Nita, as I have mentioned earlier China is ‘ahead’ of India, mainly because the Chinese society went through an extremely painful and forceful revolution in the 50s and 60s. In other words, the main thing that makes an ordinary Chinese better off is the fact that he/she belonged to a society traditionally more egalitarian than India’s which was flattened even more by the communist revolution, not roads and power plants.

    I dont think that in the broad context, infrastructure building is going to greatly improve the condition of India’s masses. I think that this emphasis on infrastructure prioritizes convenience over equality. I am not saying roads and power plants should not be built, only that the approach should be a minimalist one. What’s the point of buliding lots of power plants if the vast mass of the people wont be able to pay the bills ?

    I dont think Indian society in its current economic state can afford to create and sustain first-world infrastructure. Another aspect you have not mentioned is the blatant environmental damage being caused by these ‘projects’ (aided and abetted by the Government due to its EIA legislation, on which I will soon do a post) that will jeopardize the long term sustainability of the Indian population. Sorry I must sound a bit patronizing since I enjoy first world infrastructure here myself but if we are careful we will ensure a better, more people and environment friendly future.

  13. wishtobeanon permalink
    December 29, 2008 9:15 pm

    Good post, Nita. If India’s power and transport does take that leap forward, I do hope it’s not at the cost of it’s fragile eco-system. Sustainable, environment-friendly development should be the ‘mantra’ by both the Government and private companies.

  14. December 29, 2008 9:23 pm

    For the time we were in India last year I thought how much more productive everyone could be, if the power was on 24/7. The unannounced and announced power outages make for poor planning on everyone’s part. As for the roads, when we traveled from Tiruvannamalai to Pondicherry they were making improvements at that time. (Dec2007/Jan 2008) I wondered if they were using the road improvement project to update and improve the infrastructure as well with the laying of water/sewer/power/internet etc. lines under the new roadway.

  15. December 29, 2008 9:37 pm

    Nice informative post.
    God knows where are the roads built except the Golden Quadrilateral!! Recently in my region NH 6 was made four lane and with good quality road by a private company but no lighting has been provided.
    In my state’s capital a flyover is being built since 4 yrs..and its a small one as compared to those in metros!! The pace of the projects make the total costs of the projects so high not to mention the inconvenience to public due to the ongoing construction.
    As for power sector, though India has huge power shortage..commissioning power plants indiscriminately will end up having more repercussions in terms of environmental problem. As Shefaly said, waste disposal is a huge problem in case of nuclear power plant. I would like to add thermal power plants (which are in fact the ones that r being planned) have huge fly ash disposal problem. 140 million tonnes are generated annually across the nation!!! Imagine the magnitude if more thermal power plants come along. Thus not only red tape but also environmental clearance is also a big issue.
    Stopping power thefts should be a prime concern of the Govt.

  16. December 29, 2008 11:34 pm

    @ Vikram : Aren’t mega infrastructure plants the key to generating more employment and kick starting the economy? If people will find work they will be able to pay the bills :-)

    Infrastructure has a lot to do with development. I will give you a simple example. The Japanese are building to this day! They keep building because they know that is the only way they will be able to give people work. In fact their projects get bigger and bigger and somethings are built even if they are not needed. You either have to start a world war or keep building to make jobs. I prefer no. 2. The world war thing is disturbing. Anyway I agree with you that in the present state that we are in first world may not be possible but I think we can definitely be thailand like or malaysia like or even south korea like. If not the whole country at least big chunks of it.

  17. December 29, 2008 11:35 pm

    @ Nita : Help please, my comment it has gone somewhere.

  18. vasudev permalink
    December 30, 2008 12:56 am

    if you look at the automotive mission plan 2006-2016 and the 11th 5 yr plan and read them together then it would seem as if india was going to spend a lot on power/infra/automotive/ports etc. but under current reality when those expected to do the investing through fdi are themselves suffering from the pains of a groin punch how can we look forward to any plans taking off…except…plans such as wasting tax payers money to pardon all politicians sins?

