Environmental Engineering Reference
In-Depth Information
2.3
Social/Demographic
Environment
and consumption. The domestic gas price is
most likely to be revised from the current level
of $4.2/MMBtu to about $8/MMBtu. This
would increase competitiveness of renewable
energy. Political decisions related to subsidised
fossil fuel negatively impact renewable market
development, and subsidy on renewable energy
may prove a driver for renewable market.
Government regulations on mandatory purchase
of renewable energy to feed the grid network
promote production and consumption of renew-
able energy in the country.
In recent times, the consumer preference over
energy choice has been changing. Well-informed
consumers are getting attracted towards greener
fuel like renewables and natural gas due to less
pollution and due to it being an environmentally
safer option. Industrial and commercial customers
are looking for a reliable and effi cient supply of
energy along with other environment benefi ts
(Kar and Sahu
2012
). On the other hand, the
transport sector has been searching for economi-
cal, safer and environment-friendly fuel like
compressed natural gas (CNG). It is clear that the
social/demographic environment is steadily
pushing for the adoption of greener technologies.
Consumers across the globe are becoming far
more concerned about energy effi ciency and
intensity, water footprint and carbon footprint
which have direct linkage with climate changes.
Even Indian consumers are gradually looking for
green options, be it industrial and domestic
customers in favour of natural gas and individual
buyers looking for energy-saving white goods.
2.2
Economic Environment
Higher disposable income combined with
higher affordability and accessibility to energy-
consuming products like air conditioners, refrig-
erators, and heaters increases energy
consumption. The economic environment in
many ways impacts different industries including
the energy industry. For example, petroleum
and natural gas industry in India has been tradi-
tionally and historically exposed to various
economic challenges like high growth rate, rate
of interest, infl ation and fl uctuation in currency
exchange rates. Overdependency on import of
petroleum products means higher exposure to
currency fl uctuations leading to price fl uctua-
tions in the domestic market. Liquifi ed natural
gas (LNG) import from spot markets seriously
impacts the fi nal price of natural gas in India,
hence infl uencing the consumption pattern.
Though in the recent past there have been suc-
cessful fi nds of natural gas reserves like the KG
basin in India, still a signifi cant demand is met
through imported LNG. Thus, the international
LNG prices, shipping costs, geopolitical ties
between the countries and other international
events have a direct or indirect impact on energy
pricing in India. The recent weakening of the
Indian currency versus the US dollar seriously
dented the current account defi cit of the coun-
try. The government has been encouraging con-
sumers to consume less fossil fuel-based energy
and use more renewable forms of energy.
2.4
Technological Environment
Technological upgradations have been very
much visible in various forms of energy technol-
ogy. Advanced technology in the energy domain
has been used to enhance production, effi ciency
and utilisation of available resources. Technology
has been continuously evolving across the
energy value chain. For example, the steady
technology upgradation is clearly visible in
petroleum and natural gas value chain starting
from exploration and production to marketing of
fi nished products. Similarly, there has been con-
stant technological upgradation in the renewable
energy sector. In the case of wind technology,
the emergence of rotors designed for lower wind
speeds, having even smaller specifi c power, with
high masts and long blades in relation to genera-
tor size and even higher capacity factors (IEA
2013
), has been the outcome of technology
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