India is caught on the horns of an energy and environmental dilemma.
Its economy is driven by fossil fuels and every report on India’s energy future forecasts that coal and oil will dominate the energy basket. British Petroleum’s “BP Energy Outlook: 2019 Edition” avers, for instance, that fossil fuels (coal, oil and gas) will account for between 70 and 75 per cent of India’s primary energy consumption in 2040. This is down from approximately 90 per cent today.
Coal will remain dominant, with a 45 per cent share, and oil will trail in second place, with a 20 per cent share. The share of natural gas will stay stagnant at 7 per cent, whereas renewables will increase from the current levels of 3-4 per cent to 15 per cent.
Reports also highlight the unhealthy nexus between energy demand and the environment. Though India will meet the commitment it made at the Climate Change Summit (Paris, 2015) to reduce greenhouse gas (GHG) emissions by 35 per cent over 2005 levels, it will still be among the largest emitters of GHGs in the world. The World Bank has estimated that the cost of air pollution in 2016/17 was equivalent to 8 per cent of India’s gross domestic product (GDP).
The question that has been the subject of much debate and discussion within the policy corridors of governments is: What must be done to resolve this dilemma? How can India pull itself off these horns?
Prima facie, the answer to this is simple and incontrovertible. India must reduce its dependence on fossil fuels. It must accelerate the move towards decarbonisation and a clean future by investing in renewables and through demand management, the use of appropriate technology and regulation. This is, however, easier said than done. The challenges are structural, economic, and institutional.
First, the Indian economy is built around fossil fuels. It will take decades to shift it to a different and clean energy base. The United States of America (the US) took more than four decades to shift from steam power to electric power.
Thomas Edison illuminated the lower half of New York’s Manhattan district in 1885, but it was not until the mid- 930s that all the industrial units in the US adopted this revolutionary new technology. The reason for this delay was that industrial units were not configured to use electric power. Most had to be redesigned and some had to be demolished and rebuilt.
In India, the transition to a new energy system could take even longer because, first, the existing grid infrastructure is not robust enough to absorb and manage the intermittency of electricity flows from renewables (the sun does not shine at night and the wind blows erratically). The grid infrastructure will need to be strengthened and expanded, and this will require a massive infusion of capital.
Second, despite the sharp drop in the cost of generating power from solar cells and windmills, coal, the dirtiest of fuels, remains the most competitive source of energy.
And finally, the institutional mechanisms for driving this shift are not in place. There are many governmental bodies engaged with energy, but they all operate within disaggregated and impermeable silos.
Thus, for instance, at the level of the Central government, there are the ministries of petroleum and natural gas, coal, renewables, atomic power, and the NITI Aayog. Each of these is headed by either a member of the Union Cabinet or an official with ministerial rank. Each has a phalanx of bureaucrats and state-owned enterprises to supervise. And each operates within a well-defined framework.
The problem is that there is no formal forum for bringing them together for discussions and debate on the linkages between the different sources of energy (oil, gas, coal, renewables, hydro, and bio) and economic activities (transport, electricity, feedstock, industry and agriculture). There is no platform for bringing together the different layers of government (Centre, state, city, panchayat) to develop a collaborative approach towards energy supply, energy demand, conservation and to meet the challenge of weakening the nexus between economic growth, energy demand and environmental pollution.
There are no mechanisms for facilitating partnerships between the public and private sectors, especially regarding technology and innovation, clean energy and ecological balance. There is, in short, no public policy framework within which to develop an integrated, holistic energy policy.
Excerpted with permission from The Next Stop: Natural Gas and India’s Journey to a Clean Energy Future, edited by Vikram Singh Mehta, HarperCollins India.