  19. Voracious Blog Reader permalink
    December 30, 2008 3:13 am

    Hi Nita,

    The reason, I think, as to why China could up its Energy Generation is because of the wind industry.

    Our country has a huge potential too. The problem is with the electrical grid (read in a Magazine and don’t remember which. Sorry!). The grids are not equipped well to transmit power generated. Maharashtra and Tamil Nadu are leading in the Wind power in India, inspite of this. It is due to these problems, even the installed turbines are in standstill.

    @Shefaly: From what I know about you, you could have a valid point regarding wind power. Can you throw some light please?

    • December 30, 2008 8:26 am

      Gopinath, thanks. True, in India we cannot do without Private-Public partnerships.

      Shefaly, thanks for al that information. Very interesting indeed! Looks like our human race will need an endless supply of energy and the situation today is not at all optimistic.

      Naveen, there can be corruption in the private sector too, but at least there is accountability in the good companies. That helps in keeping things in check.

      Odzer, :)

      DI, true, there is corruption in the private sector too but what is also a problem is greed. While a private company can be as greedy as it wants when it comes to most products, there are certain areas where it needs to be fair. But then if it isn’t we can’t do a thing about it. In poor country like ours, the government is dependent on the private sector.

      Mavin, thanks for the informative comment.

      • December 30, 2008 8:58 am

        Vikram, I guess there are many reasons why China is so far ahead of us, and I am sure that while the character of its people (extremely hardworking and nationalistic) has something to do with it, so has the kind of govt. they have. That’s a good point you brought out about sustainibility but well, maybe our economic state might improve or the way things are going, private sector will step in. For eg. a private party is maintaining the 8 lane expressway between mumbai and pune. But as you mentioned if we let private parties in, the infrastructure may become unaffordable for the common man and we don’t want that to happen. About environmental damage, ofcourse there is bound to be that. However I have not researched the subject and one of these days do plan to write about it.

        wishtobeanon, thanks. Yes, that would be ideal but funding is often a problem for a developing country like India.

        Paul, in India it takes so long to be productive! I am sure if I were sitting in the US or UK I could write a blog post in half the time! And I am in a big city! The slow internet and other infrastructure is a huge problem, and worse for those who live outside the big cities.

        Reema, as you said God knows! :( Even in Mumbai flyover take like forever to be built and in Mumbai it’s like the whole city has been dug up, either with the metro or a flyover. It’s crazy because there is no way we can console ourselves with the fact that it’s going to end on so and so date! And that’s an important point Reema, about the flyash. As of now I do not know how the govt. is going to handle the pollution caused.

        vasudev, financing does look bleak doesn’t it. But this situation is not going to last forever…hopefully not more than 2-3 years at the most.

        Voracious Blog Reader, I think as you said India has a huge potential in wind power and also solar power. But as Shefaly said, setting it all up costs a lot of money. So we have the sun, but no money!

  20. December 30, 2008 9:27 am

    @ Nita, I wasnt referring so much to the qualities of individual Chinese as much to the basic dignity of labor and relatively easier social mobility that the country seems to have. This is an important reason as to why they can ‘get things done’.

    @ Odzer I would like to reiterate that I am not against infrastructure development, but that it has to be done in a very minimalist fashion right now. One has to be careful. Transportation costs form a large chunk of the monthly expenditure of the poor, hence the presence of slums near richer localities in Mumbai. Now if we just bull-doze the slums, the poor lose access to livelihoods, have to pay more for transportation and face increased hardship. We have to involve all sections of the society in the debate on infrastructure, unfortunately the English media has a very middle class centric view as usual.

  21. December 30, 2008 12:40 pm

    Informative post really. Investing in infrastructure is no doubt the most important thing for future of India’s growth. But, What about corruption involved in these projects? the number will be in crores of rupees or may be billion dollars! Anyways, such projects are only good for country though they will bring in fortunes for some.

