Unit I

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gajendra verma

Energy Sources
Syllabus: Introduction, Sources of Energy – Conventional and Non-Conventional, Elasticity of demand and
application, concepts to energy, Indian energy scene, Energy storage, Solar energy, Water, Battery and
Mechanical Storage Systems.

Energy is one of the major inputs for the economic development of any country. In the case of the developing
countries, the energy sector assumes a critical importance in view of the ever-increasing energy needs requiring
huge investments to meet them.
Energy can be classified into several types based on the following criteria:
 Primary and Secondary energy
 Commercial and Non commercial energy
 Renewable and Non-Renewable energy
 Conventional and Non-Conventional energy
Primary and Secondary Energy
Primary energy sources are those that
are either found or stored in nature.
Common primary energy sources are
coal, oil, natural gas, and biomass
(such as wood). Other primary energy
sources available include nuclear
energy from radioactive substances,
thermal energy stored in earth’s
interior, and potential energy due to
earth’s gravity. The major primary and
secondary energy sources are shown
in Figure.
Primary energy sources are mostly
converted in industrial utilities into
secondary energy
sources; for
example coal, oil or gas converted into
steam and electricity. Primary energy
can also be used directly. Some
energy sources have non-energy
uses, for example coal or natural gas
can be used as a feedstock in fertilizer
Commercial Energy and Non Commercial Energy
Commercial Energy
The energy sources that are available in the market for a definite price are known as commercial energy. By far
the most important forms of commercial energy are electricity, coal and refined petroleum products. Commercial
energy forms the basis of industrial, agricultural, transport and commercial development in the modern world. In
the industrialized countries, commercialized fuels are predominant source not only for economic production, but
also for many household tasks of general population.
Examples: Electricity, LPG, coal, oil, natural gas etc.
Non-Commercial Energy
The energy sources that are not available in the commercial market for a price are classified as non-commercial
energy. Non-commercial energy sources include fuels such as firewood, cattle dung and agricultural wastes,
which are traditionally gathered, and not bought at a price used especially in rural households. These are also
called traditional fuels. Non-commercial energy is often ignored in energy accounting.
Example: Firewood, agro waste in rural areas; solar energy for water heating, electricity generation, for drying
grain, fish and fruits; animal power for transport, threshing, lifting water for irrigation, crushing sugarcane; wind
energy for lifting water and electricity generation.

Renewable and Non-Renewable Energy
Renewable energy is energy obtained from sources that are essentially inexhaustible. Examples of renewable
resources include wind power, solar power, geothermal energy, tidal power and hydroelectric power. The most
important feature of renewable energy is that it can be harnessed without the release of harmful pollutants.
Non-renewable energy is the conventional fossil fuels such as coal, oil and gas, which are likely to deplete with
Conventional and Non-Conventional energy
Convention energy sources are those sources of energy which are used traditionally or usually and are mainly
based on fossil reserves. The main features are environmental damage, high energy density, long history of use
and commercial availability e.g. Coal, oil, Natural gas.
Non Convention energy sources are those sources of energy which are not used usually. The main features are
low environmental damage, low energy density, and short history of use e. g. all renewable energy resources,
MHD and Nuclear energy.

Sources of Energy
The energy sources have been split into three categories: fossil fuels, renewable sources, and nuclear sources.

Fossil Fuels
1. Petroleum
Petroleum, or "crude oil," is a liquid fuel that is present in various locations throughout the world. It has many
uses, from the generation of electricity to the manufacture of medicines, plastics, fertilizers and other commercial
Petroleum is formed from the remains of biodegraded organic material. When animals that lived in the sea
millions of years ago died underwater, their remains were gradually covered by layers of very fine dirt known as
"silt" on the ocean floor. Then, as the years passed, pressure from the layers built up and compressed the
organic material, forming the oil.
Before the current uses of petroleum were discovered, its main applications were waterproofing and light
emission. In the mid-1800s, it was found that a liquid fuel called "kerosene" could be isolated from crude oil.
Kerosene was important because it was used a great deal for lighting purposes during the rest of the 19th
century. During the industrial revolution of the late 1890s, new energy sources were required to fuel the
innovations constantly being discovered. Thus, people began to experiment with crude oil's other properties.
Distilled petroleum began to overtake coal as the primary heating fuel. Furthermore "gasoline," a fuel that could
be distilled from crude oil, took on central importance in industrialized societies because of the inventions of the
automobile and the internal combustion engine. Furthermore, the development of electricity around the turn of the
century increased demand for fuels that could be burned to power generators, thus increasing demand for
petroleum. Petroleum can also be directly combusted to heat houses and other buildings. Unfortunately, because
crude oil contains a number of impurities such as sulfur and nitrogen, its combustion can contribute to pollution
and the greenhouse effect.
2. Coal
About 300 million years ago, enormous ferns and other prehistoric plants were common on the swamp-like earth.
When those plants died and fell to the ground, they were covered with water and they slowly decomposed. As
decomposition took place in the absence of oxygen, much of the hydrogen content of the matter was eroded
away, leaving a material rich in carbon. The material was compressed over the years by sand and dirt, leaving
the form of carbon known as coal.
The nature of coal is such that the higher the carbon content, the more cleanly and brilliantly the coal burns. Thus
"peat", which is the state of the decomposing plants before being compressed, is a weak, impure substance. The
other states of coal, from lowest carbon content to highest, are "lignite," bituminous coal, and anthracite coal. If
the coal is heated and compressed even more, the result is "graphite," almost completely pure carbon. Nearly all
the different forms of coal are used in some way or another. For instance, peat has been used for burning in
furnaces, whereas bituminous coal is used extensively for the generation of electricity. "Coke," a very pure form
of coal with high heat content is used primarily in the steel industry, where high temperatures are required.
Although the combustion of purer coals still results in the emission of carbon dioxide into the air, the advantage is
that purer coals produce fewer byproducts. For instance, impure coal samples contain residues of sulfur and
nitrogen. When the coal is burned, oxygen in the air can unite with sulfur to form two potentially poisonous
products, sulfur dioxide (SO2) and nitrogen dioxide (NO2). Excess sulfur dioxide in the air is the main cause of
abnormal amounts of something called acid rain. When gaseous sulfur dioxide comes in contact with liquid water
(rain), something called "sulfurous acid" (H2SO3) is produced. Similarly, nitrogen dioxide can form nitric acid, an
extremely dangerous substance present in acid rain.

3. Natural Gas
Natural gas is almost always found in deposits of petroleum. When the petroleum is drilled, natural gas is also
recovered. Wells with only natural gas also exist. Once the natural gas is recovered, certain fuels that have
primarily automotive purposes are extracted by processes called condensation or absorption. The remaining gas
is piped directly for commercial and residential applications. Many houses, offices, and other buildings are heated
by natural gas heaters.
The western hemisphere, Europe, and parts of Africa contain the largest natural gas deposits. The gas is usually
transported by pipelines.
Compared to petroleum and coal, natural gas is relatively clean-burning. Because it contains only trace portions
of sulfur and nitrogen, emissions of the harmful byproducts associated with combustion of other fossil fuels are
Advantages of fossil fuels
 Depending on fuel, good availability
 Simple combustion process can directly heat or generate electricity
 Inexpensive
 Easily distributed
Disadvantages of fossil fuels
 Probable contributor to global warming
 Questionable availability of some fuels major price swings based on politics of oil regions
 Cause of acid rain

Renewable Energy
Among the most important of these sources are hydroelectric, solar, and wind. As you will see, renewable energy
sources' main assets are their environmental cleanliness and their virtual inexhaustibility. Major drawbacks,
however, are limited energy production (in most cases not suitable for large-scale power generation) as well as
relative costliness to build and maintain. In light of diminishing fossil fuels, however, renewable energy may end
up as the energy of choice for the 21st century.
1. Hydropower
Man has utilized the power of water for years. Much of the growth of early colonial American industry can be
attributed to hydropower. Because fuel such as coal and wood were not readily available to inland cities,
American settlers were forced to turn to other alternatives. Falling water was ideal for powering sawmills and grist
As coal became a better-developed source of fuel, however, the importance of hydropower decreased. When
canals began to be built off of the Mississippi River, inland cities became linked to mainstream commerce. This
opened the flow of coal to most areas of America, dealing the final blow to hydropower in early America. Water
power really didn't stage a major comeback until the 20th century. The development of an electric generator
helped increase hydropower's importance. In the mid-20th century, as Americans began to move out of the cities
and into "suburbia," the demand for electricity increased, as did the role of hydroelectricity. Hydroelectric power
plants were built near large cities to supplement power production.
Problems with Hydroelectric Power
Although hydroelectric power is admittedly one of the cleanest and most environmentally-friendly sources of
energy, it too has the capability to alter or damage its surroundings. Among the main problems that have been
demonstrated by hydroelectric power is significant change in water quality. Because of the nature of hydroelectric
systems, the water often takes on a higher temperature, loses oxygen content, experiences siltation, and gains in
phosphorus and nitrogen content. Another major problem is the obstruction of the river for aquatic life. Salmon,
which migrate upstream to spawn every year, are especially impacted by hydroelectric dams. Fortunately, this
problem has been dealt with by the production of "fish ladders". These structures provide a pathway for fish to
navigate past the hydroelectric dam construction.
 Inexhaustible fuel source
 Minimal environmental impact
 Viable source--relatively useful levels of energy production
 Can be used throughout the world
 Smaller models depend on availability of fast flowing streams or rivers
 Run-of-the-River plants can impact the mobility of fish and other river life.

