Power Sector in India : World Bank Report

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The World Bank released a report titled ‘In the Dark: How Much Do Power Sector Distortions Cost South Asia’. As per the report, Efficiency gap in India’s power sector costs the Indian economy 4% every year, which equivalents to $86 billion in 2016FY.

Key Points of the Report:

  • The rural household’s income in India can be increased by $9.4 billion and business losses worth USD 22.7 billion can be eliminated with 24 hours access to power supply.
  • There was a shortage of 14% in India in meeting coal demand in 2016FY.
  • The average output per labour shift at Coal India’s underground mines was less than one ton in 2016FY, which is very less in contrast to 25 tonnes in the United States. Also, out of total 1o underground mines only one underground coal mine in India is mechanised. (This point can also be used in Mining Topic)
  • As per the World Bank Report, Electricity subsidies provided by the government and inefficient power generation, transmission, and distribution of the power play a major role in power shortages.
  • In 2016, around 20% of electricity generated was lost during transmission and distribution. This rate is the highest loss rate in the world.
  • Industrial electricity tariffs become less affordable and competitive due to power subsidies to households and farmers.
  • India provides subsidies on electricity for agriculture which has made India the world’s largest user of groundwater. The consumption of groundwater has increased by 700% from 1950 to 2014.

Recommendations in the report:

  • The report recommends reforms in the electricity sector to restore market pricing and improve efficiency. This will complement traditional investments to increase power supply and expand access to reliable electricity.
  • Reliable access to electricity will have a positive impact on Gender Equality by increasing women’s employment and girls’ study time. It will lead to lower use of kerosene lamps which would improve health and the environment.
  • Coal allocation and delivery need to be more efficient and competition in coal and electricity supply needs to be encouraged. Energy prices should be rationalised to reflect the actual cost of supply.
  • Incentives should be given for the promotion of more efficient power generation and delivery.
  • Social assistance should be provided to help people deal with higher energy prices.

India has made great progress in expanding access to power in recent years. However, many people still lack access to electricity and power shortages harm the economy and consumer well-being. India was at the 80th spot among 137 economies in the reliability of electricity supply as per the 2018 Global Competitiveness Report.

Ethanol blending

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  • Ethanol blending is the practice of blending petrol with ethanol.
  • Many countries, including India, have adopted ethanol blending in petrol in order to reduce vehicle exhaust emissions and also to reduce the import burden on account of crude petroleum from which petrol is produced.
  • The renewable ethanol content, which is a byproduct of the sugar industry, is expected to result in a net reduction in the emission of carbon dioxide, carbon monoxide (CO) and hydrocarbons (HC).
  • Ethanol itself burns cleaner and burns more completely than petrol it is blended into.
  • In India, ethanol is mainly derived by sugarcane molasses, which is a by-product in the conversion of sugar cane juice to sugar.

ias4sure.com - Ethanol blending

Biofuels: Government Initiatives

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Considering benefits of biofuels in reducing import dependency on crude oil, as clean environment fuel and generating additional income to farmers and employment generation in rural areas, Government has undertaken number of initiatives such biofuels programme and increasing blending of biofuels etc.



  • The biofuels programme is in synergy with Government’s other initiatives for Make in India, Swachh Bharat and doubling farmers’ income by 2022.
  • Government’s major interventions in this sector includes administrative price mechanism for ethanol, simplifying procurement procedures of OMCs, amending provisions of Industries (Development & Regulation) Act, 1951 and enabling lignocellulosic route for ethanol procurement.
  • Oil PSUs are also planning to set up 12 Second Generation (2G) Bio-refineries to augment ethanol supply and address environmental issues arising out of burning of agricultural biomass especially in North India.
  • Government also has approved National Policy on Biofuels-2018 in June 2018. It aims at reaching 20% ethanol-blending and 5% biodiesel-blending by year 2030.
  • It also has  expanded scope of feedstock for ethanol production and has provided for incentives for production of advanced biofuels.
  • Government also has increased price of C-heavy molasses-based ethanol to boost to Ethanol Blending Programme (EBP).
  • It also has fixed price of B-heavy molasses-based ethanol and sugarcane juice-based ethanol for the first time at Rs. 47.40.
  • It also has reduced GST on ethanol for blending in fuel from 18% to 5%.
  • Ministry of Petroleum & Natural Gas is making all efforts to increase ethanol supply for petrol and has taken several steps in this direction.


Thermal Battery

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Thermal battery

  • Thermal battery use thermal energy to operate i.e. energy created by temperature differences.
  • The energy transfer in this battery helps to store heat when heat travels from one part of battery setup to other.
  • For this transmission, thermal battery consists of two parts viz. cool zone (sink) and hot source (source.)
  • Both these sides consist of compounds known as phase-changing materials (PCMs), which can change their state of matter on basis of physical and chemical reaction.
  • When sink of thermal battery receives heat, it transforms physically or chemically, thereby storing energy, while source cools down.
  • During operation, sink is cooled down, so it releases stored energy, while source heats up.
  • Depending on nature of battery, system can derive heat from any source, which makes thermal battery very versatile.
  • For power transmission, thermal batteries can function as long as there is heat source.




How it is different from Conventional battery technology?

  • Conventional battery technology work on basis of electrical energy and is based on system of charging and discharging cycles that are driven by electricity.
  • For example Lithium-ion (Lion) battery, staple of many electronic devices, consists of electric charges being transferred from electrodes.
  • Energy is derived from this battery, when lithium atoms turn into lithium ions (Li+), and get stored when this reaction reverses.