    If all the money that our politicians stole was used for building infrastructure we would have had great infrastructure by now! – Nita.

  22. December 30, 2008 4:46 pm

    I think it’s time we stop listening to journalists and start looking at stats first hand.

  23. Voracious Blog Reader permalink
    December 30, 2008 5:44 pm

    Ah, ok. get it.

    Could not the money invested in Nuclear power be invested in renewable energy? The problem of nuclear waste is also then taken care of. right?

  24. December 30, 2008 6:32 pm

    VBR:

    Nice to see you back.

    The problem is that the cost per KW of power generated is very high for solar and wind power, esp compared with nuclear power.

    In case of wind farms, the raw material that goes into making turbines is the most expensive component. With some effort, solar power could match coal-power in costs but for now it is far from it.

    I think this needs more than a comment. I may do a post on this sometime. I am not well right now so am mostly reading rather than using my brain much. :-(

  25. Vivek Khadpekar permalink
    December 30, 2008 7:50 pm

    @ Shefaly:

    //…am mostly reading rather than using my brain much.//

    I’m curious what you might be reading :-) but let that pass :-) .

    The cost per kW of any kind of power would be a combined function of [1] one-time or capital cost, [2] recurring costs that include raw material (fuel)inputs and their transport, [3] maintenance overheads and [4] disposal of wastes.

    Of these, for non-conventional (renewable) forms of energy, #[1] is currently “very high” as you say, but would tend to prorgressively diminish in both absolute and relative terms with economies of scale; #[2] and #[4] are — and would continue to be — zero or near-zero; and #[3] would vary according to conditions of use, not conforming to any simple thumb-rule but in general gradually diminishing with increase in maintenance efficiency.

    Among the conventional “renewable” forms, hydel is subject to the vicissitudes of change in climate and hydrological régimes. Nuclear energy, besides relying on relatively non-renewable resources, is beset with problems of both procurement of raw material and disposal of wastes that have already been discussed by others in this post. In the long-run, though presently frightfully expensive, SPV-based solar energy accompanied by investment in locale-specific R&D promises to be the most assured and reliable.

  26. Voracious Blog Reader permalink
    December 30, 2008 7:55 pm

    Hi Shefaly,

    Looking forward to your post. I would like to close my comments on Wind power here with this.

    If one takes into account:
    * the production/installation cost
    * the environment related costs (emission/disposal etc.,)
    * lifetime of the turbines (Generally 20 years or more)

    then the cost per unit KW of power should be less.

    Wind power is not only used to generate electric power. Hydrogen gas is becoming more popular as green fuel for cars. Water is converted into hydrogen in the offshore turbines. Cheap production of hydrogen and also cost cutting since underground cables need not be laid.

    ****
    Hope you get well soon.

    Just like you, I am mostly reading than commenting these days. I couldn’t let go of this topic.

  27. vasudev permalink
    December 30, 2008 9:41 pm

    dear nita and all other com-‘rade’-patriots… this is one topic i liked much better than eating free bullets. so let me dwell at brief…

    wind power has a ‘potential’ of capitalising 45000MW in another 20 yrs in india…currently we are at 8000 MW something. and adding about 1200 MW/yr. terrain difficulties, initial capital cost, prevalence of western technologies despite suzlon being world no.3 in wind power and a ‘made in india’ company. maybe govt can ask ‘pretty-priety’ the zing-zinta to buy some more into wind?