2. Solar power
The name "solar power" is actually a little misleading. In fact, most of the energy known to man is derived in
some way from the sun. When we burn wood or other fuels, we are releasing the stored energy of the sun. In
fact, there would be no life on earth without the sun, which provides energy needed for the growth of plants, and
indirectly, the existence of all animal life. The solar energy scientists are interested in is energy obtained through
the use of solar panels. Although the field of research dealing with this type of solar power is relatively new, bear
in mind that man has known about the energy of the sun for thousands of years. The energy of the sun can be
used in many ways. When plants grow, they store the energy of the sun. Then, when we burn those plants, the
energy is released in the form of heat. This is an example of indirect use of solar energy.
The form we are interested in is directly converting the sun's rays into a usable energy source: electricity. This is
accomplished through the use of "solar collectors," or, as they are more commonly known as, "solar panels."
There are two ways in which solar power can be converted to energy:
1. The first, known as "solar thermal applications," involve using the energy of the sun to directly heat a fluid.
2. The second, known as "photoelectric applications," involve the use of photovoltaic cells to convert solar energy
directly to electricity.
Problems with Solar Power
One major concern is the cost of solar power. Solar panels (accumulators) are not cheap; and because they are
constructed from fragile materials (semiconductors, glass, etc.), they must constantly be maintained and often
Further, since each photovoltaic panel has only about 40% efficiency, single solar panels are not sufficient power
producers. However, this problem has been offset by the gathering together of many large panels acting in
accord to produce energy. Although this setup takes up much more space, it does generate much more power.
 Inexhaustible fuel source
 No pollution
 Often an excellent supplement to other renewable sources
 Versatile--is used for powering items as diverse as solar cars and satellites
 Very diffuse source means low energy production--large numbers of solar panels (and thus large land
areas) are required to produce useful amounts of heat or electricity
 Only areas of the world with lots of sunlight are suitable for solar power generation
3. Biomass
Although chances are that you have never heard of "biomass" before, it is one of the oldest and most wellestablished energy sources in the world. Biomass is simply the conversion of stored energy in plants into energy
that we can use. Thus, burning wood is a method of producing biomass energy.
If the burning of wood were the only biomass application, then that field of study would not be nearly as
interesting as it is. In fact, biomass has many possibilities as a renewable energy source. High energy crops
grown specifically to be used as fuel are being developed, and scientists are beginning to consider agricultural
and animal waste products as possible fuel sources. Biomass is energy produced from organic substances. The
key to the power of biomass lies in the energy of the sun. All plants undergo a process called photosynthesis,
whereby the plants use chlorophyll to convert the energy in the sun's rays into stored energy in the plants.
Photosynthesis, water, and nutrients in the soil are the ingredients of plant growth. There are several methods of
converting biomass into energy. These methods include Burning, Alcohol Fermentation, Pyrolysis, and Anaerobic
 Theoretically inexhaustible fuel source
 When direct combustion of plant mass is not used to generate energy (i.e. fermentation, Pyrolysis, etc.
are used instead), there is minimal environmental impact
 Alcohols and other fuels produced by biomass are efficient, viable, and relatively clean-burning
 Available throughout the world
 Could contribute a great deal to global warming and particulate pollution if directly burned
 Still an expensive source, both in terms of producing the biomass and converting it to alcohols
 On a small scale there is most likely a net loss of energy--energy must be put in to grow the plant mass

4. Wind
Mankind has made use of wind power since ancient times. Wind has powered boats and other sea craft for years.
Further, the use of windmills to provide power for the accomplishment of agricultural tasks has contributed to the
growth of civilization. This important renewable energy source is starting to be looked at again as a possible
source of clean, cheap energy for years to come.
Differences in atmospheric pressure due to differences in temperature are the main cause of wind. Because
warm air rises, when air fronts of different temperatures come in contact, the warmer air rises over the colder air,
causing the wind to blow.
Wind generators take advantage of the power of wind. Long blades, or "rotors", catch the wind and spin. Like in
hydroelectric systems, the spinning movement is transformed into electrical energy by a generator. The
placement or "siting" of wind systems is extremely important. In order for a wind-powered system to be effective,
a relatively consistent wind-flow is required. Obstructions such as trees or hills can interfere with the rotors.
Because of this, the rotors are usually placed atop towers to take advantage of the stronger winds available
higher up. Furthermore, wind speed varies with temperature, season, and time of day. All these factors must be
considered when choosing a site for a wind-powered generator.
Another important part of wind systems is the battery. Since wind does not always blow consistently, it is
important that there be a backup system to provide energy. When the wind is especially strong, the generator can
store extra energy in a battery.
There are certain minimal speeds at which the wind needs to blow. For small turbines it is 8 miles an hour. Large
plants require speeds of 13 miles an hour.
One of the main problems with wind power is the space that is used up by the so-called "wind farms." In some
cases, the space taken up can seriously alter the environment. The good new is that although wind farms require
a great deal of square mileage, there is quite a bit of space between the actual wind machines. This space can
be used for agricultural purposes.
Another problem with wind power is that relatively speaking, it does not generate very much energy for the price.
Perhaps this setback is made up for in friendliness to the environment.
 Inexhaustible fuel source
 No pollution
 Often an excellent supplement to other renewable sources
 Very diffuse source means low energy production--large numbers of wind generators (and thus large land
areas) are required to produce useful amounts of heat or electricity
 Only areas of the world with lots of wind are suitable for wind power generation
 Relatively expensive to maintain
5. Geothermal
The center of the earth can reach 12000 degrees Fahrenheit. Just imagine if we could tap that heat for our own
use. Well, geothermal systems do just that. Convection (heat) currents travel quite near the surface in some parts
of the world. The earth's crust is heated by the decay of radioactive elements. The heat is carried by magma or
water beneath the earth's surface. Some of the heat reaches the surface and manifests itself in geysers and hot
springs throughout the world. Geothermal power can be used to directly heat buildings. Further, the pressurized
steam from superheated water beneath the earth's surface can be used to power turbines and thus generate
Although geothermal power seems ideal in that it is naturally occurring and does not require structures to trap or
collect the energy (as in solar panels or windmills), it does have limitations. The greatest drawback is that
naturally occurring geothermal vents are not widely available. Artificial vents have been successfully drilled in the
ground to reach the hot rocks below and then injected with water for the production of steam. However,
oftentimes the source of heat is far too deep for this method to work well.
Nor can geothermal power realistically generate enough electricity for the entire United States or any other large
industrialized nation. A good-sized hot spring can power at most a moderate sized city of around 50,000 people.
A there just aren't enough viable hot springs to power all the cities in any large country.
 Theoretically inexhaustible energy source
 No pollution
 Often an excellent supplement to other renewable sources

Does not require structures such as solar panels or windmills to collect the energy--can be directly used
to heat or produce electricity (thus very cheap)

 Not available in many locations
 Not much power per vent
6. Ocean Energy Resources
Oceans cover almost three-fourths of the earth’s surface. The oceans' waters, the air above the oceans, and the
land beneath them contain enormous energy resources. These energy resources include renewable energy
sources, such as offshore wind energy, ocean thermal energy, wave energy, ocean current energy, offshore solar
The waters of the oceans can produce two types of energy: thermal energy from the sun's heat, and
mechanical energy from tides and waves.
Oceans cover more than 70% of Earth's surface, making them the world's largest solar collectors. The sun's heat
warms the surface water a lot more than the deep ocean water, and this temperature difference creates thermal
energy. Ocean thermal energy can be used for many applications, including electricity generation.
Ocean mechanical energy is quite different from ocean thermal energy. Even though the sun affects all ocean
activity, tides are driven primarily by the gravitational pull of the moon, and waves are driven primarily by the
winds. As a result, tides and waves are intermittent sources of energy, while ocean thermal energy is fairly
constant. Also, unlike thermal energy, the electricity conversion of both tidal and wave energy usually involves
mechanical devices.
Ocean current energy is another form of ocean mechanical energy generated by the continuous movement of
surface or near-surface waters, driven primarily by wind and by solar heating of the ocean water.
Other Offshore Energy Sources
Offshore wind and offshore solar energy do not rely directly on ocean waters as an energy source, although
ocean water temperature differences affect ocean winds and cloud formation that would in turn affect these
energy sources. Both energy sources can be and are currently used for power generation on land throughout the
world. Their use in ocean regions is relatively new, although commercial offshore wind facilities are currently
in operation in a number of countries. The application of these technologies to offshore use involves adapting
them to a marine environment, which presents a number of technical and other challenges, but enables
exploitation of the potentially enormous largely untapped energy source the ocean regions provide.

