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GS Paper: GS3-13.Infrastructure: Energy, Ports, Roads, Airports, Railways etc:

  • Electricity (Amendment) Bill

    The government has tabled the Electricity (Amendment) Bill 2022 in the Lok Sabha. This has drawn huge protests across the country, in states like Tamil Nadu, Telangana, Rajasthan, and others.

    Electricity (Amendment) Bill

    • This Bill amends the Electricity Act, 2003. The Act regulates the electricity sector in India.
    • It sets up the Central and State Electricity Regulatory Commissions (CERC and SERCs) to regulate inter-state and intra-state matters, respectively.

    Key provisions under the Bill are:

    • Multiple discoms in the same area:  The Act provides for multiple distribution licensees (discoms) to operate in the same area of supply. The Bill removes this requirement.  It adds that a discom must provide non-discriminatory open access to its network to all other discoms operating in the same area, on payment of certain charges.
    • Power procurement and tariff:  Upon grant of multiple licenses for the same area, the power and associated costs as per the existing power purchase agreements (PPAs) of the existing discoms will be shared between all discoms.
    • Cross-subsidy Balancing Fund:  The Bill adds that upon grant of multiple licenses for the same area, the state government will set up a Cross-subsidy Balancing Fund.  Cross-subsidy refers to the arrangement of one consumer category subsidising the consumption of another consumer category.  Any surplus with a distribution licensee on account of cross-subsidy will be deposited into the fund.
    • Rules of Centre: The Bill specifies that the above matters related to the operation of multiple discoms in the same area will be regulated in accordance with the rules made by the central government under the Act.
    • License for distribution in multiple states:  As per the Bill, the CERC will grant licenses for distribution of electricity in more than one state.
    • Payment security:  The Bill provides that electricity will not be scheduled or despatched if adequate payment security is not provided by the discom.   The central government may prescribe rules regarding payment security.
    • Contract enforcement:  The Bill empowers the CERC and SERCs to adjudicate disputes related to the performance of contracts.  These refer to contracts related to the sale, purchase, or transmission of electricity.  Further, the Commissions will have powers of a Civil Court.
    • Renewable purchase obligation:  The Act empowers SERCs to specify renewable purchase obligations (RPO) for discoms.  RPO refers to the mandate to procure a certain percentage of electricity from renewable sources.  The Bill adds that RPO should not be below a minimum percentage prescribed by the central government.  Failure to meet RPO will be punishable with a penalty between 25 paise and 50 paise per kilowatt of the shortfall.
    • Selection committee for SERCs:  Under the Act, the Chairperson of the Central Electricity Authority or the Chairperson of the CERC is one of the members of the selection committee to recommend appointments to the SERCs.  Under the Bill, instead of this person, the central government will nominate a member to the selection committee.  The nominee should not be below the rank of Additional Secretary to the central government.

    Other key provisions

    • Tariff Ceilings: The Bill makes provision for “mandatory” fixing of minimum as well as maximum tariff ceilings by the “appropriate commission” to avoid predatory pricing by power distribution companies and to protect consumers.
    • Tariff revisions: The amendment has several provisions to ensure graded and timely tariff revisions that will help provide state power utilities enough cash to be able to make timely payments to power producers. This move is aimed at addressing the recurrent problem of default by distribution companies in payment to generation companies.
    • Payment security mechanism: The bill through amendments in Section 166 of the Act also seeks to strengthen payment security mechanisms and give more powers to regulators. It has become necessary to strengthen the regulatory mechanism, adjudicatory mechanism in the Act and to bring administrative reforms through improved corporate governance of distribution licensees.

    Why is it being opposed?

    • Provisions of the Bill are being opposed by a number of opposition-ruled states.
    • It is being termed anti-federal in spirit.
    • Power as a subject comes under the Concurrent List and it was the “the bounden duty or the mandatory obligation” of the Centre to consult the states.

    Criticisms

    • If passed in its current form it will lead to a major loss for government distribution companies, eventually helping to establish the monopoly of a few private companies in the country’s power sector.
    • By bringing in more retailers or distribution licensees, the quality of service or price is not going to be any different.

    How will these amendments help?

