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Difficulties and problems relating to energy

  • Demand and supply imbalances in commercial fuels: The demand for energy, particularly commercial energy, has been growing rapidly with the growth of the economy, but supply has not increased concurrently. In 2011-12, out of the 710 mtoe of `primary energy demand, the demand for 536 mtoe was for commercial energy and 148 mtoe was for non commercial purposes which was domestically produced, but for commercial energy requirement was fulfilled by producing 514 mtoe domestically and 197 mtoe was imported. Thus, 1/3rd of the demand for commercial energy was met through imports. The approach paper to 12th FYP says in order to achieve the target of 9% growth rate in GDP during 12th FYP, energy supply will have to grow at 6.5% per annum.
  • Oil prices and inflationary pressure: The oil prices have been rising in the international market since 1973 onwards. The Organisation of Petroleum Exporting Countries (OPEC) has increased the prices during 1973-2011 which contributed to the inflationary pressure in India.
  • Growing oil imports bill: In 1973-74, India’s oil import bill was ` 1,100 crore which increased to ` 10,816 crore in 1990-91 and further to ` 6,00,000 crore in 2011-12. Petroleum, oil and lubricants (POL) constitute 1/3rd of our import bills (35%).
  • Transmission and distribution losses: The transmission and distribution losses are very high in the SEB system. National average of this loss is around 20% while the figure is higher in many states.
  • Sick SEBs: The main reasons for sick SEBs are due to free supply of power to agriculture, operational inefficiencies, high cost structure, lower power tariffs, etc.
  • Operational incompetence: Most of the thermal plants, in India, are operating inefficiently. Plant Load Factor (PLF) measures the operational inefficiency of a thermal plant. PLF is the lowest in the eastern region (62% in 2012-13) and highest in southern region (81% in 2012-13). PLF was 65% in SEBs, 80% in central sector and 78% in the private sector in 2011-12.
  • Insufficient electrification: 19% of our villages are not yet electrified.

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