    we need to add 100000 MW in another 5 yrs to keep away competition going to china. currently our ‘english’ and ‘superiorly communcable’ technical knowhow (cheap, of course) helps us. plus we are a young society while all those developed guys aren’t doing much about raising their own unified, cultured, educated busters. but china…a civilisation older than us, has also got on the buggy quite fast… there you are…the threat

    automotive mission plan envisages tremendous growth in direct and indirect employment by making india a manufacturing and export hub for automobiles. naturally lots of employment generation. lots of backstream infrastructure generation (like steel etc). all this adds up to employment and our present govt thought it was on to a good thing and even relaxed the fdi norms. but those overspending giants crashed because they invested in incursions (you can think of owning the world and you can manipualte the world even…provided…you have the power to think rich beyond owning 100 sq.ft in mumbai…ask bush…his retirement money may run into millions of petro-dollars per day)

    ports and infrastructure? the young and well educated in india would like to zip in their honda cities or whatever, w/o having to end-up every now and then with broken hip bones and arthritic knees. therfore good infrastructure. besides, it adds up to class if you see a volvo 45 tonner zipping at 90kmph on mumbai-kutch road to deliver fast consignment of yatches for future kasabs to come enterntain us with free bullets again (we can even make terrorism into a popular industry…come take a pot shot at us and win choice prizes etc…maybe media can catch on that idea and pay me a royalty later). but infrastructure is what gets you faster into productivity…

    but for all this we need power..and now maybe we can look at doing it faster with the ‘nuke’ stuff, now that we are approved as a peaceful citizenry wanting to reign in our nuke horses (b/s…those guys got concerned about us sending them to the moon and to jupiter etc. w/o their help…ha!ha!…our scientists gave the us and france a loose motion with our self made advancements in space projects)…india stands tall guys and gals…india stands tall… but we don’t have the ‘dolly’ antmore…and we should act before those rich oldy-goldies in freezing climates decide to work up their dysfunctional prostates…

  28. Vivek S. Khadpekar permalink
    December 30, 2008 9:57 pm

    VBR,

    Ever since Jules Verne first floated it in the 1870s, the idea of hydrogen (derived from water) as a fuel or energy source has found enthusiastic supporters. Equally, in more recent times, it has had its detractors. An extreme example of the first group is The Hydrogen Manhattan Project in the USA, while the thinking of the second school of thought is fairly cogently argued in an article titled “The Hydrogen Hoax,” which appeared in the Winter 2007 issue of The New Atlantis. Both the New Atlantis Article and the arguments of the Hydrogen Manhattan Project can be accessed on the net.

    A possibly more balanced view is available at

    http://www-formal.stanford.edu/jmc/progress/hydrogen.html

    So really the issue is not all that simple.

  29. December 30, 2008 10:44 pm

    “The problem is that the cost per KW of power generated is very high for solar and wind power, esp compared with nuclear power. “

    Shefaly, that’s true, but it ignores the fact that (at least in the US – and likely in India too) nuclear is almost always subsidized (what percentage? I’ll have to look it up, but it’s not insignificant) by the taxpayers/government, and Wall Street is not willing to put up guarantees for new nuclear power plants on its own. So, once that’s taken into account, the true cost of nuclear comes up higher than what it is projected, and the playing field is leveled so that solar does not come across as a “loser” in comparison. If the government is willing/able to put up huge amounts of money for nuclear, why not solar? With continuing research into solar to make it more efficient (there are bound to be some breakthroughs in the next 5-10 years), my bets are on solar and other renewable energy sources rather than nuclear. I’m with Vivek on this one.

  30. December 30, 2008 10:45 pm

    There was a great plan of interlinking all the rivers of India through an intricate canal network. I recall reading it in either Outlook or India Today. I wonder what happened to that project!

    I read about this too, but don’t know what’s happened. I doubt that it’s being done or we would have read about it – Nita.

  31. December 30, 2008 11:24 pm

    Amit

    I do not disagree with you. The argument about cost is more complicated than one might make in the ‘comments’ section. Which is why I said to VBR I may do a post on this sometime.

    On solar, this may not surprise you but when I was in engineering college, all our hot water supply came from solar panels installed on the roof of our hostels. If I recall correctly, the state government was subsidising solar panel purchase at the time, but only for ‘consumers’. An institutional solution requires more political will and commitment. In the UK, as far as I know, there is not any such scheme in place.

