Building smart cities without energy

Despite India’s effort to achieve energy security by opening new mines and acquiring oil wells abroad, the massive quantity of energy required for smart cities is likely to remain elusive

Recent statements by Ministers from the National Democratic Alliance, when read together, provide insights into the government’s acche din promise. Urban Development Minister M. Venkaiah Naidu promised to create a hundred smart cities with better facilities, connectivity and a better environment. Environment Minister Prakash Javadekar said that to reduce poverty, India’s carbon emissions must grow till 2030-40.

But can India access the massive quantity of energy needed to develop 100 smart cities? Will more fossil fuel use, the primary cause for carbon emissions in projects such as smart cities, bullet trains, river linking, necessarily reduce poverty? Can India replicate the 20th century development model of the North nations?

It is unclear whether the new smart cities that Mr. Naidu referred to are greenfield ones or upgraded older cities. Presuming they are the latter, two questions arise: how much energy does upgradation require, and is this energy available?

Fossil fuelled cities

Unlike the fully fossil-fuelled cities of North nations, Indian cities are semi-fossil fuelled. They consist of an older city constructed in a pre-fossil fuel era, with narrow streets made for pedestrians and animal carts and low-rise buildings made from lime binders, and a newer city constructed with broad streets for fossil- fuelled vehicles and concrete high-rise buildings. A conservative energy cost for upgrading 5,000 kilometres in older cities is 600 million tonnes of oil equivalent (MTOE). That is almost equal to India’s annual total primary energy supply (TPES) worth Rs. 35 lakh crore, i.e., more than double of the Union budget for 2014-15.

Since 2000, India’s energy consumption has grown at 7 per cent per annum, keeping pace with GDP growth. If the additional energy consumption for the smart cities project is spread over the next 10 years, the annual fossil fuel consumption rate will have to jump to 15 per cent.

Unlike money, extra energy cannot be printed at will. It has to be first found, and then accessed. India is already hard pressed to meet the current demand for fossil fuel. Coal contributes 60 per cent of the fossil fuel that India consumes. The country has the fifth largest coal reserves in the world. Yet, it imported 21 per cent of its coal last year, as indigenous production failed to meet demand. Consequently, India’s power utilities enforce regular rolling power cuts. Opening new coal mines has its own problems. According to former Environment Minister Jairam Ramesh, untapped coal blocks are in dense forests that constitute only 2.5 per cent of the country’s area. Opening them will further endanger our forests.

Indigenous oil and gas reserves and production are low. Increasing imports will burden the economy, particularly if, as market analysts predict, instability in the Middle East prolongs and oil prices jump from $110 to $150 per barrel.

The party is over. We have hit peak oil and new oil discoveries have been few and small. Oil production has remained at 85 mbd for the last decade, despite rising demand. Peak gas will take place two-three decades later. Replacing oil and gas with coal will increase atmospheric carbon dioxide rapidly, and green and nuclear energies cannot replace fossil fuels.

Despite India’s effort to achieve energy security by opening new mines and acquiring wells abroad, the massive quantity of energy required for smart cities is likely to remain elusive.

Other Asian countries

Comparing India’s carbon emissions, development, and the percentage of poor people with other Asian countries that share the same tropical ecological space throws light on the second question.

India has a per capita carbon emission of 1.5 T per annum. Bangladesh, Cambodia and Laos emit 20 per cent, and Bhutan two thirds of that amount. Yet, the Human Development Index (HDI) scores of India and these countries are similar, ranging from 0.515 to 0.554. The multidimensional poverty index (MPI) puts about half of the population in India, Cambodia, Laos and Bangladesh and a quarter in Bhutan, under the poverty line. Sri Lanka’s has done much better. Its HDI is at 0.715, placing it 46 ranks above India, and has only 5 per cent of its population below the MPI line. Yet its per capita carbon emission is 0.6 T per annum, 60 per cent less than India’s.

Bangladesh, Bhutan, Cambodia, Laos and Sri Lanka matched or emulated India’s HDI and MPI scores but with significantly lower per capita emissions. Their performance questions Mr. Javadekar’s statement. How did they do it?

First, they used proportionally less fossil fuels, whose contribution ranged from 25 to 50 per cent of their TPES, compared to India’s 73 per cent, and hence lowered their per capita carbon emissions. Second, lower urbanisation in these countries results in less energy consumption and emissions. Cities consume over 75 per cent of TPES of a country but produce only 5 per cent of it. Third, India’s greater reliance on fossil fuels makes its economy less energy efficient and more polluting, consequently leaving less per capita energy available for poverty alleviation.

The energy density of fossil fuels is very high, and requires large investments in mining, transport, power generation and distribution. Only the state and big business can make the large investments required to produce energy from fossil fuels. To recover investments, it makes sound business sense to sell it for profit rather than to alleviate poverty. Biomass has an energy density that is half to a fourth of fossil fuels, and its energy conversion technologies are simpler, requiring smaller investments. Energy from these sources is cheaper and more accessible to the poor to meet daily needs.

In the last two decades, India’s economy has grown rapidly, but so has the gap between the rich and the poor. India’s GDP quadrupled.India’s Gini index, a measure for income inequality where zero denotes complete equality, is up from 0.32 to 0.38. For two decades India has sung the 10 per cent growth mantra, paying little heed to distributive justice.

There is growing consensus that “trickle down” benefits of growth have been weak in India. If the trends of the last two decades continue, it will take India several decades to lift the people under the poverty line above it, provided global warming and peak oil don’t tip the global economy into a crisis. If either happens, the poorest and the most vulnerable will be impacted the most.

To be more convincing, Mr. Naidu should share his energy costing and supply analysis for the proposed 100 new smart cities. The Ministers for Railways and Water Resources should do the same for the bullet train and river linking projects. And Mr. Javadekar must argue his “more emissions for poverty reduction” statement. Else there will be further gain maximisation for a few.