PYQ Relevance:[UPSC 2022] How will India transform from being a net import dependent country to a net export dependent in renewable energy by 2030 ? Justify your answer. How will the shift of subsidies from fossil fuels to renewables help achieve the above objective? Explain. Linkage: “A strategy fuelled by vision, powered by energy” as it discusses India’s explicit goal for a future energy landscape – transforming into a net export-dependent country in renewable energy by 2030. It also delves into the strategic policy shift – moving subsidies from fossil fuels to renewables – intended to power this transformation. |
Mentor’s Comment: Energy is very important for India’s industry, saving foreign money, and global influence. India’s energy needs will grow 2.5 times by 2047, and it will use 25% of the world’s new energy. India’s shift to stronger, cleaner energythrough smart policies and renewable sources is a great success for the country.
Today’s editorial will explain India’s energy sector strategy and challenges. This will be useful for GS Paper II(International Relations) and GS Paper III (Energy & Environment).
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Let’s learn!
Why in the News?
India is now the world’s fourth-largest economy, moving ahead of Japan, with its GDP reaching $4.3 trillion in 2025. This major success happened because of important changes in the economy and energy sector.
What are the key components of India’s energy strategy?
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Why is energy security considered equivalent to development security for India?
- Rapidly Growing Energy Demand: With India projected to account for 25% of global energy demand growth by 2047, uninterrupted energy supply is essential to fuel economic growth, industrial output, and urban development. Eg: India’s rise to the 4th-largest oil consumer shows its energy needs are deeply tied to its global economic standing.
- Foundation for Self-Reliance and Sovereignty: Ensuring access to affordable and sustainable energy strengthens national resilience and reduces geopolitical vulnerabilities. Eg: Ethanol blending (19.7% in 2025) and expanding biofuels have saved ₹1.26 lakh crore in foreign exchange, enhancing energy independence.
- Social Stability and Equitable Access: Affordable and stable energy supply supports welfare schemes and shields vulnerable populations from price shocks. Eg: Under PM Ujjwala Yojana, LPG cylinder prices for beneficiaries remain at ₹553 despite a global 58% rise, ensuring energy access for the poor.
How has India expanded its domestic oil and gas exploration acreage from 2021 to 2025?
- Doubling Exploration Acreage: India increased its exploration area from 8% in 2021 to 16% in 2025, aiming to cover 1 million sq km by 2030 to unlock vast hydrocarbon resources. Eg: This expansion includes frontier basins like the Andamans and the Mahanadi.
- Landmark Policy Reforms: Reforms such as reducing ‘No-Go’ zones by 99% and streamlining licensing through the Open Acreage Licensing Policy (OALP) rounds have facilitated easier access for exploration. Eg: The OALP rounds attract new investors by offering simplified licensing.
- Attractive Pricing and Revenue Sharing: New pricing mechanisms link gas prices to 10% of the Indian crude basket with a 20% premium for new wells, and revenue-sharing contracts allow shared infrastructure, boosting investment incentives. Eg: These incentives encourage development of new gas wells and city gas networks.
Which renewable energy initiatives have contributed significantly to India’s green energy transition?
- Ethanol Blending in Petrol: Ethanol blending increased from 1.5% in 2013 to 19.7% in 2025, expanding the ethanol supply from 38 crore litres to 484 crore litres, reducing emissions and saving foreign exchange. Eg: This has saved ₹1.26 lakh crore in foreign exchange and reduced 643 lakh MT of emissions.
- Compressed Biogas (CBG) through SATAT Initiative: The SATAT program has commissioned over 100 CBG plants and targets a 5% CBG blending mandate by 2028, promoting circular and affordable bioenergy. Eg: Central support for biomass procurement and CBG pipeline connectivity accelerates adoption.
- Green Hydrogen Production: India has produced 8.62 lakh tonnes of green hydrogen and awarded 3,000 MW electrolyser tenders, with public sector units leading large-scale hydrogen projects. Eg: Indian Oil Corporation’s 10 KTPA green hydrogen tender for the Panipat refinery.
What are the challenges?
- Infrastructure and Technology Gaps: Limited infrastructure for large-scale production, storage, and distribution of renewables like green hydrogen and biofuels slows down adoption. Eg: Need for expanded electrolyser manufacturing capacity to meet tender targets.
- Feedstock Availability and Supply Chain Issues: Securing consistent and diversified feedstock for biofuels like ethanol and CBG is challenging due to agricultural dependencies and regional disparities. Eg: Ensuring steady supply of molasses, maize, and biomass for ethanol and CBG production.
- High Initial Costs and Financing Constraints: Capital-intensive nature of renewable projects and lack of affordable financing options can hinder MSMEs and smaller players from scaling up. Eg: Limited access to credit for startups working on cutting-edge green hydrogen technologies.
Way forward:
- Boost Infrastructure and Technology: Invest in large-scale renewable production, storage, and distribution facilities—especially for green hydrogen and biofuels—and expand domestic manufacturing of key technologies like electrolysers.
- Enhance Feedstock Supply and Financing: Develop diversified, reliable feedstock supply chains for biofuels, and create affordable financing schemes to support MSMEs and startups in scaling clean energy innovations.
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