General Studies Mains Test Series (International Relations)

“India must expand its energy supply to provide universal access to modern energy and maintain economic growth.” How does India’s growing energy needs play an important role in changing geopolitical scenario in Asia?"

Energy Security and Influence of energy and India’s foreign policy

“Energy security refers to the uninterrupted availability of energy sources at an affordable price.”

Introduction

With 70% of India’s energy generation capacity is from fossil fuels and coal accounting for 40% of India’s total energy consumption followed by crude oil and natural gas at 24% and 6% respectively, the energy policy of India is largely defined by the country’s burgeoning energy deficit and increased focus on developing alternative sources of energy particularly nuclear, solar and wind energy.

India is largely dependent on fossil fuel imports to meet its energy demands — by 2030, India’s dependence on energy imports is expected to exceed 53% of the country’s total energy consumption. Due to rapid economic expansion, India has one of the world’s fastest growing energy markets and is expected to be the second-largest contributor to the increase in global energy demand by 2035, accounting for 18% of the rise in global energy consumption.

Given India’s growing energy demands and limited domestic fossil fuel reserves, the country has ambitious plans to expand its renewable and nuclear power industries. India has the world’s fifth largest wind power market and plans to add about 20GW of solar power capacity by 2022. India also envisages increasing the contribution of nuclear power to overall electricity generation capacity from 4.2% to 9% within 25 years.

What are the energy needs of India

• Energy is critical, directly or indirectly, in the entire process of evolution, growth and survival of all living beings and it plays a vital role in the socio-economic development and human welfare of a country. Energy has come to be known as a ‘strategic commodity’ and any uncertainty about its supply can threaten the functioning of the economy, particularly in developing economies.
• There is a strong two-way relationship between economic development and energy consumption. On one hand, growth of an economy, with its global competitiveness, hinges on the availability of cost-effective and environmentally benign energy sources, and on the other hand, the level of economic development has been observed to be reliant on the energy demand.
• The Indian economy has experienced unprecedented economic growth over the last decade. Today, India is the ninth largest economy in the world. The demand and supply imbalance in energy is pervasive across all sources requiring serious efforts by Government of India to augment energy supplies as India faces possible severe energy supply constraints.
• The New Policies Scenario (NPS) projects that India’s demand continues will grow quickly, reaching 1 464 Mtoe in 2035, increasing by a compound annual growth rate (CAGR) of 3.1% from 2009 to 2035, which is more than double the world’s energy demand at a CAGR of 1.3% for the same period. India’s share in world energy demand increases from 5.5% in 2009 to 8.6% in 2035.

Sources of Energy in India

Coal

India now ranks third amongst the coal producing countries in the world. Being the most abundant fossil fuel in India till date, it continues to be one of the most important sources for meeting the domestic energy needs. It accounts for 55% of the country’s total energy supplies.
Through sustained increase in investment, production of coal increased from about 70 MT (million tonnes) (2005) in early 1970s to 382 MT in 2004/05. Most of the coal production in India comes from open pit mines contributing to over 81% of the total production while underground mining accounts for rest of the national output (2005). Despite this increase in production, the existing demand exceeds the supply. The traditional buyers of Indian coal are Bangladesh, Bhutan, and Nepal.

The development of core infrastructure sectors like power, steel, and cement are dependent on coal. About 75% of the coal in the country is consumed in the power sector.

Oil and natural gas

The latest estimates indicate that India has around 0.4% of the world’s proven reserves of crude oil. The quantity of crude oil imported increased from 11.66 MT during 1970/71 to 81 MT by 2003/04. The exports of petroleum products went up from around 0.5 MT during 1970/71 to 14 MT by 2003/04.
India’s consumption of natural gas has risen faster than any other fuel in the recent years. Natural gas demand has been growing at the rate of about 6.5% during the last 10 years. Industries such as power generation, fertilizer, and petrochemical production are shifting towards natural gas. India’s natural gas consumption has been met entirely through domestic production in the past.

However, in the last 4/5 years, there has been a huge unmet demand of natural gas in the country, mainly required for the core sectors of the economy. To bridge this gap, apart from encouraging domestic production, the import of LNG (liquefied natural gas) is being considered as one of the possible solutions for India’s expected gas shortages. Several LNG terminals have been planned in the country.

