Analysis India’s energy options are critical to the world – analysis
India’s energy sector has undergone a remarkable transformation in recent years, laying the foundations for an important new stage in its development.
25 years ago, half of India’s population did not have access to electricity. Today, thanks to the successful implementation of recent government policies, 99.9% of households have electricity. A drive to improve the availability of clean kitchen solutions in rural areas has led to a “blue flame revolution,” with more than 80 million new liquefied liquefied gas connections. Along with piped natural gas connections, this has increased clean kitchen access to about 98% of households.
India has also seized the opportunity offered by energy efficiency. As part of the National Mission for Enhanced Energy Efficiency, the government has distributed about 370 million LED bulbs under the ujALA scheme.
Through these initiatives, India has ensured that energy has become widespread and affordable for its citizens, whose typical incomes are a small fraction of the global average. India has pioneered the global deployment of wind and solar technologies, which account for nearly a quarter of its total power generation capacity.
The International Energy Agency (IEA) has just published its first in-depth review of India’s energy policies, which includes high-level recommendations aimed at helping the government achieve its goals, focusing on transformation energy system and security energy.
Created 45 years ago to help ensure the energy security of the world’s major economies, the IEA is an intergovernmental organization whose member and association countries account for 75% of global energy consumption. The IEA offers ambitious solutions to today’s energy challenges that have a positive and real impact on efforts to ensure a safe and sustainable energy future for all.
India joined the IEA family in March 2017, becoming a country of association. Last month, the IEA was mandated by its member governments to initiate consultations with India on a strategic partnership as a way for eventual accession, a game change for international energy governance.
India is a rapidly growing force in global energy markets. The energy decisions the country makes will be critical to the future of the planet, and the EAI is eager to support the Indian government and share knowledge and expertise.
In recent years, the IEA has worked with the Indian government to support a number of energy policy initiatives. This work includes policy analysis and advice on the integration of higher renewable energy quotas, and on an integrated approach to using energy efficiency and renewable energy to help achieve the goals of access to energy, climate change and air quality.
The new in-depth review of India’s energy policies supports this strong collaboration and carefully looks at how the government can achieve its energy goals.
Here are some of the insights it offers for five key areas:
Renewables: India’s goals include increasing its renewable energy generation capacity from 80 gigawatts today to 175 gigawatts by 2022, and finally to 450 gigawatts in the long run. This will require a significant increase in investment, as well as the appropriate approach to accommodate the growing quotas of wind and solar power, whose electricity production may vary depending on the weather, time of day and season.
Investment: India also continues to play a greater role in the markets of its energy sector as it seeks to attract more investment for its growing energy needs. The IEA welcomes decisions to enable private sector investment in coal mining and to open up the country’s retail oil and gas markets. The Government of India should ensure full non-discriminatory access to the country’s energy transport networks, work with States to implement electricity and tariff policy reforms, and take steps to further reduce Subsidies.
Oil security: Promoting renewable energy and domestic oil and natural gas production will help mitigate India’s growing dependence on oil, gas and coal imports. But ensuring a safe supply of oil will remain a pressing need, based on expected growth in oil consumption and imports from the country. The IEA commends India for launching a strategic oil reserve to cover more than 10 days of current net oil imports. However, these reserves can only cover four days of net imports by 2040 due to increasing demand. In this context, the IEA supports India’s plan to expand its strategic oil portfolio and its efforts to develop international collaboration with countries that have experience in stock containment and emergency response to supply disruptions.
Climate resilience: Making India’s energy system resistant to extreme weather conditions has to be a high political priority, as the country is witnessing an intensification of water stress, storms, floods and others extreme weather events.
Innovation: If India’s admirable passion for innovation and technology is backed by a smart policy framework, it can trigger investments in clean energy technology. By adopting a research and development strategy for energy across the country, the government can bring together funding activities across India and engage with key players in the public and private sectors.
India has already shown that it can overcome seemingly impossible challenges in the development of its energy sector. The IEA and the Government of India hope to work closely together to further improve the lives of India’s 1.3 billion citizens by increasing their access to clean, safe and affordable energy.
Amitabh Kant is CEO of NITI Aayog, and Fatih Birol is executive director of the IEA
The opinions expressed are personal