Energy Crisis Scenario Analysis

The sample essay on Energy Crisis Essay deals with a framework of research-based facts, approaches and arguments concerning this theme. To see the essay’s introduction, body paragraphs and conclusion, read on.

Energy Crisis is a shortfall in or interruption to the provision of energy supplies. The planet is progressively marching towards a serious electric energy crisis, owing to an escalating desire of electric energy becoming greater than its supply. We have always accepted that the energy we make use of each day is not unrestricted, still we take it for granted.

Coal, petroleum, electrical power, even water has inadequate availability. Nevertheless, we have not taken sufficient precautions to handle a possible energy crisis. When I say ‘we’, I am not mentioning the governments but everybody, the widespread individuals.

Oil and gas have already become too pricey, and with each passing day, they are becoming being extinct. Some uninformed people assume that the electrical energy crisis is an illusion. They fail to conceive the whole picture.

There have been 3 chief energy crises until now – the 1973 oil crisis, the 1979 energy crisis, and the 1990 oil-price hike, aside from a couple of regional crises. Prices have been briskly escalating for the past five years, due to the rising desire and the escalating shortage of energy resources. Hence owing to the importance of energy crisis in this present world, I have selected this topic.

Causes and Consequences of Energy Crisis

Objective: Review of Literature: Relevance of Topic: Imagine this scenario: One morning you wake up, yawn, scratch yourself, and sit up.

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Wearily, you stumble out of bed. You go to your refrigerator for a glass of milk only to discover that the light inside does not turn on and everything inside it has been sitting at room temperature overnight and is quickly beginning to spoil. “That’s funny, “you think to yourself. When you try to brew a cup of coffee the coffee maker does not seem to want to start. Your gas stove won’t turn on, so it looks like there’ll be no bacon and eggs this morning.

As you sit down with your bowl of dry cereal, you glance out the window and wonder why there is no newspaper. You pick up your cordless phone to call the newspaper and complain, but it doesn’t turn on either. You begin to panic and you run out to the car. It won’t start. “What’s going on? ” you think to yourself. “Why doesn’t anything work? ” Does this sound like the beginning to some strange science fiction novel? Well, the scenario we just illustrated could be very real indeed. Together, fossil fuels (coal, petroleum, natural gas, and their derivatives) provide more than 85% of the energy used by mankind today.

Unfortunately, the reserves of those fuels are not infinite. Scientists predict that within the next two centuries we will run out of those valuable energy sources. This is you experience energy crisis. Clearly, something must be done. But what? Before the Industrial Revolution of the 1890s, human beings had only a moderate need for energy. Man mostly relied on the energy from brute animal strength to do work. Man first learn to control fire around 1 million BC. Man has used fire to cook food and to warm his shelters ever since. Fire also served as protection against animals.

Thousands of years ago, human beings also learned how to use wind as an energy source. Wind is produced by an uneven heating by the sun on the surface of the earth because of the different specific heats of land and water. Hot air has lower pressure than cold air and since high pressure tries to equalize with low pressure the current called wind is produced. Around 1200 BC, in Polynesia, people learned to use this wind energy as a propulsive force for their boats by using a sail. About 5 thousand years ago, magnetic energy was discovered in China.

Magnetic force pulled iron objects and it also provided useful information to navigators since it always pointed North because of the Earth’s magnetic field. Electric energy was discovered by a Greek philosopher named Thales, about 2500 years ago. Thales found that, when rubbing fur against a piece of amber, a static force that would attract dust and other particles to the amber was produced which now we know as the “electrostatic force”. Around 1000 BC, the Chinese found coal and started using it as a fuel. An energy crisis is any great shortfall (or price rise) in the supply of energy resources to an economy.

It usually refers to the shortage of oil and additionally to electricity or other natural resources. The crisis often has effects on the rest of the economy, with many recessions being caused by an energy crisis in some form. In particular, the production costs of electricity rise, which raises manufacturing costs. Hence it is very important to select this topic since it is directly related to the present worldwide situation. Proposed Methodology: I have selected a method in the following seven steps : 1. Project initiation 2. Establish a detailed description of the present system . Assess local, regional and global trends 4. Identify and assess key technologies which can bridge to a future sustainable system for reducing energy crisis 5. Identify key actors in the region that are responsible for energy crisis (to ensure correct decisions and competitive markets) 6. Formulate and analyse pathways towards a more sustainable energy system Observation: India has experienced impressive economic growth since its reforms in 1991. Since that time, the country has witnessed a considerable reduction in poverty and vast improvements in the standard of living.

India now has an economy with a dynamic private sector and a burgeoning middle class, however, faces growing challenges to maintain its economic growth. In the first quarter of 2012, the Indian economy grew by 5. 3%, the lowest in almost a decade. With surging trade and budget deficits, and a depreciating currency, widespread concern exists over whether India could see the return of a “1991-like crisis”(FT, 2012). To revive the vibrancy of its economy, a well-functioning and financially-sound energy sector is critical to allow India to sustain further economic growth and reduce negative impacts on its public finance.

