Articles

Print

Lack of adequate delivery infrastructure fails gas discoveries

Energy Access in India
Despite decades of emphasis on provision of modern energy forms, an unacceptably large percentage of India's population still does not have access to modern energy services due to overall shortages in availability, as well as affordability at both - infrastructure and household level.

An analysis of NSSO data over time reveals, that the switch from firewood to LPG is occurring only among the higher income classes, indicating little transition to modern fuels in case of cooking. However, in case of lighting, the switch from kerosene to electricity occurs even in lower income classes over time, indicating improved access to modern lighting fuels, thanks to the National Rural Electrification Programme or RGGVY that aims to provide electricity to all villages in India. As of May 2012, the government had spent about $14,050 billion on rural electrification under the RGGVY programme.

At the national level, even with a large unserved population base, with an installed generating capacity of around 201 GW as on April, 2012 (CEA, 2012) and a per capita electricity consumption of around 779 units in 2009/10 (CEA, 2011b), India is suffering from huge shortages of 8.8 per cent in energy terms and of 10.2 per cent in peak energy (2010/11) (MoP, 2011).The shortages have continued due to the country's inability to meet more than 40 per cent-50 per cent of the targeted capacity addition requirements as envisaged in the last three Five-year plan periods (CEA, 2007). Apart from facing electricity shortages, the country has been facing challenges in establishing new oil reserves. While it has witnessed considerably high success in natural gas discoveries, the lack of adequate delivery infrastructure has significantly limited the expansion and spread of benefits from this source.

Addressing India's energy security challenge
India's Integrated Energy Policy (IEP) that the country's primary energy supply will need to increase by 4 to 5 times the 2003-04 levels to deliver a sustained growth rate of 9% through 2031-32 (Planning Commission, 2006). TERI estimates indicate that energy requirements would increase to around 2150 mtoe by 2031 from the level of about 350 mtoe in 2001 (TERI, 2009). Over the past three decades, the energy policy and regulatory framework of the country has seen significant transformation and the Indian government has initiated many programmes to enhance inclusive, equitable and clean energy development.

The Jawaharlal Nehru National Solar Mission (JNNSM) aims at generating 20,000 MW of solar power by 2022 and work towards making India a global leader in solar energy. It has other targets too: 2000 MW of off-grid solar plants, and 20 million sq meters of solar collectors to be installed. The National Mission on Enhanced Energy Efficiency (NMEEE) seeks to achieve sustainable development by maintaining a delicate balance of the "four E's" namely- Energy, Efficiency, Equity and Environment (BEE 2008). To this effect, several implementation strategies had been planned in order to achieve saving of 10,000 MW by the end of the 11th Five year plan in 2012.

Challenges in 'greening' the MSME sector
As per an assessment by the Bureau of Energy Efficiency, the total potential for saving electricity in the industrial sector, including the MSME sector and large industries, stands close to 18 billion units annually with a major share of this potential in the MSME sector. The World Bank, in its study on India: 'Strengthening Institutions for Sustainable Growth', has identified that an estimated 70% of the total industrial pollution load in India is attributed to small and medium enterprises (SMEs). The sector faces challenges primarily due to low awareness of environmental legislations, lack of access to conventional financing to invest in new environmental technologies, unavailability of skilled know-how within the MSME to implement pollution control measures, incomplete understanding of environment impacts of pollution, use of widely varying technologies and processes spread across the sector and focus on short-term economic goals.

Promoting green technologies and improved finance for the MSME sector
A number of initiatives have been taken by the government as well as private players to promote green technologies for MSMEs. The Working Group on MSMEs Growth has proposed a budget allocation of '40 billion under the Scheme for Technology Acquisition and Development in the 12th five-year plan. Additionally, a fund of '3 billion has been proposed for technology collaboration and acquisition. The government has announced a '50 billion-India Opportunities Venture Fund with the Small Industries Development Bank of India (SIDBI) to enhance availability of equity to MSMEs, among other schemes. India's 12th five-year plan, under the Credit and Finance vertical has proposed three new schemes with an allocation of over '75 billion, to infuse funds into the MSME sector through different paths.

Green economy: Focus on poverty eradication and inclusive growth
The sustainability challenge in India is of a different nature as compared to that in developed countries. Developed countries face the challenge of whether the current level of well-being can be maintained for future periods. India, however, faces the challenge of improving the quality of life of its vast population, whilst attempting to fulfill this in an environmentally sustainable manner. About 53.7% of the Indian population remains below the poverty line as per UNDP's Multidimensional Poverty Index, 2011. Hence, the biggest concern for India is to expand access to food, energy, water and other essential goods and services to its growing population.

Another reason why poverty eradication and equity should be at the core of India's green economy is because the poor people bear the consequences of environmental degradation, although they contribute little to the problem. Majority of the population of developing countries depend directly on natural resources with their livelihoods intricately linked to the sustainability of the environment.

Tags: gas, TERI, National Rural Electrification Programme, MSME, Small Industries Development Bank of India

Archives