Within the energy and climate debate perhaps no issue is more contentious than the degree to which emerging economies should rely only on non-fossil fuel resources and energy efficiency to meet their growing energy demand. Perhaps the greatest example of this debate can be illustrated by the degree to which India confronts the dilemma of committing to a low-carbon economy while at the same time steadfastly developing a robust energy sector through which it plans to bring electricity access to all its citizens, including 300 million people currently lacking access even to one electric light bulb.
This paper pays a great deal of attention to the Indian power sector where past policies have led to such a deterioration, especially in the transmission and distribution networks, that it will take years and investments in excess of $2 trillion to get India to the point where large volumes of intermittent renewables can be integrated into the grid.
The paper also examines the institutional, social and economic bottlenecks laguing the entire energy sector from inadequate billings and collection systems, bribery of meter readers in various forms, rival bureaucracies at the state and federal levels, power theft, lack of market-based pricing and nonpayment of bills by wealthy industrialists, agricultural landlords, government agencies and the military that will hinder meaningful reform throughout the energy economy.
Finally, the paper addresses the strong arm tactics that the government of India (GoI) has used in seizing land reserved for forest preserves and tribal peoples and opening it up for coal and other industrial activities.
Through analysis of the Indian energy sector, the paper will illustrate the chief issues that will form the cornerstone of this national discussion:
- the long term role of fossil fuels (oil, gas, and coal) in the economy and the degree to which, if domestic supplies are available, they should be imported with attendant economic, security and environmental ramifications transportation bottlenecks including railways, roads, and port infrastructure
- energy and emissions related to the construction of new infrastructure developments including smart cities and expanding urban populations
- the significant upgrades to the transmission and distribution systems throughout India that require massive investments
- the ongoing issues related to rampant corruption throughout the energy sector
- land acquisition policies for generation facilities and transmission corridors for electricity and oil and gas pipelines, as well as their impact on local populations, water supplies for agriculture, and the local and national environment
- tariff policies, with special emphasis on capacity to pay
- security concerns of large scale energy trade with India’s neighbours for electricity and natural gas
- India’s attempts to diversify away from petroleum for its transportation sector