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Energising the economy

The report on Integrated Energy Policy fails to deal with the lack of a central coordinating mechanism to improve cooperation between the power and energy ministries.

india Updated: Sep 05, 2006 04:36 IST

Almost everyone is agreed that if the country is to maintain a high growth rate, it needs energy - lots of it. But obtaining it and using it in a sustainable manner is the moot point. This brings up a host of issues, including energy security, infrastructure development, demand-side management, treatment of environmental externalities and R&D expenditure. The report of a high-level committee on Integrated Energy Policy released on August 30 addresses these issues.

Energy prices in India are among the highest in the world while per capita consumption is among the lowest. This situation must change — to sustain an 8 per cent growth rate through 2031-32, the duration of the next five Five-Year Plans, India will need to scale up its energy supplies manifold. In numerical terms, it will need 400 MT of crude and 8 trillion cubic feet of natural gas (as against 125 MT and 1 TCF, respectively, at present) and electricity supply of 8,00,000 MW (up from the current 1,60,000 MW). To make the power and energy sectors competitive and hence give consumers a better deal, there is a strong case for allowing market forces and competition to decide prices and allocate resources (as well as introduce efficiency and transparency) in both the power and the petroleum and natural gas sectors. The report suggests as much. In addition to reform of the energy and power sectors, India needs to make optimal use of all sources of energy at its disposal - conventional, nuclear and renewable. Hydro-electricity, for instance, can contribute 20 per cent to India’s power requirement. Excessive reliance on coal - which, the report projects, will be the case well beyond 2031-32 - will come with the penalty of carbon emissions.

Finally, there is need for a central coordinating mechanism to enhance cooperation and mitigate duplication between the ministries of Power, Coal, Non-Conventional Energy Sources, and Petroleum and Natural Gas and the independent Department of Atomic Energy, as well as between these ministries and others in the areas of energy and power. This is the one issue that the report fails to address.