By Sarang Kanchan, Associate Partner, Takshashila Consulting; and Arun Kanchan, Former Director and CEO, BSES Rajdhani Power Limited and BSES Yamuna Power Limited
India’s urban population currently accounts for around 35 per cent of its total population and this percentage is expected to grow to over 58 per cent by 2050. Urban areas contribute an outsized share to the nation’s GDP. ThÂerÂe is a strong positive correlation betÂween the development index and GDP of a coÂuntry and its urban population percentage. There is also a unidirectiÂonal causality between electricity conÂsuÂmÂption and economic growth. TheÂreÂÂfore, raÂpid urbanisation will also traÂnsÂlate inÂto increased per capita consuÂmption of electricity.
However, electricity consumption is determined by a complex mix of variables. Certain factors that provide a fillip to electricity consumption are incÂreÂaÂse in per capita GDP; major infrastructural developments such as new airports, mass rapid transport services suÂch as meÂtÂros, railway stations and smart city initiatives; and city improvement projects such as the redevelopment of existing buildings into skyscraÂpers and extension of suburbia, mainly due to an incÂrease in urbanisation.
HowÂever, there are some factors that reÂduce electricity consumption such as improvement in the energy efficiency of appliances, and reduction of aggregate technical and commercial losses due to improved transmiÂssion and distribution networks and better surveillance. There are also factors that contriÂbute in meaningful, quÂanÂtifiable ways but have their own uniÂque variance in trends such as weather, political factors such as elections, and economic factors such as the weak finÂancial position of disÂcoms, leading to forced unmet demand and lower capacity to invest in loss reduction efforts.
As urban areas are expanding rapidly, smart energy management (SEM) is emÂÂerging as an important area of focus. Energy management has become an integral comÂponent of urban transformation. The Smart Cities Mission was launched by the government in 2015 to help resolÂve the governance and infrastructural challenges arising from rapid urbanisation and to ensure and improÂve citizens’ quality of life. It leverages inÂÂÂterÂnet of thÂings (IoT), renewable enÂerÂgy and other technologies to make cities and service infrastructure (incluÂding electricity) sustainable in the long term, in a cost-effective and resource efficient manner.
Urban planning can no longer be done in isolation due to the strong link betÂween other urban necessities with energy. Smart urban planning has to be blenÂded with smart energy generation and management technologies. IntegraÂted plÂanÂning of energy infrastructure has to be carried out along with all other ameÂnities. These include distributed geÂneration and storage, peak load shaving and other demand-side management measures, waste recycling and waste-to-energy initiatives, e-vehicle and mass mobility with mobility-as-a-service, saÂfeÂty and security measures such as street lights and CCTV cameras, waÂter, sanitation including sewage, buildings with energy neutrality (at least partially), disaster management, air quality improvements, optimum utilisation of available and prospective natural resoÂurÂces, e-goÂvernance and delivery of all public serÂvices in an efficient manner, and enÂergy-efficient health and entertainment infrastructure.
Policies and regulation
The Indian power sector is highly complex with both the central and state governments being responsible for its development. Any successful developÂmeÂnt of infrastructure (generation planÂts, transmission or distribution lines) requires a buy-in from various stakeholÂders of the central and state governments. Many power generation and distribution companies are currently facing severe financial stress due to sector-wiÂde challenges beyond their control. With power sector legislations continuing to evolve (such as amendments to the Electricity Act, 2003), the role of many stakeholders is exÂpected to change, leading to simplification in the process of generation, traÂnsmission, distribution and consumption of electricity.
Adding another dimension is the fact that most urban functions such as town and building planning, and sewage and wasÂte management come under local bodies, many of which are themselves elected bodies. Thus, the problem of alignÂmeÂnt of various agencies becomes that much more complex.
India lacks long-term and consistent SEM plans and policies. Despite, or perhaps because of, overlapping policies and complex urban governance arranÂgÂeÂÂments, SEM governance in India reÂmaÂins fragmented and lacks political commitment and support.
