Far-sighted policymaking and investment decisions can ensure energy security

Energy insecurity is a matter of grave concern for all. More so for India. The country is already on a shaky wicket importing 75% of its oil consumption with 75% of these imports from just one region—West Asia. What is even more worrisome is that our rapidly rising import of coal are fraught with uncertainties, as mentioned above. Widening the energy security lens to include environmental concerns takes us to the country’s commercial energy basket, which is dominated by fossil fuels—coal and oil (over 80%). Of particularly grave significance—from the environmental and social points of view—is India’s single most important source of energy that meets a third of India’s energy needs. This is biomass, which is mostly used in inefficient stoves for household cooking, resulting in kitchens where pollution levels exceed recommended norms by 10-100 times. As a result, this one manifestation of energy insecurity, albeit not very well-known in energy security circles, alone is estimated to account for over 4,00,000 premature deaths each year. So, India does seem quite energy insecure. What then, does this mean in terms of strategies to transition to higher energy security? At one level, we need to recognise that energy solutions cannot be expected to cater to endlessly growing demands. Teri estimates indicate that energy efficiency measures can reduce India’s energy demand by nearly a third and much of this can come by changes in the way we transport our goods and people and by switching to more energy efficient appliances in households and offices. It is clear, therefore, that each of us can do our bit for improving the country’s energy security. At another level—but staying on the consumption side of energy—the issue of provisioning clean reliable affordable energy for all must be mainstreamed. How can we contribute to alleviating this problem? One simple way is for us to agree to pay for the full cost of our LPG cylinders. This way the Rs 17,000 crore under-recovery on LPG could be channeled to develop clean cooking options for the energy-poor. What these options ought to be is a subject of much debate. It is important to wisely spend such a large sum and not fritter it away on more schemes that do not address the issues on the ground. In relooking at petroleum sector subsidies, there are several other changes that the government could do, if it were it to take its development agenda seriously. The subsidy of over Rs 28,000 crore on kerosene—currently widely used as a smoky inefficient lighting fuel—could be used to provide solar lanterns to unelectrified households, as has been suggested by Teri. Rational pricing of diesel and of kerosene (frequently used in diesel gensets) is also a must to give cleaner back-up options (such as solar-powered back-ups) a fair chance. This brings me to the potential of renewable sources of energy in addressing energy security. A figure from the brochure of International Renewable Energy Agency—founded early this year and mandated to promote renewable energy worldwide—is startling in its portrayal of the mammoth physical potential of renewable energy relative to global energy demand. Though renewable energy sources currently meet just over 5% of global energy needs, Global Trends in Sustainable Energy Development 2008 published by UNEP are promising. Renewable energy accounted for nearly one-tenth of global energy investment and for nearly a quarter of new electricity generating capacity in 2007. Teri estimates for India point to the possibility of increasing the share of renewables in power generation from 4% to higher levels (30-70%) in scenarios that push for large efficiency improvements, energy import curbs and/or stringent carbon constraints. The future of renewable energy options are almost always seen in relation to oil prices and the carbon market. However, given the huge energy security benefits that they provide in terms of reducing dependence on imported energy as well as its potential to make available clean energy for the currently energy poor, investments in this area need to be based not just on financial cost considerations, but factoring in these not-so-tangible benefits as well. In sum, energy security can no longer be confined to oil diplomacy. It’s not that it is not important. For a transition towards higher energy security, our day-to-day choices, investment decisions and policy-making have to be less myopic. A wider lens is imperative—one that that emphasises equally on fostering renewable energy options, on providing clean and efficient energy for all and on trimming energy excess in some pockets of the country. A vision that is economically sound, socially sensitive and environmentally aware and above all, politically bold.