1. IEC 2013 Securing tomorrow’s energy today: Policy & Regulations
Session B: Long Term Energy Security
February 2013

2. Demand Supply Scenario of Energy in India
Total Primary Energy Consumption of Top five countries in mtoe
India is currently placed fourth after China, US and Russia in terms of primary Energy consumption
Energy Demand is increasing at a fast pace owing to increasing economic activity
Demand outstripping supplies, thereby resulting in increasing energy deficit
Country
Primary Energy Consumption
China
2210.3
United States
2205.9
Russian Federation
644.4
India
487.6
Japan
474.0
Source: BP Statistical Review 2012
Challenges faced by Indian Energy Sector Such in terms of Supplies
Rising Imports for both hydrocarbons and coal
Declining production from mature fields for hydrocarbon production
Reducing interest of foreign players
Stagnating production in coal
Pressing Need for a well-integrated infrastructure for coal supply chain and lack of private investment

3. Integrated Energy Policy
“We are energy secure when we can supply lifeline energy to all our citizens irrespective of their ability to pay for it as well as meet their effective demand for safe and convenient energy to satisfy their various needs at competitive prices, at all times and with a prescribed confidence level considering shocks and disruptions that can be reasonably expected.”
Integrated Energy Policy,
Government of India
Energy Security, as defined by the Integrated Energy Policy of India, encompasses three critical dimensions:
Meeting India’s large energy demand to sustain an annual economic growth rate of 8 to 9 percent through ,
Meeting lifeline energy needs of all citizens to address social development, health and safety of the energy poor, and
Ensuring sustainability in energy supply and use.
In the current context energy security also encompasses a critical consideration of energy efficiency across all aspects related to energy security.
Energy Security thus entails a complex set of coordinated initiatives to align in making specific choices for the country in charting a low-carbon and energy-secure growth path for the country.

4. Policy / Regulatory Challenges Faced By the Energy Sector
Some of the challenges faced by Indian Energy Sector due to regulatory challenges are as follows:
Reduced interest of international players in recent NELP bidding rounds
CAG allegations on the non-transparent manner of coal block allocations, a number of coal blocks have recently been de-allocated
Declining domestic coal production
Stalled CGD bidding rounds
Health of distribution utilities in India
Rising Under-recoveries of OMCs
Limited participation of private players in fuel retailing
Delays in completion of projects due to clearances and especially Hydro projects
Controlled Energy pricing resulting in inefficiencies in the consuming sectors
Due to policy and regulatory challenges, India may lose on foreign investment, especially in areas like deep/ ultra deep water E&P, underground mining, Shale gas, CGD, fuel retailing, etc.

5. Evolving Geo-political Environment and Challenges faced by India
Dependence on MENA Region for Hydrocarbons
(Proven Reserves)
Evolving Geo-political scenario and Energy Security
The Arab Spring; vulnerability of supplies- stability of government/ affect on prices (India imports ~ 60% of its crude from the region)
Gas supplies and prices in post Fukushima scenario
Shale Gas revolution in the US and changing trade flows
Challenges Faced by India in Context of Geo-Political Environment
In the past, India has lost out for assets to China in countries such as Khazkhistan, Nigeria, Angola, Russia, etc.
Long pending pipeline deals; Lost Myanmar pipeline to China
U.S., rules are not favorable for exporting gas to non-FTA countries
Coal supplies and experience in Indonesia
Pressure on India to reduce imports from Iran
Securing technology and fuel supplies for Nuclear Energy

6. Key Discussion Points
Is there a need for revisiting Integrated Energy Plan in view of changing Energy Dynamics within India and Globally?
Key points towards Synergizing a Secured Energy Future Of The Country
Incentivizing investment in Hydrocarbon sector: Rangarajan committee report
Energy Resource Allocation: Transparent & attractive competitive bidding framework for allocation of coal, hydrocarbon, unconventional energy, hydro, etc.
Energy Pricing: Market driven pricing and accessibility of energy for poor
Securing assets/ long term contracts outside India: Role of Government and Energy Diplomacy
Role of regulator: Level Playing field to all players, Level of intervention
Technology gaps: underground coal mining, deep water/ ultra deep water hydrocarbon drilling, horizontal drilling, hydrofracking and nuclear related technologies
Energy Mix: Diversification of Energy Sources and overdependence on any one fuel
Supplier Diversity: Limited reliance on one supplier/ region/ country
Clearances and Licenses: Land Acquisition and R&R
Infrastructure related to coal, gas

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