Asian development bank report projected India's total energy consumption at 1279 MTOE by 2030. Per capita electricity consumption for India stood at 631 Kwh as compared to US per capita of more than 13338 by 2007. With targeting an ambitious 8 to 10% GDP growth in the coming years its per capita consumption also should increase accordingly. During my research on this paper, interestingly I found that it is not the lack of resources in our hands hampering our growth, but it is the lack of initiatives, improper proceedings and poor implementations done at the central and state levels that led to our downfall (For example The Electricity Act 2003 bill was passed way back some concepts like "open access" is yet to be practiced in some of the states like Bihar).
This paper presents the strategies to be adopted with the implication of an Integrated and co-coordinated framework, which would definitely take to the Path of Energy Security.
Coal: Coal as a fuel accounts for nearly 55% of the total energy need of India. The principal carbon asset is been relegated to political inattention and a rock solid monopolistic ideologies. Private investment is moving at a very slow pace even after the enactment of Coal Mines Amendment Bill, 2000. Coal India Limited with 95% of mines under its belt hardly gives any room for others private players to get in. Without an independent regulator, the entire sector is plagued with low productivity, Investment shortages, shoddy management and poor labor relations.
Oil and Natural Gas sector: India's foreign import dependency on oil is to grow to 85% by 2012. Government again failed to pilot the Petroleum Bill, 2002. The New Exploration and Licensing Policy, which came in 1999 with lucrative incentives, is of moderate success. Dismantling of Administrative Pricing Mechanism was done in 2002 but still, government is reluctant to cede control over pricing. The demand for natural gas could go up to 160-170 MMSCMD over the next five years. Open access could be introduced in phase after framing appropriate regulation, which could stimulate a competitive environment. Both these sectors are in need of an empowering and independent regulator.
Power sector: The aspects given in the Electricity Act 2003 like open access (section 42), competitive market (section 66), etc doesn't seems to happen in actual practice, which resulted in financial closure for about 15000 MW for IPP's and in turn resulted in slow progress of reforms. By 2008 alone the total power subsidy to the states stands at 13876 crores which nearly cover a whopping 1% of our GDP. With an energy shortage of 7.7% and peak shortage of 12.3%, the ambition of electrifying India by 2012 with more than Rs. 9 trillion as emphasized in National Electricity Policy (section 3) remains as a question mark.
What is an Integrated Energy Strategy?
The concept of Integrated Energy Strategy is not the one that requires a centralized action, but certainly involves a system of coordinated decision-making and actions that bring various energy activities into a common framework, which is represented, in the table below.
Why an Urgent Need for India?
Only at the time of formulation of five-year plan, the sector looks as a whole, rest of the times it acts as an individual sector even if one's strategy hampers other. For example, the power sector reforms are not only hampered because of its modernized technologies like FBT, but also because of lack of coal and gas supplies. Recently a 500MW power project jointly owned by NTPC and Sail power co. limited came to closure because of lack of coal supply. The coal sector also suffers by not getting the return from the power sector, because of lack of revenue collection in the power sector. Hence it is high time for India to adopt an "Integrated Energy Strategy", which is been already employed successfully in countries like USA, Australia, U.K. etc.
Formation of National Energy Companies Association (NECA):
There is a need for direct involvement of the players with the government in framing the strategies. So far it has been very less. The earlier discussions clearly underline the need for an apex body that can coordinate and promote the energy sector. In the Indian context, his has been successfully demonstrated in the software industry by NASSCOM. So, all the players in the energy sector should join hands and form an association called "National Energy Companies Association" or NECA. It could also have its members for advising from leading consultancies, research firms, and also some senior government experts. NECA's vision should be to make the sector globally competitive and make India to achieve its vision 2020 in energy.
Some important functions of NECA include:
The concept of energy and its conservation has to be taken out of the ivory tower where it is ensconced and popularized at the street level. The government is already promoting it through Bureau of Energy Efficiency, which initiated the Renewable Energy Development Agencies, operating in 3 states but it has to be formed in all the states. Massive advertisement campaigns should be held through all media's, so that a layman would come to know about Energy conservation benefits. To inculcate it among the children, the government should make a compulsory subject of "Energy and its Importance in schools". On over all, a mass awareness energy program should be formed and promoted from city to village levels.