Date: 07/09/2022

Relevance: GS-3: Infrastructure: Energy, Ports, Roads, Airports, Railways.

Key Phrases: Energy Atmanirbharta, Fossil and non-fossil fuels, Renewable energy capacity, State Electricity Boards, Aggregate Technical and Commercial Loss, DISCOMs, Private and Foreign Entrepreneurs, Green energy, Green incentives, Retraining and up skilling, Energy diplomacy.

Why in News?

• The Prime Minister has called for “Energy Atmanirbharta” by 2040 recently.

Power sector in India:

• India is the third-largest producer and second-largest consumer of electricity worldwide, with an installed power capacity of 403 GW, as of June 30th 2022.
• In India, power is generated from various sources such as Fossil and non-fossil fuels.
  • Fossil fuel includes Coal (51%), Gas (6%), Lignite and Diesel, and its share in total installed generation capacity is nearly 60%.
  • Non fossil fuel includes Renewable Energy and Nuclear Energy sources and it contributes to the remaining (40%) installed capacity.
• As of June 30th 2022, India's installed renewable energy capacity stood at 159 GW, representing 39.70 % of the overall installed power capacity.
  • 50.30 GW from Solar energy.
  • 40.1 GW from wind power.
  • 10.17 GW from biomass.
  • 46.51 GW from hydropower.
• In world, India’s ranks is
  • Fourth in wind power,
  • Fifth in solar power,
  • Fourth in renewable power installed capacity.
• India is the only country among the G20 nations that is on track to achieve the targets under the Paris Agreement.

Issues faced by Power Sector in India:

• Inadequate Electricity Generation:
  • India’s installed capacity to generate electricity is insufficient to support the country’s annual economic growth.
  • India’s commercial energy supply must grow at a rate of about 7% to meet the rising demand for electricity.
  • Coal-fired power stations provide the bulk of India’s electricity. Despite efforts to diversify the alternatives, coal remains the country’s dominant source of power, particularly in the case of renewable energies.
• Underutilization of Installed Capacity:
  • Underutilization of installed capacity due to extremely low plant load factor.
  • In India, PLF is extremely low, and very little effort is made to improve it.
• Poor Performance of State Electricity Boards (SEBs):
  • The losses incurred by State Electricity Boards (SEBs), which distribute electricity, exceed 20,000 crores.
  • AT&C (Aggregate Technical and Commercial Loss) in India is more than 20%.
  • Poor performance of state electricity boards and problems with balance sheets of state DISCOMs.
  • According to some analysts, the transmission of energy to farmers is the main cause of losses; nonetheless, power is stolen in many areas, increasing SEBs’ issues.
• Limited role of Private and Foreign Entrepreneurs:
  • Foreign investors and private sector power generators have yet to play a significant role.
  • In the power generation sector, the government almost has a monopoly.
  • The public sector is unable to meet the challenges of power generation due to a lack of management facilities.
• Shortage of Inputs:
  • Thermal power plants, which are India’s main source of electricity, are running out of raw materials and coal.
  • Thermal capacity expansion is hampered by the industry’s growing concerns about fuel availability.
  • Shortage of Inputs such as coal especially due to transportation issues affects power generation as was recently highlighted in the media.
• Pattern of Energy Consumption:
  • Pattern of electricity consumption in India is still unpredictable and this affects the power demand curve and causes a rise in the peak power demand.

Measure to make Energy Atmanirbharta by 2040:

• Priorities of access to fossil fuels.
  • The transition to a green energy system will take longer. This was because sector had to be redesigned.
  • Our policy must continue to emphasise affordable and secure access to oil and gas. Part of this objective could be met by intensifying domestic exploration.
  • We must recognise, however, the low probability of finding substantive, additional domestic resources of hydrocarbons.
• Priorities access to the building blocks of green energy:
  • We have ambitious targets for renewables.
  • For realising this target, we will be cost-competitive access to minerals/components (copper, cobalt, lithium, semiconductor chips etc) required to build EVs, solar panels, wind turbines and batteries.
  • The problem lies in that these commodities are concentrated in countries which are not on the same political page with India.
  • India has some resources such as cobalt, nickel and heavy rare earth metals but it has done little to expedite their mining and processing.
  • India must remove the obstacles to domestic mining and develop strategies to manage the dynamics of market concentration, global competition and unfavourable geopolitics.
• Infrastructure development:
  • We will need to develop innovative financing mechanisms to fund green infrastructure.
  • It should be emphasised that all such investments will get impaired if state discoms are financially insolvent.
• Green incentives:
  • The government’s production-linked incentive scheme (PLI ) offers benefits for investment in green energy.
  • The investor response has so far been encouraging. Other governments are, however, going down a similar route. Ex. The US CHIPS and Science Act has offered, for instance, tax credits and subsidies that are a multiple of that offered under PLI.
  • We may have to go back to the drawing board to retain the interest of potential investors.
• Retraining and up skilling:
  • The nature of jobs and their location will change with the progressive transition to a green energy system.
  • There might be, for instance, less need for maintenance workers on oil rigs and more for technicians on solar farms.
  • The consequential requirements for training/skilling should be anticipated and delivered.
• Energy diplomacy:
  • Our diplomats should add the arrows of energy diplomacy to their quiver.
  • This is because of our dependence on the international energy supply chains.
  • Success in navigating the cross-currents of economic and geopolitical uncertainties will rest greatly on skilful diplomacy.
• Holistic governance:
  • The current siloed structures of energy governance are suboptimal.
  • A root and branch administrative overall is required. Institutions should be created to facilitate integrated energy planning and implementation.

Way Forward

• Energy is constantly needed to achieve India's growing young population and economic growth. The Government of India has released its roadmap to achieve 500 GW of non-fossil fuel capacity by 2030, which will support India's clean energy supply.
• The policy of India at this time is to achieve the energy goals without putting too much pressure on the environment and India is succeeding in it.
• At this time, we need leadership that can reconcile temporal differences and balance the short-term pressures of elections with the longer-term imperatives of sustainability.

Sources: Indian Express

Mains Question:

Q.What are the challenges faced by the power sector in India and suggest measures to make India as Energy Atmanirbharta by 2040. [250 Words].