Energy Security of India: Economic and Environmental Implications

TERI report highlights that India needs a suitable policy and innovation-driven context to deploy clean energy technologies on a massive scale. To achieve the target by 2050, it requires more and faster deployment of large-scale solar, wind, and hydropower to enable greater electrification. TERI report also suggests that there needs to have a massive push towards renewable energy. With a target of 13% hydrogen in final energy, including fuel for industry and transport, India should generate by 2040.

Recently, India and UAE, a key supplier to India, discussed alternatives to strengthen energy cooperation. UAE is a partner in an Indian joint venture that plans to build barrels per day (BPD) petroleum complex and refinery on its west coast. Globally, India is the third-biggest oil importer and consumer, and more than 80% of its oil needs are met through the import from the Middle East.

What is energy security?

The uninterrupted availability of energy resources at an affordable price is regarded as energy security. To develop long=term energy security timely investments to supply energy in line with economic developments and environmental needs. On the other hand, short-term energy security focuses on the energy system's ability to respond promptly to sudden demand-supply balance changes.

Energy Security Challenges

It is observed that there has been extraordinary volatility in oil prices over the last year. The volatility was primarily concerned with global economic collapse due to the pandemic, which led to a reduction in demand.

Strengthening Energy Infrastructure

In recent years, India's achievements in the energy sector have been phenomenal. In this regard, the Indian Govt. is implementing reforms towards an affordable, secure, and sustainable energy system to power robust economic growth.
The Govt is also introducing important energy price reforms in the energy sectors-coal, gas, and oil, which are fundamental to further scaling the energy market and improving its financial health.

a. Policy and Innovation

With a suitable policy and innovation-driven context to deploy clean energy technologies, India requires the faster deployment of large-scale solar, wind, and hydropower for greater electrification.
The development of new fuels such as hydrogen produced from electrolysis, biogas, and liquid biofuels should be promoted.
The energy transition from conventional usage and dependency to renewable energy has many implications for society's betterment. It will significantly accelerate economic growth, local manufacturing, thereby creating jobs and ensuring energy security.

b. Technological usage

To achieve a net-zero's target by 2050, the energy sector alone does not have enough choices and lacks major technological solutions.
Steps are being taken to enhance energy security by fostering domestic production through the most significant upstream reform. The reforms mainly concern India's Hydrocarbon Exploration and Licensing Policy (HELP) and developing dedicated oil emergency stocks in the form of a strategic petroleum reserve.

About IEA

The IEA was established in 1974.
It was created to help coordinate a collective response to major disruptions in oil supply.
The IEA's mission is to shape a secure and sustainable energy future for all by working with governments and industries.
IEA recommends policies that enhance the affordability, reliability, and sustainability of energy.
IEA examines issues across all spectrum energy resources, including oil, gas, coal, renewables, clean energy technologies, electricity systems and markets, access to energy, the demand side management, and much more.
Since 2015, the IEA has started guiding and supporting major countries to expand its global impact and deepening cooperation in the growing use of clean technologies towards energy security, energy efficiency, and energy policy analysis.

India and IEA

India joined International Energy Agency (IEA) in March 2017 and became a member of the association. The partnership greatly benefits India's energy requirements in the global energy market.
IEA has recently acknowledged India's efforts to shift the focus to facilitate round-the-clock- reliability of electricity supply and provide electricity access to isolated areas.
In recent years, significant progress is made reducing traditional biomass for cooking, the leading cause of indoor pollution.
The government has encouraged clean cooking with liquefied petroleum gas and promoting cleaner cooking and off-grid electrification solutions.
There is a major shift towards using solar photovoltaics (PV) for cooking and charging batteries.
The IEA has acknowledged the reforms proposed by the Central Energy Regulatory Commission (CERC) and the progress made to improve real-time markets.

Way Forward

Energy demand has increased at a rapid pace for India. The population growth is combining with urbanization and industrialization point towards continued growth in energy demand.
India now has an institutional framework, and to meet its growing energy needs, it needs more investment.
With its geographical advantage and vast potential, India can achieve the goal of materializing its renewable potential, thereby achieving the objectives to limit greenhouse gas (GHG) emissions growth and reduce indoor and outdoor air pollution under the country's Nationally Determined Contribution (NDC).