Nuclear Power
The diminishing availability of natural resources such as coal, petroleum, and crude oil has left scientists
searching for an energy alternative. Harnessing the power of the atom appears to be the solution to that search,
at least for the time being. Fission research into lessening problems caused by reactors is of great concern to
many, while fusion has risen to the forefront of future energy research.
Fission is already an established method of energy production. Countries around the world possess fission
reactors capable of powering whole cities. The benefits in energy production, however, are shadowed by
disturbing accounts of harm to the environment and dangerous nuclear waste byproducts. Chernobyl, Hiroshima,
and Nagasaki are frightening precedents in the field of fission development and are not to be ignored. Nuclear
fission involves the splitting of a heavy element into lighter elements. The reaction is set off by the random
capture of a stray neutron. The energy produced by fission is used primarily to heat a liquid (usually water) to
boiling. The steam generated by the boiling liquid is used to power a turbine that generates electricity. Fission is
not necessarily available to every country on earth. Only those geographic locations with deposits of uranium can
successfully operate a fission power plant. Although the occurrence of uranium in the earth's crust is
approximately 2 parts per million, only about 1% of that uranium is suitable for fission (only uranium 235 is
"fissile", or fissionable). England was the first country to begin to use nuclear power. However, in 1957 the United
States was the first to use a nuclear reactor to distribute electricity. The following years saw an increase in
demand for fission power both in the United States and elsewhere in the world. People were beginning to move
away from the burning of fossil fuels to generate electricity.
The Dangers of Fission
On July 16, 1945, the first atomic bomb was detonated at Alamogordo, New Mexico. Less than a month later, on
August 6, 1945, the United States dropped an atomic bomb on the Japanese city of Hiroshima, killing more than
100,000 people. The potential damage by fission power is no laughing matter. Fission-based weapons have

already killed many people, and still have the potential for more destruction. An example of the dangers of fission
is the famous Chernobyl incident. On April 26, 1986, the carbon control rods in the Chernobyl fission reactor near
the town of Chernobyl in the former USSR caught on fire and caused an explosion in the reactor. A radioactive
cloud spread across northern Europe and even parts of England. Russian authorities reported 31 deaths from the
incident. Over 100,000 citizens were evacuated from the area. The incident pointed out to the world the dangers
of fission power plants.
 Relatively little fuel is needed and the fuel is relatively inexpensive and available in trace amounts around the
 Fission is not believed to contribute to global warming or other pollution effects associated with fossil fuel
 Possibility of nuclear meltdown from uncontrolled reaction--leads to nuclear fallout with potentially harmful
effects on civilians.
 Waste products can be used to manufacture weapons.
 High initial cost because plant requires containment safeguards.

Global Primary Energy Reserves and Indian Energy Scenario
In 2008, total worldwide energy consumption was 474 Exa joules (5×1020 J) with 80 to 90 percent derived from
the combustion of fossil fuels. This is equivalent to an average power consumption rate of 15 terawatts
(1.504×1013 W). Coal dominates the energy mix in India, contributing to 52 % of the total primary energy
production. Over the years, there has been a marked increase in the share of natural gas in primary energy
The proven global coal reserve was estimated to be 826 Billion tones by 2009. The USA had the largest share of
the global reserve followed by Russia, China; India was 4th in the list with 7.1%. India has huge coal reserves, at
least 58,646 million tones of proven recoverable reserves. India is the fourth largest producer of coal and lignite
in the world. Coal production is concentrated in these states (Andhra Pradesh, Uttar Pradesh, Bihar,
Chhattisgarh, Madhya Pradesh, Maharashtra, Orissa, Jharkhand, and West Bengal).
Coal is the predominant energy source for power production in India, generating approximately 52 % of total
domestic electricity. Energy demand in India is expected to increase over the next 10-15 years; although new oil
and gas plants are planned, coal is expected to remain the dominant fuel for power generation. Despite
significant increases in total installed capacity during the last decade, the gap between electricity supply and
demand continues to increase. The resulting shortfall has had a negative impact on industrial output and
economic growth. However, to meet expected future demand, indigenous coal production will have to be greatly
expanded. Production currently stands at around 397 Million tones per year, but coal demand is expected to
more than triple by 2030. Indian coal is typically of poor quality and as such requires being beneficiated to
improve the quality; Coal imports will also need to increase dramatically to satisfy industrial and power generation
The global proven oil reserve was estimated to be 1.256 Trillion Barrels (One barrel of oil is approximately 160
liters) by 2009. Saudi Arabia had the largest share of the reserve. Oil accounts for about 31 % of India's total
energy consumption. India today is one of the top ten oil-guzzling nations in the world and will soon overtake
Korea as the third largest consumer of oil in Asia after China and Japan. India imports 75 % of its crude needs
mainly from gulf nations. The majority of India's oil reserves are located in the Bombay High, upper Assam,
Cambay, and Krishna-Godavari. In terms of sector wise petroleum product consumption, transport accounts for
42% followed by domestic and industry with 24% and 24% respectively.
The global proven gas reserve was estimated to be 185 Trillion cubic meters by 2009. The Russian Federation
had the largest share of the reserve. Natural gas accounts for about 9 per cent of energy consumption in the
country. The current demand for natural gas is about 41.4 B m3 per year. Natural gas reserves are estimated at
1100 billion cubic meters.
Electrical Energy
The all India installed capacity of electric power generating stations under utilities is 147000 MW with current
shortage of 20000 MW. India currently has a peak demand shortage of around 14% and an energy deficit of
8.4%. Keeping this in view and to maintain a GDP (gross domestic product) growth of 8% to 10%, the
Government of India has very prudently set a target of 215,804 MW power generation capacities by March 2012.

In the area of nuclear power the objective is to achieve 20,000 MW of nuclear generation capacity by the year

*Sources: BP Statistical Review of World Energy, June 2010.
Basic Statistic of Petroleum Products, Ministry of Petroleum & Natural gas, India, Oct. 2010.





% of

% of



share of

Per year


826 B Tone

7.1 %

52 %

53 %

16 %

505 M T


1.33 T Barrels

0.4 %

31 %

01 %

77 %

1162 M Barrels


188 T m3

0.6 %

09 %

10 %

50 %

51.9 B m3


84000 MW

06 %

25 %

Other Renew.

85000 MW

01 %

08 %


61000 T

01 %

03 %

Nuclear Power
Nuclear Power contributes to about 3 per cent of electricity generated in India. India has ten nuclear power
reactors at five nuclear power stations producing electricity. More nuclear reactors have also been approved for
construction. Uranium reserves in India are estimated to be about 95,000 tones of metal. Speculative reserves
are over and above this quantity and with further exploration, could become available for nuclear power
programme. After accounting for various losses including mining (15%), milling (20%) and fabrication (5%), the
net uranium available for power generation is about 61,000 tones.
Thorium reserves are present in a much larger quantity. Total estimated reserves of monazite in India are about 8
million tones (containing about 0.63 million tones of thorium metal) occurring in beach and river sands in
association with other heavy minerals. Out of nearly 100 deposits of the heavy minerals, at present only 17
deposits containing about 4 million tones of monazite have been identified as exploitable. Mine able reserves are
70% of identified exploitable resources. Therefore, about 225000 tones of thorium metal are available for nuclear
power programme.
A three-stage nuclear power programme has been chalked out in the Department of Atomic Energy to
systematically exploit all these resources. It is planned to install a nuclear power capacity of about 20 GWe by the
year 2020. The second stage of the nuclear power programme envisages building a chain of fast breeder
reactors multiplying fissile material inventory along with power production. Approval of the Government for the
construction of the first 500 MWe Prototype Fast Breeder Reactor (PFBR) was obtained in September 2003 and
it is scheduled for completion in the year 2011. It is envisaged that four more such units will be constructed by the
year 2020 as a part of the programme to set up about 20 GWe by the year 2020. Subsequently FBRs will be the
mainstay of the nuclear power programme in India. The third stage consists of exploiting country’s vast resources
of thorium through the route of fast or thermal critical reactors or the accelerator driven sub-critical reactors (ADS)
. A 300 MWe Advanced Heavy Water Reactor (AHWR), designed to draw about two-third power from thorium
fuel, is under development and will provide experience in all aspects of technologies related to thorium fuel cycle.
A beginning is being made towards developing an accelerator needed for ADS.
Hydro Power
India is endowed with a vast and viable hydro potential for power generation of which only 15% has been
harnessed so far. The share of hydropower in the country’s total generated units has steadily decreased and it
presently stands at 25%. It is assessed that exploitable potential at 60% load factor is 84,000 MW.
Other renewable Energy Resources
The estimated potential of non-conventional renewable energy resources in our country is about 100 GWe. Wind,
small Hydro and Biomass Power/ Co-generation have potentials of 45 GWe, 15 GWe and 19.5 GWe respectively;
Solar PV, Solar Thermal and Waste-to-Energy being the other important components. All these resources will be
increasingly used in future especially in remote areas. The medium term goal is to ensure that 10% of the
installed capacity to be added by the year 2012, i.e. about 10 GWe, comes from renewable sources. Good
progress has been made in the field of wind power and installed capacity additions in the recent years have been
quite impressive.

Table: Data related to Energy and Income for Year 2009.

Total Energy Consumption

Per Capita Energy Consumption

Per Capita Income
US $


2 283.72












2 116.43















Sources: World Bank statistics, World Energy Council Statistics.
The tone of oil equivalent (toe) is a unit of energy: the amount of energy released by burning one tone of crude
oil, approximately 42 GJ.

