Energy ministries: Delicate balance between energy security, rising demand

Rising energy demand could tilt India's energy basket towards fossil fuels from coal to oil, natural gas.

In the last two terms of the Narendra Modi-led National Democratic Alliance (NDA) government, clean energy and energy transition became a crucial part of economic growth. With India now positioning itself as the voice of the Global South, the push towards green growth is expected to continue. However, rising energy demand could tilt India’s energy basket towards fossil fuels from coal to oil and natural gas.

Return of coal and natural gas

The country’s electricity demand has not been as coal-dependent as in the past couple of years. With electricity demand touching a new record every year, it is coal that is running the show.

The Union power ministry has pulled all strings to ensure surplus supply, including directives on importing coal and running gas-based units. Officials say this has helped the country wade through extreme heat days with no major hiccups.

This has had a domino effect on supply of domestic coal, imported coal, and also natural gas. Coal India Ltd (CIL) is looking to have the highest ever supply of coal this year. 

The Union Ministry of Coal has ensured coal availability of more than 15 days this summer (it usually would go below 10 days). 

The new coal minister has to maintain this streak with the much-needed support from the Railways, states, the power ministry, and generating stations.

Going green

Maintaining enough fuel supply while facing global pressure to dial down on coal mining and usage will remain a challenge for these two ministries.

But, for the power ministry, the challenge of energy security is multifold. It would need to balance green energy, which has grown multiple times in the last decade but is not available round the clock. All the power ministers in the Modi government have also donned the hat of the minister of new and renewable energy.

With India committing 500 Gw of green energy by the end of this decade, both the power and new and renewable energy ministries would need to put feet on the pedal while developing allied infrastructure from transmission to energy storage. The new power minister will also have to walk the tightrope on the new power distribution reforms scheme, which requires cooperation from all states to fix the beleaguered power supply ecosystem. In tandem with the larger push towards cleaner fuels, the petroleum and natural gas ministry aims to expand the Sustainable Alternative Towards Affordable Transport (SATAT) scheme, under which it aims to set up 5,000 compressed biogas plants by FY25, officials say.

It will also work closely with oil-marketing companies to prepare a joint road map for the adoption of green hydrogen. The ministry is ‘cautiously optimistic’ about bringing natural gas within the fold of the Goods and Services Tax regime in 2024-25. On a longer time frame, the amendment of the Petroleum and Natural Gas Regulatory Board Act — to give the regulator more power and identifying key policy enablers to raise the share of natural gas in the economy to 15 per cent — remain major goals.