by Mehul Raval, updated: March,2011

What is Fuel and Energy?

The dictionary meaning of fuel is any substance that is a source of heat or energy. For example, heat would be generated by combustion process in which carbon and hydrogen react with oxygen. The supply of energy in the form of heat or power (mechanical or electrical) is the major reason for burning fuels. Fuels of various kinds like coal, petroleum, natural gas, nuclear, etc are used for generation of energy for different sectors like industries, transportation, agriculture, commercial and public services, etc. The SI units of energy is Joule(J) or Newton-meter(N-m). The other units of energy which are commonly used are kilowatt-hours(1 kWH = 3.6 x 106 J) and calories(1 cal = 4.1868 J). The kilowatt-hour is more commonly used as the billing parameter for energy consumption by various appliances and utilities. When measuring large amount of energy as on a country-level or world-wide energy scenario, the tonne of oil equivalent(toe) is used. TOE indicates the amount of energy obtained by burning a one tonne of crude oil and is approximately 42GJ. Multiples of toe like million toe(mtoe) or giga toe(gtoe) are also often used. British Thermal Unit (BTU) is another traditional unit that is used at times to quantify energy consumption. 1 BTU = 1055.06J.

Fossil Fuels and Renewable Energy Sources

Fossil fuels are formed by natural processes such as anaerobic decomposition of buried dead organisms. The age of the organisms and their resulting fossil fuels is typically about several million of years. Fossil fuels like coal, petroleum and natural gas contain high percentages of carbon. Energy Information Administration estimated that in 2007 primary sources of energy consisted of petroleum 36.0%, coal 27.4%, natural gas 23.0%, amounting to an 86.4% share for fossil fuels in primary energy consumption in the world. Fossil fuels are non-renewable resources because they take millions of years to form, and reserves are being depleted much faster than new ones are being made. The consumption of fossil fuels raises various environmental concerns, which have become grave over time. 

The IEA defines Renewable energy (RE) as "Renewable energy is derived from natural processes that are replenished constantly. In its various forms, it derives directly from the sun, or from heat generated deep within the earth. Included in the definition is electricity and heat generated from solar, wind, ocean, hydropower, biomass, geothermal resources, biofuels and hydrogen derived from renewable resources." The two major advantages of RE are its abundance and absence of adverse environmental effects present as in the case of fossil fuels. In spite of these advantages, the share of RE in the global energy and electricity scenario were only 19% and 18% respectively in 2008. Many factors like high capital investment and high tariff compared to conventional sources have not led to a rapid increase in energy generation based on renewable sources. In the coming decade or so, depleting fossil fuel supplies and concerns over environmental effect will prove a major drive for RE sources. 



Figure 1. Types of Energy Sources

World Energy Scenario
The current and predicted world energy consumption is as shown in figure 2. The energy consumption will increase at a rate of 1.4 percent per year till 2035. The global recession that started in 2008 had a significant impact on the GDP and energy consumption throughout the world. Due to the same, growth in global energy consumption slowed to 1.2 % in 2008 and declined by around 2.2% in 2009. Historically the Organisation for Economic Co-operation and Development (OECD) member countries have accounted for the largest share of current world energy consumption, but in 2007 the energy use among non-OECD nations exceeded that among OECD nations (Figure 3). The discrepancy between OECD and non-OECD energy use will grow in future due to the more rapid growth in energy demand expected for the emerging non-OECD economies. Two nations that were among the least affected by the global recession were China and India, and they continue to lead the world's economic growth and energy demand growth. Since 1990, energy consumption as a share of total world energy use has increased significantly in both countries, and together they accounted for about 10 percent of the world's total energy consumption in 1990 and 20 percent in 2007. Strong economic growth in both countries continues over the projection period, with their combined energy use more than doubling and accounting for 30 percent of total world energy consumption in 2035. In contrast, the U.S. share of world energy consumption will fall from 21 percent in 2007 to about 16 percent in 2035 (Figure 4).


Figure 2.World Energy Consumption
1 Quadrillion BTU = 1015 BTU = 1015 x 1054 Joules



Figure 3. World Energy Consumption for OECD and Non-OECD countries



Figure 4. US, India and China Energy consumption percentage

Figure 5 shows the history and prediction of energy usage based on the fuel type. Although liquid fuels are expected to remain the largest source of energy, the liquids share of world marketed energy consumption declines from 35 percent in 2007 to 30 percent in 2035. In the electric power sector, the use of liquids will decline as electricity generator systems will switch to alternate fuels in response to steadily rising world oil prices. Liquids use in the transportation sector, in contrast, continues to increase despite the rising world oil prices. World liquids consumption for transportation grows by 1.3 percent per year, and in the absence of significant technological advances, liquids will continue to dominate the world's transportation markets through 2035.


