Energy Infrastructure

1. Power or Electricity Sector

• • India is the world’s third largest producer as well as consumer of electricity.
  • Total installed electricity capacity in India stands at 446 GW as of June 2024.
  • Peak electricity demand rose 13% to 243 GW in FY24; renewable energy saw the highest growth in generation between FY23 and FY24.
  • A total of 2.86 crore households have been electrified since the launch of the Saubhagya period in October 2017 under various schemes.
  • India’s power grid now has 4,85,544 km of transmission lines and 12,51,080 MVA capacity, with a 1,18,740 MW inter-regional transfer capability.

Key Initiatives in the Power Sector

1. Integrated Power Development Scheme (IPDS): It is a flagship scheme of the Ministry of Power launched in 2014. It aims to strengthen and improve the power transmission and submission networks.

2. Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY): It launched in 2014 for strengthening the electricity distribution system in rural India. The work included setting up new substation, separation of agriculture and non-agriculture feeders and other related things.

3. Pradhan Mantri Sahaj Bijli Har Ghar Yojana (SAUBHAGYA): It was launched in 2017 with the objective of achieving universal household electrification, by providing electricity connections to all un-electrified households in rural areas and all poor households in urban areas in the country.

4. SAMARTH Mission: Launched in 2021, the Sustainable Agrarian Mission on Use of Agri-Residue in Thermal Power Plant (SAMARTH) has a full-time mission directorate to coordinate and monitor implementation.

5. One Sun, One World, One Grid Initiative: A task force is studying the feasibility of interconnection of regional grids viz. Southeast Asia, South Asia, Middle East, Africa and Europe for exchange of renewable power.

6. UJALA Scheme: Unnat Jyoti by Affordable LEDs for ALL (UJALA), launched in 2015, LED bulbs, LED tube lights and energy-efficient fans are sold to replace conventional and inefficient variants.

7. Street Lighting National Programme: This programme was launched in 2015 to replace conventional streetlights with smart and energy-efficient LED streetlights. Over 1.31 crore LED streetlights have been installed so far.

2. Conventional Energy Sector

i. Coal

Current Status

India is the second-largest producer and consumer of coal globally. Coal is crucial for India’s energy sector, accounting for approximately 55% of its total energy needs. The all-India Production of coal during 2023-24 was 997.83 MT with a positive growth of 11.71%, with major companies like Coal India Limited (CIL) leading the sector. India is also the second-largest importer of coal, primarily to meet the demands of non-coking coal, which is used in power generation.

Issues and Challenges

• • Dependence on Coal: Despite efforts to diversify energy sources, India remains heavily reliant on coal for power generation, contributing to environmental concerns such as air pollution and greenhouse gas emissions.
  • Quality Concerns: Indian coal is generally of lower quality, containing high ash content, which affects its efficiency in power generation and contributes to environmental degradation.
  • Logistical Challenges: Transporting coal from mines to power plants is challenging due to inadequate railway and road infrastructure, leading to inefficiencies and delays.
  • Environmental Regulations: Stricter environmental regulations to reduce carbon emissions may pose challenges for the coal sector, especially as India commits to reducing its carbon footprint.

Government Initiatives

• • Coal Block Auctions: The government has allowed commercial mining by private companies to improve coal availability and reduce imports.
  • Diversification: Efforts are being made to integrate renewable energy sources with coal-based plants to reduce emissions. Initiatives like blending coal with biomass are also being explored.
  • Cleaner Coal Technologies: India is investing in cleaner coal technologies like supercritical and ultra-supercritical power plants to reduce the carbon footprint of coal-based power generation.

ii. Crude Oil

Current Status

India is one of the largest importers of crude oil globally, meeting nearly 85% of its oil demand through imports. The country’s crude oil consumption in 2023 stood at around 5 million barrels per day, with a tilt towards supplies from Urals region of Russia for its supply. India’s domestic production has been declining, with output falling to around 30 million metric tonnes in 2023-24.

Issues and Challenges

• • Dependency on Imports: India’s heavy dependence on crude oil imports leaves it vulnerable to global price fluctuations and geopolitical risks.
  • Declining Domestic Production: Domestic crude oil production has been declining due to aging fields and lack of investment in new technologies and exploration.
  • Energy Security: Ensuring a stable and affordable supply of crude oil is a key challenge for India.
  • Environmental Concerns: The oil sector is a major contributor to greenhouse gas emissions. India’s reliance on fossil fuels conflicts with its global commitments to reduce carbon emissions and transition to greener energy sources.