    • Power freebie: The Bill comes at a time when there is a debate around freebies being offered by political parties.
    • Discom crisis: Various state power distribution companies (Discoms) have not been able to raise enough resources to make timely payments to power generating companies.
    • Empowering discoms: Empowering the regulator to be able to take calls on tariff revision and ensuring that the government freebies, even on electricity, should be through direct benefit transfer.

     

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  • Ocean Thermal Energy Conversion Plant in Lakshadweep

    The National Institute of Ocean Technology is establishing an Ocean Thermal Energy Conversion (OTEC) plant with a capacity of 65 kilowatts (kW) in Kavaratti, the capital of Lakshadweep.

    What is OTEC Plant?

    • Ocean thermal energy conversion (OTEC) is a process or technology for producing energy by harnessing the temperature differences (thermal gradients) between ocean surface waters and deep ocean waters.
    • Energy from the sun heats the surface water of the ocean.
    • In tropical regions, surface water can be much warmer than deep water.
    • This temperature difference can be used to produce electricity and to desalinate ocean water.

    How do they work?

    • The OTEC technology uses the temperature difference between the cold water in the deep sea (5°C) and the warm surface seawater (25°C) to generate clean, renewable electricity.
    • The technology requires a minimum of 20°C difference between the surface and deep ocean temperatures.
    • Warm surface water is pumped through an evaporator containing a working fluid. The vaporized fluid drives a turbine/generator.
    • The vaporized fluid is turned back to a liquid in a condenser cooled with cold ocean water pumped from deeper in the ocean.
    • OTEC systems using seawater as the working fluid can use the condensed water to produce desalinated water.

     

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  • 5G

    The much-awaited auction for telecom spectrum, including for 5G airwaves, will begin tomorrow.

    Spectrums for auctions

    • A total of 72,097.85 MHz (or 72 Ghz) of spectrum with a validity period of 20 years will be put on the block.
    • Airwaves across low (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz), mid (3300 MHz) and high (26 GHz) frequency bands, valued at ₹4,316 billion ($56 billion) at least, will be put up for bidding.

    What is (Electromagnetic) Spectrum?

    • Devices such as cellphones and wireline telephones require signals to connect from one end to another.
    • These signals are carried on airwaves, which must be sent at designated frequencies to avoid any kind of interference.
    • The Union government owns all the publicly available assets within the geographical boundaries of the country, which also include airwaves.
    • With the expansion in the number of cellphones, wireline telephone and internet users, the need to provide more space for the signals arise from time to time.

    Spectrum allocations

    • Spectrum refers to the invisible radio frequencies that wireless signals travel over. The frequencies we use for wireless are only a portion of what is called the electromagnetic spectrum.
    • To sell these assets to companies willing to set up the required infrastructure to transport these waves from one end to another, the central government through the DoT auctions these airwaves from time to time.
    • These airwaves called spectrum is subdivided into bands which have varying frequencies.
    • All these airwaves are sold for a certain period of time, after which their validity lapses, which is generally set at 20 years.

    What is 5G technology?

    • 5G or fifth generation is the latest upgrade in the long-term evolution (LTE) mobile broadband networks.
    • It mainly works in 3 bands, namely low, mid and high-frequency spectrum — all of which have their own uses as well as limitations.

    Three bands of 5G

    (1) Low band spectrum

    • It has shown great promise in terms of coverage and speed of internet and data exchange, the maximum speed is limited to 100 Mbps (Megabits per second).
    • This means that while telcos can use and install it for commercial cellphones users who may not have specific demands for very high-speed internet, the low band spectrum may not be optimal for the specialized needs of the industry.

    (2) Mid-band spectrum

    • It offers higher speeds compared to the low band but has limitations in terms of coverage area and penetration of signals.
    • Telcos and companies, which have taken the lead on 5G, have indicated that this band may be used by industries and specialized factory units for building captive networks that can be molded into the needs of that particular industry.

    (3) High-band spectrum

    • It offers the highest speed of all the three bands, but has extremely limited coverage and signal penetration strength.
    • Internet speeds in the high-band spectrum of 5G have been tested to be as high as 20 Gbps (gigabits per second), while, in most cases, the maximum internet data speed in 4G has been recorded at 1 Gbps.

