As countries across the globe focus their efforts to minimise long term dependancy on fossil fuels and transition to a low-carbon economy, Kazim Rizvi sat down with Energy Policy Institute of University of Chicago’s Vaibhav Chowdhary to understand India’s renewable energy programmes, policies that focus on enhancing energy security and what will it take to achieve universal electricity coverage.
Excerpts from the interview:
Can you elaborate the key differences between the UPA and NDA in terms of enhancing India’s energy security?
There are two kind of people in the world – talkers and doers, and this tells a lot about the governance system in India. UPA designed and delivered a lot of significant reforms in India. Quite a few of those are on energy security i.e fossil fuel subsidy reform, coal price pooling, NAPCC, NMEEE, JNNSM etc. On the other side, NDA has talked about 24X7 electricity to all, 175GW Renewables etc but the delivery is yet to be seen. However, current Prime Minister’s bold Walking the Talk philosophy is that he would talk so loud that everyone else is forced to deliver eg – PM Modi set the energy security target at Urja Sangam 2015, asking MoPNG to reduce India’s oil imports by 10% by 2022. Energy security policy in current NDA regime is unique with merged ministries and junior ministers with Independent Charge, to deliver the shots taken at the highest level.
What effect do you think the Trump Administration is likely to have towards the world’s transition to a low-carbon economy?
The world has changed phenomenally in the last two decades. The earlier republican president G.W.Bush was an oil businessmen himself, and his advisors were geopolitical experts keen to secure oil and gas reserves globally, which is no more the case. US for many years has been an oil and gas exporting nation. Massive investments in low carbon technologies drives jobs and growth in US today. Even the conventional oil and gas companies have diversified their portfolios putting emphasis on new/ renewable technologies. Every country that is futuristic and has a long term vision is transitioning towards low carbon economy as they believe there is high risk due to energy dependence which might lead to global tensions. Countries in the Middle Eastern are also investing multi billion dollars in renewable energy technologies eg – Masdar City etc.
India says it needs coal, along with renewable energy to achieve universal electricity coverage. But that also means an increase in carbon emissions. How well can we balance our needs with that of the environment to prevent the catastrophic impacts of climate change?
First of all there are technologies available that can burn coal for power and still not emit carbon in the atmosphere. Question that needs to be asked is whether we are investing in such technologies? The clear answer is no, we are not. Secondly, with the cess on coal we are in a position to promote faster transition towards cleaner technology, and hence to say that we should stop coal production, we need also to find alternatives to these investments. Lastly, India is comparatively richer in coal than oil or gas, and hence we need to have a plan in place which will promote us to have thr cleanest possible pathway alongside the growth of coal, unlike China, either through converting coal to gas, or using Carbon Capture Storage (CCS) etc.
Do you think India is on the path to provide electricity access to all by 2022?
When we say electricity access it’s not just Grid connectivity, but we also mean Off Grid Electricity or Micro/ Mini Grid solutions. India is definitely on the right path to provide electricity to all by 2022 this might not be all Grid connected though. Infact 100% penetration of solar PV solutions will happen even before 2022.
What policies need to be brought in to enhance energy efficiency in India’s industrial sectors?
In industries sector, the new technologies are best in class and highly energy efficient. The issue lies with the old existing plants. Government of India should come out with a policy on retrofitting and re-modernisation of these old industrial units the way they did for the old Power Plants. Perform, Achieve and Trade (PAT) scheme is one of the key reform initiated in that direction but somehow it hasn’t started showing any results yet. May be in the next phase when these designated consumers will have tighter, tougher and more specific targets to achieve they might perform differently. Secondly, the implementation of policy is again not very easy in India hence even with a new policy would we deliver transformational change? I think the answer is no. Therefore, it’s about time when India should start taking the evaluations of energy efficiency programs more strictly as per the defined monitoring and verification protocols.
PM Modi gave a target to Petroleum and Gas ministry to reduce oil imports by 10% by 2022. But this isn’t the real issue, the real issue is “Is Import Bad”?
What new technologies globally are shaping the low-carbon agenda?
