IEA launches first in-depth review of India’s energy policies

15 January 2020

The International Energy Agency has released its first in-depth review of India’s energy policies, finding that the country has made considerable progress in providing, clean, secure and affordable energy for its citizens.

The report, written in partnership with NITI Aayog, highlights the achievements of India’s energy policies and provides recommendations to support the government’s goals of promoting well-functioning energy markets and boosting deployment of renewables.

NITI Aayog CEO Shri Amitabh Kant, who brought up the idea with the IEA to conduct the review, said: “With clear goals in place, the country is making great strides towards affordable, secure and cleaner energy for all its citizens. India is working hard to move towards its aspirations of transforming the energy sector.”

Dr Fatih Birol, executive director of the IEA, presenting the key findings of the IEA review on 10 January, commenting “The energy choices that India makes will be critical for Indian citizens as well as the future of the planet. This was demonstrated at the IEA’s 2019 Ministerial Meeting, which mandated the Agency to start consultations with India for a strategic partnership that could serve as a path to eventual membership, a game-changer for international energy governance.”

The IEA report congratulates the Indian government on its outstanding achievements in extending citizens’ access to electricity, affordable efficient lighting and clean cooking in record time through historic schemes like SAUBHAGYA, UJALA and UJJWALA, while pursuing energy market reforms and the swift deployment of renewable technologies. The report highlights the strong growth of renewables in India, which now account for almost 23% of the country’s total installed capacity. The review also found that energy efficiency improvements in India avoided 15% of additional energy demand, oil and gas imports, and air pollution as well as 300 million tonnes of CO2 emissions between 2000 and 2018.

India is becoming increasingly influential in global energy trends. The country’s demand for energy is set to double by 2040, and its electricity demand may triple, according to the IEA report. Indian oil consumption is expected to grow faster than that of any other major economy. This makes further improving energy security a key priority for India’s economy, the report says.

The IEA welcomes Indian government policies designed to conduct large-scale renewable energy auctions, open up coal mining to private companies, and promote access to oil and gas markets for foreign investors. The report offers a wide range of recommendations for reforms in support of India’s goal of promoting open and well-functioning energy markets in sectors such as coal, gas and electricity. These include building strong regulators to ensure non-discriminatory access, moving from state allocation to market pricing, and further rationalising energy subsidies.

In India’s renewables-rich states, the share of variable renewables in electricity generation is already above 15%, a level that calls for dedicated policies to ensure they integrate smoothly into the power system. NITI Aayog can play a strong role in working with the states to implement power sector reforms, advance grid integration, improve flexibility and coordinate energy policy decisions.

 

Energy policy co-ordination

The review also strongly encourages India to institutionalise energy policy co-ordination across government with a national energy policy framework.

 NITI Aayog vice chairman Dr Kumar emphasised that India’s energy goals cannot be achieved without strong co-ordination of policies and targets between central and state governments, notably on electricity market design and renewable targets, and that a stronger co-operation is therefore needed on these fronts.

Power and Renewable Energy minister Shri R K Singh commented: “India’s energy policy is a global story. India has the largest unified power grid that operates in single frequency. India has moved from scarcity to surplus electricity over the past few years while implementing the largest and the fastest energy access and energy efficiency programmes in the world.”



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