Government Initiatives

• • Strategic Petroleum Reserves (SPR): India has been building strategic petroleum reserves to safeguard against supply disruptions. It has storage facilities in Visakhapatnam, Mangalore, and Padur.
  • New Exploration Licensing Policy (NELP): The government is encouraging investment in the oil and gas exploration sector through initiatives like the Hydrocarbon Exploration and Licensing Policy (HELP) and NELP to boost domestic production.
  • Ethanol Blending Programme (EBP): India is promoting biofuels like ethanol to reduce its dependency on crude oil. The government has set an ambitious target of blending 20% ethanol with petrol by 2025.

iii. Natural Gas

Current Status

India’s natural gas production in 2023 was around 34 billion cubic meters (bcm), with significant imports in the form of Liquefied Natural Gas (LNG). The government is aiming to increase the share of natural gas in India’s energy mix from the current 6.5% to 15% by 2030. Major sources of natural gas production in India include the Krishna-Godavari Basin and offshore fields. The aim is to increase consumption of natural gas which will act as ‘Bridge Fuel’ in a transition from coal and crude oil towards cleaner and renewable alternatives in future.

Issues and Challenges

• • Infrastructure Bottlenecks: India’s natural gas infrastructure, including pipelines and LNG terminals, is underdeveloped, making it difficult to distribute gas efficiently across the country.
  • Pricing and Subsidy Issues: Natural gas pricing in India is heavily regulated, which discourages private investment and makes it challenging to develop new domestic sources.
  • Low Domestic Production: Domestic natural gas production has been stagnating, forcing India to rely on expensive LNG imports to meet its growing demand.
  • Import Dependency: Similar to crude oil, India’s dependency on natural gas imports makes it vulnerable to global price fluctuations, impacting the overall energy security of the country.

Government Initiatives

• • National Gas Grid: The government has been working to develop a national gas grid to ensure the availability of natural gas across India. Initiatives like the Pradhan Mantri Urja Ganga project aim to expand pipeline infrastructure.
  • City Gas Distribution (CGD): The CGD initiative aims to increase the supply of piped natural gas to households and compressed natural gas for vehicles.
  • Natural Gas Pricing Reform: The government has introduced reforms in natural gas pricing to encourage more investment in gas exploration.

3. Renewable Sector

• • India aims for 500 GW of non-fossil electricity capacity by 2030; 190.57 GW installed as of 31 March 2024.
  • Currently, renewable energy constitutes 43.12% of India’s total installed generation capacity.

i. Solar Energy

Current Status

India’s solar energy capacity has grown significantly, reaching approximately 85 GW by June 2024. The country aims to achieve 500 GW of installed capacity from non-fossil fuel sources by 2030. India ranks fourth globally in total renewable power capacity additions and fifth in solar power capacity. The National Institute of Solar Energy (NISE) estimates India’s solar potential at around 748 GW.

Issues and Challenges

• • Lack of Domestic Manufacturing: The domestic manufacturing sector for solar PV cells and modules is underdeveloped due to high production costs and inadequate infrastructure.
  • Space Scarcity: Limited availability of land for large-scale solar installations.
  • Maintenance: Most of the solar parks are located in regions vulnerable to dust storms like in Rajasthan and Gujarat. There is always an issue of cleaning of those panels for efficient output.
  • Financing Mechanisms: Need for innovative financing solutions to support large-scale solar projects.
  • Low Tariffs: Government-enforced low tariffs can make solar projects financially unviable for some developers.
  • Waste Management: The increasing solar waste, which includes disposed PV modules batteries etc, is predicted to reach 1.8 million tonnes by 2050.

Government Initiatives

• • Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM): As of 31 March 2024, 166 MW decentralized solar capacity has been installed and 3.26 lakh agricultural pumps have been solarized under the Scheme.
  • Production Linked Incentive Scheme for National Programme on High Efficiency Solar Photovoltaic (PV) Modules: To achieve manufacturing capacity of GW scale in High Efficiency Solar PV modules with outlay of ₹24,000 crore. As of 31 March 2024, four manufacturers have started manufacturing of solar PV modules.
  • Solar Parks Scheme: To provide solar power developers with a plug and play model, by facilitating necessary infrastructure along with all statutory clearances. Scheme has a sanctioned capacity of 39.7 GW for the development of 56 Solar Parks in 13 States. Solar projects of capacity 11.59 GW have been commissioned in these parks and the remaining capacity is at various stages of implementation.
  • PM – Surya Ghar: Muft Bijli Yojana: Aimed to install rooftop solar plants in one crore households with a total financial outlay of ₹75,021 crore and to be implemented until FY27. This is expected to enable an installation of around 30 GW of residential rooftop solar capacity and 40-45 GW of overall rooftop solar capacity addition by FY27.

ii. Wind Energy

Current Status

India’s wind energy capacity stands at around 46 GW till 2024, making it the fourth-largest wind energy producer globally. In FY 2024, India added 3.3 GW of wind capacity.

