India - Economic situation and prospects (Vol. 2) : The energy sector in India

Report No 402-IN Economic Situation and FIL mY Prospects of India Jln Three Volumes) Volume II: The Energy Sector in India May 7, 1974 Asia Region South Asia Department Not for Public Use DocmU nt of-the tntmai6mal Hank fX Reconstcton and D)evelopent Iernationat oweker st Vws~ p pr$epawed Tor offkta us o* bv the &aik Croup it fay not be puNed, *Kted or aed-wnti g GmWp authowLzAtm The BaXnk Gro does not at tept respunybky for tII acot7 or mpfeioens o( Ahe repor  CURRENCY ANiD OTHER EQUIVAIENTS Currency Prior to mid-December 1971 : US $ 1.00 = Rs.7.50 Rs. 1.00 = US $ 0.1333 Mid-December 1971 to end June 1972 : US $ 1.00 = Rs.7.27927 Rs. 1.00 = US $ 0.1374 After end-June 1972 : floating rate Spot rate (March 31, 1974) : approx. US $ 1.00 = Rs.7.85 approx. Rs. 1.00 = US $ 0.127 Rupee trade figures have been coverted into dollars by using the prevailing exchange rate up to 1970/71. For subsequent years DMF trade conversion rates have been used. These are Rs.7.444, Rs.7.706 and Rs.7.505 per US dollar for the periods 1971/72, 1972/73 and (April to September 1973/74. For projection purposes the rate used has been Rs.8.0 per US dollar. Weights Unless otherwise specified all weight measures are metric. Years The Indian fiscal year runs from April 1 through March 31.  This report was prepared in the Office of the Resident Representative of the World Bank in India by P.D. Henderson.  .:E ENERGY SECTOR IN INDIA Table of Contents MAPS Page No. INTRODUCTION 1 I THE SETTING 1. The Energy Resources of India . . ........................... 2 (a) Coal .......... . . . . .............. 3 (b) Oil and natural gas ...... ................ 8 (c) Hydro-electric power ............................... 12 (d) Nuclear fuels ..................... .................. 16 (e) Sources of non-commercial energy ......... ........... 18 2. The Growth of Energy Consumption and Supply ............. .. 19 (a) Total energy, commercial and non-commercial ......... 19 (b) Commercial energy ................. .. ................ 21 3. The Development of the Fuel and Power Industries .......... 29 (a) Introduction . . ............ 29 (b) The coal mining industry ..... ....................... 31 (c) The oil industry .................................... 42 (d) The electricity supply industry ..................... 58 11 CURRENT PROBLEMS AND FUTURE POSSIBILITIES 1. The Present Energy Shortage and the Immediate Prospects ... 79 (a) The shortage of electric power ...................... 79 (b) Problems of coal production and coal transport ...... 83 (c) The oil situation: availability and prices .......... 86 2. Energy Supplies in the Fifth Plan Period .. ............... 96 (a) Introduction ........................................ 96 (b) Targets and prospects in coal , .. . . 98 (c) The oil industry in the Fifth Plan ........ . ... ....... 105 (d) E:Lectricity supply ...... ............................ 116 3. Some Questions of Policy and Practice in the Energy Sector 123 (a) Information and data ............... .. ............... 123 (b) The prices of energy products ..... .................. 125 (c) The coal industry ................................... 127 (d) The oil industry ................... ................. 129 (e) The electricity supply industry ............ 133 (f) The use of energy in rural areas ......... ........... 135 APPENDIX I: Aggregative Measures of Energy ..................... 139 APPENDIX II: Estimates of the Consumption of Non-Commercial Fuels 143  Index of Tables Table No. Page No. A-1 Estimated Coal Reserves in India ...................... 3 A-2 Respective Shares in Production & Reserves of Bengal/Bihar and Outlying Fields. 7 A-3 Crude Petroleum - Proved & Indicated Reserves and Domestic Production 1966 - 1972 .. 9 A-4 Natural Gas: Reserves, Production and Utilisation 1965 - 1972 11 A-5 Estimated Share of Hydro Potential by States and Regions, River Systems and Types of Project .......................... 13 A-6 Estimated Energy Consumption, Commercial and Non-Commercial 1953/54 - 1970/71 ....................................... 20 A-7 Commercial Energy Consumption by Main Fuels,1953/54-1970/71.. 22 A-8 Commercial Energy Consumption by Sector 1960/61-1970/71 24 A-9 Growth Rates of Total Commercial Energy Consumption, CDP, and Industrial Production 1960/61-1970/71 .25 A-10 Main Producing Sectors,Contributions to GDP, Commercial Energy Consumption and Energy Intensity 1960/61-1970/71 .... .. . 26 A-il Analysis of Changes in Commercial Energy Consumption by Sector, 1960/61-1970/71.. 28 A-12 Fuel. and Power Industr-es:Targets and Realizations in the Foi:rth Plani Period ................. 30 ;- 13 Coal Production by Sector, Typc of Coal and Main Coalfieldls 32 s- -1 r inland Consumption of Coal,19C60/61-1970/71 . .33 A-15 1rnployment, 0utput and Output per Man-Year in Coal Mines 1961-1971 .35 *A-l6'. Ur.nit Costs cf Coal Production in 1973: Singarcri Collieri.es Company and Saunda Colliery .36 A - L7 .ver2ge Uni, Value of Coal Production for Selected Yeirs. .... 