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

TRENDING

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

Examples of support to Hindu temples, scriptures, saints by 'Muslim' rulers galore

Siya Ram coin issued by Akbar By Bharat Dogra* At a time when the country as well as the world are passing through very difficult times leading to more urgent need for strengthening national unity for meeting several big challenges ahead, unfortunately disputes relating to religious places have been allowed to raise their ugly head once again. It is well-realized by now by many people that it is not historical facts but narrow considerations of political gain and spreading of fanatic ideas of intolerance which are behind such mischief, but due to the increasing threat of mob violence and patronage available at higher levels to groups spreading intolerance many people are reluctant to openly and fearlessly express their views. Hence there is urgent need for broad-based peace committees with wider social support to spread the message of communal harmony and to appeal against the dangers of spreading false messages regarding places of worship which can ultimate

Gyanvapi case: Use of 'illegal' lawfare to keep the communal pot simmering

By Venkatesh Narayanan, Bobby Ramakant, Manoj Sarang* With a steady drumbeat of bad news for the lives of ordinary citizens --  inflation at a multi-year high , rupee at an all-time low , negative job creation and when all forward indicators as seen by industry leaders point to recessionary clouds on the horizon , what’s a serially-incompetent government to do?  Dust out their time-tested-citizen-distraction playbook. The Gyanvapi-Masjid case is all of this -- as a weapon of mass distraction. This zeitgeist of our times is best captured by a recent opinion piece : "The idea is to keep the pot on a perpetual boil, simmering at the top, whirling feverishly beneath. A restless society forever living precariously on the precipice arouses distrst, uneasiness, fear and discomfort, That is a toxic panoply for manufacturing rage, which can then be effortlessly mobilized at short notice. BJP is creating an eco-system of real-time instant delivery of hate-mongers. That is how we are sudde

Targeting mosques, churches: 'Roadmap' for 2025, RSS' centenary year?

416 years old Our Lady of Health Church, Sancoale, Goa  By Fr Cedric Prakash SJ*  Fascists use manipulative strategies aimed at whipping up sympathy and support from the majority community, to which they normally ‘belong’. They do so in a variety of insidious and subtle ways. In the past few months, they have gone overboard in their efforts to denigrate and demonize minorities in India, particularly Muslims and Christians. They have spewed hate and divisiveness through their venomous speeches; incited people to violence and have effectively used officialdom to further their vested interests. The results are there for all to see: greater polarisation of the majority community in a country which prided itself for its pluralism and diversity. Their meticulously planned agenda is in order to gain absolute power of the country in the 2024 national elections. More so it is also a roadmap towards 2025 when the Rashtriya Swayamsevak Sangh (RSS) will complete one hundred years of its existence.

This varsity succumbed to extra-academic mobocracy, 'ignored' Hindutva archives

By Shamsul Islam* Open letter to Sharda University vice-chancellor Sub: Discarding a Question on Linkages of Hindutva with Nazism/Fascism is blatant Academic Dishonesty! Dear Professor Sibaram Khara Saheb, Namaskaar! According to your esteemed University’s portal: “The name of University, 'Sharda' is synonymous to 'Goddess of knowledge and learning-Saraswati'. She is identified with 'veena', an Indian musical instrument and the ‘lotus’, where she resides. The lotus in our logo symbolizes the seat of learning that the University is created for.  "Variety of colours signify the variety of disciplines the university offers and the overlap between petals creating new colours demonstrate the ethos of collaboration between students and teachers of different programme, nationality, creed and colour working towards creating new knowledge…the University's cherished mission to provide education beyond boundaries and to facilitate the students and faculty to achie

Whither climate goal? Increasing reliance on coal 'likely to worsen' India's power crisis

By Shankar Sharma*  Recent news articles, How to shock-proof India’s power sector and Power minister points finger at states for worsening electricity crisis , have highlighted a few current problems for the ongoing power sector issues as in April 2022. However, there is a lot more to it than a few temporary solutions as indicated in the articles. It should also be emphasised that it is techno-economically impossible to completely shock-proof a highly complex and geographically wide-spread vast power network, such as the one in India, which is only getting more and more complex with the passage of each year due to some irrational policies/ practices in the sector. A business-as-usual (BAU) scenario, wherein more and more of conventional technology power plants, including coal power plants, will be added in the near future, will also necessitate the increased complexity in the integrated national grid, and as a result the instances of power shortage/ disruptions can only escalate for

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

A former Modi ally, Prashant Kishor wanted to enter Congress 'on contract, as trader'

By Anand Sahay*  The Congress Party and the election campaigns specialist Prashant Kishor, whose company has done strategic communications for a host of political parties across ideology, should both count themselves lucky that they could not reach an agreement for Kishor to join the party. News reports suggest that the Congress rejected Kishor’s terms. This is not wholly unexpected. People join a party because they are attracted to it, and wish to serve it in any capacity that the party may see fit. But that isn’t Kishor at all. He gave the impression of entering into a contract, as a trader might. If news reports are to be believed, he sought freedom to report directly to party chief Sonia Gandhi, and sought untrammeled control over party communications. When such ideas did not find favour, the consultant withdrew. It is clear he has no particular love for the Congress, and its ideas, ideology and politics. In contrast, look at the key personae in G-23. They

Govt of India 'compromising' on mandate to regulate gene technologies, protect nature

Counterview Desk  In a letter sent to the Union Ministry of Environment, Forests and Climate Change (MoEFCC) and other related ministries and departments, the Coalition for a GM-Free India has raised "serious concern" over the guidelines notified for Genome Edited Organisms, in which major exemptions from regulations have been offered to certain categories of Genome Edited Organisms/Plants and products. A letter signed by Sridhar Radhakrishnan and Kapil Shah, co-convenors of the NGO network, addressed to Union Minister for Environment, Forest & Climate Change Bhupender Yadav, said, the Office Memorandum, dated May 17, 2022 of the Department of Biotechnology, Ministry of Science & Technology about Safety Assessment Guidelines, which follows the Office Memorandum dated March 30, 2022 of the MoEFCC, said, the move "essentially amounts to entry of risky GMOs through the backdoor. Text : Coalition for a  GM-Free India is a national volunteer-driven platform of hundre

A Marxian trend that queries undemocratic customs and traditions of capitalism

By Bhabani Shankar Nayak*  A very well-meaning comrade called me a pluriversal Marxist with a wild smile full of English irony, while chairing my book release function in the Marx Memorial Library, London. I dedicate this piece to her… There is no other philosopher who is more abused and misunderstood like Marx. There is no other philosophy like Marxism which is more demonised on a regular basis. The mindless vilification campaign against Marx and Marxism continues without any form of reason. The propaganda and portrayal of Marxism as a devilish doctrine signify its importance as a philosophy of human emancipation from the very forces who demonise it. Marxism is a philosophy of praxis which helps us to understand the centrality of creative power of labour in producing socially meaningful value. It helps us to analyse the laws governing production, distribution, consumption, exchange, market, profit, pricing and private property in the development of class-based society. As a humanist p