Context: The recent coal shortage shows flaws in the entire energy production chain. There is no public body at the government level with executive oversight, responsibility, and accountability for the entire energy value chain.
What are the challenges leading to the energy crisis?
Structural issues: The cycle of blame game-

• The problem of the failure of ‘Coal India’ in managing the production process has roots in power generation companies, which in turn is related to the DISCOMs inability to pay back the dues.
• DISCOMs ultimately blame the politics for compelling them to sell electricity to residential and agricultural sector consumers at subsidized tariffs, whereby the cost of energy is not recovered.

There is no energy strategy with the executive authority. NITI Aayog and planning commissions policies are mere recommendations without executive force.

• Accessibility Challenge: The household sector is one of the largest consumers of energy in India. It is responsible for about 45% of the total primary energy use. In rural areas, biomass accounts for 90% of total primary fuel consumption for cooking. This has serious health impacts on the rural people.
• Infrastructure and skill related challenges: Lack of skilled manpower and poorly developed infrastructure for developing conventional and unconventional energy.
• India lacks transportation infrastructure for making energy accessible e.g. pipelines can be a useful way to boost the total supply of gas in the country. Gas will play a major role in the Indian energy mix because it can be used effectively in several demand sectors.
• Economic challenges: Coal, oil and natural gas are the most important sources of primary energy in India. Inadequate domestic supplies of these hydrocarbons are forcing the country to increase its import bill. Rising fuel subsidies create difficult conditions for the economy.

What is the solution?
The government should pass an Act granting energy the ‘constitutional sanctity’ and frame for the formulation and execution of an integrated energy policy.

• Laying out measurable metrics for monitoring the progress towards the achievement of energy independence, security, efficiency, and “green” energy.
• Single ministry -‘Ministry of Energy’ should be created to oversee the currently siloed verticals of the ministries of petroleum, coal, renewables, and power.
• As it could be politically challenging, therefore an executive ‘department’ can be created under PMO. The objective would be to identify and handle all of the issues that currently challenge the value chain.
• Fiscal Actions: There should be easy access to finance and the government should incubate clean energy R&D and innovation.
• Raise Public Awareness: It would be to coordinate and implement the communication strategy to raise public awareness about existing and emergent energy-related issues, especially global warming.

What are the potential benefits?

• This would increase investments in the energy sector if the current fragmented and opaque regulatory, fiscal, and commercial systems and processes were replaced by a transparent and single-point executive decision-making body for energy.

Road Ahead

• The Ministry of Energy should not alter the existing roles and responsibilities of the various ministries that oversee petroleum, coal, renewables and power, but would identify and handle all of the issues that currently fall between the cracks created by the existing structure.