India's energy sector is currently confronted with multiple challenges, which stem not only from supply-side constraints but also from demand pressures imposed by a buoyant economy and a growing population. As per recent Planning Commission estimates, if economic growth is sustained in the 7-8 per cent range, the energy demand would rise by at least 5.2 per cent annually.In the face of relatively inflexible supply options, the gap between energy requirement and availability can only be expected to widen in the future. This gap raises serious concerns, not only about the country's energy security but also on the sustainability of its economic growth momentum. On a more micro-level, the shortage could lead to rising incidence of power outages and greater import dependency on fossil fuels such as crude oil and coal. Let us first take a look at where we stand in terms of overall investment achievement in the energy sector. The World Bank has estimated the minimal annual investment needed for energy and related infrastructure at about 5 per cent of the GDP. New electricity generating capacity of nearly 700,000 MW would need to be added—at the rate of 140,000 MW per Five Year Plan period. Compare this with the capacity addition of 21,000 mw during the 10th Plan that just ended in 2007. To be able to sustain this level of electricity generation, we would need to import nearly one billion tonne of coal from the current level of less than 100 MT, and we would need to add nuclear capacity of 3,000 MW per year (almost equal to our total current nuclear generating capacity) from 2017 onwards, assuming a ten year gestation period. Imagine the import bills, port capacities required, transport infrastructure needed and of course the international cooperation on the nuclear issue. India is well on the path to extreme vulnerability on the energy front.
On the other hand, India is fairly well endowed with renewable energy sources such as solar, wind and biomass. Exciting research is going on in universities and research labs in the developed world—supported by their governments and industry—to harness such energy sources and bring them to work in a techno-economically efficient manner.
India should take stock of where we are in terms of our knowledge and technological capability as regards renewable energy and related technologies, draw up a strategy for taking carefully selected initiatives to the market at the earliest, prioritise future research and development efforts based on our relative advantage and interest, and allocate sufficient resources to ensure a time bound result. At the same time, we also need to take cognisance of those technologies that will hit the global market prior to our engagement with the research or development process.
The key advantage that renewable energy holds over nuclear is the potential for deploying it on a large scale in a relatively short period of time. Sceptics tend to equate renewable energy to solar energy and dismiss the option as too expensive. While this may be true for the end-user, in the long term solar energy is economically effective. The farmer who uses diesel pumps to irrigate his fields spends Rs 10-12 to generate the equivalent of one unit of electricity - almost the same as the cost of electricity from a solar system. Installing solar roof top systems in urban areas with a net metering system could improve grid performance during normal hours. A well designed programme could see a solar capacity of about 10,000 MW becoming available in the country in less than 5 years.
With a capacity of nearly 8,000 MW, India is already among the top five countries producing electricity using wind energy. The nuclear option is equally important for the country, but would see fruition only in the medium to long term. It is short- sighted to look at the contribution nuclear energy would make in the year 2030- the real potential of this form of...