Issues and Challenges

• • Land Acquisition: Difficulties in acquiring land for wind projects.
  • Grid Integration: Challenges in integrating wind energy into the grid due to its intermittent nature.
  • Financial Viability: High initial costs and long gestation periods can deter investment.

Government Initiatives

• • National Wind-Solar Hybrid Policy: Promotes the installation of wind-solar hybrid systems to optimize the use of land and transmission infrastructure.
  • Green Energy Corridor: Aims to facilitate the flow of renewable energy into the national grid.

iii. Hydroelectricity

Current Status

India has a total hydroelectric capacity of around 47 GW, contributing significantly to the renewable energy mix. Hydroelectricity accounts for about 11% of the total installed power capacity.

Issues and Challenges

• • Environmental Impact: Hydroelectric projects can have significant ecological and social impacts, including displacement and loss of biodiversity.
  • Regulatory Hurdles: Lengthy approval processes can delay project implementation.
  • Water Availability: Variability in water flow due to climate change affects the reliability of hydroelectric power.
  • Displacement: Large scale displacement of local population for the creation of supporting infrastructure like dams and reservoirs creates a challenge.
  • Environmental concern: There have been concerns of sinking of towns and villages due to construction related infrastructure. Landslides also is a potential threat related to hydroelectricity infrastructure.

Government Initiatives

• • National Hydroelectric Power Corporation (NHPC): Focuses on the development of hydroelectric projects across the country.
  • Renovation and Modernisation Scheme: Aims to improve the efficiency and capacity of existing hydroelectric plants.
  • Declaring Large Hydro Projects (>25 MW) as Renewable Energy source.

iv. Biofuels

Current Status

India’s biofuel production includes ethanol, biodiesel, and biogas, with ethanol blending in petrol reaching around 10%. The government has set a target of achieving 20% ethanol blending by 2025.

Issues and Challenges

• • Feedstock Availability: Limited availability of feedstock for biofuel production. There is also an issue of competition with food stocks which may risk the food security of India.
  • Technological Advancements: Need for improved technology to enhance biofuel production efficiency. There is a need to quickly switch to production of 3^rd and 4^th Generation biofuels.
  • Infrastructure: Inadequate infrastructure for biofuel storage and distribution.
  • Economic Viability: High production costs compared to fossil fuels.

Government Initiatives

• • National Biofuel Policy, 2022: It aims to promote the use of biofuels in the energy and transportation sectors. The target for blending ethanol in petrol has been advanced from 20% by 2030 to 20% by 2025-26. The policy has been expanded to include additional feedstocks for biofuel production. This includes corn stover, bagasse, and bamboo.
  • Pradhan Mantri JI-VAN (Jaiv Indhan- Vatavaran Anukool fasal awashesh Nivaran) Yojana: The Scheme aims to provide financial support to integrated bio-ethanol projects for setting up Second Generation (2G) ethanol projects in the country using lignocellulosic biomass and other renewable feedstocks.
  • Global Biofuel Alliance: It is an initiative led by India, which was launched at the G20 Summit in New Delhi in 2023. The Alliance intends to expedite the global uptake of biofuels through facilitating technology advancements, intensifying utilization of sustainable biofuels. It also aims at shaping robust standard setting and certification through the participation of a wide spectrum of stakeholders.

v. Green Hydrogen

Current Status

Green hydrogen is an emerging sector in India, with significant potential to reduce carbon emissions and support the transition to renewable energy sources. The government aims to produce 5 million tonnes of green hydrogen annually by 2030.

Issues and Challenges

• • High Production Costs: Current technology for green hydrogen production is expensive.
  • Infrastructure Development: Need for infrastructure to produce, store, and transport green hydrogen.
  • Regulatory Framework: Lack of a comprehensive regulatory framework for green hydrogen.

Government Initiatives

• • Green Hydrogen Policy: Provides incentives for green hydrogen production, including tax benefits and subsidies.
  • National Green Hydrogen Mission: Launched to accelerate plans for hydrogen production and utilization, including indigenous development of electrolysers.

National Green Hydrogen Mission It aims to make India a ‘global hub’ for using, producing and exporting green hydrogen. It envisages developiment of green hydrogen production capacity of at least 5 MMT (Million Metric Tonne) per annum by 2030. It aims to attract over Rs 8 lakh crore of total investments and is expected to generate six lakh jobs. Sub Schemes 1. Strategic Interventions for Green Hydrogen Transition Programme (SIGHT): To fund the domestic manufacturing of electrolysers and produce green hydrogen. 2. Green Hydrogen Hubs: States and regions capable of supporting large scale production and/or utilization of hydrogen will be identified and developed as Green Hydrogen Hubs.

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