38 1-18 2-Prce of Ra; Coking Coal to Steel Plants, vasheries and Ot7her Custonmers - 31 january, 1973 .39  Table No. Page No. A-19 Price of Non-Coking Coal Per Ton, 31 January 1973 ......... 39 A-20 Consumption of Petroleum Products ......................... 43 A-21 Consumption of Petroleum Products: Ratesof Increase for Main Product Groups & Selected Products 1951-1973 . .. 44 A-22 Consumption of Petroleum Products: Relative Shares of Product Groups .46 A-23 India, U.S. & Western Europe: Comparative Shares of Main Petroleum Products,1972 ................... ................ 46 A-24 Production of Crude Petroleum in India by Company ....... ... 47 A-25 Crude Tiroughput of IndianRefinerics:Private, Public and Joint Sectors .............................................. 49 A-26 Estimated Refinery 'Tfhroughput Capacity, March 1974 ........ 50 A-27 Domnestic Production & Imports of Crude Cil & Refined Products 52 928 Petroleum Sector: Extent of Dependence on Imports .......... 53 s.-21-9 Prices Ex-Refinery & Ex-Storage Point, and Excise Duties, for Six iMajor Petroleum Products at Selected Dates ........ 57 A-30 E.Lectricity Generated: Gross and Net .......... .. ........ 59 A-31 Gross E'lectricity Generated According to Primary Fuels .... 60 A-32 Conventional Thermal Stations: Consumption of Principal u,els, 1971/72 ..61 A-33 e'.'-ctricity Supply: Installed Capacity ................ 62 A -34 Relative Shares in Net Electricity Consumption ............ 63 A-35 . lectricity Consumption in Selected Manufacturing Industries 64 A-36 Number of Villages Electrified & Irrigation Pumpsets/Tubewells Energised ........................ .................. 65 A-37 Per Canita E.lectricity Consumption by State . .............. 66 A-38 S.-les of Energy to Ultimate Consumers by Different Supplying Auenc Les,1971/7Z .2............. ...................... 6R A-39 State Electricity P,oards: Average Revenue Per Unit of Power Soldi 1971/72el ................. ......................... 75  Table No. Page No. A-40 Revenue and Operating Costs in Total and per Unit Sold, 1970/71 .......... ... ., 0. * ....... ... I ...4 76 A-41 Borrowing and Capital Expenditure of Six State Electricity Boards, 1971/72 . ....... .. ........................... ..... 78 A-42 Available Power Supply and Estimated Demand by Regions and for All India, February - April 1973 and November, 1973 - January, 1974. ............ . . .. . . . . .. . 81 A-43 Coal Transport: Daily Average Wagon Loading, 1969/70 to 1973/74 .................................................. 85 A-44 Petroleum Imports by Quantity, Value and Unit Value, and Total Commodity Imports, 1970 to 1973 .................... 88 A-45 Iranian Light f.o.b. Prices and Tax Paid Costs ........... 89 A-46 Fifth PLan Program: Proposed Plan Outlays in the Energy Industries, 1974/75 to 1978/79 .......................... 96 A-47 Fifth PLan Program: Proposed Plan Targets for the Energy Industries, 1973/74 to 1978/79 . ........ * ................. 97 A-48 Coal: Estimated Consumption in 1973/74, and Projected Demand in 1978/79, by Main Consumers ... ..... 98 A-49 Coal Production in 1973/74 and 1978/79 by Type of Coal, Coalfields and Public Sector Colliery Companies .......... 100 A-50 Coal Mining Eqruipment: Projected Demand for the Fifth Plan Period and Anticipated Domestic Production in 1974/75 .... 101 A-51 Fifth Plan Program: Proposed Plan Outlays by the Three Public Sector Coal Mining Companies e 0 ....... 103 A-52 Fifth Plan Program: Proposed Plan Outlays in the Petroleum Industry . .. .. . ................. 106 A-53 Domestic Crude Production in the Fifth Plan Period: Official Targets and Bank Estimates .............................. . 108 A-54 ONGC: Proposed Distribution of Expenditures by Area in the Fifth Elan Period . ................ . . . . 108 A-55 ONGC: EProposed Distribution of Expenditure in the Fifth Plan Period between Exploration and Development and by Category of Field.* ...................... #.. ........ 109 A-56 Petroleum Refining Capacity: Approved Additions in the Fifth E'lan Period ............. ..... . ...... .. . . .. 110  Table No. jPage No. A-57 Fifth Plan Period: Possible Growth of Refining Capacity, Refining Output, and Consumption and Imports of Petroleum .113 A-58 Fifth Plan Period: Possible Growth of Crude Imports, and Changes in the Degree of Dependence on Petroleum Imports 115 A-59 Fifth Plan Program: Relative Shares in Plan Outlays in the Power Sector . 116 A-60 Coal Replacement and Conversion Factors ..... 140 A-61 Energy Consumption in 1970/71: Shares of Various Fuels on Three Different Measures .......................... 141 A-62 Estimated Energy Consumption, Commercial and Non-Commer- cial: Coal Equivalent Basis, 1953/54 to 1970/71 142 A-63 Commercial Energy Consumption by Main Fuels: Coal Equivalent Basis, 1953/54 to 1970/71 .142 A-~'.8 Estimated Urban and Rural Population, and Consumption of Non-Commercial Fuels, Past and Projected .144 A-65 Estimated Consumption in India of Non-Commercial Fuels, 1970/71 ....................................... 145  I /~ ~ ~ ~~~~~~~~~~~~ )I | AFGHANiSTAN '