Niti Aayog recently released a draft National Energy Policy. Policy has four key objectives — Access at affordable prices, improved security and Independence, Greater Sustainability, and Economic Growth. Policy takes considerable inputs from the research conducted during last couple of years under the India Energy Security Scenario 2047 program. The objectives and targets set by these policies are ambitious and are in the right direction. However, the policy lacks clarity on action plans to address the all these objectives
The policy focuses on two horizons: a short term horizon going up to 2022, and a medium term going through 2040.
Key premise for the policy*
*Data from the policy. Draft policy document is available in Niti Aayog website here.
Policy dictates that the growth in energy consumption has to be met while meeting the INDC (Intended Nationally Determined Contribution) goals of renewable energy capacity (achieve 40% of electric power installed capacity from non-fossil fuel by 2030), emission intensity (reduce the emissions intensity of its GDP By 33–35% by 2030 from 2005 level), and non-fossil fuel share in the electricity mix of India in the year 2030.
Energy efficiency is an important key element in the policy document. Improved energy efficiency alone can reduce our energy demand over BAU (business as usual) scenario by 17% in 2040. Under energy efficiency improvement category, policy is silent on current challenges. The Bureau of Energy Efficiency (BEE) has gathered working experience of over 15 years in the energy efficiency sector. It has set up many institutionalized program in the country. Although the policy says, strong institutionalized mechanisms are to be created, this author feels that BEE/govt. should strengthen already existing mechanism rather creating new ones. Currently running programs such as Perform, Achieve and Trade (PAT) scheme are still not able to meet their objectives as expected. Industry feels that such schemes should follow the timeline as announced to unveil its true potentials. Strong compliance to all such regulatory schemes is also a key factor. PAT schemes also need to cover all industries and building sector in the coming years.
Policy rightly identifies that there are multiple agencies working in the same domain of energy efficiency (BEE, PCRA, NPC etc) and calls for close coordination to avoid duplication of work. Why not consolidate all the agencies into one or two umbrella agencies? More importantly, moving the focus of agencies as enablers would be better. In the same breadth, policy calls for setting a research body/ technical institutes. Again, it is appropriate to enable the existing institutions rather than creating a new institution. Policy has touched manpower demand for achieving the efficiency goals, but hasn’t specified a path from the current state. It is prudent to consider existing state of energy managers and energy auditors (more than 10,000 and increasing at ~10% every year). For updating their skills, periodic certifications, and refresher courses can be considered. Policy has entrusted HRD with establishing energy universities as currently India lacks good such degree programs. Policy also talks about creating cadres in organizations to avoid the problems of deputationist. These are positive changes.
All these are important as key results are to be achieved in short time horizon by 2022 as per the policy. Policy has identified Direct Benefit Transfer (DBT) is the solution to end cross subsidy. This is clearly in the right direction. Presently industry or large consumers pay cross subsidy surcharge in order to finance below cost price charged to other customers. As DBT is already running in LPG delivery, Govt can enforce DBT for concerned customer as early as possible to reduce overall T&D losses.
Draft NEP identifies labeling program to cover all appliances and along with vehicles. This will be a major step towards energy efficiency in logistics. Market should be incentivized to develop & sell most efficient products. Recognition, tax incentives may be planned for those buying most efficient devices.
India has already leapfrogged to BS-VI from BS-IV to reduce pollution from vehicles. Similarly India has moved directly to cell phones and smart phones leapfrogging landlines and desktops. So can this happen in energy efficiency too? NEP aims for 100% electrification by 2022. By then, all the new users would be purchasing appliances like refrigerators, washing machines, TVs etc. Can NEP create an atmosphere where they will be buying only most efficient product from the market? However, labeling program for vehicles should not end up being like PUC (Pollution Under Control). Recommendations on effective implementation of such labeling program based on best practices from around the world would be a good addition to the policy document.
Policy also identifies chronic laggers like Energy Service Companies (ESCO) projects and the need to promote the program. However, no solution is proposed by the policy.
Under “Clean Cooking Access” chapter, policy focuses only on providing LPG directly to the last mile. Policy does not provide any reference to other sustainable means available for cooking. Biogas from cow dung, Gasification of biomass, community solar cookers etc can provide sustainable cooking solutions. This may be augmented with LPG connection if intermittency is spotted. Plenty of domestic biogas models are available which may be funded for initial deployment. Policy for cooking to be developed considering availability of site specific and location specific resources. This will definitely reduce LPG requirement and may accelerate clean cooking before 2022. This author suggests adding this to the policy. To track the progress and improving transparency, a clean cooking app/data similar to GARV app can be developed.
Policy aims to promote power generation by ensuring compliance of Renewable Purchase Obligation (RPOs). However, current status and implementation of RPO is a big disaster without any clarity. Also, with the kind of falling cost of renewable energy (especially, solar power), and people claiming grid parity, RPO may not provide any further incentive to renewable energy generator. Policy is completely silent in this area. Given country’s commitment to Paris Accord, policy must address this clearly.
Also, government claims that by 2030, India plans to sell only electric vehicle. To cater to such a large demand, significant electrical energy would be required. Policy has not addressed this at all.
If the policy is supportive to increased use of Alternate Fuels, average thermal substitution rates in India could reach 19% in 2030, and 25% in 2050, from 0.6% today. Policy must identify the potential in what is considered as waste. Policy must identify the energy content of waste and should promote co processing in most sustainable manner. As the population increases to 1.6 billion in 2040, so is the waste. Case in point is Cement manufacturing. Their process offers an excellent option to co-process the wastes in an environmentally friendly manner. The wastes can be from Hazardous & non-hazardous Industrial wastes, Municipal Solid wastes, Agro waste & Bio-mass. Energy released from the wastes processed in cement kilns will replace fossil fuel (Coal or Petcoke) thereby conserving fuel. Support is required for making solid waste available to cement industry with waste generator paying for the disposal.
Various studies predict that half of the buildings of 2030 is yet to be built in India. With the anticipated urbanization, there is tremendous stress on energy and environment from these buildings. Green building concepts popular only to the upper echelon of the society due to higher capital costs. Even if a normal customer wishes to buy the green construction material or wishes to build a completely green buildings, it is not easy to get material. Policy should focus more on green buildings to reduce the burden of increased energy demand.
India has become a strong proponent in utilization of renewable energy. With the proposed 175 GW by 2022, it will be the top player. With the amount of knowledge and business acumen with it by then, India can be the main market for any renewable technology and can lead the world in this. India can take along all the affected countries in their fight against climate change. But our current research and collaboration focus is not equipped to take us there. Policy should address this aspect by connecting institutions and market opportunities.
National Energy Policy will be the guiding document for the next decades. Hence, the policy should learn from failures from current programs, strengthening and consolidating existing institutions, skilled manpower development, and establishing fundamental research capabilities. Reconciling the objectives with already announced initiatives by the government would provide clarity to the industry and to the citizens.
· In this commentary article, only following chapters were covered: Energy Demand (Chapter 3), Renewable Energy (Chapter 6), Electricity (Chapter 8), Regulators (Chapter 9), Human Resource Development (Chapter 11), Technology and R&D (Chapter 12), and Air quality (Chapter 14)
· The author has shared detailed section wise feedback with Niti Aayog already
· With inputs from Mr. Vikas Argod (https://medium.com/@vikasargod )