India’s challenges on the energy front are enormous

by NSVenkataraman

It is generally believed that the level of energy consumption is an indicator of industrial, economic and social conditions in a society. This is true, because energy use is essential for industry, agriculture, services, transport, energy and other sectors, the growth of which inevitably reflects economic growth and social development.

(Green hydrogen)

With the impressive growth of the Indian economy, especially in the last ten years, the country’s energy consumption has been steadily increasing. To generate energy, fuel is needed. The main sources of fuel are crude oil, natural gas, and coal.

Requirements for Oil, Gas and Coal

India is heavily dependent on imports of crude oil and natural gas for its energy sources.

India’s current demand for crude oil is around 250 million tonnes per year, while domestic production is only around 30 million tonnes per year. Therefore, around 220 million tonnes of crude oil are imported per year.

India’s current demand for natural gas is around 75 billion cubic meters per year, while domestic production is only around 35 billion cubic meters per year. Therefore, around 40 billion cubic meters of natural gas are imported per year.

Domestic production of crude oil and natural gas has remained virtually unchanged for several years and is likely to increase only slightly in the coming years, despite proactive government policies aimed at increasing domestic production.

Consumption of crude oil and natural gas is steadily increasing by 7% per year, so imports must also grow at the same rate.

Global prices of crude oil and natural gas are subject to fluctuations due to geopolitical factors and any increase in these prices causes major problems for India due to large outflow of foreign exchange.

India has large reserves of coal, which is an alternative fuel. In recent years, domestic coal production has increased significantly and the production is likely to reach 1000 million tonnes per annum in the next few years due to several proactive measures and policies initiated by the Indian government over the last decade. About 60% of power generation in India is powered by coal.

Environmental problems

Crude oil and natural gas are used as raw materials for the production of derivative products and as fuels such as diesel, heating oil and gasoline. The use of these fossil fuels for transportation, industrial processes and energy generation leads to the emission of harmful gases such as carbon dioxide, sulfur dioxide, nitrogen oxides and methane.

The use of coal as a fuel for energy production and other purposes also causes the emission of harmful gases.

The emission of these gases negatively affects the climate and causes global warming, which can have catastrophic consequences.

India pledged at the global climate conference to achieve net-zero emissions of these gases by 2070. This means completely eliminating the use of oil-based fuels and coal. In the current environment, it is difficult to imagine a scenario in which India could eliminate the use of oil-based fuels and coal in the next few decades.

Alternative fuels that are environmentally friendly

Even though the challenges facing the Indian energy sector are enormous, there are opportunities to overcome the looming energy crisis and reduce harmful gas emissions by taking appropriate measures.

The Indian government has taken several steps to develop and install the capacity to generate energy from alternative sources that do not rely on fossil fuels. However, it remains questionable whether these alternatives can completely eliminate the need for fossil fuels.

Renewable energy (solar, wind and water)

Renewable energy capacity, particularly solar and wind, has grown significantly over the past decade and now stands at around 185 GW. India has set a target of increasing renewable energy capacity to 500 GW by 2030. In FY24, renewable energy capacity increased by 4%.

However, renewable energy sources such as solar, wind and hydro are seasonal and weather dependent. Furthermore, the capacity utilization in the renewable energy industry is only about 20% or less, compared to 60% for coal-fired thermal energy.

Nuclear energy

In addition to renewable energy, India is looking to significantly increase nuclear power production, especially since it produces no emissions and does not require conventional fuels such as oil or coal. India’s current nuclear capacity is 7,480 MW. As of July 2024, India has 21 reactors under construction with a total capacity of 15,300 MW.

However, environmentalists have raised concerns about nuclear power due to safety issues and nuclear waste storage. These protests often lead to delays in site selection and project implementation.

Green Hydrogen Project

The Indian government is focusing on green hydrogen projects, where green hydrogen is produced from water using electrolysis. Green hydrogen is an environment-friendly source for generating energy.

Currently, India produces a significant amount of hydrogen using natural gas or crude oil as a feedstock.

Although the green hydrogen production process does not use crude oil, natural gas or coal as raw materials, the cost of its production is currently several times higher than the cost of producing hydrogen from natural gas or crude oil.

It is necessary to ensure that the cost of producing green hydrogen is reduced to the level of hydrogen from fossil fuels. This currently seems like a difficult task, although several technological efforts have been initiated to reduce the cost of production. For now, one can only wait and see how this develops.

Biofuel

There are excellent prospects for producing biofuels from a variety of natural sources.

Algae biofuel is particularly suitable for India because it can be produced from algae crops, which require only sewage and sunlight and use carbon dioxide to grow. India’s climate is very suitable for algae cultivation, which can be done on wasteland, avoiding conflicts with food crops.

However, efforts in India to produce biofuel from algae are insufficient.

Ethanol

The government has taken steps to blend ethanol with gasoline to reduce gasoline consumption, which also benefits the environment. However, some observers have expressed doubts about whether this is appropriate, since ethanol can be used as a building block for several derivatives that are currently made from coal or natural gas. Moreover, in its eagerness to increase ethanol production, the Indian government has allowed ethanol production from food crops such as rice and corn, raising concerns about food security in a country with a growing population.

Ethanol can also be produced from sugar cane or beet molasses. Beet crops require much less water and can be harvested in half the time of sugar cane. However, no significant steps have been taken in India to promote beet cultivation. It is an opportunity that has not yet received adequate attention.

NS Venkataraman is a board member of a non-profit organisation, ‘Nandini Voice for the Deprived’, which aims to highlight the problems of the downtrodden and deprived, advocate for their causes, promote honesty and ethical values ​​in private and public life and make objective and unbiased decisions on socio-economic issues.