India’s energy scenario looks bright, albeit with some hiccups that need urgent attention.
For a burgeoning economy, energy is the prerequisite for all future developments, and India is poised to grow leaps and bounds in the next few decades. At least a strong roadmap seems visible, as clarified by the ruling government. India’s energy sector is taking a lead in global consumption, pushed by its consistent economic growth. Its energy sector has remained dynamic, open to new ideas and their implementation, and encouraging innovation to beat overt reliance on conventional fuels like gas, oil, and coal.
The country is expected to grow significantly, almost defeating China’s growth, provided it continuously accommodates rapid market demands and shifts to exploit resource utilisation. With environmental norms and emission sanctions getting more stringent, the energy sector’s direction henceforth remains a crucial decision. How India manages to thwart of perceived challenges by moulding its energy policy, is what remains to be assessed.
India’s per capita energy consumption, having doubled since past 15 years, is growing at 6% per year, but only 1/3rd of the global average. In addition, about 240 million people still live without any access to affordable electricity. Energy development comes with a demand of being affordable, which remains a challenge for India, given the rapid and uncertain fluctuations in global fuel prices. Coal as a fuel accounting for 58% of energy needs in India, reduced its share while simultaneously increasing the share of environment friendly fuel is a pertinent challenge. To address this, the Ministry of Energy realizing the need for alternative energy, has embarked on an ambitious plan of ramping up solar energy generation to 100 GW by the year 2022, for which the World Bank is lending $1 billion in FY17 alone.
India is leading the International Solar Alliance promoting solar power generation globally, which facilitates exchange of innovative production, sharing creative power saving mechanisms, and a singular forum of financial assistance to solar power projects. As for alternative fuel, India is productive enough at the right time that could prevent electricity shortage for its future. Although oil and gas imports remain a challenge, expediting domestic oil and gas discoveries under the newly introduced Hydrocarbon Exploration Licensing Policy is a perfect policy move. It eases license acquisition by introducing all hydrocarbon discoveries under one single license. Through this, sudden rise in domestic natural gas prices could be circumvented, to offer stable cooking gas options in urban and rural areas.
Solar and wind power tariffs are successively reducing, reaching to a new low of 2.97 per unit for solar and 3.46 per unit for wind power projects. However, if renewable power project finance is also reduced with innovative long term payment schemes, more players could be interested in alternative energy. The government, sensing a challenge in financing power projects could introduce new policy measures of innovative financing. The Supreme Court banning diesel vehicles more than 10 year old, and banning their registration in Delhi indicates a firm footing against environment damaging fuel. Gradual shift to environment friendly fuel cars remains a challenge that could be addressed by luring hybrid car and electric vehicle production. Promises abound to make India a 100% electric car market, but unperceived issues pose a bigger challenge that would only manifest as these cars start to ply on roads.
India’s energy sector is dynamic, a mix of seemingly unlimited opportunities, specific lack of policy motivation, and challenges in practical implementation. It is trying to face every challenge head on, and is wise enough to be on the right track of addressing perceived issues by replacing costly power with cheaper options. With a resolute understanding of the country’s future challenges and opportunities, India can be an energy innovation leader.