Energy Distribution between Developed and Developing Countries
Although 80 percent of the world’s population lies in the developing countries (a fourfold population increase in
the past 25 years), their energy consumption amounts to only 40 percent of the world total energy consumption.
The high standards of living in the developed countries are attributable to high-energy consumption levels. Also,
the rapid population growth in the developing countries has kept the per capita energy consumption low
compared with that of highly industrialized developed countries.

The world average energy consumption per person is equivalent to 2.2 tones of coal. In industrialized countries,
people use four to five times more than the world average and nine times more than the average for the
developing countries. An American uses 20 times more commercial energy than an Indian.

Energy Pricing in India
Price of energy does not reflect true cost to society. The basic assumption underlying efficiency of market place
does not hold in our economy, since energy prices are undervalued and energy wastages are not taken seriously.
Pricing practices in India like many other developing countries are influenced by political, social and economic
compulsions at the state and central level. More often than not, this has been the foundation for energy sector
policies in India. The Indian energy sector offers many examples of cross subsidies e.g., diesel, LPG and
kerosene being subsidized by petrol, petroleum products for industrial usage and industrial, and commercial
consumers of electricity subsidizing the agricultural and domestic consumers.

Grade wise basic price of coal at the pithead excluding statutory levies for run-of-mine (ROM) coal are fixed by
Coal India Ltd from time to time. The pithead price of coal in India compares favorably with price of imported coal.
In spite of this, industries still import coal due its higher calorific value and low ash content.
As part of the energy sector reforms, the government has attempted to bring prices for many of the petroleum
products (naphtha, furnace oil, LSHS, LDO and bitumen) in line with international prices. The most important
achievement has been the linking of diesel prices to international prices and a reduction in subsidy. However,
LPG and kerosene, consumed mainly by domestic sectors, continue to be heavily subsidized. Subsidies and
cross-subsidies have resulted in serious distortions in prices, as they do not reflect economic costs in many
Natural Gas
The government has been the sole authority for fixing the price of natural gas in the country. It has also been
taking decisions on the allocation of gas to various competing consumers.
Electricity tariffs in India are structured in a relatively simple manner. While high tension consumers are charged
based on both demand (kVA) and energy (kWh), the low-tension (LT) consumer pays only for the energy
consumed (kWh) as per tariff system in most of the electricity boards. The price per kWh varies significantly
across States as well as customer segments within a State. Tariffs in India have been modified to consider the
time of usage and voltage level of supply. In addition to the base tariffs, some State Electricity Boards have
additional recovery from customers in form of fuel surcharges, electricity duties and taxes. For example, for an
industrial consumer the demand charges may vary from Rs. 150 to Rs. 300 per kVA, whereas the energy charges
may vary anywhere between Rs. 2 to Rs. 5 per kWh. As for the tariff adjustment mechanism, even when some
States have regulatory commissions for tariff review, the decisions to effect changes are still political and there is
no automatic adjustment mechanism, which can ensure recovery of costs for the electricity boards.

Energy and Environment
The usage of energy resources in industry leads to
atmosphere. Few of examples of air pollution are
sulphur dioxide (SO2), nitrous oxide (NOX) and
carbon monoxide (CO) emissions from boilers and
furnaces, chloro-fluro carbons (CFC) emissions
from refrigerants use, etc. In chemical and
fertilizers industries, toxic gases are released.
Cement plants and power plants spew out
particulate matter. Typical inputs, outputs, and
emissions for a typical industrial process are shown
in Figure
Air Pollution
A variety of air pollutants have known or suspected
harmful effects on human health and the
environment. These air pollutants are basically the
products of combustion from fossil fuel use. Air pollutants from these sources may not only create problems near
to these sources but also can cause problems far away. Air pollutants can travel long distances, chemically react
in the atmosphere to produce secondary pollutants such as acid rain or ozone.
In both developed and rapidly industrializing countries, the major historic air pollution problem has typically been
high levels of smoke and SO2 arising from the combustion of sulphur-containing fossil fuels such as coal for
domestic and industrial purposes. Smog resulting from the combined effects of black smoke, sulphate / acid
aerosol and fog have been seen in European cities until few decades ago and still occur in many cities in
developing world. In developed countries, this problem has significantly reduced over recent decades as a result
of changing fuel-use patterns; the increasing use of cleaner fuels such as natural gas, and the implementation of
effective smoke and emission control policies. In both developed and developing countries, the major threat to
clean air is now posed by traffic emissions. Petrol- and diesel-engine motor vehicles emit a wide variety of
pollutants, principally carbon monoxide (CO), oxides of nitrogen (NO x), volatile organic compounds (VOCs) and
particulates, which have an increasing impact on urban air quality. In addition, photochemical reactions resulting
from the action of sunlight on NO2 and VOCs from vehicles leads to the formation of ozone, a secondary longrange pollutant, which impacts in rural areas often far from the original emission site. Acid rain is another longrange pollutant influenced by vehicle NOx emissions. Industrial and domestic pollutant sources, together with

their impact on air quality, tend to be steady-state or improving over time. However, traffic pollution problems are
worsening world-wide. The problem may be particularly severe in developing countries with dramatically
increasing vehicle population, infrastructural limitations, poor engine/emission control technologies and limited
provision for maintenance or vehicle regulation. The principle pollutants produced by industrial, domestic and
traffic sources are sulphur dioxide, nitrogen oxides, particulate matter, carbon monoxide, ozone, hydrocarbons,
benzene, 1,3-butadiene, toxic organic micro pollutants, lead and heavy metals.

Energy Conservation and its Importance
Coal and other fossil fuels, which have taken three million years to form, are likely to deplete soon. In the last two
hundred years, we have consumed 60% of all resources. For sustainable development, we need to adopt energy
efficiency measures. Today, 85% of primary energy comes from non-renewable and fossil sources (coal, oil, etc.).
These reserves are continually diminishing with increasing consumption and will not exist for future generations.
What is Energy Conservation?
Energy Conservation and Energy Efficiency are separate, but
related concepts. Energy conservation is achieved when growth of
energy consumption is reduced, measured in physical terms.
Energy Conservation can, therefore, is the result of several
processes or developments, such as productivity increase or
technological progress. On the other hand Energy efficiency is
achieved when energy intensity in a specific product, process or
area of production or consumption is reduced without affecting
output, consumption or comfort levels. Promotion of energy
efficiency will contribute to energy conservation and is therefore an
integral part of energy conservation promotional policies.
Energy efficiency is often viewed as a resource option like coal, oil
or natural gas. It provides additional economic value by preserving
the resource base and reducing pollution. For example, replacing
traditional light bulbs with Compact Fluorescent Lamps (CFLs) means you will use only 1/4 th of the energy to light
a room. Pollution levels also reduce by the same amount. Nature sets some basic limits on how efficiently energy
can be used, but in most cases our products and manufacturing processes are still a long way from operating at
this theoretical limit. Very simply, energy efficiency means using less energy to perform the same function.
Although, energy efficiency has been in practice ever since the first oil crisis in 1973, it has today assumed even
more importance because of being the most cost-effective and reliable means of mitigating the global climatic
change. Recognition of that potential has led to high expectations for the control of future CO 2 emissions through
even more energy efficiency improvements than have occurred in the past. The industrial sector accounts for
some 41 per cent of global primary energy demand and approximately the same share of CO 2 emissions. The
benefits of Energy conservation for various players are given in Figure. Nature sets some basic limits on how
efficiently energy can be used, but in most cases our products and manufacturing processes are still a long way
from operating at this theoretical limit. Very simply, energy efficiency means using less energy to perform the
same function. Although, energy efficiency has been in practice ever since the first oil crisis in 1973, it has today
assumed even more importance because of being the most cost-effective and reliable means of mitigating the
global climatic change. Recognition of that potential has led to high expectations for the control of future CO 2
emissions through even more energy efficiency improvements than have occurred in the past. The industrial
sector accounts for some 41 per cent of global primary energy demand and approximately the same share of CO 2

Sector wise Electrical Energy Consumption and Conservation potential in India
The sectoral consumption on an All-India basis for the year 2007-08 has been broken down in agriculture,
commercial, municipalities, domestic and industries. The conservative potential for savings is about 20 % of the
electricity consumption:
Sr. No.



% of Total

(Billion KWh)



Agriculture Pumping


18.42 %


Commercial Buildings/ Establishments


2.00 %




2.48 %




24.13 %




53.00 %



The Energy Conservation Act 2001 and its Features
The Energy Conservation Act, 2001 was enacted, in March, 2002, to provide for efficient use of energy and its
conservation and for the matters connected therewith or incidental thereto. The said Act provides for statutory
measures to establish statutory authority by the name of Bureau of Energy Efficiency (Bureau) and confer upon
the Central Government, State Government and the Bureau certain powers to enforce the said measures for
efficient use of energy and its conservation.
1. Bureau of Energy Efficiency (BEE):
• The mission of Bureau of Energy Efficiency is to institutionalize energy efficiency services, enable delivery
mechanisms in the country and provide leadership to energy efficiency in all sectors of economy. The primary
objective would be to reduce energy intensity in the Indian Economy.
• The general superintendence, directions and management of the affairs of the Bureau is vested in the
Governing Council with 26 members. The Council is headed by Union Minister of Power and consists of
members represented by Secretaries of various line Ministries, the CEOs of technical agencies under the
Ministries, members representing equipment and appliance manufacturers, industry, architects, consumers and
five power regions representing the states. The Director General of the Bureau shall be the ex-officio membersecretary of the Council.
• The BEE will be initially supported by the Central Government by way of grants through budget, it will, however,
in a period of 5-7 years become self-sufficient. It would be authorized to collect appropriate fee in discharge of its
functions assigned to it.