Renewable energy sources

Renewable energy sources offer viable option to address the energy security concerns of a country. Today, India has one of the highest potentials for the effective use of renewable energy. India is the world’s fifth largest producer of wind power after Denmark, Germany, Spain, and the USA. There is a significant potential in India for generation of power from renewable energy sources—hydro, biomass, and solar energy. The country has an estimated SHP (small-hydro power) potential of about 15 000 MW. Other renewable energy technologies, including solar photovoltaic, solar thermal, small hydro, and biomass power are also spreading. Greater reliance on renewable energy sources offers enormous economic, social, and environmental benefits.

Energy Conservation

Bio-Fuels

The former President of India, Dr. Abdul Kalam, is one of the strong advocaters of Jatropha cultivation for production of bio-diesel. In a speech, the Former President said that out of the 6,00,000 km² of waste land that is available in India over 3,00,000 km² is suitable for Jatropha cultivation. Once this plant is grown, it has a useful lifespan of several decades. During its life Jatropha requires very little water when compared to other cash crops.
It is estimated that renewable and carbon neutral biomass resources of India can replace present consumption of all fossil fuels if used productively.

Wind power

The once-impoverished village of Muppandal benefited from the building of the nearby Muppandal wind farm, a renewable energy source, which supplies the villagers with electricity for work.The village had been selected as the showcase for India’s $2 billion clean energy programme which provides foreign companies with tax breaks for establishing fields of wind turbines in the area.

Oil

The state-owned Oil and Natural Gas Corporation (ONGC) acquired shares in oil fields in countries like Sudan, Syria, Iran, and Nigeria – investments that have led to diplomatic tensions with the United States.Because of political instability in the Middle East and increasing domestic demand for energy, India is keen on decreasing its dependency on OPEC to meet its oil demand, and increasing its energy security.

Nuclear power

India boasts a quickly advancing and active nuclear power programme. It is expected to have 20 GW of nuclear capacity by 2020, though they currently stand as the 9th in the world in terms of nuclear capacity.

Hydrogen Energy

Hydrogen Energy programme started in India after joining the IPHE (International Partnership for Hydrogen Economy) in the year 2003. There are nineteen other countries including Australia, USA, UK, Japan are members. This globe partnership helps India to set up commercial use of Hydrogen gas as an energy source. This will implemented through Public Private Partnership.

Solar Energy

India’s theoretical solar potential is about 5000 T kWh per year far more than its current total consumption. Currently solar power is prohibitive due to high initial costs of deployment. However India’s long-term solar potential could be unparalleled in the world because it has the ideal combination of both high solar insolation and a big potential consumer base density.

Specific questions on each sector

Wind Energy to boost India’s energy security

The development of wind power in India began in the 1990s, and has significantly increased in the last few years.
As of 2013 the installed capacity of wind power in India was 19779.15 MW, mainly spread across Tamil Nadu , Gujarat, Maharashtra ,Karnataka, Rajasthan ,Madhya Pradesh, Andhra Pradesh ,Kerala ,Orissa ,West Bengal.
Wind energy could soon supply 5 GW annually to fight chronic power shortages in the country.
India was the 3rd largest wind power market in 2011, China and USA and fifth in overall cumulative installed capacity.
Suzlon, an Indian-owned company, emerged on the global scene in the past decade, and by 2006 had captured almost 7.7 percent of market share in global wind turbine sales. Suzlon is currently the leading manufacturer of wind turbines for the Indian market, holding some 43 percent of market share in India. Suzlon’s success has made India the developing country leader in advanced wind turbine technology.

Barriers in Wind energy

• Initial cost for wind turbines is greater than that of conventional fossil fuel generators per MW installed.
• Noise is produced by the rotor blades. This is not normally

Solar energy

The Indian government’s thrust on inclusive growth is laudable and it is well known that growth, prosperity, healthcare, education and improvement in living conditions are all dependent on availability of power and an energy security model based on large power producing plants and a massive transmission and distribution system is neither viable nor feasible in rural areas whether remote or otherwise.
Solar energy applies energy from the sun in the form of solar radiation for heat or to generate electricity. Solar powered electricity generation uses either photovoltaics or heat engines (concentrated solar power). A partial list of other solar applications includes space heating and cooling through solar architecture, day lighting, and solar hot water, solar cooking, and high temperature process heat for industrial purposes.
India is densely populated and has high solar insolation, an ideal combination for using solar power in India.

In July 2009, India unveiled a US$19 billion plan to produce 20 GW of solar power by 2020. Under the plan, the use of solar-powered equipment and applications would be made compulsory in all government buildings, as well as hospitals and hotels.On 18 November 2009, India was launched its National Solar Mission under the National Action Plan on Climate Change, with plans to generate 1,000 MW of power by 2013. From August 2011 to July 2012, India went from 2.5 MW of grid connected photovoltaic to over 1,000 MW.

