Conclave 2006-Implementing the Integrated Energy Policy: The Way
Minister’s speech at the Inaugural Session, 26 July 2006
Ladies and Gentleman,
am happy to be with you at this Energy Conclave, which is discussing
the Integrated Energy Policy. I thank Dr.Parikh and his colleagues
for the report they have prepared. I am sure it provides valuable
insights into the energy scenario unfolding in our country and can
be a valuable tool in planning our energy requirements.
goals of eliminating chronic poverty and providing a better quality
of life to our people can be achieved only in the framework of a
rapidly expanding economy. As our economy grows rapidly,-and I am
confident it will,- the demand for energy will continue to accelerate.
In this context, an integrated energy policy becomes vital for sustaining
our economic growth.
we need to improve the lives of our people, we need adequate energy
at a reasonable cost. It is needed for cooking, lighting and transport.
Our women and children bear a disproportionate burden caused by
the lack of clean, convenient, affordable energy. Their health and
their lives are critically affected by this. If we have to free
them from drudgery and ill health, we need to address the issue
of access to energy.
set up an Energy Coordination Committee under my chairmanship to
enable various ministers to take an integrated energy view of energy
policy. The Planning Commission was asked to suggest an Integrated
Energy Policy that addresses energy security, access and availability,
affordability and pricing, efficiency and environment covering all
sources of energy.
believe the Integrated Energy Policy document has estimated energy
requirements in the year 2030 to be higher than today’s levels by
factor of anywhere between 4 and 5, if our economy grows at around
8% per annum. The figures of future requirements are gigantic. Electricity
generation capacity would need to go up from our current installed
capacity of a 131,000 MW to between 800,000 to a 950,000 MW. This
would imply huge annual import of oil-anywhere between 300 to 450
million tons-and coal imports that could touch 800 million tons
numbers raise important questions. Can we afford to follow this
energy path? How can we ensure that such vast quantities of energy
are available to us? What would be the investment and foreign exchange
requirements? India urgently needs to define a new paradigm of development
for its energy sector. This paradigm would have to focus on both
the demand side and the supply side; it would have to be based on
a coordinated development and judicious use of our domestic resources.
It would also have to focus on efficiency at all levels.
is short of modern energy resources like oil, gas and uranium. Even
coal is not as abundant as is generally believed. Thus we must use
energy resources optimally and efficiently. This requires large
investment in exploration, in production of fuels, in generation,
transmission and distribution of power and is setting up a gas grid
and import infrastructure Unless the sectoral policies are consistent
and unless they provide reasonable returns, we cannot attract the
needed investment in each of these areas. I believe the power sector
alone will need more than Rs.60 lakh crores of investment over the
next 25 years. Equally large investments are required in other sectors.
Both the public and private sectors have to play important roles
here We need to develop public private partnership in ways that
attract the needed investment and provides energy services to the
consumers to the least cost. We, however, recognize that in many
areas and regions, the public sector and the government will continue
to play an important role.
the shortage of energy resources, we need to reduce wastage of energy
by improving efficiency in production, and in consumption. We need
to develop all resources, coal, gas, oil, hydro and nuclear along
with renewables, such as wind and solar. Moreover, there are many
options of using alternative fuel and technologies. We need to make
serious efforts to promote the use of all available alternative
sources of energy. The report says that from a long term prospective,
nuclear energy and solar energy are two abundant sources for our
country. The speed with which we can develop nuclear power is constrained
by the availability of uranium. The civil nuclear agreement we have
entered into with the United States, and our discussions with the
Nuclear Suppliers Group should help in accelerating the development
of nuclear energy.
for solar energy we are blessed with an abundance of this source
and it could be the major source in coming years. It is time we
expanded research in the use of solar energy so that we not only
develop appropriate technologies but also generate economies of
scale by promoting their extensive use. We also need to examine
the potential of hydrogen as a fuel of the future. Hydroelectric
resources too should be optimally utilized to reduce the dependence
on fossil fuels.
see that Integrated Research and Action for Development has devoted
some effort in understanding the role of bio-fuels, especially as
a means of ensuring energy security in rural areas. Our government
has launched various biofuel programmes. To make them successful
we need to mobilize people and provide information through the agricultural
extension system. We must ensure availability of planting material
and create an enabling policy framework. We can also use the resources
available from the employment guarantee scheme for developing these
plantations. We have launched a large scale programme that will
be spread out over many villages. We need to help, steer and assess
this programme. Here institutions like IRADe can help in identifying
problems, analyzing possible solution and working out their implications.
policies play an important role in consumer’s selection of energy
sources. We must examine the relevance of the entire gamut of taxes
and subsidies on various energy forms and energy using devices.
Are we sending the correct signals to consumers and producers of
energy? Are these in line with the country’s overall energy strategy
and our economic security?
extreme volatility that we have seen in international oil markets,
couple with similar magnitude of price increases in natural gas
and imported coal, has put enormous pressure on domestic prices.
We need to factor in the economic cost and the environmental cost
of alternative sources of energy while setting their prices. Only
then we will be able to ensure that the energy security we desire
gets translated into reality.
supply side issues are relevant equally important is the need to
focus public attention on the demand management. This is an area,
which has not received the attention that it deserves in our country.
We need to promote economy on the use of energy in public and private
transportation and for domestic and industrial use. Many countries
have demonstrated the importance of energy efficiency in reducing
their dependence on energy for fuelling growth. Given the magnitude
of our future demand, if we follow current trends, it is imperative
that we pay urgent attention to this neglected area. If India continues
to focus primarily on enhancing supply and imports to meet its ever-growing
energy demand, we could be tying up our resources into an unduly
high cost energy economy.
government launched the Rajiv Ghandhi Grameen Vidutikaran Yojana
to provide electricity to all households by 2009. This programme
has an ambitious target of extending the grid to all households
by the year 2012. Significant progress has been made towards this
objective. We have introduced a fairly innovative concept of franchisees
for rural electricity distribution. These would be responsible for
providing last mile connectivity and service. All the concerned
stakeholders should see if the same franchisees can take responsibility
for the delivery of the wider set of services. That would also improve
their viability. We would clearly need to supplement grid based
electricity supply with more decentralized distributed generation
option based on locally available renewable energy resources.
all villages will be connected to the grid, 25000 remote villages
will be provided electricity based on their own local generators.
These would use locally available resources. Clean cooking fuels
in the form of kerosene, LPG or biogas are desirable to reduce indoor
air pollution, and its adverse healthy impact. A subsidy for such
fuels targeted at poor households can, therefore, be justified.
hope that this Conclave will offer a guide to the way forward in
implementing the recommendations of the Expert Committee on Integrated
Energy Policy. I look forward to receiving the suggestions from
this conclave. I wish IRADe and this conclave all success.