2. Role of Bureau of Energy Efficiency:
The role of BEE would be to:

Prepare Standards And Labels Of Appliances And Equipment.

Develop a list of Designated Consumers.

Specify certification and accreditation procedure for Energy Managers and
Energy Auditing Firms.

Prepare Energy Conservation Building Codes.

Maintain Central Energy Conservation fund and other funds raised from
various sources for innovative financing of energy efficiency projects in order to promote energy efficient

Undertake promotional activities in co-ordination with center and state
level agencies.

The role would include development of Energy service companies
(ESCOs), transforming the market for energy efficiency and create awareness through measures including
clearing house.
3. Standards and Labeling:
Standards and Labeling (S & L) has been identified as a key activity for energy efficiency improvement. The S &
L program, when in place would ensure that only energy efficient equipment and appliance would be made
available to the consumers.
The main provision of EC act on Standards and Labeling are:
• Evolve minimum energy consumption and performance standards for notified equipment and appliances.
• Prohibit manufacture, sale and import of such equipment, which does not conform to the standards.
• Introduce a mandatory labeling scheme for notified equipment appliances to enable consumers to make
informed choices
• Disseminate information on the benefits to consumers
4. Designated Consumers:
The main provisions of the EC Act on designated consumers are:
• The government would notify energy intensive industries and other establishments as designated consumers;
schedule to the Act provides list of designated consumers which covered basically energy intensive industries,
Railways, Port Trust, Transport Sector, Power Stations, Transmission & Distribution Companies and Commercial
buildings or establishments;
• The designated consumer to get an energy audit conducted by an accredited energy auditor;
• Energy managers with prescribed qualification are required to be designated by the designated consumers;
• Designated consumers would comply with norms and standards of energy consumption as prescribed by the
central government.
List of Energy Intensive Industries and other establishments specified as designated consumers:
1. Aluminum
2. Fertilizers
3. Iron and Steel
4. Cement
5. Pulp and paper
6. Chlor Akali
7. Sugar
8. Textile
9. Chemicals
10. Railways
11. Port Trust
12. Transport Sector
13. Petrochemicals, Gas Crackers, Naphtha Crackers and Petroleum Refineries 14. Commercial buildings
15. Thermal Power Stations, hydel power stations, electricity transmission companies and distribution companies
5. Certification of Energy Managers and Accreditation of Energy Auditing Firms:
The main activities in this regard as envisaged in the Act are:
A cadre of professionally qualified energy managers and auditors with expertise in policy analysis, project
management, financing and implementation of energy efficiency projects would be developed through
Certification and Accreditation programme. BEE to design training modules, and conduct a National level
examination for certification of energy managers and energy auditors.
6. Energy Conservation Building Codes:
The main provisions of the EC Act on Energy Conservation Building Codes are:
• The BEE would prepare guidelines for Energy Conservation Building Codes (ECBC);
• These would be notified to suit local climate conditions or other compelling factors by the respective states for
commercial buildings erected after the rules relating to energy conservation building codes have been notified. In
addition, these buildings should have a connected load of 500 kW or contract demand of 600 kVA and above and
are intended to be used for commercial purposes.
• Energy audit of specific designated commercial building consumers would also be prescribed.
7. Enforcement through Self-Regulation:
E.C. Act would require inspection of only two items:
• The certification of energy consumption norms and standards of production process by the Accredited Energy
Auditors is a way to enforce effective energy efficiency in Designated Consumers.

• For energy performance and standards, manufacturer’s declared values would be checked in Accredited
Laboratories by drawing sample from market. Any manufacturer or consumer or consumer association can
challenge the values of the other manufacturer and bring to the notice of BEE. BEE can recognize for challenge
testing in disputed cases as a measure for self-regulation.
8. Role of Central and State Governments:
The following role of Central and State Government is envisaged in the Act
• Central - to notify rules and regulations under various provisions of the Act, provide initial financial assistance to
BEE and EC fund, Coordinate with various State Governments for notification, enforcement, penalties and
• State - to amend energy conservation building codes to suit the regional and local climatic condition, to
designate state level agency to coordinate, regulate and enforce provisions of the Act and constitute a State
Energy Conservation Fund for promotion of energy efficiency.
9. Penalties and Adjudication:
• Penalty for each offence under the Act would be in monetary terms i.e. Rs.10,000 for each offence and
Rs.1,000 for each day for continued non Compliance.
• The initial phase of 5 years would be promotional and creating infrastructure for implementation of Act. No
penalties would be effective during this phase.
• The power to adjudicate has been vested with state Electricity Regulatory Commission which shall appoint any
one of its member to be an adjudicating officer for holding an enquiry in connection with the penalty imposed.
Following key changes are made to the energy conservation act 2001:
1.“building” means any structure or erection or part of structure or erection after the rules relating to energy
conservation building codes have been notified and includes any existing structure or erection or part of
structure or erection, which is having a connected load of 100 Kilowatt (kW) or contract demand of 120 Kilovolt
Ampere (kVA) and above and is used or intended to be used for commercial purposes.
2.Penalty for each offence under the Act would be in monetary terms i.e. Rs.10 Lakh for each offence and
Rs.10000 for each day for continued non Compliance.

The Electricity Act, 2003
Brought into force with effect from 10th June, 2003
Background and salient features of the Act
Only 55% households were having access to electricity in 2003. The financial health of SEBs had been
deteriorating. There was a big gap between unit cost of supply and revenue and the annual losses of SEBs had
been increasing and had reached unsustainable levels (over Rs. 33,000 crores in 2003). Transmission losses of
most of the SEB’s were more that 40 %.
It is in this context that the Electricity Act, 2003 was enforced to bring about a qualitative transformation of the
electricity sector through a new paradigm. The Act seeks to create liberal framework of development for the
power sector by distancing Government from regulation. It replaces the three existing legislations, namely, Indian
Electricity Act, 1910, the Electricity (Supply) Act, 1948 and the Electricity Regulatory Commissions Act, 1998.
Even today electricity losses in India during transmission and distribution are extremely high i. e. about 33 %
against 8 % in china. The billing efficiency at national level is about 70 %.The power shortage during year 2009
was 12 % at peak and 8 % on overall. Due to shortage of electricity, power cuts are common throughout India
and this has adversely effected the country's economic growth. Theft of electricity, common in most parts of urban
India, amounts to 1.5% of India's GDP. Despite an ambitious rural electrification program, some 400 million
Indians lose electricity access during blackouts. While 83 percent of Indian villages have at least an electricity
line, just 44 percent of rural households have access to electricity and most of these do not get uninterrupted
reliable supply.
The salient features of the Act are:
1. The Central Government to prepare a National Electricity Policy in consultation with State
Governments. A National electricity plan shall be prepared in accordance with National Electricity Policy
every 5 years. The Central Government shall, from time to time, prepare the national electricity policy and
tariff policy, in consultation with the State Governments and the Authority for development of the power
system based on optimal utilization of resources such as coal, natural gas, nuclear substances or materials,
hydro and renewable sources of energy.

