Table of Contents
THE CONTEXT: India stands at a pivotal juncture in its energy sector, facing the dual challenge of managing its reliance on fossil fuels while accelerating the transition to renewable energy. The next administration must avoid the pitfall of preparing for past scenarios and instead craft a forward-looking strategic framework for energy policy and its implementation. This framework should integrate the dual prongs of India’s energy policy by managing fossil fuel dependency and accelerating the shift to clean, renewable fuels.
THE ISSUES:
- Relationship Between Hydrocarbon PSEs and Other Energy Companies: Several hydrocarbon Public Sector Enterprises (PSEs) are now operating in the domain of renewable energy companies. The government should aim to prevent duplication of effort and resources by clearly defining the roles and responsibilities of these entities. This will ensure efficient resource use and avoid redundant investments.
- Strategy for Critical Mineral Supply: The International Energy Agency (IEA) has warned of potential volatility and supply shortages in the markets for critical minerals like copper, lithium, nickel, and cobalt. India must develop a clear strategy to secure its future requirements for these essential materials, which are crucial for the green energy transition. This could involve investing in domestic mining, securing international supply agreements, and promoting recycling and alternative materials.
- Competitiveness of Clean Energy vs. Fossil Fuels: Considering the “China factor,” which includes China’s dominance in low-cost green technology and critical mineral supply chains, India must assess the competitiveness of clean energy relative to fossil fuels. The government should study the impact of anti-dumping duties on Chinese electric vehicles (EVs) imposed by the US and EU and consider similar measures if necessary. The focus should be on balancing national security concerns with economic impacts on investors and the pace of the green transition.
- Encouraging Private Capital for Green Investment: Private capital is essential for the green energy transition, but investors currently exhibit risk aversion. The government should address this by identifying specific sectors or activities for special incentives and stepping up public investment to “crowd in” private capital. This approach can help mitigate risks and attract more private investment into green energy projects.
- Integrated Energy Policy Framework: The current energy policy is fragmented, with different ministries handling various aspects of fossil fuels and renewable energy. The government should create an integrated energy policy framework that converges the dual-pronged approach into a single, cohesive strategy. This framework should be documented in a comprehensive strategy titled “Energy Strategy: Towards Convergence, Security, and Sustainability,” addressing all related issues in a unified manner.
- Adapting to Geopolitical and Technological Changes: The global geopolitical context is increasingly polarized, with significant competition between major powers like the US, China, and Russia. Technological innovation is also advancing rapidly. The government must adapt its energy strategy to these changes, ensuring that India’s energy policy is resilient, forward-looking, and capable of leveraging new technologies while safeguarding national interests.
THE WAY FORWARD:
- Integrated Energy Policy Framework: Develop a comprehensive and integrated energy policy framework that aligns the objectives of different ministries and agencies involved in energy production, distribution, and consumption. China has implemented industrial policies to promote integrating energy production, supply, distribution, and consumption. The policies encourage collaboration between stakeholders, including government bodies, state-owned enterprises, and private companies, to optimize energy management and reduce carbon emissions.
- Strategic Resource Management: Formulate a clear strategy for securing essential materials for green energy technologies, such as copper, lithium, nickel, and cobalt, to mitigate supply chain risks and ensure resource availability. Japan has implemented policies to secure stable supplies of critical minerals through international partnerships, investments in overseas mining projects, and recycling initiatives. This approach has helped Japan reduce its single-source dependency and enhance supply chain resilience.
- National Security and Green Technology: Develop a strategic framework to balance national security concerns with the competitiveness of clean energy technologies, ensuring a stable and secure supply of green technology components. The US has legislated the Chips and Science Act to boost domestic semiconductor manufacturing and reduce dependency on foreign suppliers, particularly from China. This act provides incentives for domestic production and R&D in critical technologies.
- Encouraging Private Investment in Green Energy: Implement policies to reduce risk aversion among private investors and attract private capital into the green energy sector through targeted incentives and public-private partnerships. Germany’s EEG provides feed-in tariffs and other financial incentives to encourage private investment in renewable energy projects. This policy has attracted significant private capital and accelerated the deployment of renewable energy technologies.
- International Collaboration and Knowledge Sharing: Enhance international collaboration and knowledge sharing to leverage global best practices and technologies in the energy transition. The IEA emphasizes the importance of international cooperation in energy efficiency and clean energy transitions. Countries like Japan, Brazil, and Turkey have benefited from the IEA’s recommendations by adopting best practices and technologies from other nations.
THE CONCLUSION:
The next government’s challenge is accelerating the latter against a polarized international geopolitical context and exponential technological innovation. By weaving the various strands of energy policy into a cohesive strategy, India can ensure energy security, sustainability, and resilience in the face of global uncertainties. A comprehensive document titled “Energy Strategy: Towards Convergence, security, and Sustainability” should be the cornerstone of this effort, addressing key issues and laying a clear roadmap for the future.
UPSC PAST YEAR QUESTIONS:
Q.1 Do you think India will meet 50 percent of its energy needs from renewable energy by 2030 ? Justify your answer. How will shifting subsidies from fossil fuels to renewables help achieve the above objective? Explain. 2020
Q.2 Describe the benefits of deriving electric energy from sunlight in contrast to conventional energy generation. What are the initiatives offered by our government for this purpose? 2020
Q.3 Give an account of the status and the targets to be achieved for renewable energy sources in the country. Briefly discuss the importance of the National Programme on Light Emitting Diodes (LEDs). 2016
Q.4 To what factors can the recent dramatic fall in equipment costs and solar energy tariffs be attributed? What implications does the trend have for the thermal power producers and the related industry? 2016
MAINS PRACTICE QUESTION:
Q.1 Discuss the challenges and suggest measures to create a strategic framework that integrates fossil fuels and renewable energy to ensure energy security, sustainability, and resilience in the face of international geopolitical tensions and technological advancements.
SOURCE:
Spread the Word