    Where does India stand in the 5G technology race?

    • On par with the global players, India had, in 2018, planned to start 5G services as soon as possible, with an aim to capitalize on the better network speeds and strength that the technology promised.
    • Indian private telecom players have been urging the DoT to lay out a clear road map of spectrum allocation and 5G frequency bands so that they would be able to plan the rollout of their services accordingly.
    • One big hurdle, however, is the lack of flow of cash and adequate capital with some companies due to their AGR dues.

    Global progress on 5G

    • More than governments, global telecom companies have started building 5G networks and rolling it out to their customers on a trial basis.
    • In countries like the US, some companies have taken the lead when it comes to rolling out commercial 5G for their users.
    • A South Korean company, which had started researching on 5G technology way back in 2011, has, on the other hand, take the lead when it comes to building the hardware for 5G networks for several companies.

     

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  • Government bailouts are not the answer to India’s energy sector woes

    Context

    Across several states, the fiscal situation is becoming increasingly challenging. Yet, the common thread that runs through these deficits — state ownership and control — remains unaddressed.

    State ownership: structural cause of India’s deficit

    • Coal India’s inability to raise production to meet growing demand contributed to the recent power crisis.
    • The state-owned power distribution companies have failed to bring down losses despite many schemes and packages.
    • The state control of these critical aspects of India’s power chain is central to a higher current account deficit and growing fiscal risks at the state level.

    Coal output fails to meet the demand

    • From 2013-14, the Indian economy has grown by around 50 per cent (in real terms).
    • But Coal India, which accounts for around 80 per cent of India’s total coal production, was able to raise its output by just 34 per cent over the same period.
    • Increased reliance on imported coal: India’s coal imports (thermal and cooking) rose to a staggering 230.3 million tonnes in 2020-21, up 37 per cent from 168.5 million tonnes in 2013-14.
    • Coal imports for thermal power alone have more than doubled in the first quarter, compared to the same period last year.
    • To put this in perspective — the value of coal imports in just the first three months of this year is likely to be around half of what was imported in all of last year.
    • Increase in current account deficit: This growing reliance on coal imports (along with crude and gold) is at the root of the country’s widening current account deficit.
    • An inability to ramp up production, to forecast demand accurately, as every episode of coal shortage over the years has exposed, is the hallmark of the coal sector that is still largely the preserve of a public sector monopoly.

    Problem of DISCOMS

    • No improvement in financial and operational issues: Despite repeated attempts to turn around their financial and operational positions, on key metrics, the divide between the public and private sector discoms is deepening.
    • In 2019-20, public sector discoms lost Rs 0.72 per unit of power sold, while private discoms made Rs 0.20 per unit.
    • High AT&C losses: Similarly, in 2019-20, the AT&C losses (due to operational inefficiencies) for state discoms were pegged at 21.7 per cent, while for the private sector, losses were at 8 per cent.
    • With deteriorating finances, the net worth of all public sector discoms put together stands at a negative Rs 61,757 crore, while for the private sector, it is a positive Rs 24,965 crore.
    • There have been several attempts to rescue state discoms.
    • In the early 2000s, the scheme for repayment of SEB dues amounted to Rs 41,473 crore.
    • In 2012, the financial restructuring plan added up to Rs 1.19 lakh crore.
    • In 2015, UDAY involved a transfer of Rs 2.01 lakh crore to state government balance sheets.
    • Notwithstanding various schemes to turn around their finances, the total debt of all discoms put together stood at Rs 5.14 lakh crore at the end of 2019-20.
    • Of this, Rs 4.87 lakh crore is owed by state discoms.
    • Impact on entire power chain: A deterioration in the financial position of discoms means that their dues to power generating companies start mounting, which in turn delay payments to coal miners, affecting the financial stability of the entire power chain.

    Declining cross-subsidisation

    • As tariffs charged by discoms are much higher than the cost of alternatives, a sizeable part of non-agricultural sales of discoms (industrial and commercial consumers) have already shifted towards captive and solar.
    •  And with the ministry of power recently reducing the threshold for green energy open access, more and more consumers will increasingly opt out.
    • This would mean that discom losses will rise as cross subsidisation from commercial and industrial consumers will decline, increasing their dependence on state subsidies.
    • In 2019-20, the total state subsidy claimed and released was around Rs 1.1 lakh crore or 17 per cent of total discom revenue.
    • This will only increase down the line, making future bailouts even more fiscally challenging.

