There is a growing energy crisis in India and the current Government policy of ensuring growth rate of 7-8% will be faced with severe energy crunch in the coming years. While maintaining an eco-friendly approach, the nation requires extraordinary efforts, innovation and viable solutions to meet the current energy demand. The non-performing policy initiatives have been paralyzing the operations of the nation and have created an imbalance between demand and supply of energy. Presently, there are high levels of consumption of all the energy commodities which include gas, oil, coal, renewable energy and electricity.
India is an energy deprived nation that relies heavily on coal that produces two thirds of its electricity. According to World Bank, nearly 400 million Indians still have no access to electricity. The estimated demand of oil will rise to 850 million tonnes by 2020 and that of coal will be 980 MT by 2017. This actually means that India has to rely heavily in the coming years on energy imports. The challenges to this are greater geopolitical risks, fluctuating global market prices and intensifying international competition.
Looking at the present scenario of energy crisis in India, Fiinovation advises the following solutions to address the challenges to create a functional and financially-viable energy market in India:
€The core capacities of players in India's energy sector - mainly, energy companies - should be improved.
€Pricing mechanisms in the energy sector must ensure commercial viability and send proper signals to the market.
€India requires significant investment to meet its growing energy demand and provide access to all citizens, many of which are excluded from access to modern and clean sources of energy.
€Effective implementation of policy adhering to the issue of energy crisis is required.
€Investment in Renewable Energy and Nuclear energy that creates a hedge against coal supply shocks.
€Opening up the coal sector for private sector investment and increasing its efficiency.
€Increasing the capacity of the 20 nuclear plants that only account for less than two percent of its power capacity.
Fiinovation believes that in order to make the Energy sector functional, there is a need of a strong political will and modifying the perception of people that energy is a commodity, not an entitlement. There should be a Renewable Energy Law in the country to ensure sustainable and clean energy for the future. Even the corporations under their CSR policy should undertake CSR projects for development of renewable energy in the rural areas. Fiinovation understands that it is time to work aggressively on energy production and conservation so that new opportunities for employment and socio-economic development apart from raising the standard of living.
India is an energy deprived nation that relies heavily on coal that produces two thirds of its electricity. According to World Bank, nearly 400 million Indians still have no access to electricity. The estimated demand of oil will rise to 850 million tonnes by 2020 and that of coal will be 980 MT by 2017. This actually means that India has to rely heavily in the coming years on energy imports. The challenges to this are greater geopolitical risks, fluctuating global market prices and intensifying international competition.
Looking at the present scenario of energy crisis in India, Fiinovation advises the following solutions to address the challenges to create a functional and financially-viable energy market in India:
€The core capacities of players in India's energy sector - mainly, energy companies - should be improved.
€Pricing mechanisms in the energy sector must ensure commercial viability and send proper signals to the market.
€India requires significant investment to meet its growing energy demand and provide access to all citizens, many of which are excluded from access to modern and clean sources of energy.
€Effective implementation of policy adhering to the issue of energy crisis is required.
€Investment in Renewable Energy and Nuclear energy that creates a hedge against coal supply shocks.
€Opening up the coal sector for private sector investment and increasing its efficiency.
€Increasing the capacity of the 20 nuclear plants that only account for less than two percent of its power capacity.
Fiinovation believes that in order to make the Energy sector functional, there is a need of a strong political will and modifying the perception of people that energy is a commodity, not an entitlement. There should be a Renewable Energy Law in the country to ensure sustainable and clean energy for the future. Even the corporations under their CSR policy should undertake CSR projects for development of renewable energy in the rural areas. Fiinovation understands that it is time to work aggressively on energy production and conservation so that new opportunities for employment and socio-economic development apart from raising the standard of living.
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