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

2. Energy Security defined
Expert Committee Report on Integrated Energy Policy (IEP) in its August 2006 report defines Energy Security as follows: “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.”
Nuclear Power in India – Opportunities and Challenges

3. Energy Demand in India expected to increase at a fast pace putting pressure on supplies
Primary Energy Consumption dominated by coal and hydrocarbons
Per capita consumption of 585 Kgoe; well below world average of 1,797 Kgoe
In the last five years, India has averaged a growth rate of 8% and the demand for energy
India is the fourth largest primary energy consumer, after China, USA and Russia and accounts for ~4.6 % of total global consumption
As per WEO, energy demand expected to increase at CAGR of 5.69% from FY10 to FY20
Demand side management through energy efficiency has seen thrust (energy conservation potential estimated ~23%)
Indian Primary Energy Mix (2011)
Source: BP Statistical Review 2012
While it is certain that India will see an increased escalation of energy demand, efficient utilization of energy remains a big challenge

4. Energy Supply key concerns include rising imports of hydrocarbons and stagnating production of coal among others
Increasing Import Dependence of India
Rising Imports of energy including hydrocarbon/ coal
Low proven reserves of hydrocarbons (Reserves to Production ratio of 18 years for oil/ 27 years for gas)
~34 percent remains poorly to completely unexplored in terms of hydrocarbons
Stagnating production in coal/ increasing demand supply gap /lack of private investment
Solar and wind having high cost of production
Hydro sector faced by issues related to R&R, land acquisition, clearances and evacuation infrastructure
Shale gas policy under formulation
Anti-nuclear sentiment and technology related challenges
Source: BP Statistical Review
Increasing Demand Supply Deficit of Coal (MT)
Source: India Energy
Book, 2012
High import dependence for energy amounts to high vulnerability and compromised energy security of the nation. Also, it adds to concerns regarding continuously increasing fiscal deficit and depleting foreign Exchange

5. Higher imports of coal and diesel, affect the country’s balance of trade
Nuclear Power in India – Opportunities and Challenges

6. Diversifying Energy Supply Reduction in Energy Intensity
Energy Security is an interplay of Regulations, Policies and Energy Strategies of the Country
Sustainability
Reliability
Affordability
Diversifying Energy Supply
Reduction in Energy Intensity
Geo-Politics
and
Energy Diplomacy
Policies
Regulations
Energy
Security
Strategies

7. Development Plan for each
Need for an Integrated Resource Policy to ensure long term Sustainability
Integrated Resource Policy: Energy, Water, Food
Inter-linkages of Energy with resources like food and water to be understood
Energy and food e.g. fertilizers,
Energy and water e.g. power (UMPPs)
Institutional arrangement for integrated development of various resources
Integrated
Resource
Policy
Integrated Energy
Policy
Integrated Energy Policy to be a sub set of Integrated Resource Policy
Need to institute a mechanism to implement Integrated Energy Policy
Need to keep the IEP dynamic
Development Plan for each
Energy Sector
Mix of Energy to be used
Integrated development of each resource
Longer term perspective on development and utilization
Integrated Resource policy linked with sustainable development that covers all resources and addresses all aspects including security, access, availability, affordability and pricing of resources

8. There is a need for revisiting Energy Strategy of the Country
Energy Strategy in changing Geo-political Environment and stagnating domestic production
The global energy scenario is redrawn by rising energy prices, evolving Geo-political environment (Arab Spring), changing trade flows, retreat from nuclear power in some countries, growth in the use of renewable and global spread of unconventional gas production.
There is a need for revisiting Energy Strategy of the Country
Improving production Efficiency in Coal sector
Private investment in Coal Sector/ Underground mining
Incentivizing Deep water/ ultra deep water exploration., unconventional energy, etc.
An attractive fiscal regime incentivizes risk taking and promotes cost control, apart from capturing economic returns
Developed energy markets with transparent pricing and energy trading
Rangarajan Committee Report
Focus on Renewables and nuclear energy
Need to focus on Energy Diplomacy through Bi-lateral government level ties
Creating Interdependence with resource rich countries (especially in Africa) through integrated packages creating socio- economic impact
Regional co-operation and interdependence (Nepal/ Bhutan/ Myanmar/ Bangladesh/ Sri Lanka) in the areas:
Common Sourcing of Energy/ transnational pipelines
Complementary fuel arrgt/ Energy Mix- Hydro/ coal
Regional Grid- interlinkage/ Power Exchange Mechanism
Investment by Indian players
Logistics Bottlenecks, etc.
Geo- Politics
and
Energy Diplomacy
Ramping up
Domestic
Energy Production

9. Cross- Sector Concerns
Stable And Consistent Regulatory Environment To Attract Investment And Develop Resources At Required Pace
Regulator
Institutionalization of coal sector regulator
Upstream Regulations
Resource Allocation
Competitive bidding framework for resources allocation- Coal/ hydro/ etc.
Attractive Fiscal regime to ensure increased investment- government involvement in contract administration, review of investment decision and pricing in Hydrocarbon sector
Stable pricing mechanism to promote long term investment
Balancing between market driven pricing and energy access to poor
Pooling of resources having Multiple price points being considered by government
Transparency in subsidy mechanism
Pricing
Cross- Sector Concerns
Instituting a cross-sector mechanism to address concerns such as land acquisition, R&R, etc.
Leaner, transparent and efficient approval process- Co-ordination committee at the Centre and State level to be set up with senior representation from the concerned departments.
Regulatory Environment to Transform Indian Energy Sector to a Market Economy providing a level playing field to all the players thereby promoting efficiency and protecting consumer interest

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