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Review of India’s Energy Policies

  • 11 Jan 2020
  • 4 min read

Why in News

The International Energy Agency (IEA) has released the first in-depth review of India’s energy policies.

  • 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.
  • IEA regularly conducts in-depth reviews of energy policies for its member and association countries. This is the first review carried out for India, which has been an IEA-association country since March 2017.

Key Findings

  • Policies Appreciated
    • Government’s achievements in extending citizens’ access to electricity, affordable efficient lighting and clean cooking through historic schemes like SAUBHAGYA, UJALA and UJJWALA.
    • Energy efficiency improvements in India avoided 15% of additional energy demand, oil and gas imports, and air pollution as well as 300 million tonnes of CO2 emissions between 2000 and 2018.
    • Government policies designed to conduct large-scale renewable energy auctions, open up coal mining to private companies, and promote access to oil and gas markets for foreign investors.
  • Status of Renewables: There is a strong growth of renewables in India, which now accounts for almost 23% of the country’s total installed capacity.
  • India’s Demand for Energy
    • The country’s demand for energy is set to double by 2040, and its electricity demand may triple.
    • Indian oil consumption is expected to grow faster than that of any other major economy (including China). This makes further improving energy security a key priority for India’s economy.
    • India's oil demand is expected to reach 6 million barrels per day (bpd) by 2024 from 4.4 million bpd in 2017, but its domestic production is expected to rise only marginally, making the country more reliant on crude imports and more vulnerable to supply disruption in the Middle East.
    • India's oil refining capacity is expected to rise to 5.7 million bpd by 2024, making it a very attractive market for refinery investment.
  • Recommendations
    • NITI Aayog can play a strong role in working with the states to implement power sector reforms, advance grid integration, improve flexibility and coordinate energy policy decisions.
    • In renewables-rich states, the share of variable renewables in electricity generation is already above 15%, a level that calls for dedicated policies to ensure they integrate smoothly into the power system.
    • The review encourages India to institutionalise energy policy coordination across government with a national energy policy framework.
    • India should also to expand its Strategic Petroleum Reserves (SPR).

Note

  • India ranks third in terms of global oil consumption after China and the United States.
  • India ships in over 80% of its oil needs, of which 65% is from the Middle East through the Strait of Hormuz.
  • India is the world's fourth largest oil refiner and a net exporter of refined fuels, mainly gasoline and diesel.

International Energy Agency

  • The IEA was created in 1974 to help coordinate a collective response to major disruptions in the supply of oil.
  • It is made up of 30 member countries. It also includes 8 association countries.
  • It is an autonomous inter-governmental organisation within the Organisation for Economic Co-operation and Development (OECD) framework, headed by its Executive Director.
  • It is headquartered in Paris, France.

Source: PIB

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