  • Thermal battery is hailed as perfect alternative to non-renewable energy sources.
  • It is considered to be even better than solar energy.
  • It will be energy source for power telecommunications services, electrical grids, electric vehicles (electric buses, on a single charge expected to run for up to 800kms).
  • It has lesser heat sensitivity, and low carbon footprint these are better than Li-ion batteries and outperform solar panels, which have expensive maintenance, and high weather-dependent operation.
  • Solar batteries cannot be charged or utilised to their optimum potential after sunset or even when the skies are densely clouded.
  • Though thermal batteries are priced at par with widely used Lithium-ion batteries, but they have low carbon footprint and also last longer.


Why in news?

The world’s first-ever thermal battery plant was inaugurated in Amravati, Andhra Pradesh. 


Unconventional Hydrocarbons : Policy Changes

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Union Cabinet has approved policy framework to permit exploration and exploitation of unconventional hydrocarbons such as Shale oil/gas, Coal Bed Methane (CBM) etc. It will be carried out under existing Production Sharing Contracts (PSCs), CBM contracts and Nomination fields to encourage existing contractors in licensed or leased area to unlock full potential of unconventional hydrocarbons in existing acreages.
With this policy, there will be complete shift from One hydrocarbon Resource Type to Uniform Licensing Policy which is presently applicable in Discovered Small Field (DSF) Policy and Hydrocarbon Exploration & Licensing Policy (HELP).
Benefits of this Policy Framework
  • It will enable the realization of prospective hydrocarbon reserves in existing contract areas which otherwise would have remain unexplored and unexploited.
  • It will give impetus to new investment in exploration and production (E&P) activities and chances of finding new hydrocarbon discoveries and increasing domestic production.
  • It will also spur exploration and exploitation of additional hydrocarbon resources giving impetus to new investment, economic activities, additional employment generation and thus benefitting various sections of society.
  • This will also lead to induction of new, innovative and cutting-edge technology and forging new technological collaboration to exploit unconventional hydrocarbons.
 ias4sure.com - Unconventional Hydrocarbons Policy Changes
What was earlier arrangement?
  • Under existing contractual regime of PSCs, existing contractors are not allowed to explore and exploit CBM or other unconventional hydrocarbons in already allotted licensed or leased area.
  • Similarly, CBM contractors are not allowed to exploit any other hydrocarbon except CBM.
  • Acreages held at present by various contractors in PSCs and CBM blocks and National Oil Companies (NOCs) in nomination regime constitute a significant part of India’s sedimentary basin.

Ethanol production for Sugarcane

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  • Union Food Ministry has notified decision to allow sugar mills to manufacture ethanol directly from sugarcane juice or an intermediate product called B-molasses.
  • In this regard, Sugarcane Control Order, 1966 has been amended.
  • The move would help mills divert cane juice for ethanol manufacturing during surplus years.
Why this decision is important?
  • Sugar mills are incurring losses as prices of sugar have fallen below production cost on account of record output of 32 million tonnes (mt) in 2017-18 season as against annual domestic demand of 25 mt.
  • The production of ethanol directly from sugarcane juice or B-molasses will help to divert this overproduction.
  • Sugar mills are expecting revenue realisation of over Rs 5,000 crore from sale of ethanol to OMCs during the 2017-18 sugar season (October-September).
  • OMCs procure ethanol from sugar mills for blending with petrol.
  • Government has mandated blending of up to 10% ethanol in petrol but inadequate availability has restricted this to under 4%.
  • Higher price for ethanol will incentivise higher ethanol production.

ias4sure.com - Ethanol production for Sugarcane

Shale Gas in India

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  • Union Ministry of Petroleum and Natural Gas has amended Petroleum and Natural Gas Rules 1959 to include shale in definition of petroleum.
  • This change will allow private companies to explore and produce the resource in the blocks they already operate.


Benefit of this modification?

  • The updated definition of petroleum means naturally occurring hydrocarbons, whether in form of natural gas or in liquid, viscous or solid form, or mixture thereof, occurring in association with petroleum or coal or shale but does not include coal, lignite, and helium.
  • Prior to this, definition excluded shale and therefore barred companies from exploiting it from fields that are producing conventional oil and gas or coal-bed methane.
  • The amendment of definition of petroleum will open up exploration of all hydrocarbons in existing fields which is line with new Hydrocarbon Exploration Licensing Policy (HELP).
  • It will help in enhancing domestic exploration and production of hydrocarbons and increasing India’s energy security and reducing dependency on imports.


What is Shale?

  • It is fine-grained sedimentary rock that forms from compaction of silt and clay-size mineral particles, commonly called as mud.
  • The composition of shale places it in category of sedimentary rocks known as mudstones.
  • Shale is distinguished from other mudstones due to laminated (rock is made up of many thin layers) and fissile (rock readily splits into thin pieces along the laminations) nature. 
  • Some shales have special properties that make them important resources.
  • Black shales contain organic material that sometimes breaks down to form natural gas or oil.

What is Shale gas?

  • Shale gas is natural gas formed from being trapped within shale formations.
  • It is unconventional source of methane, like coal-bed gas (in coal seams) and tight gas (trapped in rock formations).
  • It is colourless, odourless gas, lighter than air.
  • It is cheaper than natural gas, releases 50% less CO2, hence better source for generating electricity.
  • It also provides feedstock for petrochemicals industry, which is turned into fertilizer, plastics and other useful stuff.
  • In India, potential shale gas sites are Cambay, Gondwana, Krishna-Godavari and Cauvery Basins.


ias4sure.com - Shale Gas in India