Energy Security, Pg12

Key Highlights:

• India imports over 85% of its crude oil, making it vulnerable to geopolitical instability and necessitating energy security measures.
• India aims for 500 GW of Renewable Energy (RE) by 2030, but a revised target of 1,500 GW is proposed to enhance energy sovereignty.
• The government plans full electrification of new two-wheelers and three-wheelers by 2030, and cars and trucks by 2035.
• India aims to achieve 100 GW of nuclear capacity by 2047 using small modular reactors and private sector participation.
• The focus is on developing domestic capabilities in critical minerals processing and refining through strategic partnerships.
• India should position itself as a clean energy manufacturing hub by leveraging its scale and policy incentives.
• Deepening the green finance ecosystem is crucial, including green bonds and risk mitigation instruments.

Detailed Insights:

• India's energy insecurity leads to inflation, fiscal pressure, and current account stress, highlighting the need for a redesigned energy architecture.
• To achieve the increased RE target, procurement mechanisms must be strengthened, and grid infrastructure should be treated as a national priority.
• Electric induction cooking can shift household energy consumption towards clean power, utilizing the Ujjwala beneficiary database for distribution.
• The Production Linked Incentive (PLI) scheme for advanced chemistry cells needs restructuring to fix the battery ecosystem for transport electrification.
• Scaling nuclear energy with small modular reactors requires operationalizing reforms through bidding for projects and creating a predictable pipeline.
• Developing domestic processing capabilities for critical minerals requires assured offtake mechanisms, price support frameworks, and long-term contracts.
• India needs to align PLIs across sectors, reduce logistics costs, and enhance export competitiveness to become a clean energy manufacturing hub.
• Execution of energy transition requires institutional coordination and accountability through a whole-of-government approach.

Key Concepts Involved:

• Renewable Energy (RE): Energy derived from natural processes that are replenished at a higher rate than they are consumed.
• Production Linked Incentive (PLI) Scheme: A scheme that gives incentives to domestic manufacturers for increasing production.
• Green Finance: Financial investments flowing into sustainable development projects and initiatives.