Context

The current trajectory is fundamentally antithetical to the objective of sustainable development.And, because time is of the essence.

Background

• Today, every projection of India’s energy future draws the same broad conclusion.

• The International Energy Agency (IEA), multinationals like Exxon-Mobil, BP or Shell, the erstwhile Planning Commission, or now the NITI Aayog Conclusion is that

  • The forecast is that energy demand will move on an upward curve.

  • Indigenous supplies will fail to keep pace with this increase in demand;

  • Energy imports will rise in absolute and relative terms.

  • The environment will face increasing stress.

  • Coal will dominate, oil and gas will have significance; renewables, whilst on a rising trend, will account for a relatively inconsequential share and air pollution, depleting water tables and extreme weather conditions will presage ecological collapse.

Data Regarding Usage

• India will import 95 per cent of its oil requirements; 60 per cent of its gas requirements and 30 per cent of its coal requirements (despite the fact that it contains the fifth largest deposits of coal in the world).

• India will meet its Paris commitments to reduce GHG emissions by 35 per cent in 2035 relative to 2005.

• It will be one of the largest absolute emitters of pollutants in the world.

Reasons

1. Abundance of Coal

• Coal is abundantly available — it is the cheapest of fuels and there are no competitive substitutes for liquids as a fuel for mobility.

2. High cost for renewables

• The costs of transitioning to renewables — whether calculated in terms of the sunk costs of stranded thermal power assets or the creation of transmission and distribution infrastructure to overcome the problem of “intermittency” (the sun does not shine all the time; nor does the wind blow with regularity) are huge.

3. Technology and other constraints

• There are technological (that is, storage or carbon sequestration) and regulatory (conservation norms, emissions standards) issues to overcome before clean energy can be brought to scale.

How to overcome dependence on energy imports

• We have to ask the counterfactual and contemplate the counterintuitive — “What institutional, economic, technological, financial and collaborative steps must be taken to flip the ratio between fossils and renewables in the energy basket of emergent India?

Way forward

• A few early steps must be taken by the new government to start this process.

1. Replacing the Current views on energy sectors

• • This lens provides a disaggregated picture and encourages a siloed approach to energy governance.

  • It does not facilitate a holistic overview of the linkages between the different components of energy (oil, gas, coal, renewables, nuclear, hydro, bio, non-commercial);

  • Nor between fuel usage, electricity, mobility, industry, and agriculture, on the one hand, and, ecology on the other.

  • A general equilibrium macro model is required that captures such linkages and enables decision-makers to consider the systemic implications of changes in one or more of these variables.

2. Creating appropriate Instituions

• We have to create the appropriate institutional structures of decision-making.

• The current structure of multiple “energy” ministries (petroleum, coal, renewables, power, atomic) should be collapsed into one omnibus Ministry of Energy and Environment.

• This will enable integrated decision making; it will also provide a platform for collaborative public-private and constructively “disruptive” innovation.

• Besides, it will also bring sustainability to the fore of policy.

3. Legislate Environment Act

• The government should use its newly derived mandate to legislate an “Energy and Environment Security” Act.

• The purpose should be to engage the public in the larger debate on how to weaken if not break the current unhealthy nexus between economic growth, energy demand and environmental degradation.

• It should be to elevate the objective of wreaking an energy “discontinuity” into a national priority.