Figure 5. Fuel-wise Energy Consumption

Natural gas remains an important fuel for electricity generation worldwide. Electricity generation based on natural gas is less expensive than with oil as the primary energy source, and natural-gas-fired generating plants are less capital-intensive than plants that use coal, nuclear, or most renewable energy sources. High world oil prices encourage consumers to turn to natural gas in the future, but as supplies of natural gas become increasingly expensive to produce after 2020, the growth of natural gas usage will greatly reduce. 

Although world coal consumption increases by 1.6 percent per year on average from 2007 to 2035, most of the growth in demand will occur after 2020. Worldwide coal consumption increased by 35 percent between 2002 and 2007, largely because of the growth in China's coal use. Between 2007 and 2009, however, coal consumption declined by 3 percent. Coal use was strongly affected by the global recession, and the consumption contracted strongly in 2009, in large part because coal is widely used in the production of heavy commodities (such as, steel and pig iron), which were particularly hard hit in the recession.

World Electricity Scenario

Electricity is one of the world's fastest-growing form of end-use energy consumption. Net electricity generation worldwide will rise by 2.3 percent per year on average from 2007 to 2035 as compared to 1.4 percent per year growth for total world energy demand. The growth in electricity generation for non-OECD countries increases by an average annual rate of 3.3 percent, as rising standards of living increases the demand. In OECD nations, where infrastructures are more mature and population growth is relatively slow, growth in generation is much slower, averaging 1.1 percent per year from 2007 to 2035. Figure 6 shows the distribution of electricity generation from different sources till 2035.


Figure 6. Electricity Consumption Bar Graph

Coal provides the largest share of world electricity generation. It accounted for 42 percent of total generation in 2007, and its share will largely remain unchanged through 2035. In contrast, liquids, natural gas, and nuclear power will lose market share of world generation over the course of the projection period, displaced by the strong growth projected for renewable sources of generation. Renewable generation is the world's fastest-growing source of electric power, rising at an average annual rate of 3.0 percent over the projection period, as compared with increases of 2.3 percent per year for coal, 2.1 percent per year for natural gas, and 2.0 percent per year for nuclear power. With government policies and incentives throughout the world supporting the rapid construction of renewable generation facilities, the renewable share of world generation will increase from 18 percent in 2007 to 23 percent in 2035.

Hydroelectricity and wind will provide the largest shares of the projected increase in total renewable generation, accounting for 54 percent and 26 percent of the total increment, respectively. In OECD nations, the majority of economically exploitable hydroelectric resources have already been developed. With the exception of Canada and Turkey, there are few large-scale hydroelectric power projects planned for the future. Instead, most of the renewable energy growth in OECD countries is expected to come from nonhydroelectric sources, especially wind. Many OECD countries, particularly those in Europe, have government policies (including feed-in tariffs, tax incentives, and market-share quotas) that encourage the construction of wind and other nonhydroelectric renewable electricity facilities.

In non-OECD nations, hydroelectric power is the predominant source of renewable energy growth. Strong increases in hydroelectric generation, primarily from mid- to large-scale power plants, are expected in Brazil and in non-OECD Asia (especially, China and India), which in combination accounts for 83 percent of the total increase in non-OECD hydroelectric generation over the projection period. Growth rates for wind-powered electricity generation also are high in non-OECD countries. The fastest-growing non-OECD regional market for wind power is attributed to China, where total generation from wind power plants will increase from 6 billion kilowatthours in 2007 to 374 billion kilowatthours in 2035. Still, the total increase in China's wind-powered generation is less than half the increase in its hydroelectric generation.

Electricity generation from nuclear power worldwide will increase from 2.6 trillion kilowatthours in 2007 to 4.5 trillion kilowatthours in 2035. World average capacity utilization rates have continued to rise over time, from about 65 percent in 1990 to about 80 percent today, with some increases still anticipated in the future. In addition, most of the older plants now operating in OECD countries and in non-OECD Eurasia probably will be granted extensions to their operating licenses. There is still considerable uncertainty about the future of nuclear power, however, and a number of issues could slow the development of new nuclear power plants. Plant safety, radioactive waste disposal, and nuclear material proliferation concerns, which continue to raise public concerns in many countries, may hinder plans for new installations, and high capital and maintenance costs may keep some countries from expanding their nuclear power programs. Nearly 72 percent of the world expansion in installed nuclear power capacity is expected in non-OECD countries. China, India and Russia account for the largest increment in the world net installed nuclear power between 2007 and 2035.

