Skip to main content

India's 'confusing' energy policy: Is govt putting the cart before the horse?

By NS Venkataraman*
India presently imports more than 220 million tonne per annum of crude oil while Indian production of crude oil is only around 30 million tonne per annum. India imports around 35 billion cubic metre of natural gas per annum while Indian production is only around 30 billion cubic metre per annum. The domestic production of crude oil and natural gas is almost stagnant at present, with no feasibility of increasing the production in significant quantities in the foreseeable future.
With the use of crude oil and natural gas as energy source and feedstock, the demand is steadily increasing at around 7% per annum. In such a scenario, it is likely that the import of crude oil will be around 300 million tonne per annum and that of natural gas would be around 50 billion cubic metre per annum by 2025-26.
The present outflow of foreign exchange due to import of crude oil and natural gas is reported to be around 28 to 30% and it is likely to go upto unacceptable levels by 2025-26, which may cost severe stress on Indian foreign exchange reserves. Considering the fact that the price of crude oil and natural gas in the world would be fluctuating from time to time based on several factors beyond India’s control, any larger import dependence on crude oil and natural gas is a matter of high concern.
In such circumstances, it is surprising to read the Prime Minister’s statement that India will double oil refining capacity in the next five years and would raise the share of natural gas in energy consumption by up to four times, which will substantially increase the import dependence on crude oil and natural gas. Given the already heavy import dependence on crude oil and natural gas and stagnant production scenario in India, one wonders as to whether this would be an appropriate energy policy.
Even as the Prime Minister is speaking about increasing the petroleum refining capacity (which mean more crude oil consumption and import) and increasing share of natural gas (which means increasing import of natural gas), repeated announcements by the central ministers that the production of coal would be substantially increased, knowing well that greater coal consumption would mean greater emission of carbon dioxide, sulphur dioxide and nitrous oxide that would cause global warming, create doubt as to whether the energy policy approach of Government of India is appropriate.

Renewable energy initiative

Of course, India is significantly and laudably increasing the production of renewable energy and may fulfill the promise made by the Prime Minister during the Paris Climate Conference to increase renewable energy capacity to 175 GW. But, such measures like increasing the consumption of crude oil, natural gas and coal would undo the positive impact of developing renewable energy at a great pace to reduce emissions.
Use of crude oil and coal result in harmful emissions and the use of natural gas would increase the fugitive emission of methane gas. As it is known, emission of methane gas is environmentally even more hazardous than the emission of carbon dioxide, sulphur dioxide and nitrous oxide.
A few significant steps have been initiated by the Government of India in energy management such as blending of ethanol with petrol, promotion of electric vehicles etc. Even here, there are many problems.
Most ethanol produced in India today goes for human consumption which is increasing at an alarmingly disturbing level. Due to non availability of ethanol for blending, the target for blending ethanol with petrol have been missed several times in the past. The target of blending 20% ethanol with petrol is unlikely to be met in the near future.
Renewable energy is not available and will not be available at the required scale for supplying power to the battery in electric vehicles
The promotion of electric vehicle schemes is facing several hurdles, which make it doubtful as to what extent the targets can be achieved in India.
Electric vehicles require charging of power at periodic intervals and it would be counterproductive to use power produced from emission causing coal based thermal power plants for charging the battery. Renewable energy is not available and will not be available at the required scale for supplying power to the battery in electric vehicles.
The important component of electric vehicles is lithium ion battery cells, whose production at present in India is at negligible level. If 2% of the existing automobile units were to be replaced by electric vehicles by 2025-26, then India would need lithium ion battery cell capacity of around 27 GWH.
There is no feasibility of domestically producing lithium ion battery cells to this level by 2025-26, considering the present pace of building capacity for lithium ion battery cells in India . Therefore, India will become heavily import dependent for the requirement of lithium ion battery cells which has to come from China, as China has huge capacity for making lithium ion battery cells more than any other country in the world. 
Further, for production of lithium ion cells, several speciality chemicals and components are required , apart from minerals such as lithium, cobalt and nickel. India has no deposits of cobalt, nickel and lithium and only some preliminary understanding has been reached with some overseas countries with regard to sourcing supply of nickel and lithium. In the case of cobalt , there is a worldwide shortage and more than 70% of the global requirement of cobalt is supplied from Democratic Republic of Congo. China has already firmly tied up a large share of it’s requirement of cobalt from the leading cobalt mining company in Congo.
The Tibet region in China has large deposits of lithium, whereas India has no lithium deposits.
Apart from these, several speciality chemicals and components for use in the production of lithium ion battery cells such as cathode actives, anode actives , electrolyte and separators are required for lithium ion battery cell production. There is no production in India of these speciality chemicals and components at present.
If India were to produce a large number of electric vehicles, lithium ion battery cells are required in large numbers. No projects have been announced for the production of speciality chemicals and components required for production of lithium ion battery cells in India so far.
With regard to electric vehicles, is India building castles without firming up the foundation? Is India putting the cart before the horse?

