Energy Diplomacy

In the 21st century, the world faces new challenges, which threaten the sustainability and stability of the global system. Energy commodities shortage that appeared due to limitations of the economic potential of our planet and the growing demand for energy resources, is one of the most important problems of our time. Under such conditions, the role of energy security increases significantly.

Energy Security in India

Energy security is, doubtless, a key priority of the foreign policy of India, as the national reserves of energy commodities are scarce. The growing energy needs of India essentially define and will define the nature of its relations with other countries, as India is actively using foreign policy to conduct its energy policy and its provide energy security.

Current Energy Policy of India

• The energy policy of India is largely defined by the country’s expanding energy deficit and increased focus on developing alternative sources of energy, particularly nuclear, solar and wind energy.
• India ranks 87 position in energy architecture performance in 2017-conducted by WEF.

Energy Consumption

As per the report on Energy Statistics 2018-

• The primary energy consumption in India is the third biggest after China and USA with 5.5% global share in 2016. The total primary energy consumption from crude oil (212.7oe; 29.38%), natural gas (45.1 Mtoe; 6.23%), coal (411.9 Mtoe; 56.90%), nuclear energy (8.6 Mtoe; 1.19%), hydroelectricity (29.1 Mtoe; 4.01%) and renewable power (16.5 Mtoe; 2.28%) is 723.9 Mtoe (excluding traditional biomass use) in the calendar year 2016-17.

Imports and Exports

• Exports of the Coal during 2007-08 to 2016-17 increased at a CAGR of 27.22%against the decrease in imports by (-) 3.84%.
• During the period 2007-08 to 2016-17, the imports of Natural gas and Crude Oilincreased by 15.42% and 5.46% respectively.
• Export of Petroleum products, increased at a CAGR of 8.22% and its importincreased by 12.57%.
• For electricity, the import increased at a CAGR of 7.11% whereas the exportregistered a CAGR of 30.29%.
• About 70% of India’s electricity generation capacity is from fossil fuels. 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.

Renewables Energy

• Given India’s growing energy demands and limited domestic fossil fuel reserves, the country has ambitious plans to expand its renewable and most worked out nuclear power programme.
• India has the world’s fifth largest wind power market and also plans to add about 100,000 MW of solar power capacity by 2020. India also envisages to increase the contribution of nuclear power to overall electricity generation capacity from 4.2% to 9% within 25 years.
• The country has five nuclear reactors under construction (third highest in the world) and plans to construct 18 additional nuclear reactors (second highest in the world) by 2025.

Energy Diplomacy: Key Issues

A century ago, Sir Winston Churchill recognised that ‘safety and certainty in energy lies in variety and varietyalone.’ Energy diplomacy goals should crucially go beyond engaging energy partners and must include India’s entire neighbourhood, both immediate and extended.There are several economic challenges to India’s energy security - demand and supply issues, gas pricing issues, high costs of installing power plants, inefficient allocation of resources, need for reform, and challenge of deregulation and (over) dependence on imports are just some of these.

• As the coal sector opens up to private investment and many claim it brings more efficiency and competitiveness, the challenges of a private-public partnership model and how that would work also need to be addressed.
• Then there are technical challenges - India’s power grid suffers from uneven and spotty power (as little as 3-4 hours a day), frequency fluctuations, load generation imbalances, shortage of equipments such as generators, boilers and turbines.
• India’s aging and overburdened power infrastructure is a technical nightmare, and this was demonstrated by the 2012 power grid collapse that left 600 million people without electricity for two days.
• It raised important questions about supply, load imbalances, inefficiency, administration, grid compliance, and responsibility and so on.

Politics of Energy Security

• It is clear that India’s energy crisis is multidimensional, but these seemingly different aspects are also intricately interconnected. Inherent to these challenges is an overarching political aspect to the crisis and this is not specific to India.
• Energy is and has always been a deeply political issue. This was understood profoundly by the international community in 1973, during the Arab-Israel War, when several Arab countries imposed an oil embargo against the US, to protest its support for Israel.
• Energy goals and security goals are often intertwined. This is essentially because of the interconnectedness of international relations. As regions shrink in geostrategic terms, threats from the choke points have far-reaching impact. From a security/strategic perspective, a crisis or the threat of crisis is always around the corner.
• The motivation for energy diplomacy comes from this principle. As India deals with an acute energy crisis in an unenviable neighbourhood, its energy goals are quite visibly defined within the larger framework of its foreign and security goals.

Security & Self-sufficiency

• From a security perspective, a significant goal for all sovereign states is to achieve self-sufficiency wherever possible. In the energy sphere, this will mean that Indian government will look to rely as little on imports and as much on domestic production to meet its energy needs. Unfortunately, this will mean an increased domestic production of coal, despite the environmental costs of this choice.
• Unlike oil and gas reserves, existing coal reserves and production capacities are largely located in the same countries that consume most of the coal, namely China, US, India and former Soviet Union. What this means is that, “the supplies of coal are less likely to be disrupted for such geopolitical reasons that are much feared in the cases of oil and gas.” Therefore, the motivation for increasing coal production could well be strategic more than anything else, and if this is the case, it is likely that it will override all other concerns, including environmental ones.

Dependence on Imports

• India’s dependence on imports is definitely seen as undesirable for energy security; however, self-sufficiency in energy is not easily achievable. The challenge posed by high dependence on imports is that these have to manoeuvre through difficult neighbourhoods. Disruption of supplies has always been a big concern for India.
• Apart from the increasing volatility of the neighbouring West Asia, the geopolitical challenges of India’s immediate neighbourhood also create energy vulnerabilities that its diplomacy needs to address. This is particularly true for the import of hydrocarbons from Russia and the Central Asian countries, which are affected by India-AfPak dynamics. Therefore, while these Central Asian countries are high on India’s energy diplomacy agenda, it is equally important to link these to the larger foreign policy goals of engaging the neighbourhood.
• The other challenge for India is to move away from this image of import dependence and reframe the relationship with its energy suppliers as one of interdependence. This can be observed in India’s energy diplomacy, as Prime Minister NarendraModi visits the oil rich countries of Central Asia, particularly Kazakhstan and Turkmenistan trying to sell India as an alternative energy market of growing importance rather than a nation struggling to meet its energy demand.

Neighbourhood Policy Crucial to Energy Security

• The constraints related to India’s neighbourhood will however continue, particularly its volatile relationship with Pakistan, increasing closeness that China enjoys with India’s neighbours, aftermath of diplomatic missteps in Nepal and the Maldives, tenuousness of its relationship with Sri Lanka and Bangladesh depending on who is in power - all of these will necessarily continue to add to the vulnerable conditions that affect energy security.
• However, this is what makes energy diplomacy a key part of India’s foreign policy goals; or to put it in another way, the goals of energy diplomacy very much reflect India’s larger foreign policy aims.
• Despite claims of India’s abandonment of non-alignment, what we see in reality is more a policy of multi-alignment as India engages equally with the US, China, Russia, Japan, Iran, Israel, Saudi Arabia and so on, and at the same time emphasising the centrality of South Asian stability and security through the Neighbourhood First policy.
• The goals of energy diplomacy are essentially the same; given the changing nature of international relations, there is no effective way to mitigate security risks, other than to diversify energy options as much as possible, which ultimately means to engage all energy partners - both existing and new; and at the same time to ensure the stability of its neighbourhood. Without a stable South Asia, India will neither achieve its energy goals nor its foreign policy goals.