    Conclusion

    Tackling these deficits requires addressing the issue of government control over critical aspects of India’s energy sector. Without shifting to market-determined prices — reforms are ultimately about price — little headway is likely to be made.

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  • Supreme Court orders status quo on Kaleshwaram Project expansion

     

    The Supreme Court has ordered status quo on the Kaleshwaram Lift Irrigation Project (KLIP) after it was told the Telangana government was increasing the capacity of the project without any environmental clearances.

    Kaleshwaram Lift Irrigation Project (KLIP)

    • The KLIP is a multi-purpose irrigation project on the Godavari River in Kaleshwaram, Bhupalpally in Telangana.
    • Currently the world’s largest multi-stage lift irrigation project, its farthest upstream influence is at the confluence of the Pranhita and Godavari rivers.
    • The Pranahita River is itself a confluence of various smaller tributaries including the Wardha, Painganga, and Wainganga rivers which combine to form the seventh-largest drainage basin on the subcontinent.
    • It remains untapped as its course is principally through dense forests and other ecologically sensitive zones such as wildlife sanctuaries.

    Grandeur of the project

    • Till date, the biggest lift schemes in the world were the Colorado lift scheme in America and the Great Manmade River in Egypt.
    • The capacities of these schemes are in horsepower and they took over three decades for completion.
    • Now, the Kaleshwaram lift irrigation project, an Indian lift scheme has become the worlds biggest in terms of capacities.

    Key facts associated

    • Built across Godavari river, KLIP will lift the water to a height of half-a-kilometre.
    • It is designed to irrigate 45 lakh acres for two crops in a year, meet the drinking water requirement of 70 percent of the state and also cater to the needs of the industry.
    • The foundation stone for the Rs 80,500 crore project was laid in 2016 and claimed to be the world’s biggest project of its kind, completed in the shortest time.
    • The government is planning to lift two thousand million cubic (TMC) feet of Godavari water per day from Medigadda barrage.
    • Claimed to be an engineering marvel, the project comprises 1,832 km water supply route, 1,531 km gravity canal, 203 km tunnel routes, 20 lifts, 19 pump houses and 19 reservoirs with a storage capacity of 141 TMCs.
    • It requires nearly 4,992 MW of electricity to pump 2 TMC of water every day in the first phase. The requirement will go up to 7,152 MW for lifting 3 TMC from next year.

    How important is KLIP to Telangana?

    • The project will enable farmers in Telangana to reap multiple crops with a year-round supply of water wherein earlier they were dependent on rains resulting in frequent crop failures.
    • This year, Telangana farmers have already delivered bumper rabi crops of paddy and maize due to better irrigation facilities and an extended monsoon.
    • KLIS covers several districts which used to face rainfall deficit and the groundwater is fluoride-contaminated.
    • Apart from irrigation, a main component of the project is the supply of drinking water to several towns and villages and also to twin cities of Hyderabad and Secunderabad.
    • Mission Bhagiratha, to supply drinking water to every household in villages, draws a large quantity of water from the KLIS and some quantity from projects on River Krishna.
    • There is a burgeoning freshwater fishing industry in the state.

    Issues with the Project

    • The NGT has observed that the Telangana government subsequently changed the design of the project to increase its capacity.
    • By increasing its capacity to pump 3 TMC water from 2 TMC, large tracts of forest land and other land were taken over and massive infrastructure was built causing an adverse impact on the environment.
    • Extraction of more water certainly requires more storage capacity and also affects hydrology and riverine ecology of Godavari River.
    • Such issues have to be examined by the statutory authorities concerned.

    Back2Basics: National Green Tribunal

    • It is a specialized body set up under the National Green Tribunal Act (2010) for effective and expeditious disposal of cases relating to environmental protection and conservation of forests and other natural resources.
    • With the establishment of the NGT, India became the third country in the world to set up a specialized environmental tribunal, only after Australia and New Zealand, and the first developing country to do so.
    • NGT is mandated to make disposal of applications or appeals finally within 6 months of filing of the same.
    • The NGT has five places of sittings, New Delhi is the Principal place of sitting and Bhopal, Pune, Kolkata and Chennai are the other four.