2. Thrust to complete the rural electrification.
3. Provision for license free generation and distribution in the rural areas. The act allows setting up of
generation as well as distribution in rural area without any license. Consumers are allowed to form bulkpurchasing groups and buy power directly from generating companies, traders or distribution companies.
Non-government organizations, local bodies and user organizations too can distribute power in non-urban
areas, purchasing power from the supplier of their choice without license with applying.
4. Generation being delicensed and captive generation being freely permitted. Any generating company
may establish, operate and maintain a generating station without obtaining a licence under this Act if it
complies with the technical standards relating to connectivity with the grid. Hydro projects would, however,
need clearance from the Central Electricity Authority.
5. Transmission Utility at the Central as well as State level, to be a Government company – with
responsibility for planned and coordinated development of transmission network: Unlike other
provisions of EA 2003 directed at opening up competition in power generation and distribution, the statute
retains power transmission as primarily a government responsibility by the CTU and STUs, although private
companies can be licensed to transmit electricity under licensing requirements established by CERC and
6. Open access in distribution to be introduced in phases with surcharge for current level of cross
subsidy to be gradually phased out along with cross subsidies and obligation to supply. SERCs to
frame regulations within one year regarding phasing of open access.
7. Distribution licensees would be free to undertake generation and generating companies would be
free to take up distribution businesses.
8. The State Electricity Regulatory Commission is a mandatory requirement.
9. Gradual (progressive) reduction and ultimate elimination of Cross-subsidization & Provision for
payment of subsidy through budget if required. If the State Government requires the grant of any subsidy
to any consumer or class of consumers in the tariff determined by the State Commission, the State
Government shall pay, within in advance in the manner as may be specified , by the State Commission the
amount to compensate the person affected by the grant of subsidy in the manner the State Commission may
direct, as a condition for the licence or any other person concerned to implement the subsidy provided for by
the State Government
10. Trading, a distinct activity is being recognized with the safeguard of the Regulatory Commissions being
authorized to fix ceilings on trading margins, if necessary.
11. Provision for reorganization or continuance of SEBs.
12. Metering of all electricity supplied made mandatory.
13. An Appellate Tribunal to hear appeals against the decision of the CERC and SERCs.
14. Provisions relating to theft of electricity made more stringent: EA 2003 provides for the inspection and
searches of premises and documents and the imposition of criminal penalties for the theft and unauthorized
use of electricity by defining such unauthorized use (e.g., tapping into lines, meter tampering, meter damage)
and imposes fines based on use (if less than 10 KW, first convictions equal at least three times the financial
gain and second convictions equal at least six times; over 10 KW, first convictions are the same but the
penalty for second and subsequent convictions is six months to five years imprisonment with a fine not to
exceed six times the financial gain of the electricity theft.
15. Consumer protection against failure to meet the standards of performance. Appropriate Commission
should regulate utilities based on pre-determined indices on quality of power supply. Parameters should
include, amongst others, frequency and duration of interruption, voltage parameters, harmonics, transformer
failure rates, waiting time for restoration of supply, percentage defective meters and waiting list of new
connections. The Appropriate Commissions would specify expected standards of performance. All State
Commissions should formulate the guidelines regarding setting up of grievance redressal forum by the
licensees as also the regulations regarding the Ombudsman and also appoint/designate the Ombudsman
within six months.
The Electricity (Amendment) Act, 2007, amending certain provisions of the Electricity Act, 2003, has been
enacted on 29th May, 2007 and brought into force w.e.f 15.6.2007. The main features of the Amendment Act are:

Central Government, jointly with State Governments, to endeavor to provide access to electricity to all
areas including villages and hamlets through rural electricity infrastructure and electrification of households.

No License required for sale of electricity from captive units.

Definition of theft expanded to cover use of tampered meters and use for unauthorized purpose.

Theft made explicitly cognizable and non-bailable.

The provision for reduction of cross subsidies would continue.

Energy Storage
Consumer demand for power varies throughout the day as well as seasonally, but many power plants have
limited ability to make rapid changes in their outputs in response to such demand-side fluctuations. For example,
nuclear plants reliably provide baseline power but cannot respond rapidly to demand spikes. No one storage
technology can currently address all applications. Storage technologies handle power ranging from hundreds of
kilowatts (kW) up to about ten giga watts (GW). The charge/discharge time for storage devices ranges from
seconds to minutes to hours. Power quality applications need fast-acting storage devices to respond to short,
unexpected interruptions in the power supply or sudden changes in the demand for power, while storage devices
used for energy management must respond on a longer time scale and must store greater quantities of energy.
The following parameters characterize the performance of storage devices:
• Quantity of energy stored (commonly kWh or MWh)
• Duration of discharge (seconds, minutes, hours)
• Power level (kW or MW)
• Response time (milliseconds to minutes)
• Frequency of discharge (number per unit of time)
• Cycle life and/or calendar life
• Energy density (facility space and total energy storage capacity)
• Transportability
• Cost
• Footprint/compatibility with existing infrastructure
• Ease of implementation
• Cycle Efficiency (fraction of energy removed that is returned to the grid)
Developing efficient and inexpensive energy storage devices is as important as developing new sources of
energy because:
1. Energy storage technologies allow generation facilities to be more evenly utilized. The demand for
electricity is seldom constant over time. Excess generating capacity available during periods of low demand
can be used to charge an energy storage device. The stored energy can then be used to provide electricity
during periods of high demand, helping to reduce power system loads during these times. In this type of
application, energy storage concepts are economical when the costs of the energy storage system's
construction, operation and maintenance are offset by the differential between peaking and base-load energy
costs. Energy storage systems could also be justified if they are more economic than new generating capacity
that would be used only during times of peak load.
2. Storage systems are also useful in combination with intermittent energy sources, a common trait of
many Renewable Energy Sources. The most common example of this is a system that utilizes the excess
electricity from a photovoltaic array to charge a battery during daylight hours, and then draws off the battery
during the night. Furthermore, storage systems may produce additional system advantages, such as spinning
reserve, and area frequency and voltage control. It can be also used for Wind Power Smoothing.
3. Energy storage systems can also effect a profound improvement on the quality of electricity service.
Poor power quality is not a new issue for consumers. However, as industrial equipment has become more
finely controlled over the last few decades, the need for improved power quality has increased along with it.
Power fluctuations as short as tens of milliseconds cause computer-based systems to fail. Many industries
such as plants manufacturing integrated circuits and computer-intensive data processors require uninterruptible
power supplies (UPS) that also provide extremely stable voltages and frequencies.
4. Energy storage can improve the efficiency and reliability of the Electric Utility System by reducing the
requirements for spinning reserves to meet peak power demands, making better use of efficient base load
5. Energy storage is not just confined to large scale energy supply but there is also the whole array of
battery technologies which are widespread and ubiquitous. These can be found in every single car and truck,

Inverters and in most consumer electronic products. Without battery technology, probably none of these would
be possible.
6. Can be used for domestic demand side management of electricity. Another area interlinked with mass
storage is Demand Side Management (DSM) where the aim is to reduce peak demand and optimize off-peak
usage. The combination of electrical energy storage and demand side measures - one operating from the
supply side (storage) and the other from the demand side (DSM) - will potentially allow generation plant, both
traditional and renewable, to operate in a more cost effective manner.
7. Economic benefits for time based tariffs.

Mechanical Energy storage Systems
1. Pumped Hydro-electric Storage
In the pumped hydroelectric storage
concept, such as that employed at
Wivenhoe power station in Queensland,
electrical energy from the electricity
supply network is used to pump water
from lower level water storage to higher
level water storage. The electrical
energy is therefore stored as the
gravitational potential energy of the
water in the upper storage.
When required, the water in the upper
storage is released and flows through a
turbine on its way back to the lower
storage. The potential energy in the
water is reconverted into electrical
energy again by the turbine / generator.
Because of losses and inefficiencies in
the elements of this system, the storage
efficiency could be as low as 70% and up to 85%. Overall the technology is one of the most mature on the market
and further technological advances are thought to be unlikely. Pumped hydro is the main form of energy storage
worldwide and has been used since the 1890’s.
Advantages and disadvantages:
 Most effective with largest capacity of electricity (over 2000 MW).
 Energy density = 0.001MJ/Kg, η= 70 – 85 %.
 Geographical dependence.
 The capital cost is massive.
 Possibilities of Soil erosion, land inundation, silting of dams.

2. Flywheel Storage
Flywheels were the original means for energy storage in early designs of “no-break” engine-generator sets. The
energy stored in flywheel is in the form of kinetic energy in the rotating mass of a rapidly spinning flywheel. A
flywheel is an electromechanical device that couples a motor generator with a rotating mass to store energy for
short durations. A flywheel can be used
to store energy by combining it with a
device that operates either as an electric
motor that accelerates the flywheel to
store energy or as a generator that
produces electricity from the energy
stored in the flywheel. The faster the
flywheel spins the more energy it
retains. Energy can be drawn off as
needed by slowing the flywheel.
Modern flywheels use composite rotors
made with carbon-fiber materials. The
rotors have a very high strength-todensity ratio, and rotate in a vacuum
chamber to minimize aerodynamic
losses. The use of superconducting
electromagnetic bearings can virtually
eliminate energy losses through friction.
Traditional flywheel rotors are usually

constructed of steel and are limited to a spin rate of a few thousand revolutions per minute (RPM). Advanced
flywheels constructed from carbon fiber materials and magnetic bearings can spin in vacuum at speeds up to
40,000 to 60,000 RPM. The flywheel provides power during period between the loss of utility supplied power and
either the return of utility power or the start of a sufficient back-up power system (i.e., diesel generator).
Flywheels provide 1-30 seconds of ride-through time, and back-up generators are typically online within 5-20
The energy stored in a flywheel is given by the classical equation:
J = ½ I ω2
Where, J=energy in joules or (w-s)
I=moment of inertia, (N-m-s2)
ω=rotational velocity, (rad/s2)

Flywheels are able to charge and discharge rapidly.
Flywheels have an efficiency of around 90%.
Very compact when compared to other energy storage systems.
Little affected by temperature fluctuations.
They take up relatively little space, have lower maintenance requirements than batteries
Have a long life span.
Flywheels are relatively tolerant of abuse — for example, the lifetime of a flywheel system will not be
shortened by a deep discharge.


Power loss is faster than for batteries.
It is not economical as it had a limited amount of charge/discharge cycle.

