GS Paper 3
Syllabus: Infrastructure (Energy)
Context: An integrated approach that focuses on renewable energy along with the exploration of traditional fuels is the key to energy security in the next 25 years in India.
Need for an integrated approach:
- 3As: Ensuring energy access, availability and affordability for India’s large population.
- As the world’s fastest-growing major economy with rising energy needs, India will account for approximately 25% of the global energy demand growth between 2020-2040.
The success story of India:
- When petrol and diesel prices went up by 35-40% in the US, Canada, Spain and the UK, prices of diesel in India have actually gone down in the last 1 year.
- This is despite the fact that India imports over 85% of its crude oil and 55% of its natural gas requirements.
- When several countries in India’s neighbourhood have had dry outs and power cuts to manage demand, there has been no shortage of fuel anywhere in India.
How was this made possible?
Through a pragmatic and balanced energy strategy → ensuring energy justice.
Focus on traditional fuels:
- The Centre and many states announced massive cuts in excise duty and VAT rates.
- Oil PSUs absorbed huge losses to ensure that the massive hikes in the prices of crude oil and natural gas were not passed on to Indian consumers.
- Subsidised APM gas for the city gas distribution sector was drastically increased.
- Imposing an export cess on petrol, diesel and ATF.
- A windfall tax on domestically produced petroleum products to prevent refiners and producers from profiteering at the cost of domestic consumers.
- Over the years, India has expanded –
- Its network of crude oil suppliers from 27 nations to 39 nations. For example, in the US, the energy trade has gone up 13 times in the last four years.
- Its refining capacity (450 MMT by 2040) – India is a global exporter of petroleum products [refining capacity is the 4th-largest after the US, China and Russia].
- Traditional fuel exploration – reduced the prohibited/no-go areas in its EEZ by 99%, releasing nearly 1 million sq km for exploration.
- These strategic market cards not only ensured affordable energy for Indian consumers but also had a calming effect on global petroleum markets.
- India is also pushing to move towards a gas-based economy by increasing the share of gas from the current 3 to 15% by 2030.
Focus on alternative fuels/energy transition:
- India announced its net-zero emissions by 2070 and cutting down emissions by 1 billion tonnes by 2030 targets.
- At the India Energy Week 2023, India took a giant stride in its biofuel revolution by launching E20 – 20% ethanol-blended gasoline, which will be rolled out in 15 cities in the next 2 years.
- India’s ethanol-blending gasoline has grown from just 53% in 2013-14 to 10.17% in 2023.
- India is also setting up five 2nd-generation ethanol plants that can convert agricultural waste into biofuel, further reducing pollution due to stubble burning, and generating income for farmers.
- The National Green Hydrogen Mission has been launched with an outlay of Rs 19,744 crore to accelerate India’s efforts towards 4 MT of annual green hydrogen production.
- It will save Rs 1 lakh crore in cumulative fossil fuel import savings by 2030.
- India is also supporting electric vehicles through a production-linked incentive scheme to make advanced fuel cells of 50-gigawatt hours.
- India is also targeting the installation of alternative fuel stations (EV charging/ CNG/ LPG/ LNG/ CBG) at 22,000 retail outlets by May 2024.
Energy security and independence remain the main objectives as India implements its Amrit Kaal plan to grow to a $ 26 trillion economy by 2047.
India wants energy transition on its own terms – without phasing out coal and with more grants