Need for Renewable Energy Sources

The energy requirement has been continuously increasing which puts a lot of pressure on the conventional energy sources. But since the fossil fuels are limited and also cause environmental issues, alternative sources need to be explored for sustained energy supply. Table 1 shows the data for the current reserves of the main energy source and their expected availability based on the current consumption rates. In addition, the sources are not distributed proportionately throughout the world. In case of coal, USA contains about 25% of world coal reserves while Middle East countries account for about 60% of oil reserves. This results in energy insecurity for other countries and could be a potential reason for political problems.

Fossil fuels are mainly carbon based and hence their combustion leads to CO2 emission. CO2 absorbs the infrared part of sun's radiation and re-radiates it back to earth's surface which leads to trapping of heat i.e. 'Green House Effect'. The green house effect increases earth's average temperature which will result in erratic weather patterns, floods, droughts and submerging of lows-lying areas due to melting of ice at poles. Figure 7 shows the graph of CO2 concentration over the last 50 years and it is a steep increase compared to the previous three centuries. The current concentration level is around 390ppm (in Jan 2011) and scientists claim that this value should drop to 350ppm or else it might lead to irreversible catastrophic effects.

Based on the need for alternate source and concern about the environment has lead to an increased focus on renewable energy sources. As presented before, this will lead to an increased contribution to world energy and electricity requirement from RE sources.

Current Reserves and Production rates for primary energy sources

CO2 concentration over the last 50 years.

Table 1. Current Reserves and Production rates for primary energy sources

Figure 7. CO2 concentration over the last 50 years



Role of Solar Energy

One of the obvious choices for clean energy is the source of life on Earth i.e. the Sun! The energy from Sun is inexhaustible and guaranteed till our existence on planet earth! In one second sun produces enough energy to meet the current needs of earth for 500,000 years! Sun's energy is used in many ways from photosynthesis in plants and energy generation in the form of biomass, wind energy, hydro electricity and solar thermal/photovoltaic technology.

It is estimated that nearly one-quarter of world's population (1. 6 billion) does not have electricity today. Nearly one billion people entered the world in 21st century unable to read a book or sign their names and it in total there are 121 million children without education. Also the poorest 40% of world's population accounts for 5% of global income, while the richest 20% for three-fourth of world income! These figures are alarming from a global perspective. Given the comforts and facilities people like us have, it is our responsibility to try to make their lives more facilitated in terms of education and basic requirements. It's our moral and ethical responsibility to be more concerned and sensitive towards energy usage.

Wide spread use of solar application like solar home lighting system (SHS), mini-grids, water purification systems and solar cooking systems can be used to lighten up lives of many people across the world. Moreover, aggressive implementation of grid-level solar farms and roof top systems can lead to major reduction in CO2 emissions from countries. Countries like Germany and Spain have been at the fore-front in terms of solar system installation across the world. The JNNSM launched in India last year (Jan 2010) has set an ambitious target of 22GW of solar installation by 2022. This mission is an encouraging sign for the future of solar energy in India. 

Challenges for Solar Energy

The following are the main challenges for the proliferation of solar technologies in the future:

1. Cost: The conventional energy sources have been the most cost-effective way to supply energy and meet the needs of current times. Energy generation from RE sources like solar and wind is more expensive and hence will become a viable option when the cost is at par with the conventional sources. Hence reduction in the material costs and innovation along the material and process chain is important to reduce the cost.
    
2. Fluctuation: Utility companies can stockpile conventional sources to meet the ever-fluctuating requirements of electricity, especially during peak demand times. Since for RE sources, the output depends on the instantaneous available energy, mechanisms of storage and efficient use are important. A thorough study to estimate the rate of energy generation over time from a particular installation is important to predict the expected returns over time.
    
3. Hugh Investment Requirements: Alternative technologies don't have the infrastructure as compared to fossil fuels which have been developed over the years. Hence financing would strongly depend upon factors like guarantee of returns and prior experience. Awareness about the advantages and benefits of solar energy is also important. 
    

Drivers for Solar Energy in India

India is one of developing countries at the fore-front of economic progress. Due to this our primary energy and electricity requirement have been rapidly increasing. Reliance on coal for electricity and oil/gas imports accounts for 7% of our GDP! In addition around 400 million homes have no grid electricity and the government annually spends 10,000-20,000 crores of Rupees on kerosene subsidies! Based on such factors, solar energy could be one of the key driver for our energy requirements and problems. The various factors are summarized below.

