By Dr Sapan Thapar, Associate Professor, TERI School of Advanced Studies
The current oil crisis in West Asia and associated constraints on fossil fuel trade present an opportunity for India to foster its energy independence. India’s existing energy basket is dominated by fossils – 60 per cent coal, 28 per cent oil and 7 per cent gas. The country is rich in terms of coal, with 400 billion tonnes of estimated resources, sufficient to meet 400 years of demand (as per current consumption trends). However, the scenario for the oil sector is precarious, with the country importing as much as 90 per cent of its demand. Similarly, natural gas, promoted due to its versatile usage and low-carbon characteristics, has an import dependency of 50 per cent.
Ample availability of coal, primarily used for power generation, offers a stable pricing regime, providing a cushion against supply vulnerabilities. This is assisted by the rapid pace of renewable deployment in the country, helping reduce the demand-supply gap. Annual incremental demand of electricity (experiencing a growth rate of 6 per cent) is aptly supported by this technological contrast of old-age coal and new-age renewables. Thus, most parts of the country experience near-zero outages.
However, the share of electricity within the energy basket (as an end-use fuel) is limited to 20 per cent. Large dependency upon oil and gas imports makes consumers and the government vulnerable to availability as well as cost, and the same gets exacerbated by currency fluctuations.
The present crisis, in terms of fuel oil/gas availability, can trigger the shift towards alternative fuels. Amid a call towards the electrification of the economy, some use cases can be shifted. This can include induction stoves for cooking (replacing liquefied petroleum gas) and electric vehicles (replacing petrol/diesel). The use of electric power in kitchens during the daytime can also reduce the curtailment of solar energy. Farm equipment is another area, with e-tractors getting charged from solar panels at the farmlands. Heavy vehicles like buses and trucks can be shifted under national replacement programmes, similar to the compressed natural gas (CNG) shift that happened in Delhi during the year 2000. Commercial-scale bio-CNG plants, fed on rural and urban organic waste, can provide an alternative to natural gas for both CNG and piped natural gas (PNG) purposes.
It is interesting to note that the western coast of India is surrounded by the Arabian Sea, with sedimentary basins of similar chemistry found in the Gulf area. Even the eastern coast and the Andaman-Nicobar basin are perceived to have ample fossil reserves. Further, nearby areas of Indonesia have witnessed large oil discoveries.
Oil and gas exploration policies can be attuned to attract global investors and oil companies. Indian entrepreneurs, having demonstrated their credentials by developing deep-tech areas like space and artificial intelligence, can be tapped to bring in their skills and innovative business models. Fiscal tools like tax depreciation, used widely in the wind sector, can also be experimented with.
We can learn from the success witnessed in the solar sector, which was on account of an interplay of private investment, technology transfer (imports) and market demand (through renewable purchase obligations).
It may be noted that the renewable energy movement started in India in the early 1980s as a result of the oil embargo encountered due to the conflicts in the Gulf region in the 1970s. A similar opportunity is available at present as well.
Energy independence for a country overrides all concerns, including sustainability. Harnessing alternative fuel options and relying upon domestically available fuels would make India resilient to geopolitics and attain energy sovereignty. Going forward, synergies among the concerned ministries would better the Indian energy consumers.