    We also had an elective in Photovoltaics which sadly was seen as a course for losers :-( One of my classmates however was dead serious about it and has always worked in this space. She now lives in Sili Valley where her vision is well rewarded I imagine :-)

    Vivek:

    Complexities of hydrogen are not related to production alone but also with storage and transportation. These are complicated issues and probably require a series of posts to explain fully, taking all sorts of arguments into account.

  32. vasudev permalink
    December 30, 2008 11:50 pm

    solar. yeah! at one point in time it was a no-idea and now a no-brainer.

    i was very much a fan of a project which said something like this…dip a very long multi-metallic rod into a convenient sea and generate electricity by using the tempt diffs between the sea bottom and the top to run a steam generator (may not be an accurate description but something to the effect)

    or i had heard about capabilities of generating power through oceanic waves! great ideas but no one seems to be talking anymore, at least in india.

    india seems to churn out mere engineers (the kind who do a job strictly within specifications) than churning out good bsc/msc graduates who can later develop into good geo-thermal scientists. all the best scientific brains get into iit and rot with engineering degrees, i am sorry to observe.

    therefore…solar also suffers in india because we aren’t still capable of generating solar cells that can generate enough practical voltaic current w/o seemingly having to occupy half of the country’s landscape to generate a mere 1 mw. but solar does give em hope when i consider that a 1 mb disk space once used to occupy a whole room and today i have a 16gb storage on pendant round my neck. but maybe…a decade later? i am sure even in developed countries solar cells aren’t that efficient to generate mass voltages in small spaces. and therefore, they continue to heat your bath water while india is merely used as a cheap assembly line for the panels imported from various countries.

  33. Naveen permalink
    December 31, 2008 1:03 am

    Private companies could be greedy…..Huh? Aren’t they supposed to stay so? Isn’t maximizing their investor’s money the primary responsibility of a company? Aren’t the greatest revolutions -Industrial, Telecom, Computer, Internet that created millions of jobs today a result of the so-called ‘greed’. Everyone might call it greed, but I prefer calling it ‘risk-taking’. Because they alternate for one another depending on the case. Whether one likes it or not, private individuals pursuing their self-interest is the only way to create wealth in a country. Thats been the truth for centuries.

    Private companies are corrupt!….Huh? By definition, corruption means using ‘one’s position or power of trust for dishonest gain’. In a free society, devoid of ‘too-much’ government intervention, no company will be handed over power, so automatically it should mean less corruption. And individuals outside a company should have nothing to do with corruption within a company. Yes, Private companies pursuing self-interest may commit ‘fraud'(important to make the distinction) and the legal system should be stregthened to take care of it.

    My point is- if a private investor sees no worth in a project, why should everybody’s tax money (I prefer calling it extortions) be poured into it? Onething I know for sure- even if the government puts our money to start such a project, it will stop with the inauguration ceremony. It is probably important for us all to understand that the time is not right. If I have a choice, I would like to put my tax money into programs that encourage self-employment programs and probably improving the security measures and the judicial system. Because self-employment programs and individual self-interest will take care of other programs like education, health programs and a lot more very effectively, very effective than government programs. I feel that my money should not certainly go into welfare programs, to benefit a few individuals temporarily, and the ruling party for the next 4 years. Thats who I love to call -‘the Greedy’.

    By the way, France was a free-market in the truest sense for more than three decades. The protectionism and ‘government into everything’ is a much recent stance in France introduced by Dominique de Villepin. The theory is being sold there because they don’t have faith in the future of their economy, with a fast receding population. ‘Excellent economy in France?’ – thats baloney! Enron and Sub-prime crises are results of corporate fraud and again government’s indulgence/manipulation respectively. Enron- the culprits are brought to justice but Subprime mess- the people responsible are going for another election. You choose, which is better.

