Mains Paper3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways, etc.
From UPSC perspective following things are important
Prelims: Not much
Mains level: This article is important for the as it brings out the drawbacks of Niti Aayog’s DNEP.
- Niti Aayog’s Draft Energy Policy (DNEP) ) predicts that between 2017 and 2040, there will be a quantum leap in the uptake of renewable energy together with a drastic reduction in fossil fuel energy intensity.
- With economic and population growth, India’s annual per-capita electricity consumption is expected to triple, from 1075 kWh in 2015-16 to over 2900 kWh in 2040.
- The DNEP assumes 100% electrification throughout India in the near term
- The government will invest $2.5 billion to provide electricity connections to every home in India by the end of 2018.
- But the DNEP fails to consider several critical issues involved in the ongoing energy transition.
Drawback of DNEP
- Based on Coal
- Despite the fact that existing coal plants are running at low efficiencies (at merely 60% plant load capacity utilization) because of weak industrial growth in last 3 years, the DNEP relies on coal power to sustain the nation’s base load requirement to meet rising energy demand.
- It proposes that coal will fuel 67% of India’s power generation in 2022.
- It is contrary to the India’s claim that it will make a big push for renewables, it will continue to rely on coal for its baseload generation. While renewables grow, coal power grows too.
- This duality is possible because India did not commit to any actual reductions in its greenhouse gas emissions at the Paris climate meeting in 2015.
- Even this target India will need only 741 million tonnes of coal by 2022 however the Ministry of Coal has ambitious target of 1.5 billion tonnes by 2020.
- The DNEP is silent on the fate of the new allottes of coal mines. The concern is what would they do with their coal if they can’t generate power with it.
- Generation of power is licence free under the Electricity Act of 2003, so private miners do not need any licence to set up generating plants. All they need is a connection to the grid. Since the grid is State-owned, the Central government has adequate leverage to defer or delay connections.
- Based on failure to highlight the gradual substitution of internal combustion engines with electric vehicles.
- The DNEP acknowledges increased oil and gas consumption in India decreased refining of oil and production of gas.Thus, India’s energy security does require a large strategic storage of oil to contain any vagaries in international supply chain.
- But this strategic storage of oil does not tackle the systemic causes of this high dependence on oil.
- The peaking of India’s oil demand could have been envisaged but has not been identified in the DNEP. But it recognises that by 2040, India’s oil import dependence may reach 55% from the current level of 33%. To curtail this import dependence DNEP promotes use of public transportation and railways to reduce oil consumption.
- Unless electric transport is carefully planned, India’s dependence on imported oil is likely to continue.
- The drafting committees need to examine the paradigm shifts occurring in storage and electric vehicles to promote new technologies in renewable energy, such as smart grids, smart homes, battery storage and concentrated solar heat and power.
- New institutions, organisations and funding mechanisms for promoting renewable technologies need to be created not later than this year’s end.