Building renewable energy capacities crucial for India’s energy independence and economic growth
February 27th, 2015, 5:11 pm|
Energy by its nature and use plays a crucial role in economic production and therefore in economic growth of a country. As a ‘strategic commodity’, any uncertainty in its supplies can have cascading effects on the growth potential particularly for developing economies. India still tagged as a ‘developing nation’, is the fourth largest energy consumer in the world (according to Mckinsey India Study). With Prime Minister Narendra Modi’s ambitious plans of ‘Make in India’ to revive the manufacturing sector and with India projected to become the fastest growing economy by 2016-17 according to World Bank estimates, the energy requirements of the country are bound to increase.
India is already facing a widening demand-supply gap of its energy requirements. According to Energy Statistics 2014 published by Ministry of Statistics and Programme Implementation, GOI, India’s net import of coal alarmingly increased by 281% from 2005-06 to 2012-13 whereas imports of crude oil rose by 86% during the same period. Given India’s increased dependency on imports for conventional energy sources, it is a high time for the Government to build its indigenous renewable energy capabilities.
The Present Government has started realizing how crucial energy security is for ensuring favourable balance of trade at a macro level and adequate access to all forms of energy at a micro level. The upcoming 2015 budget is expected to bring in substantial policy focus and budget allocations for the renewable energy sector. Union Power Minister Mr Piyush Goyal has been pushing forward to accord solar energy as a priority sector status in the upcoming budget. The Power Ministry is also leading the efforts to a build a consortium of 50 solar power-rich nations and to make India, the renewable energy capital of the world.
The list of pre-conditions that needs to be fulfilled to enable India to strategically build its own renewable energy capabilities are numerous and interlinked. However, the more important ones are creating a favourable regulatory and policy environment to attract more private players as the state run companies are plagued by excess demand, inefficiency and low productivity.
While the ambitious targets and policy announcements are part of the cycle of the frenetic activity that characterize pre-budget seasons, what follows usually is a long lull in effective and time-bound implementation. If India has to truly emerge as world’s renewable energy capital and be energy ‘independent’ in the near future, this trend has to change.