Feasible suggestions from experts

Some feasible alternate options to overcome the impending energy crisis in India , without excessive dependence on crude oil and natural gas import , have been suggested by experts and one is not sure as to whether the voice of these experts have been adequately heard by the policy planners in Delhi.
The Government of India has taken some steps to set up a project for methanol from coal (which is presently produced in India from natural gas and present import of methanol is around 2 million tonne per annum and the import is steadily increasing from year to year) with the object of using methanol as fuel. This project proposal is in the preliminary stage now and even a pre feasibility report is yet to be prepared convincingly. There are problems in producing methanol from high ash Indian coal at a competitive cost of production.
Methanol can be the feedstock for the production of several petro chemicals such as ethylene , propylene, which are presently produced from natural gas and crude oil. Experts have suggested that India should put up methanol plant abroad in countries where natural gas is available at very low price in joint venture and then bring this methanol to India to produce several petrochemicals such as ethylene, propylene and derivative products, which will significantly boost the industrial growth and reduce dependence on import of several petrochemicals.
Experts have also suggested production of algae biofuel from algae crop, which contains around 25 to 30% oil. Algae crop requires only sunshine and carbon dioxide as inputs and need water which can be even unclean water. Many algae based biofuel projects are now successfully operating abroad. India is a tropical country particularly well suited to produce algae crop and biofuel from it, which will help both the agricultural sector as well as industrial sector and pave way for reducing import dependence on crude oil and natural gas. Has the Government of India paid adequate attention to this opportunity?
Taking the overall look at the energy policy in India, it appears that the Government of India has to reexamine it’s energy policy with great sense of urgency.
---
*Director, Nandini Consultancy Centre, Chennai

Comments

Post a Comment

TRENDING

From plagiarism to proxy exams: Galgotias and systemic failure in education

By Sandeep Pandey*   Shock is being expressed at Galgotias University being found presenting a Chinese-made robotic dog and a South Korean-made soccer-playing drone as its own creations at the recently held India AI Impact Summit 2026, a global event in New Delhi. Earlier, a UGC-listed journal had published a paper from the university titled “Corona Virus Killed by Sound Vibrations Produced by Thali or Ghanti: A Potential Hypothesis,” which became the subject of widespread ridicule. Following the robotic dog controversy coming to light, the university has withdrawn the paper. These incidents are symptoms of deeper problems afflicting the Indian education system in general. Galgotias merely bit off more than it could chew.
1 comment
»

Covishield controversy: How India ignored a warning voice during the pandemic

Dr Amitav Banerjee, MD *  It is a matter of pride for us that a person of Indian origin, presently Director of National Institute of Health, USA, is poised to take over one of the most powerful roles in public health. Professor Jay Bhattacharya, an Indian origin physician and a health economist, from Stanford University, USA, will be assuming the appointment of acting head of the Centre for Disease Control and Prevention (CDC), USA. Bhattacharya would be leading two apex institutions in the field of public health which not only shape American health policies but act as bellwether globally.
Post a Comment
»