This will require an accelerated transition to an energy sector based on market economy. We have seen two major trends appearing in India’s overall energy sector: first, a serious energy shortage across different fuel sectors, ranging from coal, gas, and oil to uranium. The deficiency of these fuels is resulting in a considerable shortage of electricity, which hampers economic and social development. Second, there is an increasing need to import more energy as a result of the country’s stagnating domestic production. Crude oil used to be the main energy import, but India now needs to import greater volumes of coal and gas as well.

However, due to considerable disparity between domestic and international prices for these fuels, actual imports might not take place, or will take place to a lesser degree then the actual fuel shortage might require. Moreover, increasing fuel imports will have negative implications on India’s financial condition. To effectively address these two trends, India needs a functioning energy market, in other words,a system where national energy demand can be met by timely and adequate investment in a sustainable way and business entities operating in the energy market are commercially viable.

Six major challenges are identified in this paper, which need to be resolved to create a functioning energy market: players, pricing, investment, implementation, policy and political will. These challenges should be addressed urgently by Indian policy makers, as the deteriorating energy situation can seriously weaken the country’s prospects for a robust national economy and improved daily life of its citizens Players The capability of individual players to carry out their business objectives is as important as the overall business structure that shapes and limits the scope of their operations.

Financial capacity This is the most important capacity required for players to fulfiltheir primary business objective – delivering energy profitably to consumers. However, many of India’s energy players suffer from financial weakness, with limited financial resources and restricted investment ability Management autonomy India’s energy sector is dominated by public sector companies or PSUs (owned by the central anstate government) Other expertise Technical and managerial expertise of Indian energy companies needs to improve.

Obtaining thelatest technology for upstream investments in coal, oil and gas to boost domestic production should be the top priority. Additionally, more focus should be given to the level of operation and management. Pricing Pricing is the key to ensure the commercial viability of business entities and to attract investment into each fuel sector. Proper pricing that ensures long-term business viability should be in place. As described earlier, some parts of the energy sectorin India keep end-user prices too low: for instance, power tariffs for agricultural consumers and subsidised cooking and transport fuels.

The problem is that these subsidies are untargeted and ineffective in terms of benefiting the poor, while the overall price level is not sufficient for companies to recover costs. The price should be set at the level where business stays viable and generates adequate financial resources for investment, and at the same time, subsidies should be directly channelled to those who are in need. Analysis (Graph) The 450 Scenario projects that energy demand would reach 1 223 Mtoe in 2035, which is 17% less than under the NPS. Coal demand is much lower at 365 Mtoe, almost half of the NPS projection.

The demand for nuclear energy would double in the 450 Scenario to 90 Mtoe, growing at a CAGR of 11. 9% from 2009 to 2035, and renewable demand would increase to 57 Mtoe. Sectoral energy demand reflects the economic structure of a country. In 1990, the building sector was India’s largest energy consumer, representing 42% of India’s total primary energy demand (TPED), using biomass as the major fuel. The share of buildings dropped to 29% in 2009 and will decrease to about 18% in 2035. The industry sector consumed approximately 22% of TPED in 1990 and will remain similar until 2035.

Domestic energy production in India grew from 291 Mtoe in 1990 to 502 Mtoe in 2009 at a CAGR of 2. 9%. Considering India’s demand growth at a CAGR of 4% for the same duration, domestic supply could not keep up with the demand. Biomass was the largest production source with 46% share in 1990, but dropped to 33% in 2009. Result: A serious energy shortage and growing pressure on imports have been seen in the Indian energy sector. In the middle of 2012, India’s power shortage led to massive rolling power cuts across the nation.

Industries and businesses shut down and public protests followed, demanding better power supply. That the current power crisis is not a temporary hiccup in the power system, but rather a symptom of the entire energy sector reaching the tipping point, is worrying. After a decade of unfinished liberalisation of the energy sector, India is now standing at the crossroads with a need for the next phase of energy sector reform. Strong political leadership is vital to address energy challenges. Public perception should be shifted to accept that energy is not an entitlement, but a commodity.

Energy supply cannot be taken for granted, and it requires sufficient resources to be delivered to consumers. India’s policy objective of inclusive development and affordable energy should be maintained, but business viability cannot be sacrificed in the process. This perception is the foundation of a functioning energy market and the sustainable, green growth economy that India pursues. India is undoubtedly and irrevocably integrated into the global energy market. It relies on significant amounts of energy from foreign sources and, as such, India is a price taker, not a price setter.

India can reduce its vulnerability to energy price fluctuation through a flexible and competent energy market, but it cannot isolate itself from price volatility. At the same time, to expand its energy supply capacity to meet the rapidly growing energy demand of its people, India needs more investment. A significant portion of the required investment must come from foreign investors, for whom it competes with other countries. This implies the necessity of integrating India’s energy institutions and policies with global practices.

Finally, energy challenges should come before political interests. As the father of India’s nuclear energy, Dr. Bhabha, once put, “no power is as expensive as no power. ” A reliable and adequate supply of modern and clean energy is the prerequisite for India’s continued economic development. Nothing would be more costly than the disruption of the national economy, which has so much potential to prosper, as well as the disruption of daily activities of the Indian citizens, who are ready to participate in another economic miracle.