Should the Indian government re-examine its strategy about the country’s energy mix? In the context of current crisis, analyse (200 Words)
Refer - Business standard
Enrich the answer from other sources, if the question demands.
IAS Parliament 4 years
KEY POINTS
· The ongoing Covid-19 pandemic has shaken up global energy markets. Amid widespread demand destruction, the price of Brent crude oil has fallen to around $30 a barrel, and was even lower for much of the time.
· While it is possible that the prices will recover, the pandemic is only enhancing trends in the market that had previously been observed. Major producers agreed on production cuts after considerable effort and expending political capital.
· One major strategic and economic criterion has always been a desire to use bountiful domestic reserves of coal. Oil and gas imports were seen as a dangerous drain on Indian foreign exchange resources as well as causing dependence upon a few exporters.
· In addition, many existing independent power producers are facing financial trouble; and few new plants will be built in the private sector, given the difficulties of obtaining financial closure.
· Given these concerns as also the impact of more coal mining in densely forested tracts and on local communities in those areas, as well as the public health costs to populations near thermal power plants it would be wise for the government to re-evaluate its energy plans.
· It already has ambitious renewable energy targets, and it should re-commit to those once the pandemic is over indeed, one framework for policy should be that thermal power plants should never receive any direct or hidden subsidies greater than those received by renewable power.
· It is sensible to re-examine natural gas-fired combined cycle plants in particular. Natural gas is cleaner than coal or oil, and its prices will also be lower in tandem with crude oil.
· Till a more extensive physical pipeline system comes into being, a flexible “virtual” pipeline system that flattens tariffs for natural gas transport across various mode might be considered.
Aradhana Tiwari 4 years
The ongoing Covid-19 pandemic has shaken up global energy markets. The global energy markets continue to grapple with a pandemic-driven collapse in demand.
In such situation, the Indian government should re-examine its strategy about the country’s energy mix :
* Power sector :
- An approach based on direct benefits transfer (DBT) can be adopted to ensure power affordability and access to electricity.
- This is the best time for gas-based power generation since global natural gas prices are low.
* Coal sector :
- India’s coal ministry should try to substitute imported coal with domestic production to keep power plants interested in taking more supplies because domestic coal is far cheaper than imported coal.
* Crude supply:
- The oil marketing companies wrestle with problems of excess supply, and at the same time the demand for energy has plummeted across the board due to the Covid-19 induced lockdown.
- Over supply of fuel has become a chief concern for the Indian economy as India’s strategic storage capacity is just 5.33 million tonnes i.e., India can store just about 39 million barrels of crude oil.
In such situation;
- India should look at how it can quickly enhance its strategic reserves to benefit from the falling prices of crude oil in international market; China, for instance, is doing just that.
- India should assure future supplies as this is a good time to enter into long-term contracts.
- And finally, India should also judge how the present oil crisis will affect, for better or for worse, its long-term energy strategy.
* LPG supply :
- Yet the shape of the problem is not uniform.
- Demand for LPG for instance has shot up after the government promised under "Pradhan Mantri Garib Kalyan Yojana" to free refill cylinders for at least three months to all those getting subsidised supply.
- For this, enhancement in construction of pipelines is needed as LPG has been imported in India to fullfill the increasing demand.
>>> Way forward :
India should keep a firm eye on its long-standing goals of promoting solar and wind energy, shifting more baseload power to natural gas, and shutting its most-polluting coal-fired power plants.
>>> Conclusion :
The road to recovery for Indian economy will be long and tough but a more significant and structural intervention is required so that the energy sector is able to emerge viable and robust.
IAS Parliament 4 years
Good attempt. Try to stick to word limit.Keep Writing.
