Energy is an important input in all sectors of any country’s economy.
The standard of living of a given country can be directly related to per capita
energy consumption.
Energy crisis is due to the two reasons:
a) Firstly that the population of the world has
increased rapidly
b) The standard of living of human being has
increased.
If we take the annual per capita
income of various countries and plot them against per head energy consumption,
it will appear that the per capita energy consumption is a measure of the
prosperity of the nation. The per capita income of U.S.A. is about 50 times
more than that of India, and so also is the per capita energy consumption. The
per capita energy consumption in U.S.A. is 8000kWh per year, whereas the per
capita energy consumption in India is 150kWh. U.S.A. with 7% of the world’s
population consumes 32% of the total energy consumed in the world, whereas
India, a developing country with 20% of the world’s population consumes only 1%
of the total energy consumed in the world.
Major sources of energy in India are as following :
1) Oil- 3.31%
2) Coal- 9.37%
3) Hydropower- 7.87%
4) Nuclear power -19.13%
5) Natural gas- 18.53%
6) Lignite- 11.72%
Details of energy available and imports
Today, India is the 5th largest energy consumer in the world.
While the world consumes12000 million tones of oil equivalent (mtoe) of energy
resources, India consumes 4.4% of the world’s total (524.2 mtoe). Of the total
primary energy consumption basket, oil and gas constitute 45% share in the
total energy basket mix.
Most of the oil and the natural gas in the world is concentrated in a
few producer nations, which has implications for consuming nations. There is,
as of now, no particular substitute for oil for transportation. Since the
almost the entire transportation industry depends totally on petroleum
derivatives, it become a compulsion for India to import them. Renewable energy
resources have an increasing role in electricity generation in India, but the
dominance of hydrocarbons, and in particular that of coal, is not going to away
very soon.
If coal and renewable sources are set aside for a moment, India’s energy
supplies are almost entirely imported from overseas. India’s key external
partners are RIL-BP, Middle East, Suadi Arabia, Iran, Qatar, EU, United States,
Turkmenistan, Afghanistan, Pakistan etc. This makes compulsion for India to
have a friendly relation with these countries.
Energy Diplomacy
The search for energy and military power go hand in hand. America’s
interest in Afghanistan may well be partly predicted on
Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline to bring
Central Asia gas via Afghanistan to Karachi, Pakistan. Iraq’s and Iran’s large
reserves may be principal reasons for American interest. Similarly India’s
interest in importing energy sources, make it vital to have a good relation
with oil importing countries like Iran, Turkmenistan etc.
Some Indian analysts have a pipe-dream of building natural gas pipelines
from Myanmar via Bangladesh, and from Turkmenistan or Iran via Pakistan (TAPI
and IPI pipelines). But the proposed gas pipeline from Myanmar’s offshore field
to Kolkata was bogged down in disagreements with Bangladesh, and finally it was
lost because Myanmar announced they would sell the gas to China.
India is beginning to promote its own energy diplomacy, although this is
still confined to foreign policy and not military policy. For instance; despite
American apprehensions, India is pursuing ties with Iran, with which it is
traditionally had good relations. In 2005, India completed a $40 billion,
25-year deal on LNG from Pars, the largest gas field in the world, although
Iran now asking to renegotiate the deal. India has stakes in Iran’s Yahavaran
and Jufeir oilfields. India is also developing the Iranian port of Chabahar as
well as the highway from there to Afghanistan and Central Asia, also
strategically as a way of getting to Central Asia bypassing Pakistan.
Impacts of recession on Indian Energy Sector
1) Crude oil imports fell to 5.52% ($12.22
billion), while non-oil imports declined 8.57% ($25.70 billion), indicating a
sluggish industrial scenario.
2) Trade financing and capital flows can dry up
very quickly even in relatively isolated India.
3) As the fall in exports was more than that in
imports the trade deficit widened to $15.5 billion in July, 2011 against $11.08
billion.
Government actions regarding control over the energy imports
1) New
exploration License policy (NELP): To increase domestic exploration and production, the government
introduced NELP. During the ninth round of bidding under NELP, there was an
investment commitment of more than USD 827.44mn.
2) Underground
Coal Gasification: ONGC
has signed an agreement with Skochinsky Institute of Mining, Russia, to harness
world class technology to tap this energy source. This will commence by the end
of 2015.
3) The government has been encouraging
acquisition of overseas E&P assets.
4) 100% FDI
is permitted in exploration, refining, pipelines and marketing.
Energy policies and scenario of India till 2030
a) India’s commercial energy needs in 2031-2032
shall require an annual energy production with growth rate between 5.2% and
6.1%.
b) Coal would remain in 2031 the main source of
energy in India, accounting for close to 41% of the total energy mix.
c) The problem of costly and uncertain energy
imports, and eventually CO2 emissions being raised.
d) Hydro-biomass would represent, in 2030,
according to a hypothesis of restrained growth, between 12 and 19% of the total
energy mix.
Although India ranks in terms of energy consumption, the per capita
energy consumption (500 kgoe) is significantly lower than the global average
(1800 kgoe), indicating significant growth potential of the energy demand in
the country. According to the International Energy Agency estimates, India will
need investments worth nearly US$600 billion till 2030, across various segments
of its hydrocarbon chain, to increase its energy supply and improve the
infrastructure to enable this.
Conclusion
Energy security is defined by the terms right price, right time and
right quantity. The main problems of Indian energy security are unexplored
energy resources, marine line security, widening gap between demand and supply,
geopolitical risks to energy supplies, depletion of available energy resources
like coal etc.
India should focus on the renewable and unconventional sources of energy,
it should focus on encouraging technologies to explore other available but
unexplored energy resources in its territory, should address the geopolitical
risks to energy supplies, it must negotiate well its vital interests in highly
complex negotiations on climate change etc. These measures must be opted to
have better energy security and sufficiency in the nation.
