The basic aim of energy security for a nation is to reduce its dependency on the imported energy sources for its economic growth. India will continue to experience an energy supply shortfall throughout the forecast period. This gap has widened since 1985 when the country became a net importer of coal.
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| Energy Security |
India has been unable to raise its oil production since the 1990s. Rising oil demand of close to 10 percent per year has led to sizable oil import bills. Also, the government subsidizes refined oil product prices, thus compounding the monetary loss to the government. Imports of oil and coal have been increasing at rates of 7% and 16% per annum during the period 1991-99.
The dependence on energy imports is projected to increase in the future. Estimates state that oil imports will meet 75% of total oil consumption requirements and coal imports will meet 22% of total coal consumption As per requirements in 2006. The imports of gas and LNG (liquefied natural gas) are likely to increase in the coming years.
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This energy import dependence implies vulnerability to external price shocks and supply fluctuations, which threaten the country's energy security. Increasing dependence on oil imports means reliance on imports from the Middle East, a region susceptible to disturbances and consequent disruptions of oil supplies. This calls for diversification of sources of oil imports.
The need to deal with oil price fluctuations also necessitates measures to be taken to reduce the economy's oil dependence, through fiscal measures to reduce demand, and by developing alternatives to oil, such as natural gas and renewable energy. Some of the strategies that can be used to meet future challenges to their energy security are
- Building stockpiles
- Diversification of energy supply sources
- Increased capacity of fuel switching
- Demand restraint
- Development of renewable energy sources.
- Energy efficiency
- Sustainable development
Although all these options are workable, their implementation will take time. Also, reliance on stockpiles would tend to be slow for countries like India because of resource constraints. Besides, the market is not sophisticated enough or the monitoring agencies experienced enough to predict the supply situation in time to take necessary action.
Insufficient storage capacity is another cause for worry and needs to be augmented if India has to increase its energy stockpile. But, out of all these options, the simplest and the most attainable is reducing demand through persistent energy conservation efforts.
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