    Structure of NGT

    • The Tribunal comprises of the Chairperson, the Judicial Members and Expert Members. They shall hold office for a term of five years and are not eligible for reappointment.
    • The Chairperson is appointed by the Central Government in consultation with the Chief Justice of India (CJI).
    • A Selection Committee shall be formed by the central government to appoint the Judicial Members and Expert Members.
    • There are to be at least 10 and a maximum 20 full-time judicial members and Expert Members in the tribunal.

     

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  • Universal Service Obligation Fund (USOF)

    The Union Cabinet has approved a project for providing 4G mobile services in thousands of villages across the country under the USOF.

    What do you mean by Universal Service?

    • In the modern world, universal service refers to having a phone and affordable phone service in every home.
    • It means, providing telecommunication service with access to a defined minimum service of specified quality to all users everywhere at an affordable price.
    • In 1837, the concept was rolled on by Rowland Hill, a British educator and tax reformer, which included uniform rates across the UK and prepayment by sender via postage stamps.

    What is USOF?

    • The Universal Service Obligation Fund (USOF) was formed by an Act of Parliament, was established in April 2002 under the Indian Telegraph (Amendment) Act 2003.
    • It aims to provide financial support for the provision of telecom services in commercially unviable rural and remote areas of the country.
    • It is an attached office of the Department of Telecom, and is headed by the administrator, who is appointed by the central government.

    Scope of the USOF

    • Initially, the USOF was established with the fundamental objective of providing access to ‘basic’ telecom services to people in rural and remote areas at affordable and reasonable prices.
    • Subsequently, the scope was widened.
    • Now it aims to provide subsidy support for enabling access to all types of telecom services, including mobile services, broadband connectivity and the creation of infrastructure in rural and remote areas.

    Funding of the USOF

    • The resources for the implementation of USO are raised by way of collecting a Universal Service Levy (USL), which is 5 percent of the Adjusted Gross Revenue (AGR) of Telecom Service Providers.

    Nature of the fund

    • USOF is a non-lapsable Fund.
    • The Levy amount is credited to the Consolidated Fund of India.
    • The fund is made available to USOF after due appropriation by the Parliament.

     

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  • How to increase production of coal

    Context

    With inflation at unprecedented levels in many countries, concerns over energy security have gained centre stage.

    National Coal Index to factor in the increased price of imported coal

    • This index was created to provide a benchmark for revenue-sharing contracts being executed after the auctions for commercial mining of coal.
    • The NCI had to be introduced as the wholesale price index (WPI) for coal has no component of imported coal.
    • For the last six months, the WPI for Coal has been stable at around 131.
    • Over the same period, the NCI has jumped from about 165 to about 238 reflecting the sharp increase in international coal prices.

    Needs to increase domestic coal production

    • High prices of coal and coal-based generation will only encourage imported coal and expose the country to price risks from international energy prices.
    • The domestic coal industry has responded to increasing internation prices with an increase of over 30 per cent in coal production from April to June this year.
    • Anticipating these problems, a big effort toward permitting commercial mining has been made to get the private sector to produce more coal.
    • Gradual transition: Looking at coal from a singular focus on GHG emissions will give a myopic view of energy requirements for a growing economy like India.
    • The path to achieving 500 GW of renewables needs to be gradual, ensuring an orderly transition as coal is unavoidable in the near future.
    • Reducing coal imports and increasing domestic production of coal needs focused attention

    Suggestions to increase domestic production of coal

    1] Sensitising the financial community

    • The financial community has to be sensitised to the need of increasing domestic coal production to meet the growing energy demand.
    • The draft National Electricity Policy released in May 2021, recognised the need to increase coal-based generation.
    •  This policy has not yet been finalised.
    • It should clearly articulate the importance of domestic coal-based generation.
    • Holistic approach in ESG criteria: Apart from the government, the industry should also take up this issue with the financial community in adopting a more holistic approach toward environmental, social, and governance (ESG) criteria.

