NITI Aayog Draft National Energy Policy

NITI Aayog Draft National Energy Policy
What is the NEP? The Draft National Energy Policy or the NEP, published by NITI Aayog on 27th June 2017, the think tank of the Government of India has the primary objective making plans related to energy in terms of its mandate and coordinating role as well as improving the energy security of the country by reducing the dependency on imports. India heavily relies on its imports for oil and gas, the primary fuels required for energy generation. The NEP takes off from the 2006 Integrated Energy Policy in setting the trajectory of growth for the energy sector in India. What are its objectives? It aims to produce 175 GW energy in the country from renewable resources till the year 2022 while aiming for independence in the energy sector and to provide round the clock energy and power to all parts of the nation. The policy recommendations are based on India’s energy ambitions for the year 2040. The NEP presents a broad framework for the energy sector by considering all available technology and fuel options. Piyush Goyal, the Minister of Power, Coal, New and Renewable Energy and Mines, said that the NEP was commendable for taking into consideration the reduction of crude oil prices, variations in solar energy technology, the government’s concern for providing electricity to villages and also considering the need for clean energy. What are the differences between the NEP and IEP? The former Planning Commission had framed the Integrated Energy Policy or the IEP which had formulated a course of action to accomplish specific objectives. With regard to the advancement of renewable energy, the IEP had recommended the conversion of the Indian Renewable Energy Development Agency (IREDA) into a national institution such as the NABARD to stress on the production of clean energy. The NEP, however, recommends revolutionary reforms like considering to shifting the entire power sector value chain to private investment for electricity production. The recommendations of the NITI Aayog relating to specific energy sectors are as follows: •Oil and Gas: India needs to efficiently explore its sedimentary area and geological data needs to be provided to the prospective Exploration and Production (E&P) companies. Giving cash directly through DBT can meet the government’s aim of subsidizing farmers in the purchase of gas-based urea. Forming a 90-day consumption requirement of strategic and commercial storage for crude and petroleum products with private investment is required. A National Gas Grid needs to be formed along with making fuels available in rural areas for the supply of clean cooking fuels. •Coal: High domestic production will advance India’s energy security. The seven subsidiaries of Coal India Limited need to be corporatized into independent companies to allow competition against one another in an open market. Private investment must also be increased. The potentials of exploiting coal bed methane (CBM) and in-situ gasification of non-producible coal (Underground coal gasification or UCG for short) have not been exploited efficiently and this should be under the Ministry of Coal. The coal sector needs to be opened to commercialization. Ash and slag handling at plants need to be done efficiently. •Renewable energy: The hydro projects need to considered for a longer time frame for long term financing. A Bioenergy Policy that encompasses all forms of biomass-based energy (solid fuel, first/second-generation biofuels and gasifying biomass) needs to be formulated. Smart grids need to be made available across the country. Islands, hills and remote locations are to be considered for application of off-grid renewable sources of electricity supply. Small-sized solar plants (up to 50 MWp) need to be built across the country in rural areas to solve grid integration. Applications of Renewable Energy in domestic, commercial and industrial sectors also need to be encouraged. •Nuclear energy: Foreign investment needs to be boosted to encourage efficient exploitation of clean and safe nuclear energy to power the country. •Electricity sector: India needs to efficiently utilise renewable sources of energy to provide more electricity to the nation in terms of transport, power generation and developing new infrastructure to also maintain a clean and healthy environment. What are the limitations of the NEP? The NEP has been criticized on various grounds for not providing a comprehensive account of the objectives and how to accomplish them. Too much emphasis on private investment has been seen as the government’s way of delegating control to private entrepreneurs which will make power generation expensive. It does not address the uncertainties and the production costs involved in energy generation through renewable resources. The reliance of the policy on thermal power raises questions about India’s commitment to clean energy and could harm investment in the renewable sector. Expanding the thermal power capacity of plants is not in tune with the climatic factors because this will fuel the already high levels of pollution in India. There are recommendations on how India should work towards developing and acquiring the technology needed for the energy sector but no mention of consistent and strong policy and budgetary support for the same.
Source: https://www.financialexpress.com/economy/niti-aayog-national-energy-policy-2017-here-are-key-points-of-draft-policy/789133/

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