Influence of energy and India’s foreign policy (India’s Energy Diplomacy)

India’s pursuit of equity oil has led it to forge strategic relationship with supplier countries such as Russia, Iran, Saudi Arabia, Kazakhastan, Venezuela, ASEAN Countries Gulf and African Countries etc.

Russia

India has made substantial investments in Russia and former Soviet republic Kazakhastan .Russia being a leading energy producer and India being a significant energy consumer makes them perfect partners in this vital sector energy cooperation.

India has stepped up efforts to access to energy resources in Russia, destined to lay an important role in ensuring India’s energy security. India energy cooperation constitutes a strong piller of Indo-Russians special and privilege strategic partnership.

• Energy sector is an important area in Indo-Russian bilateral relations. In 2001, ONGC-Videsh Limited acquired 20% stake in the Sakhalin-I oil and gas project in the Russian Federation, and has invested about US $1.7 billion in the project.
• The Russian company Gazprom and Gas Authority of India Ltd. have collaborated in joint development of a block in the Bay of Bengal.
• Kudankulam Nuclear Power Project with two units of 1000 MW each is a good example of Indo-Russian nuclear energy co-operation. Both sides have expressed interest in expanding co-operation in the energy sector.

Gulf Countries

India enjoys traditionally cordial relations and cooperation with the GCC. India’s old, historical ties with GCC states, coupled with increasing imports of oil and gas, growing trade and investment opportunities, and presence of approximately 6 million Indian workers in the region, are of vital interest to India.

India after having consolidated ties with the ASEAN countries especially after the FTA is now energy security with the GCC states. The key factors driving its policies are apart from India quest for energy security, trade, investment, security of workers and their remittances.

India and Iran

India and Iran relations span centuries marked by meaningful interactions. The two countries shared a border till 1947 and share several common features in their language, culture and traditions. Both India the Persian Gulf have strong commercial, energy, cultural and people-to-people links.

ONGC Videsh Ltd: Farsi Offshore Exploration Block

The Exploration Service Contract (ESC) for Farsi Offshore Exploration Block, Iran was signed in December, 2002. The Consortium carried out seismic API and drilled four exploratory wells in the Block during 2006 - 07 resulting in discovery of oil and gas. Subsequently, the Farzad-B gas field was declared Commercial with effect from 18th August, 2008 by National Iranian Oil Company (NIOC). The Master Development Plan (MDP) for the Farzad ‘B’ Gas Field is under finalisation. OVL’s share of investment was about USD 36 million till 31st March, 2011. About TAPI

The Trans-Afghanistan Pipeline (also known as Turkmenistan–Afghanistan–Pakistan–India Pipeline) is a proposed natural gas pipeline being developed by the Asian Development Bank. Expected to be completed around 2017, the pipeline will transport Caspian Sea natural gas from Turkmenistan through Afghanistan into Pakistan and then to India. Proponents of the project see it as a modern continuation of the Silk Road.

Shale gas- India

About Shale gas

Shale gas is natural gas produced from shale, a type of sedimentary rock. Shale gas has become an increasingly important source of natural gas in the United States over the past decade, and interest has spread to potential gas shales in Canada, Europe, Asia, and Australia, India.

There is an obvious interest in exploring for shale gas domestically, given the enormous success in the US. The Ministry of Petroleum and Natural Gas (MoPNG) has identified six basins as potentially shale gas bearing. These are Cambay, Assam-Arakan, Gondwana, Krishna-Godavari, Kaveri, and the Indo-Gangetic plain.

During US President Obama’s visit to India in November 2010, India and US decided to cooperate in the fields of clean-tech and shale gas.

India and USA agreed to deepen our co-operation in pursuit of clean energy technologies, including the creation of a new clean energy research centre here in India, and continuing our joint research into solar, biofuels, shale gas and building efficiency.

India’s participation in the shale gas industry in the US

Reliance Industries Ltd (RIL) has made big investments (US$ 3.5 billion) in the Marcellus and Eagle Ford shales through joint ventures with Chevron, Carrizo, and Pioneer.

Marcellus has been described as the largest discovered unconventional gas field in the US and one of the largest worldwide, with estimated net recoverable resources of 318 trillion cubic feet (tcf).

Oil India Limited (OIL), Indian Oil Corporation (IOC), and GAIL India Limited have also made investments in shale gas production in the US.