In our opinion, there are six focus areas where policymakers and decision-makers need to take the following actions:
- Tap into the strong synergies betÂween energy efficiency and renewable energy
- Plan a power sector wherein renewabÂles provide a high share of the energy
- Increase the use of electricity in transport, building and industry
- Foster system-wide innovation
- Align socio-economic structures and inÂvestment with the transition
- Ensure that transition costs and benefits are fairly distributed
Such a focused approach must result in:
- Integrated policy governance and effÂecÂtive decision-making
- Development of information, educaÂtiÂon and communication strategies for staÂkeholder awareness and engaÂgemeÂnt
- Establishment of performance goals for effective implementation and moÂniÂtoring
- Provision of better resources and inÂfrastÂrÂucture for technological advanÂceÂments
At the micro level, we have the following recommendations:
- For all upcoming buildings on plot areÂas of over 250 sq. yards, make it maÂnÂdaÂtory to have a solar water heating system, a grid-connected solar PV system and a groundwater recharge system, beÂÂsides a segregated waste system.
- For existing buildings, strengthen the incentives and legislative measures (tax breaks, faster depreciation, direct subsidies, etc.), apart from making it manÂdatory to effect measures as suggested in the recommendation above, starting with 5-star hotels and big commercial and industrial establishments, and goÂing down to large houses built on plot areas exceeding 500 sq. yards.
- A biofuel blending mandate is already in place. It is suggested that strict peÂnalÂÂties be imposed for non-compliaÂnce, and research carried out to broÂaÂden the base of biofuels.
- A massive push is required to rent out/lease vacant public places to solar PV developers along with enhancemeÂnt of aesthetics.
- Gasification technologies must be commercialised to utilise the vast coal reserves that India has for producing clean energy.
- Focus on rapid development of low-cost storage technologies to utilise the full potential of abundant solar radiation in the country.
- Some states have preferred to opt for gross metering instead of net metering for prosumers. It is recommended that they notify rates and regulations for net metering as a choice for consuÂmers, leading to a rapid increase in rooftop installations.
- Use of copper must be encouraged for creation and replacement of power disÂÂtribution infrastructure. This infrastructure is usually created for a very long period – typically 50 years or moÂre. Copper may initially cost a little moÂÂre, but the payback in terms of enÂergy efficiency may be significant.
Urban planning and energy planning being two separate entities should beÂcome a thing of the past. We put forward suggestions for organisations carrying out urban planning and energy plannÂing, more specifically electricity plannÂing at different levels, to enable us to move towards a sustainable energy future with maximum efficiency and speed. The seamless integration of the two, urÂban and energy planning, needs to be seen as a necessity and, therefore, it is paÂramount to recognise this shift now and act upon it.
Drivers of urban planning and energy planning, and their impact
Some of the important drivers for urban planning and energy (in particular, electricity) planning as well as their future trends are investigated in this section.
Space constraints due to urbanisation: No megacity is immune to the global phÂenomenon of urbanisation. High-rises taller than ever before are being built in these megacities.
Ageing infrastructure: A direct reflection of the high rate of urbanisation is the higher load density for new constrÂucÂtion and the resultant strain on water, sewage and energy (electricity, gas) inÂfraÂstructure.
Climate change and GHG reduction: PerÂhaps one of the most critical issues facing the world today is climate change and its impact on both the natural and built environments (city infrastructure). Extreme weather-related events of the past decade or so attest to the seriousness of the issue and its repercussions on sewage systems, grids and traÂnÂsÂporÂtation, etc. Under the auspices of the KyoÂto Protocol, many jurisdictions of the world, including India, have esÂtabÂlished definite emission targets, whiÂch they are endeavouring to meet.
Technology: Technological developments continue at an astounding pace. In fact, the pace is so fast that the affected industries are having a difficult time coping with it. In the power sector, the growth in technology is on all fronts, affecting all players: customers, electricity generators, transmitters and distributors. While concerns exist with respect to the reliability of new technologies beÂcause of a lack of performance history, the benefits of new technologies cannot be overlooked. For example, through the use of new technologies, electricity distributors can, among other things, imÂproÂve reliability, asset utilisation levels and efficiency, as well as maximise the inÂtegration of renewables in the grid. Meanwhile, electricity consumers can better manage their electrical bills throuÂgh load control and can be a partner in effecting solutions to grid problems. The emerging technology of energy storage, which can be utilised by electricity distributors and consumers alike for a multitude of benefits, is seen as a game-chÂanÂger in the electrical utility industry.