    2] The regulator needs to facilitate  greater role of private sector

    • There is the need for a regulator to address the issues arising from a greater role of the private sector.
    • The current arrangements were put in place at a time when the public sector dominated.
    • There are several issues where new private commercial miners would need help.
    • Single point of contact: A single point of contact for the industry in the form of a dedicated regulator would give great comfort to private players and would help to overcome problems that could arise in due course.

    3] Diversifying the production base

    • Increasing domestic production of coal and diversifying the production base are both needed.
    • This must be complemented with efforts to improve the quality of the coal produced.

    4] Remove financial burden due to cross subsidies

    • The undue financial burden on the coal sector due to various cross subsidies needs attention.
    • The regime needs to be reformed.

    Conclusion

    Action on the issues discussed above will only help to deepen and strengthen these reforms which are needed to overcome the challenges that have resurfaced over the past few months.

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  • Aviation sector in India: Issue and Challenges

    What is the issue?

    Policymakers ought to recognise the country’s untapped potential and work towards dismantling the many hurdles.

    What is the significance of aviation sector?

    India is the world’s third-largest market in aviation sector.

    • Aviation is integral to equitable economic growth, for a country to be globally competitive and to change the situation of poverty and unemployment.
    • Passenger airlines and air cargo overcome geography and connect remote areas that are alienated from the mainstream.
    • They can drive investment deep into the country, giving people access to markets.
    • They also boost tourism, which is the largest employment generator in the unorganised sector.

    What is the status of aviation sector in India?

    • Pre-economic reform period– India had only two airlines – Air India and Indian Airlines.
    • Post 1991 reforms– The reforms that opened up the aviation sector in 1991 and ended the licence raj and the monopoly of Indian Airlines and Air India changed the sector.
    • Numerous private sector airlines were given the licence to fly, but Jet Airways and Sahara, survived, resulting in cartelisation.
    • The concept of low cost airlines in India took shape in 2003 which overcame the cost barrier.
    • Sadly, Indian aviation has become ‘the sick man of India’.

    What are the barriers in Indian aviation sector?

    • Per capita consumption of air tickets – The number of Indians who buy air tickets in 2019 is 140 million of which 35 million to 40 million frequent flyers form the bulk of ticket buyers.
    • It translates to less than 4% of the population who can afford air travel, placing India just alongside some poorer African countries, in terms of the per capita consumption of air tickets.
    • Factors affecting the growth of aviation sector– The growth of aviation has been affected by
      • Choking regulations
      • Tough entry barriers for new entrants
      • High fuel prices on account of sky high taxes
      • Inefficient public sector airports that pave the way for monopoly airports
    • Frequent and knee-jerk changes point to the absence of a long-term visionary strategic policy for the entire gamut of sectors in aviation.

    How efficient are government schemes in the development of the airline sector?

    • Boosting entrepreneurship- Start-up India initiative was started with the objective of supporting entrepreneurs, building a robust startup ecosystem and transforming India into a country of job creators.
    • Regional connectivity– Ude Desh Ka Aam Naagrik (UDAN) scheme aims to connect small and medium cities with big cities through air service.
    • Low cost airlines– UDAN plans to connect the underserved airports to key airports through flights that will cost Rs 2,500 for per hour flight.
    • Comprehensive development– The National Civil Aviation Policy 2016 aims to take flying to the masses and covers 22 areas of the Civil Aviation sector.

    What reforms are needed?

    • Reforms in all sectors– It is critical to understand that for passenger airlines to grow, there have to be reforms in all areas of aviation – air cargo, airports, aviation fuel taxes and Maintenance, Repair and Overhaul (MRO).
    • Updated laws– India’s Aircraft Act, 1934 and Aircraft Rules, 1937 need to be updated to keep pace with modern technology in aerospace, increasing costs to the industry and ultimately affecting passenger growth.
    • Overhaul DGCA – India’s statutory regulatory authority, the Directorate General of Civil Aviation (DGCA), needs to be modernised, well-staffed, motivated and incentivized.
    • Need for aviation professionals– There need to be aviation professionals in charge rather than the ubiquitous bureaucrat from the Indian Administrative Service.