    I agree with all your points Naveen. I think you picked up something I said casually in a comment and argued against it. I was meaning the kind of greed that works against the interest of the company, and I had Lehmann bros in mind when I was writing that. Also I am very much aware of the exact definition of corrupt. I was using the word in a very broad sense, to mean dishonesty. – Nita.

  34. December 31, 2008 3:40 am

    Dear Nita,
    not in relevance with this post, but with the coming date – I wish you a very special and just wonderful 2009 (I know, you had Diwali already, but as we all count same style…)!!!

    LOVE & HUG and hope to see you next year,
    axinia

    Happy New Year to you too Axinia! – Nita.

  35. Vivek S. Khadpekar permalink
    December 31, 2008 9:42 am

    Shefaly,

    Yes, I am aware of that, but I was keeping my comment brief, and in any case the Stanford paper to which I provided a link does deal comprehensively with the topic.

    You are right about government policies in India on solar energy. I would call them both lopsided and shortsighted. In fact for much of NW India (Western Rajasthan, Haryana and North Gujarat)and the adjoining parts of Pakistan (Sind, extending into Balochistan) with their very high levels of insolatation, it makes sense to aggressively go into massive, SPV-based power generation. I don’t have the data to base calculations on, but it could, I guess, generate enough power to supply the whole of India and Pakistan.

    An unrelated aside, which I should have mentioned in my first comment, is that in convenient situations solar energy can also work without requiring a distribution grid.

  36. December 31, 2008 10:10 am

    An unrelated aside, which I should have mentioned in my first comment, is that in convenient situations solar energy can also work without requiring a distribution grid.

    Vivek, yes! And if it is connected to the grid and generates more power than can be used, it can feed the grid with the owner getting paid for the excess power.

  37. December 31, 2008 8:46 pm

    On transport, what I’m seeing here in Boston is more traction from the administration for ideas that promote bicycling as a means of transport (more bike paths, bike lanes on roads, talk of bike hubs where one can rent a bike for a day etc.) as well as building new roads keeping pedestrians in mind, instead of as an afterthought. Even our mayor has started riding a bike regularly and that has contributed to his administration being more open to these ideas.

    It’ll be wise for Indian transport policies to keep bikes and pedestrians in mind and plan development accordingly (especially in big cities), rather than solely focusing on car, as it can help mitigate many problems of traffic congestion, stress, obesity, pollution etc.

  38. vasudev permalink
    December 31, 2008 10:43 pm

    obesity and related diseases is a concern for responsible countries which take care of their citizens. as amit pointed out and more so in protien rich diet consumers like the west obesity deaths are common. govts there have to foot a large part of the bill since they have medical insurances.

    rogue nations like india tax the citizen w/o any commitments in return like free or subsidised medical coverage and reasonable pension for those who are retirees. instead retirees are also taxed and even dead bodies are taxed. obesity is not a concern for the indian govt since obesity is income thru taxes.

    kyoto protocol apart, greenhouse gases continue to go up but those who cried ‘greenhouse’ now turn a blind eye towards the ‘bric’ nations ’cause bulk of their personal and govt investments are here. and so you have some anbumanis fooling the proletariat who have problamatic smokers and drinkers. the govt, of course, quietly forgets that almost all children in cities like mumbai and bangalore suffer from lung diseases caused by low level vehicular and industrial pollution (not by an occassional smoker who hides behind a tree to smoke..ha!ha!ha!..btw..i quit.)

    so…where am i leading to? what i am trying to do is to give a background to those outside india about rogue india which tops in corruption as well! last year i discussed with at least three central secretaries and they all agreed to create separate cycle & jogging tracks along every arterial road in the cities. we even dug out the entire delhi road plans and maps and got even highest level officials to commit. i think we moved in the right direction along some routes but now we do not have sponsors…u firangy indians care to share some burden in the cause of yor country? bolo and i will carry yor commitments to the right honest ears of administrative power.

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