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Energizing IndiaTowards a Resilient and Equitable Energy System

Suman Bery, Arunabha Ghosh, Ritu Mathur, Karthik Ganesan, Rhodri Owen-Jones, Subrata Basu
May 2016 | Energy Access

Suggested citation: Bery, Suman, Arunabha Ghosh, Ritu Mathur, Kartik Ganesan, Rhodri Owen-Jones, Subrata Basu. 2016. Energizing India: Towards a Resilient and Equitable Energy System. New Delhi: SAGE

Overview

This book explores the opportunities and challenges in articulating and implementing a robust but flexible set of strategies for meeting India’s primary energy needs. It presents a case to make India’s energy system more resilient to drive India’s economic growth and more equitable to fulfil the basic energy needs of all citizens in an uncertain future. It emphasises on the demand and supply sides of the energy system and deals with it as a whole rather than following a sectoral approach. It also discusses infrastructure for an integrated energy system, technology for a productive energy system, and pricing for an efficient energy system.

The book has been published in collaboration with Shell’s scenarios group based in The Hague and The Energy and Resources Institute (TERI).

Key Highlights

India’s energy future

  • India’s future energy demand will be growing with a significant requirement for oil, gas, and coal. India needs to adjust to the step changes it will have to make in dealing with the global energy markets and in building institutional structures.
  • Forward-looking policies are needed for urbanising efficiently and for managing the associated stresses in energy, food, water, and land.
  • Energy policy should focus on the following objectives - reducing energy power by providing energy to every Indian, securing stable energy supplies, and limiting carbon emissions without stunting economic growth.

Source: iStock

Infrastructure for an integrated energy system

  • As per the reference scenario, coal constitutes about 66 per cent of the total energy supply, and its demand will multiply nearly six times by 2050. Natural Gas consumption will rise five-fold by 2050 (150 Mtoe or 176 billion cubic metres).
  • As per the alternative sustainable scenario, India’s energy demand will come down by just five per cent, suggesting that many of the efficiency gains in Indian industry and other end-use applications are likely to be internalised even in the reference scenario.
  • India’s transition to a low-carbon economy over the next 30 to 35 years will happen gradually by developing, commercialising, and integrating known but currently underdeveloped solutions.

Technology for a productive energy system

  • The life span of technologies is 20 to 30 years, while that of infrastructure is longer. Also, investment in the next few years will remain in place until at least 2050.
  • Off-grid solar technologies could bring modern energy to remote parts of the country. Solar lanterns and home lighting could reach remote places and have the added benefit of not suffering transmission losses.
  • Appropriate market mechanisms would be desirable for the propagation of technologies that have low implementation levels due to lack of awareness, inadequate knowledge about maintenance, or inappropriate incentives.

Pricing for an efficient energy system

  • Innovative pricing can help deliver energy at a lower cost to end-users by reducing the overall system cost and by easing the initial outlay.
  • Central and state taxes on energy supplies need to produce optimal fuel choices and investment decisions. If taxes and subsidies are not equivalent across fuels, then the relative prices of fuels can be distorted.
  • Specific allowances can be introduced to encourage exploration, which is important given India’s underexplored hydrocarbon resources.

Source: iStock

India in the global energy market

  • Private firms in the growing renewable energy sector will have their business interests at home and abroad, relating to investments in technology, manufacturing facilities, and services.
  • India’s membership in an existing or new energy institution should provide it with a platform to share experiences with other emerging economies and demonstrate leadership in areas where its strengths lie.
  • Membership in an energy institution should facilitate discussions on how each member country’s strategic reserves could instill confidence in energy markets to mitigate short-term supply shocks.

Politics and policies for a resilient and equitable energy system

  • India needs a consistent energy policy that addresses the link between demand and supply among the energy sectors and the economy’s non-energy sector.
  • Economy-wide, the policy should incorporate a robust framework of demand-side assessment and management to forecast energy needs and allow for transparent and coordinated planning.
  • The overall policy and regulatory systems have to build trust so that it can make tough decisions to reconcile often-conflicting challenges.
Energy policy should focus on the following objectives - reducing energy power by providing energy to every Indian, securing stable energy supplies and limiting carbon emissions without stunting economic growth.

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