Public choice and participation: A key shift in urban development planning and urban energy planning has been frÂom expert-driven activities to those that allow far greater public engagement and participation. Public engagement and partnerships are, thus seen as a cornerstone in novel planning approacÂhes, which can empower communities and result in more options to choose frÂom, greater public acceptance of the opÂtion chosen, as well as better overall deÂsign of urban projects.
Considering the complex nature of the socio-political issues involved with various Indian urban planning bodies and the broad resistance to change, an integrated approach to urban planning seeÂms to be quite some distance away. To speed up the process, our recommendations are as follows:
- The government must set up a separate urban planning institution (a facilitating office) to build the capacity of integrated urban planning agencies in a holistic manner, covering SEM and all other facets. This entity must be facilitated in all respects by the government, which must provide the requisite knoÂwhow, software and tools required for the planning, along with the best exÂperÂts from around the world.
- Functional offices of this entity must be located in every state capital and imÂportant towns, and must be under the exclusive control of the respective state governments. The central agenÂcy, as described above, must facilitate thÂem in all respects.
- The working experts for this entity must be drawn from various state, discom and ULB agencies such as urban town planning, to increase ownership of their output as well as to build caÂpaÂcity. Initially this agency may play an advisory role until a conducive climate is created to make them a statutory authority.
- The functional offices must necessarily seek inputs from other stakeholders such as activists and conglomerates befoÂre finalising their action plans.
- The central agency must also evolve incentive plans, including grants and soft loans, to keep the state agencies enÂgaged and motivated. This must be completely transparent and incentive-driven so that it is not seen as interference by the central government. The incentive matrix must inÂcorporate some of the focus areas and micro-level suggestions given in the previous section.
It has been seen that organisations such as NITI Aayog have crystallised the initiatives to be taken behind the vision of the Government of India. The structure discussed above will ensure that the synergies between energy efficiency, renewaÂble energy and other focus areas are identified at a national level by the facilitating office and then drilled down to the state level by the functional offices. This will also engender cooperation between various functional offices through the various joint coordination efforts promoted by the facilitating office and lead to a cross-pollination of initiatives, and proÂcess/system innovations. This will lead to optimally low transition costs in the implementation of various initiatives and improved benefits, which are practical and aligned with each state’s typical socio-economic structure.
To sum up, urban planning and smart energy infrastructure planning must be sustainable and renewable energy-led, make India energy independent, and haÂve coÂmplementary knock-on effects in other infrastructural bedrocks such as water, sanitation, housing and transÂportatiÂon/mobility. Further, it should be resilÂient in the face of natural disasters by being distributed, and digitalisÂed to ensure pervasive access to affordable, reliable, quality electricity; and must ensure energy efficiency through IoT and regulation. It shÂouÂld also involve citizens with a free flow of information including data collection, processing and sharing in a transÂparent manner. There must be investment in emerging technologies and technology partners keeping an eye on available resources. For example, India’s vast coal reserves will be renÂdered useless unless clean technoÂlogies such as integrated coal gasification are made viable. Lastly, there is a need to develop and monitor the business case for smart technologies.
One of the most appealing aspects of urban smart energy, at least from a consumer perspective, is the possibility of breaking the hegemony of a centralised distribution system and making power more local. It’s a challenge to the traditional utility structure, certainly, but microgrid projects offer a glimpse into how local, distributed energy infrastructure can improve system resilience.
Recommendations regarding administrative, control and regulatory mechanism
We have seen that energy distribution is far more efficient in cities that have been handed over to private players. However, for a variety of reasons, privatisation of urban electricity distribution has not gathered pace.
The next best alternative is to vest the power distribution function of discoms to ULBs (and discoms can provide them bulk power at the periphery of the muÂnicipality till such time as ULBs develop competencies to procure power on their own). This will strengthen the ULBs and allow them to share metering, billing and collection infrastructure with other services such as water and sewerage. Besides, municipal councillors are more approachable for people and, therefore, it will strengthen the grievance redressal mechanism.