Flywheels are particularly suitable for power quality control. No large-scale applications of the technology have
been made. High-temperature superconducting flywheels are currently under development. Such systems would
offer inherent stability, minimal power loss, and simplicity of operation as well as increased energy storage

3. Compressed Air Energy Storage
Compressed Air Energy Storage (CAES) is a technology in which energy is stored in the form of compressed
air in an underground cavern. Air is compressed during off-peak periods, stored in a cavern, and then used on
demand during g peak periods to generate power with a turbo-generator system. A typical CAES unit consists
of five basic components:
1. Compressor train (compressor,
inter Coolers and after-cooler)
2. Motor Generator
3. Turbine expander train (including
expanders and combustors)
4. Recuperator
5. Underground cavern
Electricity from the grid powers an
electric motor drives an air
compressor. The heat generated by
extracted by inter-stage cooling and
after cooling and stored. Most of the
electric energy from the grid is
therefore stored as the pressure
potential energy of the compressed
air in the cavern, with the small
amount extracted by the compressor
coolers is stored as heat energy
when air is extracted from the cavern; it is first preheated in the Recuperator. The Recuperator reuses the
energy extracted by the compressor coolers. The heated air is then mixed with small quantities of oil or gas,
which is burned in the combustor. The hot gas from the combustor is expanded in the turbine to generate

electricity. The combustor and turbine components are identical to those used in a conventional gas turbine.
However, instead of having to utilize some of its output to compress its air needed for combustion, all the power
of the turbine can be used to generate electricity (its combustion air has already been compressed and stored).
Less fuel is therefore required to generate the same quantity of electricity, resulting in a high thermal efficiency
of the energy recovery stage. However, the overall cycle efficiency would be the ratio of the electrical energy
generated to the total energy input (electrical energy from the grid + fuel energy).
An important performance parameter for a CAES system is the charging ratio, which is defined as the ratio of
the electrical energy required to charge the system versus the electrical energy generated during discharge (the
number of kWh input in charging to produce 1 kWh output). A low charging ratio results in low off-peak electrical
energy requirements during the charging cycle.
Advantage and limitations of CAES
Fast start-up is an advantage of CAES. A CAES plant can provide a start-up time of about 9 minutes for an
emergency start, and about 12 minutes under normal conditions. By comparison, conventional combustion
turbine peaking plants typically require 20 to 30 minutes for a normal start-up. A significant contributor to the
cost of a CAES system is the construction of the underground cavern. The availability or generation of large
underground storage space can potentially have environmental impacts. A constraint on this technology is the
presence of suitable locations for underground air storage.
The first commercial scale CAES plant in the world is the 290 MW Huntorf, Germany. The Huntorf plant runs on
a daily cycle in which it charges the air storage for 8 hours and provides generation for 2 hours. The plant has
reported high availability of 86% and a starting reliability of 98%.
The Alabama Electric Co-operative, Inc, in McIntosh, Alabama built the second commercial scale CAES plant.
This plant has the maximum existing CAES cavern capacity of around 1.8 million cubic meters. It began
operation in 1991 and provides 110 MW of power generation. This plant supplies compressed air supporting
generation of 100 MW for 26 hours. The CAES plant has a full load net plant heat rate of 4819 kJ/kWh (74.7 %
thermal efficiency) with a charging ratio of 1.3
In addition to the NDK and the McIntosh CAES facilities, a 35MW CAES unit is under construction in Japan.
Israel also has a 100MW CAES unit under construction, which uses an aquifer cavern for storage.
Solar Thermal Storage (STS)
Although the sun provides an abundant, clean and safe source of energy, the supply of this energy is periodic
following yearly and diurnal cycles; it is intermittent, often unpredictable and diffused. Its density is low
compared with the energy flux densities found in conventional fossil energy devices like coal or oil-fired
furnaces. The demand for energy, on the other hand, is also unsteady following yearly and diurnal cycles for
both industrial and personal needs. Therefore the need for the storage of solar energy cannot be avoided.
Otherwise, solar energy has to be used as soon as it is received. The technical use of solar energy presently
poses problems primarily because of inefficient collection and storage.
There are three basic methods for storing thermal energy:
1.Heating a liquid or a solid, without changing phase: This method is called sensible heat storage. The
amount of energy stored depends on the temperature change of the material and can be expressed in the
form E = m CP ∆T, Where m is the mass and Cp the specific heat at constant pressure. The difference ∆T is
referred to as the temperature swing.
2.Heating a material which undergoes a phase change (usually melting): This is called latent heat
storage. The amount of energy stored (E) in this case depends upon the mass (m) and latent heat of fusion
Hf of the material. Thus, E=m Hf. The storage operates isothermally at the melting point of the material. If
isothermal operation at the phase change temperature is difficult, the system operates over a range of
temperatures T1 to T2 that includes the melting point.
3.Using heat to produce a certain physicochemical reaction and then storing the products. Absorbing
and adsorbing are two examples for the bond reaction. The heat is released when the reverse reaction is
made to occur. In this case also, the storage operates essentially isothermally during the reactions.
However, the temperature at which heat flows from the heat supply is usually different, because of the
required storage material and vice versa. Of the above methods, sensible and latent heat storage systems
are in use, while bond energy storage systems are being proposed for use in the future for medium and high
temperature applications.
The specific application for which a thermal storage system is to be used determines the method to be adopted.
Some of the considerations, which determine the selection of the method of storage and its design, are as
 The temperature range, over which the storage has to operate.
 The capacity of the storage has a significant effect on the operation of the rest of the system. A smaller storage
unit operates at a higher mean temperature. This results in a reduced heat transfer equipment output as

compared to a system having a larger storage unit. The general observation which can be made regarding
optimum capacity is that short-term storage units, which can meet fluctuations over a period of two or three
days, have been generally found to be the most economical for building applications.
Heat losses from the storage have to be kept to a minimum. Heat losses are particularly important for longterm storage.
The rate of charging and discharging.
Cost of the storage unit:
This includes the initial
cost of the storage
medium, the containers
and insulation, and the
operating cost.
include the suitability of
materials used for the
container, the means
adopted for transferring
the heat to and from the
storage, and the power
requirements for these
purposes. A figure of
merit that is used
storage unit is the storage efficiency, which is defined the time period over which this ratio is calculated would
depend upon the nature of the storage unit. For a short-term storage unit, the time period would be a few days,
while for a long-term storage unit it could be a few months or even one year. For a well-designed short-term
storage unit, the value of the efficiency should generally exceed 80 percent.

Battery Storage
A lead acid battery consists of a negative electrode
made of spongy or porous lead. The lead is porous
to facilitate the formation and dissolution of lead.
The positive electrode consists of lead dioxide. Both
electrodes are immersed in an electrolytic solution
of sulfuric acid and water. In case the electrodes
come into contact with each other through physical
movement of the battery or through changes in
thickness of the electrodes, an electrically
insulating, but chemically permeable membrane
separates the two electrodes. This membrane also
prevents electrical shorting through the electrolyte.
Lead acid batteries store energy by the reversible
chemical reaction shown below. In the charged state, each cell contains electrodes of elemental lead (Pb) and
lead dioxide (PbO2) in an electrolyte of approximately 33.5% sulfuric acid (H2SO4) and remaining water. In the
discharged state both electrodes turn into lead sulfate (PbSO4) and the electrolyte loses it’s dissolved sulfuric
acid and becomes primarily water.
The overall chemical reaction is:

At the negative terminal the charge and discharge reactions are:

At the positive terminal the charge and discharge reactions are:

As the above equations show, discharging a battery causes the formation of lead sulfate crystals at both the
negative and positive terminals, as well as the release of electrons due to the change in valence charge of the
lead. The formation of this lead sulfate uses sulfate from the sulfuric acid electrolyte surrounding the battery. As
a result the electrolyte becomes less concentrated. Full discharge would result in both electrodes being covered

with lead sulfate and water rather than sulfuric acid surrounding the electrodes. At full discharge the two
electrodes are the same material, and there is no chemical potential or voltage between the two electrodes. In
practice, however, discharging stops at the cutoff voltage, long before this point. The battery should not
therefore be discharged below this voltage. A battery storage system comprises the battery, dc/ac converter,
charger, transformer, ac switchgear and a building to house these components.

 Wet cell stand-by (stationary) batteries designed for deep discharge are commonly used in large backup
power supplies for telephone and computer centers, grid energy storage, and off-grid household electric
power systems. Lead-acid batteries are used in emergency lighting in case of power failure.
 Traction (propulsion) batteries are used for in golf carts and other battery electric vehicles. Large lead-acid
batteries are also used to power the electric motors in diesel-electric (conventional) submarines and are
used on nuclear submarines as well. Motor vehicle starting, lighting and ignition (SLI) batteries (car
batteries) provides current for starting internal combustion engines.
 Valve-regulated lead acid batteries cannot spill their electrolyte. They are used in back-up power supplies for
alarm and smaller computer systems (particularly in uninterruptible power supplies) and for electric scooters,
electrified bicycles, marine applications, battery electric vehicles or micro hybrid vehicles, and motorcycles.
 Lead-acid batteries are widely used.
 Have fairly well-known operating characteristics.
 Gel types are very robust and can take more heat and charge abuse than traditional lead-acid batteries.

A disadvantage of battery storage systems is the high initial cost.
Batteries using existing technologies require replacement every 8 to 10 years.

