New Delhi: The International Energy Agency (IEA) has termed India’s plan to become energy independent by 2030 as a “very ambitious” and an “idealistic challenge”.
This comes in the backdrop of oil minister M. Veerappa Moily’s plan of achieving the target by 2030, even as India, the world’s fourth largest energy-consuming nation, imports 80% of its crude oil and 25% of its natural gas requirements.
“Where 300 million Indians are lacking access to electricity and where per-capita electricity consumption is one-fourth of the world’s average, this is a very, very ambitious and huge challenge. It is not easy. There is a dependency in India on oil and gas imports and that’s something that shouldn’t be forgotten either,” Maria van der Hoeven, executive director of IEA, said in a telephone interview. “So, to put it very mildly, it is a very, very, very ambitious target.”
India’s energy demand is expected to more than double by 2035, from less than 700 million tonnes of oil equivalent (mtoe) today to around 1,500 mtoe, according to the oil ministry’s estimates, even as there is rapidly diminishing interest in the Indian hydrocarbon sector.
Moily has set ambitious targets to reduce crude oil imports by 50% by 2020, 75% by 2025, and achieve self-sufficiency and energy independence by 2030.
Paris-based van der Hoeven said energy ties, including water, hold the key to peace in the Indian subcontinent. She also expressed concern over the lack of investment in clean technologies such as carbon capture and sequestration (CCS). Of India’s installed power generation capacity of 243,029 megawatts (MW), projects totalling 145,273.39MW are fuelled by coal.
“Till the time there is no price on carbon, it is very difficult to find the right incentive to finance CCS. This is a problem and this was the problem,” van der Hoeven said ahead of the release of Energy Technology Perspectives (ETP) 2014 report in Seoul.
Commenting on India’s energy mix, the ETP report said: “Coal is India’s most abundant primary energy resource: presently, 68% of electricity comes from coal. At 33.1%, the average efficiency of its coal-fired power plants is low and emissions (over 1,100 grammes of CO2 per kilowatt hour [gCO2/kWh]) are well above global state-of-the-art levels (750 gCO2/kWh). Policies to halt construction of sub-critical units and encourage more efficient technology are insufficient to achieve the CO2 emissions reduction needed. Additionally, continued reliance on fossil fuels will require that India heavily supplement domestic supplies of coal and gas with imports.”
By 2025, India will also be the world’s second largest consumer of coal after China. The World Health Organization on Wednesday said Delhi has the most polluted air in the world.
In response to a question about energy ties holding the key to peace in the subcontinent, van der Hoeven said: “Cooperation and dialogue between neighbours is of extreme importance, especially where in this neighbourhood it’s not only about energy, but we are also talking about water, as you know water is necessary for energy and also for food.”
India and China have sparred intermittently over hydropower projects in Arunachal Pradesh, with China planning to divert waters from rivers that flow into the Brahmaputra to the arid zones of Xinjiang and Gansu. India has also been pitted against China in a geopolitical race to sew up as much of the world’s resources as it can.
“Ongoing use of imported fossil fuels in generation by some countries increases energy security risk and exposure to fuel supply volatility, creating competitiveness issues,” the IEA report said.
The IEA has been trying to get large energy-consuming nations, including India, China and Russia, which are not a part of the 29-member Organisation for Economic Co-operation and Development, to act in concert to counter supply disruptions.
“This is something that we are working on with different countries. It is not easy, of course, because they are different positions, different interests, but there is one interest that everybody shares (and that) is that when you look at the changing geography of energy demand, it goes east,” van der Hoeven said.
In one of the scenarios, the IEA said global population and economic growth can be decoupled from energy demand, even for oil.
Commenting on the growing tensions in Ukraine and its impact on the energy markets, van der Hoeven said: “What we are looking at are the developments of oil and gas markets day by day and it is very difficult to make a comment on that now. We can see that the Europeans are looking at the diversification of the source of their gas supply, but it is not something that will come overnight. Some work has to be done there. Europe has a lot of underutilized LNG (liquefied natural gas) capacity, but you know as well as I do that the LNG market is tight and LNG is expensive.”