Roadmap to Energy Justice

Why in News?

• Between 2020-2040, India will account for approximately 25% of global energy demand growth.
• Therefore, India must ensure energy access, availability, and affordability for its large population.

 

Comparing energy scenario in India with other countries

• Petrol and diesel prices went up by 35-40 per cent in the US, Canada, Spain and the UK.
• Whereas, despite importing over 85 per cent of its crude oil requirements and 55 per cent of its natural gas requirements, prices of diesel in India have gone down in the last year.
• Several countries in our neighbourhood have had dry-outs and power cuts to manage demand. There has been no shortage of fuel anywhere in India.

 

How has India managed to stabilise energy prices?

• Massive cuts in excise duty and VAT rates were announced twice by the centre and many states as well.
• Oil PSUs absorbed huge losses to ensure that the massive hikes in the prices of crude oil and natural gas in the international market were not passed on to Indian consumers.
• Subsidised administered pricing mechanism (APM) gas for the city gas distribution sector was drastically increased even at the cost of cutting down the captive use of domestic gas by PSUs.
• Export cess on petrol, diesel and ATFand windfall tax on domestically produced petroleum products helped to prevent refiners and producers from profiteering at the cost of domestic consumers.
• Expansion of the network of crude suppliers from 27 nations to 39 nations has been a significant step amidst global turmoil in the energy sector.
  • Energy trade with the US has gone up 13 times in the last four years and at the same time India has balanced relations with Russia to ensure a reliable supply of crude oil.
• By expanding petrochemical production: India is a global exporter of petroleum products and its refining capacity is the fourth largest in the world after the US, China, and Russia.
  • The refining capacity expansion was also one of the major factors in ensuring fuel price stability during the international oil price volatility seen last year.
  • India’s effort is to enhance this capacity to 450 MMT by 2040.

 

Impact of steps taken by India

• Above policies not only ensured affordable energy for Indian consumers but also had a calming effect on global petroleum markets.
• India’s purchase of petroleum products from certain nations has kept the global demand and supply of around 98-100 million barrels/day balanced, thereby keeping oil prices in check for the global value chain.
• Had this not been done, global prices would have shot to $300/barrel.

 

India’s roadmap to ensure energy justice

• Traditional fuels exploration reforms: By 2025, India wants to boost its net geographic area under exploration from 8 per cent (0.25 million sq km) to 15 per cent (0.5 million sq km) and has reduced the prohibited/no-go areas in our Exclusive Economic Zone (EEZ) by 99 per cent.
• Reforms in the direction of energy transition: India remains steadfast in climate change commitments; becoming net-zero in emissions by 2070 and cutting down emissions by one billion tonnes by the end of 2030.
• Moving towards a gas-based economy: By increasing the share of gas from the current 6.3 per cent to 15 per cent by 2030.
  • India has connected more than 9.5 crore families with clean cooking fuel in the past nine years.
  • PNG connections have increased from 22.28 lakh in 2014 to over 1 crore in 2023.
  • The number of CNG stations in India has gone up from 938 in 2014 to 4,900 in 2023.
  • Since 2014, India has increased the length of its gas pipeline network from 14,700 kms to 22,000 kms in 2023.
  • Recently revised gas price guidelines are intended to ensure stable pricing regime for domestic gas consumers while at the same time providing adequate protection to producers from adverse market fluctuation with incentives for enhancing production.
• Biofuel revolution: By launching E20 - 20 per cent ethanol blended gasoline will be rolled out in 15 cities and will expand across the country in the next two years.
  • India’s ethanol-blending gasoline has grown from just 1.53 per cent in 2013-14 to 10.17 per cent in 2023.
  • India is also setting up five second-generation ethanol plants, which can convert agricultural waste into biofuel, further reducing pollution due to stubble burning and generating income for farmers.
• The National Green Hydrogen Mission: It has been launched with a budget of Rs 19,744 crore to develop the entire green hydrogen ecosystem in the country.
  • It aims accelerate India’s efforts towards 4 MT of annual green hydrogen production which will lead to import savings worth of Rs 1 lakh crore of cumulative fossil fuel by 2030.
• Transitioning India’s future mobility pathways: Along with green hydrogen and biofuels, India is also supporting electric vehicles through a production-linked incentive scheme to make advanced chemistry cells of 50 GW hours.
  • The govt has announced viability gap funding and customs duty exemptions for the sector.
  • India is targeting the installation of alternative fuel stations (EV charging/CNG/ LPG/LNG/CBG etc.) at 22,000 retail outlets by May 2024.

 

Conclusion

• A pragmatic and balanced strategy has helped India to keep prices of petrol, diesel and gas under check.
• As India grows to become a $26 trillion economy by 2047, we are implementing a unique strategy for ensuring energy security and achieving energy independence.

 

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Q1) What are the benefits of Ethanol Blending?

A: Immense benefits can accrue to the country by 20% ethanol blending by 2025, such as saving Rs 30,000 crore of foreign exchange per year, energy security, lower carbon emissions, better air quality, self-reliance, use of damaged foodgrains, increasing farmers' incomes, employment generation, and greater investment opportunities. 

 

Q2) How is green hydrogen different from other hydrogen?

Green hydrogen is clean hydrogen produced via electrolysis. The primary difference between green and other forms of hydrogen (grey and blue) is that it is produced sustainably, without harming the environment. 95% of the hydrogen widely used and produced today through a process called “steam methane reforming”. But along with hydrogen, it produces massive amounts of carbon monoxide and carbon dioxide. Hence this type is known as “grey” hydrogen.

 

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Source: The Indian Express