Policy Wise: India’s Power Sector

Energy Atmanirbharta

Note4Students

From UPSC perspective, the following things are important :

Prelims level : NA

Mains level : energy secure India

EnergyContext

  • The Prime Minister has called for “Energy Atmanirbharta” by 2040.

What is Atmanirbharta?

  • Atmanirbharta translates literally to self-reliance.

What is the main purpose of Atmanirbhar Bharat?

  • The aim is to make the country and its citizens independent and self-reliant in all senses. Five pillars of Aatma Nirbhar Bharat are – Economy, Infrastructure, System, Vibrant Demography and Demand.

How to achieve energy self-reliance?

  • Definitional clarity: Atmanirbharta translates literally to self-reliance. Many interpret it to mean self-sufficiency. That should not be our goal. Energy self-sufficiency is infeasible and uneconomic. A better statement of intent would be “strategic autonomy”.
  • Affordable access to fuel: Our policy must continue to emphasise affordable and secure access to oil and gas. Part of this objective could be met by intensifying domestic exploration.
  • Prioritise access to the building blocks of green energy: The sine qua non for realising this forecast will be cost-competitive access to minerals/components (copper, cobalt, lithium, semiconductor chips etc) required to build EVs, solar panels, wind turbines and batteries.
  • Infrastructure development: We must expand our strategic petroleum reserves to cover at least 30 days of consumption and upgrade the transmission grid and battery storage systems to scale up renewables and smoothen its supplies. We will need to develop innovative financing mechanisms to fund green infrastructure. It should be emphasised that all such investments will get impaired if state discoms are financially insolvent.
  • Green incentives: The government’s production-linked incentive scheme (PLI) offers benefits for investment in green energy.
  • Demand conservation and efficiency: Energy usage norms must be standardised and tightened. Legislation should be contemplated to ensure compliance.
  • Energy diplomacy: Our diplomats should add the arrows of energy diplomacy to their quiver. This is because of our dependence on the international energy supply chains. Success in navigating the cross-currents of economic and geopolitical uncertainties will rest greatly on skilful diplomacy.
  • Holistic governance: The current siloed structures of energy governance are suboptimal. A root and branch administrative overall is required. Institutions should be created to facilitate integrated energy planning and implementation.

Case study for value addition

  • Costa Rica lasted 300 consecutive days on renewable energy alone. Costa Rica set the record in 2017 for most consecutive days with renewable energy. The previous record for this feat was in 2015 when Costa Rica lasted 299 consecutive days on pure, clean energy.

Challenges ahead

  • Anti-nuclear public sentiment: The Fukushima-Daiichi accident resulted in growing concern over the safety of nuclear plants in India .The construction of a nuclear plant in Kudankulam, Tamil Nadu, brought the issue directly into the public domain in 2012.
  • Management autonomy: Power sector is dominated by public sector companies or PSUs (owned by the central and state government). Some parts of the energy sector have made very little progress in attracting private investment since 2007.
  • Pricing: is the key to ensure the commercial viability of business entities and to attract investment into each fuel sector.
  • Rigid tariff setting mechanism: Theoretically,  prices should be supervised and adjusted in a timely manner and adequately by independent regulators to reflect changing costs. However, in India, regulators including CERC and SERCs operate in a very rigid way due to political considerations. This jeopardises the operational profitability of companies.

EnergyConclusion

  • We need leadership that can reconcile temporal differences and balance the short-term pressures of elections with the longer-term imperatives of sustainability in energy security which calls for bold and pragmatic decision making by the leadership.

Mains question

Q. How India can achieve “Energy Atmanirbharta” by 2040 an ambitious target stated by prime minister? What are the challenges in achieving this goal?.

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