Different types of energy storage have different characteristics:
Type of Storage



Energy Storage

22,000 MWh

Duration of

~ 12 hours

~ 20 hours

Power Level

Up to 4 GW

Response Time

0.5 - 15 minutes

Cycle Efficiency

0.7 - 0.85


30 years

Flywheels Compressed
Air Storage


250 kWh 2,400 MWh

50 – 250 MWh

seconds 4 – 24 hours

1 – 8 hours

< 5MW

kW Scale 50-300 MW

50 kW – 50 MW


2 - 12 min

4 minutes

0.9 – 0.95 0.85

0.65 - 0.90

30 Years

5 -15 years

30 Years

30 years

Elasticity of demand
Economic theory says that as prices rise, the quantity demanded will fall, holding all other factors constant.
Economic theory also suggests that consumers’ demand for energy is less sensitive to price changes than the
demand for many other commodities. Economists define consumers’ sensitivity to price changes as a measure of
price elasticity. Price elasticity is calculated as follows:

In this equation, the numerator and denominator are expressed as a percentage of change. Because price
elasticity is a ratio of two percentages, it is not expressed as a specific unit of measure and can be compared
across different commodities. Price elasticities are typically in the negative range, which indicates that demand
falls as prices increase or, conversely, that demand increases as prices fall. Demand elasticities are of two types,

inelastic and elastic, and the range of each type differs. The range of inelastic demand is within absolute values
of 0 to 1, and the elastic range begins with values greater than 1. These terms can be interpreted intuitively. A
commodity with inelastic demand has a less than proportional change in demand for a given change in the price
for the commodity. For instance, if prices increase by 10 percent on a good with a price elasticity of –0.20, then
demand for the good drops by only 2 percent. In the elastic range, consumer demand responds with a greaterthan-proportional change for a given price change. For instance, a good with an elasticity of –1.5 would have a
15 percent drop in demand with a 10 percent increase in price. This relationship is pictured in Figure.
The figure shows a conventional supply curve (S1)
and two demand curves with different elasticities
(D1 and D’1). D1 is less elastic (i.e. steeper) than
D’ 1. At equilibrium, both demand curves intersect
the supply curve at the same point, with price at P1
and quantity at Q1. If the supply curve shifts
inward, which could represent an increase in the
price of a fuel, used to produce electricity such as
natural gas, the new equilibrium point would
depend on which demand curve is used as
demonstrated in Figure. If the demand curve is
relatively inelastic (D1) then prices would rise and
there would be only a small reduction in demand
(P2, Q2). With the more elastic demand curve
(D’1), both the equilibrium price and the quantity
are lower than the more inelastic curve (P’2, Q’2).
In the end, the difference in the equilibriums would
depend on the magnitude in the variation between
the elasticities.

Determinants of Price Elasticity of Demand:
 Necessities versus Luxuries
 Availability of Close Substitutes
 Definition of the Market
 Time Horizon
Demand tends to be more inelastic:
 If the good is a necessity.
The smaller the number of close substitutes.

 If the time period is shorter.
The more broadly defined the market.

Demand tends to be more elastic:
 If the good is a luxury.
 The larger the number of close substitutes.

 The longer the time period.
 The more narrowly defined the market.

Relationship between Energy and Price Elasticity:
Price elasticities can be used to interpret how consumer demand responds to price changes. They also indicate
how readily consumers can purchase substitutes for a product that has gone up in price and how much
consumers value a particular good. Price elasticities can be used in this way because of the underlying theory of
consumer response to price changes.
A consumer with a fixed budget in the short term has three possible responses to a price change:
(1) The consumer can buy another good as a substitute
(2) The consumer can buy less of the good with no corresponding purchase of a substitute or
(3) The consumer can continue to purchase the same amount of the good and reduce expenditures on other
goods in his or her consumer bundle.
In the case of electricity and natural gas, these commodities have a limited degree of substitutability, especially in
the short term. For end uses such as home heating and cooking, consumers can switch between energy-using
systems that use electricity or natural gas. However, the consumer may want to purchase a new appliance that
uses the less-expensive energy source. In other uses, such as a power supply for a computer, electricity has no
substitutes. Nevertheless, the consumer still has the option to purchase a more efficient computer and enjoy the
same level of service using less electricity. Typically, purchasing a more efficient appliance or one that uses a
different type of fuel requires replacing a relatively expensive item, like a computer or refrigerator, and is
considered a long-run adjustment by the consumer to high energy prices. Based on this analysis, consumer
demand for electricity and natural gas should be relatively unresponsive to price changes in the short term and
more responsive to price changes in the long term but could differ substantially by region. Demand for these
goods is generally inelastic in the short term, because a consumer’s main options when energy prices change
are to vary how he or she uses energy-consuming appliances (e.g., adjust a thermostat or turn on fewer lights) or
reduce expenditures on other goods. Over the longer term, consumers can buy appliances that use a different
energy source and/or purchase more-efficient appliances. Therefore, price elasticities tend more toward the
elastic range than the inelastic range in the long term. During times when markets have high, volatile crude oil
prices, large countries are less sensitive to price changes, and are more likely to have a slower rate of change in
inventory levels. This may imply that small or poor countries may back out of high-priced petroleum trading
markets before big or wealthy countries, thus reducing the effective world demand for crude oil. The results on
price elasticity of Energy demand for the world are interesting. The elasticities remained the same over the past
two decades—i.e., they remained low. In other words, demand did not tend to react much to changes in price.
There are small, and somewhat consistent, changes, but on the surface it seems that there are few options for
consumers or commercial businesses to switch to electricity or natural gas use in response to energy prices.

Relationship between Energy Efficiency and Price Elasticity:
The price elasticity has a number of implications for decision making and policymaking. The price-demand
relationship, or price elasticity, was important for estimating the impact of energy efficiency programs and
technology. In examining demand in each sector (residential and commercial electricity demand and residential
natural-gas demand), we found that there are some differences in regional trends—in particular, trends in the
intensity of energy use. Energy efficiency might have a bigger impact on regions with rapidly growing intensity of
use than on regions with intensity that is either declining or growing slowly. In terms of the price-demand
relationship, if increasing prices motivate investments in energy efficiency, then the impact of energy efficiency
might be greater in regions or states that are the most elastic (i.e., those with the lowest negative price
elasticities). In these regions and states, the price-demand relationship is the most robust, and changes in price
could lead to greater changes in energy efficiency, and vice-versa. Any estimates of the impact of energyefficiency programs will be impacted by price elasticity, and if the elasticity differs significantly by region or state,
the estimates of the impacts will differ accordingly. In the case of the residential electricity sector, it is clear that
there are regional differences. It also seems clear that the elasticities are relatively consistent among states
within the regions and that, at least for the near term, disaggregating data on energy efficiency programs to the
regional level should be sufficient to evaluate the different effects that energy efficiency could have in different
regions of the country. Price elasticities are typically in the negative range, which indicates that demand falls as
prices increase or, conversely, that demand increases as prices fall. We have to look at how individual factors—
such as climate, supply constraints, energy costs, and demand for natural gas—might themselves affect the
extent of the impact of energy efficiency.
101 different studies found that in the short-run (defined as 1 year or less), the average price-elasticity of demand
for gasoline is -0.26. That is, a 10% hike in the price of gasoline lowers quantity demanded by 2.6%. In the longrun (defined as longer than 1 year), the price elasticity of demand is -0.58; a 10% hike in gasoline causes
quantity demanded to decline by 5.8% in the long run.

Income elasticity: demand response to income change
The second type of demand elasticity is called as Income Elasticity which reflects the change in demand with
respect to change in income. This demand elasticity is generally Elastic in nature i. e. value is more than 1.

Income Elasticity
Below is the table showing common values of elasticity for energy demand in Canada.

Cross-Price Elasticity of Demand
Cross price elasticity is how a change in the price of one product will affect the demand for another.
The responsiveness of the demand for one fuel type to changes in the price of another fuel type is
called the cross-price elasticity of demand. Defined as the percent change in the demand of one
good divided by the percent change in the price of another good.
Substitutes and Complements
If an increase in the price of one good leads to an increase in the demand for another good, their
cross-price elasticity is positive the two goods are substitutes. If an increase in the price of one
good leads to a decrease in the demand for another, their cross-price elasticity is negative the two
goods are complements Otherwise, two goods are unrelated.

Low-income households are more responsive to price and income changes than higher-income
households, while all households are more responsive to price changes than income changes. It
can therefore be anticipated that increases in energy prices caused by climate-change-driven
energy policies will be borne disproportionately by lower-income groups. In India, a variety of fuels

are used including electricity, gas, kerosene, wood and charcoal. The degree of substitutability
among the fuels varies and is more highly correlated with income. For example, a high-income
family in India would not substitute their electricity- or gas-run cooking stove for a wood or charcoal
cook stove if the price of electricity or gas increases. However, the low-income groups may not
have an option but to switch to cheaper alternatives if the price of electricity or gas were to
increase. Furthermore, the penetration of appliances like refrigerators, dishwashers and hot water
heaters is higher in the middle- and high-income groups in India. If this is the case, then the
possibility of implementing a differentiated price system may be an option in India whereby the
high-income groups pay a higher price than the middle-income groups which, in turn, pay a higher
price than the low-income groups.

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