Dialogue January-March, 2013, Volume 14 No. 3

Editorial Perspective

Energy Security Paradigm in India

The Indians have genuine concern for their energy security due to various reasons. Whereas the people in general – rich and poor alike – need energy resources for fuel and lighting as a part of their minimum needs, and it is a major task before the country to provide them access to the modern sources of energy, the country shall have to meet the energy needs for the growth and development also. The recent blackout from the east to west of our country affecting the communication net work, the railways and industries crippling the economic activities and life of about 600 million people of our country revealed the weaknesses of our conventional power infrastructure. Nature has endowed us with ample, coal, solar, wind and hydel power resources. Our rural and urban biological waste has also the ample potential of energy generation. Unfortunately, these resource potentials have not been fully harnessed due to lack of insightful planning,

India, unlike a large number of countries, does not need a lot of energy to keep our houses warm and lighted. But, our engineers and architects hardly take advantage of the same in planning the building-construction and town-planning. Otherwise also, though solar energy is costly due to necessity of importing silicon and solar wafers, in long-term it is not so; its technology is simple, may have micro-grid and grid-parity with conventional sources. Moreover, this country, with second in the solar energy potential, may find it beneficial to provide solar to off-grid villages.

This country, with fourth highest coal reserves in the world, should have coal-intensive growth model, although coal is the highest emitter of carbon and our coal has higher percentage of ash/solid content. We, however, do not have coal gasification technique, which was to help us in this case. We are, therefore, forced to import high quality coal from other countries. Apart from technologicall snag, the coal sector also suffers due to the inefficient functioning of the Coal India Limited and mafia culture of the coal-belt. The film Gangs of Wasseypur depicted real picture of the mafia culture afflicting coal-belt. Moreover, politics of this country also adversely affected the healthy growth of coal sector. Incidentally, it may be mentioned that highly inflated work force due to political interference at the time of nationalization of coal industry and labour unionism were also the major factors responsible for the malady. The sad experience of coalgate is as yet fresh in our mind. In any way, in spite of these adverse factors and the environmental perils of fossil energy, we shall have no other option than to use our own coal due to our acute energy vulnerability. Being fissile energy poor country, we have also no option than to go for fissile fuel imports in spite of rising costs of imports.

The energy security paradigm in India, essential for the economic growth and development of the country and wellbeing of all its citizens, is subject to conflicting pulls, pressures, theories and formulations. These straddle across the political, economic, pragmatic and ideological spectrums. With various energy resources, fossil, hydro-carbon, nuclear and non-conventional jostling for space and prominence the debate becomes more complex. All these are rooted in severe lack of domestic resources and unavoidable high dependence on imported resources to fuel our growth ambitions on the one hand and satisfy energy needs of citizenry at affordable prices on the other.

The problems and the way forward are comprehensively addressed in the Integrated Energy Policy document (IEP-2006) of Govt. of India, which forms the bedrock of our energy initiatives for the future. We have reproduced “overview” chapter of the report which gives an idea of the problem. To a large extent the realization of our developmental ambitions will be determined by the way we address, tackle and actualise our energy conundrum in consonance with the welfare of various segments of population. This is easier said than done in a democratic polity subject to various pulls and pressures and varying commercial and economic interests of the public sector and private entities and sectoral interests of the population. Determination of energy cost/price to the providers and consumers itself is subject to counter pulls of administered price regulation by the govt. or as demanded by oil companies, both public and private, by the market forces. Recent Rangarajan Committee Report on fixing natural gas prices has run into controversy as to various formula, comparisons with foreign countries and price equivalence between the imported and domestically produced energy resources.

Heavy dependence on outside resources further exposes the sector to uncertainties of policies of foreign counties over which we can have no control both in respect of supplies and prices. The quest for self-sufficiency has so far not achieved a credible traction and the nuclear and non-conventional energy sources can but provide only partial relief in the background of enormous energy requirements by 2032 and 2050. According to experts thermal (coal) plants as sources of energy will continue to be the main source of power for the time being and will be gradually replaced by gas. In this environment the issues of affordability, pricing and subsidies play an important role as policy determinants. Subsidy for the deserving is often compromised by the influential and upward mobile middle classes, with media backing. Result is that even those who can afford unsubsidiesed LPG gas cylinders, use their clout and voice to access it at the cost of those who really deserve subsidy and in bleeding the oil companies. Same goes for diesel (HSD) where now govt. is trying to slowly dilute the subsidization and move towards price deregulation. We must see that our oil companies are in sound financial health so that they optimise the energy options at home and access resources abroad. A misplaced subsidy regime for all who shout loudest is bleeding them and depriving the deserving.

In sum total considering the vital importance of energy resources in our national progress a more daring and pragmatic pricing policy based on affordability criteria and a rational and integrated mix of energy providers, with natural gas at the core, and non-conventional-solar and wind, providing the hybrid back-up, appear to be credible and sustainable. But these must be backed by needed infrastructure and technological innovation on one hand and by an integrated approach of rationalising our transport, building and consumption conservation initiatives. In brief the energy sector alone cannot provide the answer; the politico-societal and other sectors must join hands to get over the crisis.

—B.B. Kumar