The list is limitless and I won’t even talk about the disruptive technologies – like third generation bio fuel technologies, Fast Breeder Reactors, carbon capture and storage etc. – these technologies are coming in big way. Rather, I will highlight the technologies that will have significant role in next 5-10 years. On the supply side, the fastest growing technology is Solar – mostly photo-voltaic (PV) with some CSP, then comes Wind – both On and Off shore. Most importantly the role of gas will ramp up in short to medium term considering the low cost fuel and already installed capacities. Lastly on the supply side, the role of Nuclear and especially the thorium based Fast Breeder Reactor technologies will come in long term. On the demand side the industrial efficiency will improve due to process improvement and fuel switching. Transport fuel consumption reduction will happen due to the penetration of hybrid car, Hydrogen fuel cells, solar battery cars and gas based automotive.
Can we import less energy yet produce enough to meet our demands? (emphasis on oil and gas) How can we improve domestic production?
Yes of course we can improve domestic production and reduce imports, in-fact we are already trying to do this. PM Modi gave a target to Petroleum and Gas ministry to reduce oil imports by 10% by 2022. But this isn’t the real issue, the real issue is “Is Import Bad”? From the economic growth point of view the answer in no, for emissions point of view answer is yes. In fact importing fossil fuel might be good for short to medium term growth perspective.
I will give you three examples –
- At today’s low oil and gas prices – due to crises within OPEC, earlier Iran sanctions, US shale gas revolution – the import oil/gas cost could be much more economical than producing domestically.
- India has the potential to be the top refining hub of the world and hence with more imports we can refine more, which can lead to greater exports of refined products.
- Similarly with Coal, as India being the only big buyer in the world of coal, we can negotiate much better price from Australia, Indonesia and even South Africa.
I am not advocating for more imports. The reason why India remained indecisive to ramp up its oil and gas production aggressively is because oil and gas is still a transitional fuel. Ultimately the world will move towards total renewable sources of energy and any decision we take today (promoting conventional energy) will have its repercussions for at least 40-50 years.
How can we improve India’s oil exploratory capacity?
As I said before there isn’t any dying need to massively ramp up India’s oil exploration capacity as a) price of oil today is low b) it is present in limited quantity. But still if India wants to scale up its upstream business than –
- Open Acreage Licensing shall be implemented with immediate effects wherein round the year bidding process could be done, similar to the practice followed in the UK.
- Data availability and authenticity is a real challenge. National data repository should be built asap. All the existing sedimentary and subsea data with DGH should be made available.
- Oil and Gas PSU’s shall not function as life-savers of the government and autonomy should be given to these companies to run independently based on market principles. This will promote level playing field and promote competition.
The UK’s 2050 pathways calculator is a key initiative designed in 2008 to deliver this objective. India is following the path by developing IESS 2047 and soon even the Indian states will be developing this pathways calculator approach for the long term energy planning.
How does the interplay between civil society, bilateral and multilateral and government works in the energy space to drive growth?
They all hit the problems of energy security, affordability, sustainability from different angles. The civil society will be interested in furthering adaptation and resilience and thereby working on mitigation related to equity linked climate finance. Bilateral and multilateral push economic and trade agenda weaved around sustainable development narrative. Respective governments have political priorities for which electricity affordability (hence subsidies) and supply reliability becomes paramount. The interplay still being – developing and underdeveloped economies (where maximum capacities will come in future) asking for financial assistance to move to a lower emission pathway as this impacts their growth trajectories.
If the co-benefits around health, labour productivity, energy independence etc. can be weaved into the holistic growth narrative then both the developing and under developed countries can have their own massive renewable expansion plans. The UK’s work towards “New Climate Economy” was an excellent initiative in this direction and India seem to set moving right.
Finally, all these key players have a crucial role to play in sustainable development of individual countries and the world but the challenge here is to bring all these players together and facilitate informed energy and environment debates. The UK’s 2050 pathways calculator is a key initiative designed in 2008 to deliver this objective. India is following the path by developing IESS 2047 and soon even the Indian states will be developing this pathways calculator approach for the long term energy planning.
What more needs to be done to enhance renewable energy in India? When can renewable replace traditional modes of energy?
In India the energy demand is expected to double in next 10-12 years and hence rather than renewable replacing conventional, both will grow simultaneously at varying pace at least in the short to medium term. For renewable energy to replace traditional modes of energy in India we need wholesale market, ancillary market, pricing reform and implementation of RPO as a minimal prerequisite. I don’t see that happening in the short term.
Also there are different levels of risks attached to both renewable and non-renewable energies. Non renewable based generation emits more emission and thereby leads to greater climate impacts, however, renewable based energy is prone to digital/ cyber attacks as these technologies needs smart grids, smart meters and sophisticated software which are mostly imported.