Question

Energy and Waste

Do you believe that the government should establish a national energy policy? If so, how would you construct this policy? Would you emphasis non-renewable energy (oil, natural gas, coal) or renewable energy (solar, hydro, thermal)? If not, how would you address our current energy issues? Again, would you emphasis non-renewable energy (oil, natural gas, coal) or renewable energy (solar, hydro, geothermal)?

Your paper should be 2-3 pages in length and all citations must use APA formatting.

Answer 1

Yes our government should establish national energy policy.It should be based on renewable energy resoureces.There are four key objectives of our energy policy: Access at affordable prices,Improved security and Independence, Greater Sustainability and Economic Growth.

Our schematic division allows us to identify seven areas of intervention: Energy Consumption by businesses, households, transportation and agriculture,Energy Efficiency/de-carbonisation measures on the demand side,Production and distribution of coal,Electricity generation, transmission and distribution,Augmenting supply of oil and gas, both by domestic E&P, and through acquisition of overseas acreages,Refining and distribution of oil and gas,Installation, generation and distribution of renewable energy. Considering poverty and deprivation in India, access to energy for all at affordable prices is of utmost importance. We are yet to provide electricity to nearly 304 million people, and clean cooking fuel to nearly 500 million people, which still depend on Biomass. The policy aims to ensure that electricity reaches every household by 2022 as promised in the Budget 2015-16 and proposes to provide clean cooking fuel to all within a reasonable time. While it is envisaged that financial support will be extended to ensure merit consumption to the vulnerable sections, competitive prices will drive affordability to meet the above aims.Improved energy security, normally associated with reduced import dependence, is also an important goal of the policy. Today, India is heavily dependent on oil and gas imports while also importing coal. In so far as imports may be disrupted, they undermine energy security of the country. Energy security may be enhanced through both diversification of the sources of imports and increased domestic production and reduced requirement of energy. Given the availability of domestic reserves of oil, coal and gas and the prospects of their exploitation at competitive prices, there is a strong case for reduced dependence on imports. In due course, we may also consider building strategic reserves as insurance against imported supplies.The goal of sustainability acquires added importance and urgency in view of the threat of catastrophic effects of climate change as well as the detrimental effects of fossil fuel usage on local air quality. In India, sustainability is also closely linked with energy security. Our fossil fuel requirements, which comprise nearly 90% of our commercial primary energy supply, are increasingly being met by imports. This means that cutting fossil fuel consumption would promote the twin goals of sustainability and security. Hence the policy lays heavy emphasis on de-carbonisation through the twin interventions of energy efficiency and renewable energy. Finally, the energy policy must also support the goal of rapid economic growth. Efficient energy supplies promote growth in two ways. First, energy is the lifeblood of the economy. It is an important enabling factor of growth and its availability at competitive prices is critical to the competitiveness of energy-intensive sectors. Second, being a vast sector in itself, its growth can directly influence the overall growth in the economy. For example, petroleum products have been an important direct contributor to our growth in recent years by attracting large investments in refining/distribution, and also fuelling economic activity.In general, these four goals may or may not move in harmony with one another. We noted above that energy security and sustainability are mutually reinforcing in our case since our energy imports are predominantly fossil fuel based. Reduction in imports and in emissions can both be achieved through an expansion of renewable energy consumption. On the other hand, as long as fossil fuels remain the cheapest source of energy, the goal of energy accessibility at affordable prices would come in conflict with the goal of sustainability and possibly energy security as well. Until such time as the costs of generating, transmitting and distributing renewable energy drop sufficiently to allow its delivery to the customer at lower cost than energy from fossil fuel sources, a conflict is likely to exist among the above three objectives. Energy efficiency is, however, one goal that reinforces all the four objectives. Hence, we identify it as a common area of intervention across all demand sectors in the Strategy.Having identified the four broad objectives of our energy policy, we need to link them to propose actions on the ground. Figure 1a and 1b provide a schematic division of possible areas of intervention. The areas are classified according to the source (coal, oil gas or renewable) or form (electricity) of energy and the stage of value chain. Stages of value chain are divided into upstream, midstream and downstream. For example, upstream stage of electricity is generation while midstream and downstream stages are transmission and distribution. Likewise, exploration and production define the upstream stage of oil while refining and distribution are midstream and downstream stages of it. Final consumption is analysed according to four major consumption sectors: businesses, households, transportation, and agriculture.Our schematic division allows us to identify seven areas of intervention.Energy Consumption by businesses, households, transportation and agriculture.Energy Efficiency/de-carbonisation measures on the demand side.Production and distribution of coal.Electricity generation, transmission and distribution.Augmenting supply of oil and gas, both by domestic E&P, and through acquisition of overseas acreages.Refining and distribution of oil and gas.Installation, generation and distribution of renewable energy.Our discussion of the policy in the following chapters heavily relies on the above areas of intervention.An important aspect of interventions in virtually all areas we have identified concerns governance, particularly as it relates to pricing and regulatory policies.In the past, insufficient attention has been paid to robust institutions, optimal pricing and regulation issues in India. The present policy focuses more centrally on this aspect. There are important gains to be had from the introduction of well-functioning institutions to enable efficient decision-making, pragmatic pricing and regulatory reforms at various stages of value addition in the chains associated with different energy sources.Energy efficiency, which entails using less energy for the same service, is an important element in energy policy. For example, the recent campaign by the government to replace regular bulbs by LED bulbs has the potential to reduce energy load by 20 GW and save nearly 100 billion kWh worth of energy each year after replacement of all incandescent bulbs. The urgency of action on the enhancement of energy efficiency stems from the fact that our CO2 emissions and energy imports could go up substantially in the ‘do-nothing’ scenario. Improved energy efficiency alone can reduce our energy demand over BAU (business as usual) scenario by 17% in 2040. These projections by India Energy Security Scenario (IESS) 2047 also indicate that demand reduction through energy efficiency could be further supplemented by actions on domestic supply. Recognizing the importance of energy efficiency, the policy addresses energy efficiency .There also remains the issue of time horizon of the policy. The policy focuses on two horizons: a short term horizon going up to 2022 and a medium term going all the way up to 2040. The time frame upto 2022 is short enough that it allows us to discuss interventions that are required right away while the period upto 2040 is long enough to contemplate bolder interventions that are required to fully modernize India’s energy sector.The objectives of the energy strategy are inextricably linked with those of the economic policy of the Government. Hence, the complexity of the energy sector is no less than the national challenges of development and growth. The economic transformation of India has to be supported by transformation of the energy sector, too. While striving for competitiveness of manufacturing in India, even the welfare objectives have to be expeditiously met. In the past, the challenge of meeting both objectives resulted in sacrificing one for the other. Global experience tells us that the two are actually two sides of the same coin, and the two are complementary. The NEP aims at efficiently delivering intended benefits to vulnerable sections of the society as has been eminently displayed in the energy sector itself (DBT-L), while not making our industries un-competitive. Towards the above objective, the NEP draws heavily from the country’s economic strategy.