Securing adequate energy supply for sustainable development

Securing adequate energy supply for sustainable development
India will have to increase its power generation to keep up with the demand.  This thought was reflected in the knowledge paper ‘Forging ties: Securing energy supply for a stronger economy’ jointly prepared by FICCI and PwCIndia is a power guzzling economy.  To sustain itself, India needs power generation on a large scale. The consumption trend in India can be evaluated from the fact that world energy consumption in 2012, saw an increase of 2.1 per cent compared to 2.4 per cent in 2011. The European Union’s (EU) energy consumption fell by 0.8 per cent, North America by 1.8 per cent and Japan by 0.6 per cent, but on the contrary India’s and China’s consumption grew at 5.4 per cent and 7.7 per cent respectively. India will have to increase its power generation to keep up with the demand.  This thought was reflected in the knowledge paper ‘Forging ties: Securing energy supply for a stronger economy’ jointly prepared by FICCI and PwC. The paper sets out the current energy scenario in India and analyses the impediments to energy security, international cooperation and efficient use of available energy. In 2012, India was the fourth-largest energy consumer in the world, with a consumption of 563 million tonnes of oil equivalent (MTOE). Accordingly, the per capita consumption of energy is about 456 kg oil equivalent (KGOE) in India which is less than one third of the global average. According to the paper, the demand for primary energy in India will increase almost three times in 2035 to 1,516 MTOE from 563 MTOE in 2012. India is also expected to almost double its share in the global primary energy consumption to almost 9 per cent by 2035. Rising energy demandManaging the efficient use of oil, gas & coal and exploring non-conventional forms of energy is the answer to improving India’s energy scenario. By 2031-32, India’s oil consumption is expected to be in the range of 350 to 486 MMT and the import dependency will be in the range of 90 to 93 per cent. Dependence on imported natural gas is expected to increase from 26 per cent in 2012 to 54 per cent in 2021-2022. The demand is such that even coal, which is by far India’s most abundant energy resource, would be insufficient. The aggregate demand for coal by the end of the 2017 is likely to be 407 MTOE depending upon the pace of implementation of power capacity. As against this, the domestic output is unlikely to exceed 317 MTOE, leaving a shortfall of over 90 MTOE.The substantial crude oil import also offsets 56 per cent of the foreign exchange earned through total exports in 2012-13. The import dependency on oil is bound to be around 90 per cent of its consumption in the next two decades. This will require a higher percentage of GDP to be spent on oil imports, thereby further increasing Indian economy’s vulnerability to external shocks. Potential in non-conventional energy sourcesOther fuels such as nuclear energy, hydroelectricity, other renewable fuels like solar, wind and geothermal, biomass and others form only 8 per cent of the total primary energy consumption in 2012. Hydroelectricity constituted 5 per cent and other renewable energy constituted 2 per cent of the total primary energy consumption in India in 2012. Thus, non-conventional energy sources have great potential to grow in India and is therefore necessary to explore the possibilities of enhancing the exploration and production of hydrocarbon resources by promoting investment in the sector. Need to provide energy security and encouraging energy efficiencyImmense potential exists in energy efficiency, particularly in the use of domestic equipment such as pumps, heating, ventilation, air-conditioning and lighting areas.  Also, wise energy usage can help cut down air and water pollutants, contributing to a sustainable environment. The government has formulated various policies to encourage businesses and install more renewable energy capacity. As a result of an encouraging investment climate, wind power has grown rapidly in the country. From about 41 MW in 1992, the total installed capacity has reached almost 18,000 MW this year.It is also necessary to have a strong diplomatic relationship with the oil and gas producing countries. The government needs to attribute prime importance for having its representatives engage in a continuous dialogue with the oil-exporting countries. It needs to encourage a healthy amount of trade with these countries by offering our robust products and services such as IT software, garments, etc.In the pursuit of sustainable development, securing adequate energy supply that is affordable and easily accessible, is a major concern both financially and strategically. To address the challenges, we need to enhance the domestic growth drivers, remove structural constraints and above all, make ourselves resilient to external factors like, volatile international crude oil prices, economic and geopolitical uncertainties in the resource-rich nations.

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