Growth without justice: The politics of wealth and the economics of hunger

By Vikas Meshram*  In modern history, few periods have displayed such a grotesque and contradictory picture of wealth as the present. On one side, a handful of individuals accumulate in a single year more wealth than the annual income of entire nations. On the other, nearly every fourth person in the world goes to bed hungry or half-fed.
Post a Comment
»

The 'glass cliff' at Galgotias: How a university’s AI crisis became a gendered blame game

By Mohd. Ziyaullah Khan*  “She was not aware of the technical origins of the product and in her enthusiasm of being on camera, gave factually incorrect information.” These were the words used in the official press release by Galgotias University following the controversy at the AI Impact Summit in Delhi. The statement came across as defensive, petty, and deeply insensitive.
3 comments
»

Thali, COVID and academic credibility: All about the 2020 'pseudoscientific' Galgotias paper

By Jag Jivan   The first page image of the paper "Corona Virus Killed by Sound Vibrations Produced by Thali or Ghanti: A Potential Hypothesis" published in the Journal of Molecular Pharmaceuticals and Regulatory Affairs , Vol. 2, Issue 2 (2020), has gone viral on social media in the wake of the controversy surrounding a Chinese robot presented by the Galgotias University as its original product at the just-concluded AI summit in Delhi . The resurfacing of the 2020 publication, authored by  Dharmendra Kumar , Galgotias University, has reignited debate over academic standards and scientific credibility.
1 comment
»

'Serious violation of international law': US pressure on Mexico to stop oil shipments to Cuba

By Vijay Prashad   In January 2026, US President Donald Trump declared Cuba to be an “unusual and extraordinary threat” to US security—a designation that allows the United States government to use sweeping economic restrictions traditionally reserved for national security adversaries. The US blockade against Cuba began in the 1960s, right after the Cuban Revolution of 1959 but has tightened over the years. Without any mandate from the United Nations Security Council—which permits sanctions under strict conditions—the United States has operated an illegal, unilateral blockade that tries to force countries from around the world to stop doing basic commerce with Cuba. The new restrictions focus on oil. The United States government has threatened tariffs and sanctions on any country that sells or transports oil to Cuba.
Post a Comment
»

Conversion laws and national identity: A Jesuit response response to the Hindutva narrative

By Rajiv Shah  A recent book, " Luminous Footprints: The Christian Impact on India ", authored by two Jesuit scholars, Dr. Lancy Lobo and Dr. Denzil Fernandes , seeks to counter the current dominant narrative on Indian Christians , which equates evangelisation with conversion, and education, health and the social services provided by Christians as meant to lure -- even force -- vulnerable sections into Christianity.
2 comments
»

When a lake becomes real estate: The mismanagement of Hyderabad’s waterbodies

By Dr Mansee Bal Bhargava*  Misunderstood, misinterpreted and misguided governance and management of urban lakes in India —illustrated here through Hyderabad —demands urgent attention from Urban Local Bodies (ULBs), the political establishment, the judiciary, the builder–developer lobby, and most importantly, the citizens of Hyderabad. Fundamental misconceptions about urban lakes have shaped policies and practices that systematically misuse, abuse and ultimately erase them—often in the name of urban development.
1 comment
»

When grief becomes grace: Kerala's quiet revolution in organ donation

By Vidya Bhushan Rawat*  Kerala is an important model for understanding India's diversity precisely because the religious and cultural plurality it has witnessed over centuries brought together traditions and good practices from across the world. Kerala had India's first communist government, was the first state where a duly elected government was dismissed, and remains the first state to achieve near-total literacy. It is also a land where Christianity and Islam took root before they spread to Europe and other parts of the world. Kerala has deep historic rationalist and secular traditions.
1 comment
»