First In-depth Review Of India’s Energy Policies

  • On 10th January, 2020, International Energy Agency (IEA), in partnership with NITI Aayog, released the first in-depth review of India’s energy policies.
  • This first in-depth review of India’s energy policies examines the country’s achievements in developing its energy sector as well as the challenges it faces in ensuring a sustainable energy future.
  • The IEA has been conducting in-depth peer reviews of its member countries energy policies since 1976. This is the first review carried out for India, which has been an IEA association country since March 2017.

Key Highlights

Significant Progress towards Affordable Cleaner Energy

  • The IEA report congratulates the Indian government on its outstanding achievements in extending citizens access to electricity, affordable efficient lighting and clean cooking in record time through historic schemes like SAUBHAGYA, UJALA and UJJWALA, while pursuing energy market reforms and the swift deployment of renewable technologies.
  • The report lauded the Indian government’s effort to promote off-grid electrification solutions, including a shift toward using solar photovoltaics (PV) for cooking and charging batteries.

Major Energy Reforms Lead to Greater Efficiency

  • The IEA commends India for its continuous pursuit of market opening and greater use of market-based solutions through ambitious energy sector reforms. It welcomed the government’s decisions to allow private-sector investment in coal mining, and to open up the country’s oil and gas retail markets.
  • India now has the institutional framework it needs to attract more investment for its growing energy needs.
  • The IEA welcomed the reforms proposed by the Central Energy Regulatory Commission (CERC) and progress made to wards improved real-time markets.

India is Making Energy Security a Priority           

  • IEA welcomed Indian government policies designed to conduct large-scale renewable energy auctions, opening up coal mining to private companies, and promoting access to oil and gas markets for foreign investors.
  • The report offers a wide range of recommendations for reforms in support of India’s goal of promoting open and well-functioning energy markets in sectors such as coal, gas and electricity. These include building strong regulators to ensure non-discriminatory access, moving from state allocation to market pricing, and further rationalizing energy subsidies.
  • However, the IEA slammed India’s natural gas pricing policy, saying linking domestic production to very low global reference prices has reduced incentives for producers to raise supplies.

Significant Progress towards Sustainable Development

  • India has made important progress towards meeting the United Nations Sustainable Development Goals (Goal 7) on delivering energy access.
  • The report highlights the achievements of India’s energy policies and provides recommendations to support the government’s goals of promoting well-functioning energy markets and boosting deployment of renewables.
  • India has been addressing energy-related environmental pollution including air, water, land, and waste issues.The government has been progressively strengthened rules to combat air pollution, and adopted the National Clean Air Programme (NCAP), which focuses on monitoring and enforcement.

Energy Technology and Innovation Enables “Make In India”

  • Energy research, development and deployment (RD&D) can be a strong enabler of India’s energy policy goals while also contributing to broader national priorities such as the “Make in India” manufacturing initiative.
  • The government is strengthening its innovation efforts in a broad range of energy technology areas, including cooling, electric mobility, smart grids and advanced biofuels.
  • There has been a marked increase in clean energy RD&D funding, especially as India works to double its spending over five years under Mission Innovation.
  • However, funding efforts arespread both thinly and widely across the government and its public sector companies.

Key Recommendations for India’s Energy Sector

  • Establish permanent energy policy co-ordination in the central government, with anoverarching national energy policy framework to support the development of a secure, sustainable and affordable energy system.
  • Continue to encourage investment in India’s energy sector by:
    • ensuring full non-discriminatory access to energy transport networks
    • working with the states to implement power sector and tariff policy reforms with afocus on smooth integration of variable renewable energy and power system flexibility
    • moving from government allocation of energy supplies to allocation by market pricing
    • further rationalising subsidies and cross-subsidies.
  • Prioritise actions to foster greater energy security by:
    • reinforcing oil emergency response measures with larger dedicated emergency stocks and improved procedures, including demand-restraint action and proper analysis of risks by using oil disruption scenarios and capitalising on international engagement
    • strengthening the resilience of India’s energy infrastructure, based on a robustanalysis of the water–energy nexus and cooling demand, notably when planning future investment.
  • Improve the collection, consistency, transparency and availability of energy data across the energy system at central and state government levels.
  • Adopt a co-ordinated cross-government strategy for energy RD&D, which enables impact-oriented measurement and dissemination of results.
  • Ensure India’s international energy collaboration continues to be strong and mutually beneficial, highlighting the country’s energy successes and supporting continued opportunities to learn from international best practices.

Significance of Report

  • The report provides insights into the rise of India in global energy markets. It analyses the full breadth of the country’s energy sector and presents recommendations for strengthening energy policies in various areas.
  • This in-depth review aims to assist the government in meeting its energy policy objectives by setting out a range of recommendations in each area, with a focus on energy system transformation, energy security and energy affordability.
  • It also highlights a number of important lessons from the rapid development of India’s energy sector that could help inform the plans of other countries around the world.
  • The report will help India to design implementation strategies to achieve secure and sustainable energy access for its citizens.

International Energy Agency (IEA)

Headquarters:Paris, France

  • IEA was created on 18th November 1974 by the Agreement on an International Energy Program (IEP Agreement).
  • It is an autonomous body within the Organization for Economic Co-operation and Development (OECD) framework. 
  • The IEA works to ensure reliable, affordable and clean energy for its member countries and beyond.
  • The Agency's mandate has broadened to focus on the "3Es" of effectual energy policy: energy security, economic development, and environmental protection.

Members

  • Only the OECD member states can become members of the IEA. Except for Chile, Iceland, Israel, and Slovenia, all OECD member states are members of the IEA.
  • Currently, it has 30 member countries and 8 association countries.

Source : Civil Services Chronicle Online, January, 2020