  • After Ukraine, the new energy disorder

    Context

    Our long-standing “friend“ (Russia) is now in the bad books of our other friends (the US and Europe) and in a deepening relationship with our adversary (China). The Gulf countries are crucial for our energy security but Russia has replaced them as our principal supplier

    How Ukraine war is changing the energy policies

    • Six months back before the start of the Ukrainian conflict, there was a deepening sense that fossil fuels and the industry built around them were in terminal decline.
    • After the Ukraine war began, the petroleum market is tight and prices are ratcheting up.
    • Oil prices are close to $120/bbl and gas prices have jumped 500 per cent year on year in Europe.
    • The regulatory constraints on petroleum exploration and distribution infrastructure have been eased and several countries have removed the output limits on thermal power generation and reopened the coal mines that were closed.
    • The share prices of the oil majors are trading at multi-year highs.

    Three issues that influences India’s energy policy

    1] Long term implications of buying oil from Russia

    • India is now a major purchaser of Russian crude.
    • Last month, it reportedly purchased an average of 1.2 mbd.
    • If this figure is correct, Russia is now our largest provider of crude oil surpassing Saudi Arabia and Iraq.
    • The reason for this ramp-up is the price discount offered by Russia.
    • The decision is driven by good economics and energy security.
    • The Western world does not, however, see it this way.
    •  The question does arise: What might be the medium to longer-term implications of our “support” to Russia on relations with Capitol Hill, the UK and the European Commission?

    2] Increased economic and energy ties of Russia and China

    •  Russia and China have, for long, shared the view that the US is their biggest security threat.
    • China also increased the purchase of Russian oil and gas.
    • This tightened economic and energy embrace has implications for India.
    • Several questions will need to be addressed.
    • Russia’s role in India-China conflict: How might a post-Ukraine weakened Russia that is in hock to China respond to India in the event matters deteriorate on our border with China?
    • Will they be reliable providers of crude oil, military equipment, minerals, and metals essential for our green transition?
    • Will they be politically autonomous or client states?

    3] Important role of the Gulf states

    • The Ukrainian crisis has forced a presidential u-turn. Later this month, President Biden will visit Saudi Arabia.
    • Several other European leaders will also beat a path to the Gulf, all in the hope of extracting a promise of higher production to lower oil prices and some to negotiate gas supply deals.
    • India needs the Gulf producers for supply security. But it also wants oil prices to come down.
    •  The position of these producers in the reordered post-Ukraine energy landscape is, therefore, of relevance.
    • Will they respond positively to the courtship of Russia/China, move back into the Western fold, or stay outside both orbits, neutral and opportunistic?
    • The answer will bear on India’s energy security.

    Way forward

    • Integrated energy policy: What we need is a mechanism for the development and execution of an integrated energy policy.
    • This is because currently there is no executive authority responsible for energy.
    • There are ministries responsible for components of energy policy but no formal mechanism for aligning their separate approaches.
    • The Ukraine war has disrupted the existing energy order.
    • The new energy (dis) order has created fissures that impact our national security, economic growth, trade, clean energy supply lines, transfer of technology and international relations.
    • We cannot, therefore, afford to continue with our existing siloed approach.

    Conclusion

    The Ukrainian crisis has radically altered the contours of the global energy landscape and created a tangle of relationships and issues for India. To smoothen this tangle and address the issues India should adopt “a whole of the system” approach to energy policy.

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  • What are Private Captive Networks?

    The Cellular Operators’ Association of India (COAI) wrote a letter urging the government against allotting 5G spectrum to private captive networks, claiming that it will diminish their revenue to the point where offering 5G will pointless.

    What is a Private Captive 5G Network?

    • A private captive 5G network is basically a network set up by a private entity for the use of just one organisation.
    • It is similar to a captive coal mine in that the 5G service offered by this captive network will only be utilised by the enterprise concerned, and no one else.

    Why are telecom providers against it?

    • The COAI’s argument is that enterprises are the biggest users of 5G networks.
    • If private entities are allowed to offer captive networks to enterprises, the TSPs (telecom service providers) retail revenues will fall.
    • COAI implied that there is no great demand for 5G right now as “the needs of voice and data of the entire nation is being adequately met by the TSPs through their 4G networks today”.

     

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