By Satya@gt
Published: May 28, 2007
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As we all know India’s economy has been growing at a tremendous pace. Our economic growth has earned many kudos, such as ‘the next Super Power’, ‘the new Economic Giant’, and rightly so. Our government hopes to eradicate poverty by achieving an average growth rate of 8% for the next 25 years. In the next quarter century or so, we are set to overtake both Russia and Japan in GDP and Energy consumption. The most crucial element for any sustained economic growth is ENERGY and the sole element we acutely lack.

Any country with a fast growing economy, middle class and increased urbanization needs reliable sources of energy. The most important sources of energy are Coal, Petroleum, Natural gas and Nuclear power, and except coal we do not have abundant resources of the other sources.

Coal: 50% of our electricity is produced by burning coal. Coal produced in most mines of India is of low quality and high ash content; by burning more of this coal we are just polluting our environment, and adding more green-house gases.

Petroleum: We import 65% of oil, and with our increased demand for energy our reliance on external sources is estimated to reach 90%.

Natural Gas: A cleaner and efficient alternative to coal, but only 7% of our electricity is produced by burning natural gas. Our country does not have easily accessible gas fields inside our boundaries.

Nuclear Power: Nuclear Power makes up 3% of our electricity. We do not have the technology to expand this sector, the initial cost is very high, and not enough uranium deposits in India.

The Challenges:

India faces many problems securing reliable sources of energy like terrorism, political turmoil, troublesome neighbors, and strong competition from china.

Coal:

To reduce the environmental risks posed by burning too much, we should aggressively adopt Integrated Gasification Combined Cycle (IGCC) technology. This reduces the carbon emissions and increases the efficiency of our existing coal-fired power plants, but this technology is quiet expensive and refitting all our existing coal plants with this technology will be a huge challenge.

Petroleum:

Indian government has entered into agreements with governments of Sudan, Nigeria, Iran, and Venezuela to increase our sources of petroleum. Except Venezuela all the other regions are really un-stable, civil wars raging in Sudan and Nigeria make it hard to efficiently and quickly access petroleum reserves in these countries and China constantly outbids us in petroleum deals in these two countries. If we want the resources in the African continent we should quickly learn to counteract and beat the Chinese in these deals or we are in for big trouble.

USA and EU are imposing severe sanctions on Iran to curb its nuclear program, and India supported the UN sanctions against Iran, due to this we fell in disfavor with the Iranians and this makes it really hard for us to secure reliable supply from Iran. It is quite a challenge to be on good terms with Iran at same time, supporting the US and EU in their campaign against Iran. The best (actually the most painful and irritating) part of this scenario is we cannot go against US in the case of Iran, if we want the Civilian Nuclear Cooperation deal which is also crucial for us.

Natural Gas:

The best alternative for coal is impossible to access. Our main external sources of natural gas are Turkmenistan, Iran, and Myanmar (Burma) and internal sources are off-shore gas fields in Bay of Bengal.

Taliban terrorism and lack of cooperation from Pakistan make it impossible to get gas from Turkmenistan.

Pakistan is again the obstacle in getting gas from Iran, because the Pakistani government cannot guarantee the safety of any pipeline over their territory.

Insurgency and Freedom movements in India’s northeast make it hard to get gas from Myanmar.

Our off-shore gas fields are hard to access, and off-shore rigs can pose environmental risks.

Nuclear Energy:

Cleanest and very efficient source of power, but even this field is dogged with challenges.

Challenges like high initial cost of nuclear power plants, insufficient uranium processing, and the lack of cutting nuclear technology. The Indo-US Civilian Nuclear Agreement will give a strong boost to our nuclear sector, but the crucial obstacle to this deal is the moratorium on nuclear tests.

The question is: ‘Are we willing to give up Military Nuclear program for Civilian Nuclear energy?’ or better put ‘Are we willing to give up our physical security & strategic status for greater energy security?’

Honestly, in this issue I could not yet reach a conclusion, it’s like asking which eye would you rather have the left one or the right one. It would be great if the deal goes through with out sacrificing our right to test and increase our military nuclear program.

Internal Crisis:

India’s power generation and distribution sector is extremely disorganized, inefficient, and politics ridden. We lack a coherent policy to generate, procure, and distribute power in our country. Competition and infighting between the different ministries responsible i.e. ministries of Coal, Petroleum and Natural Gas, Non-conventional Energy Sources, and of Power has impeded us from having a coherent energy policy. On average a staggering 30% of electricity is wasted while transporting it alone, this annually costs the country 29,400 crore rupees. Government subsidy for state industries and farmers is killing efficiency of the industry and has already many state boards bankrupt.

Many villages are still without a regular or any electricity, cities are troubled by frequent power cuts, and private industries do not get power at low prices thus enabling them to produce goods at lower costs.

The need of reform in the power sector is most urgent, if we wish to sustain our growth rate. We need a coherent policy in terms of both securing external sources, and better utilization and distribution of available energy. While we are all proud of the economic success we have achieved so far, we need to find an answer for the looming energy crisis. If we do not get our act right soon, we will have to settle for being called ‘next super power’ but not a ‘super power’.

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