Topic : Making India energy robust
Topic in syllabus: General Studies Paper 2:Indian Governance
India faces a variety of challenges related to energy and environment. Below are some initiatives that the next government could contemplate early on its term.
Initiatives to make India energy robust:
(On the national front)
- Integrating energy and environment policy:
This will help doing away with the current siloes approach to energy policy and enable the government to view the sector through an integrated and holistic lens.
It could more easily track and evaluate the systemic implications of changes in any one or more component variable.
- An “Energy and Environment Security Act” should be passed at the earliest possible opportunity.
The objective of such an act should be to bring energy and environment into the national narrative; to set out the road map for managing and mitigating the emergent challenge of balancing economic development and energy demands with the goal of environmental protection; and, to mobilize public support for the policy and regulatory changes required to hasten the transition to a non-fossil fuel based energy system.
- Decarbonisation, demand management and efficiency should be the watchwords of the new government’s energy policy.The focus should be on generating electricity from solar and wind, incentivising electric vehicles, curtailing diesel consumption in agriculture, enforcing standards and emission norms, redesigning buildings and factories to make them carbon neutral and influencing behavioral change towards energy conservation.
- The “clean energy fund” which is currently funded through a cess on coal production should be augmented through the issuance of “green bonds” and a clean energy tax.
This is to intensify research and development on clean energy technologies (battery storage, carbon capture and sequestration, hydrogen, coal gasification, modular nuclear reactors, etc.) and to fund the transmission and distribution infrastructure required for absorbing the flow of clean energy.
- The fund is currently managed by the Ministry of Finance. It should be managed by those who have domain expertise.
- Energy data is scattered across various government departments. This hinders policy and investment.The government should establish an integrated energy data center, whose data should be regularly updated and made available to all players on commercial terms.
On International front:
- The levers of energy and, in particular, oil policy, are today in the hands of autocratic leaders. The local actions of leaders now have global, supply-related ramifications.
- The government should, therefore, look to develop a specialized cadre of “energy diplomats.”
- Unshackling the energy public sector units from intrusive bureaucratic oversight will enable their management to respond with agility to unexpected market developments.
- Establishing strong personal relations with the leaders of oil exporting states.
Increasing domestic capabilities:
Intensifying exploration and enhancing recovery:
- The government should replace the current revenue-sharing model with a production-sharing model for new exploration.
- It should link investment in the marginal and smaller discovered fields with access to the domestic retail market.
- It should contemplate bidding out Mumbai High and other major producing oil and gas fields to international players with proven enhanced oil recovery technologies. The current recovery rates of production from these fields are well below the global average.
- Coal India Limited (CIL) is a major producer of coal but faces huge legacy issues (labour unions, mafia, politics and organisation) which constrain its ability to fully and efficiently harness the country’s indigenous coal reserves.
- The government can allow private sector companies into commercial coal mining. The consequent pressure of competition will bear positively on the performance of CIL.
- Gas Authority of India Limited (GAIL) should be unbundled into a monopoly gas pipeline company. It should be divested of its upstream (production/ re-gassification of LNG) and downstream (petrochemicals) operations.
- The “common access” principle must be fairly enforced. Every player, private or public, must have equal access to gas pipelines.
- The price of gas should be determined on the basis of market and competitive principles.
- A gas trading hub should be expeditiously established.
- Special energy courts should be established to expedite adjudication of disputes and ensure sanctity of contracts.
India faces a variety of challenges in energy and environment sectors. In order to make India energy robust, actions need to be taken at national and international level. Comment.