1. Tremendous potential for off-grid deployment
   • Rural Electrification and Lighting - About 72 million people rely on kerosene for lighting today. Inspite of the Rajiv Gandhi Grameen Vidyutikaran Yojana which aims to provide 20 million SHS by 2020, around 30 million households may not have electricity by 2012. Hence it can be seen that off-grid applications have tremendous potential to transform the lives of millions in India.
      
   • Powering Irrigation Pumps- Around 21 million pumps are installed in India out of which 9 million run on diesel and 12 million run on grid supply. In addition the government subsidy for electricity is around 30,000-40,000 crores per year. If the government implements effective long-term policies and efficient diversion schemes of the subsidies, reliance on diesel and grid power can be reduced and irrigations systems based on Solar PV could be the future of agriculture. 
      
   • Captive Power Generation- Diesel based power generation accounts for a sizable portion of 20-25 GW captive power generation. Due to the boom of telecommunication industry there has been a rapid increase in the cellular tower installation which have diesel power back up. In 2009, 2,58,459 towers were installed and the total subscription is to touch 600 million by 2011. This implies additional 1,50,00 towers to be installed in the next two to three years. Hence the telecommunication sector is also a very potent domain for the growth of Solar PV.
   
    
2. Manpower and Education
   • It is estimated that the solar program in India can generate employment for 100,000 by 2022 with 25,00 students and engineers working in this niche area. Also MNRE has been designing various courses at Master's level related to solar energy.
   
    
3. Increasing Electricity demand
   • From the current installed capacity of 167GW (2010) it is expected that the capacity will increase to 460 GW by 2030. Also electricity consumption will grow from 660KWh/capita to over 2000KWh/capita by 2032. Given the limited life of coal reserves (14 to 43 years) and oil reserves to deplete within 20 years, it becomes imperative to find an alternate source of energy. From the current installed capacity, RE based sources account for only 16.5GW and around 70% of that is based on wind energy, while the current Solar PV installation is less than 50MWp. However India's medium wind profile and saturation of optimal locations are expected to make wind energy less attractive compared to Solar PV in the future.
   
    

Challenges for Solar Energy in India

The promise that JNNSM holds bodes well for India, but along the way there are many challenges from policies to implementation. The main points are as presented below.

• Predictability - There's a lack of Solar Insolation data for grid-level design. Due to this it's difficult to predict the data and plan for reliability and returns analysis. It's been planned by MNRE to monitor Solar Insolation by C-WET,Chennai.
   
• Affordability - For SHS systems it is important to identify the income groups to be targeted for various products. There is s a huge variation in the income level across India and the applications which are more prominent also vary in different areas. In addition to competitive pricing, factors like high utility and good quality are important to avoid a bad experience, which may drive the customers away from solar based products. For grid-connected systems, the FIT are to be competitive enough to maintain the enthusiasm of various players to avoid events like that of Spain in which the installation took a sudden strong dip due to reduction in FITs.
   
• Financing - Financing is critical for new players to start up in various domains along the solar system value chain. Finance in India is available @ 12% interest as compared to 6-8% in Europe. It has been argued that the JNNSM will entail an investment of 30-40 billion dollars, but the process is slow and not prepared for the same. Also the banking sector needs to be more educated about the advantages of solar energy, so as to encourage financing of such projects.
   
• Available Expertise - The local expertise in India is limited to small-scale and rural solar lighting systems. In view of JNNSM, a lot of trained local manpower will be needed and hence rigorous training and education structures need to be implemented.
   
• Priorities - Though the major emphasis for implementation is on grid-level, in a practical scenario the impact of the same will not be much. More emphasis on off-grid applications like SHS, mini-grid and roof-top systems will actually transform the lives of millions and decrease dependence on grid. Subsidies for kerosene can be diverted to provide solar lantern systems, which will also avoid the harmful effects of emissions due to kerosene combustion.
   
• Who pays more? - The funding mechanism for JNNSM and promoting solar in India should be borne by the rich and should not be uniformly distributed. The uniform cess on fossil fuels as proposed in JNNSM will affect all people in India. Uniform cess will affect the cost of electricity, transportation and commodities for all the consumers. It should be the rich and the high end consumers who should pay the cess. 
   

References:

1. International Energy Agency(IEA) - www.iea.org
    
2. Solar Photovoltaics: Fundamentals, Technologies and Applications by Chetan Singh Solanki. 
    
3. SEMI(PV Group) White paper on Solar PV Landscape in India- www.semi.org
    
4. U.S. Energy Information Administration - www.eia.gov
    
5. CO2 Now - www.co2now.org
    
6. Reports of Prayaspune on JNNSM - www.prayaspune.org/peg
    
7. Learnings from InterSolar India 2010.