'Having no energy costlier than cost of any energy'

As India builds its infrastructure to cater to increased energy demand, energy experts warn against excessive lock-ins that the country might regret later.

Speaking to Business Standard, Jeremy Bentham, vice-president, global business environment, Shell, said, "Having no energy is much more costly than the cost of any energy, because energy enables the economy to develop." Robustness and resilience are important and natural parts of sustainability, and an element of that is not getting locked into infrastructure that a country is going to regret, he said.

Suman Bery, chief economist, Shell International, said in a world where volatility and uncertainty are given, diversity of alternatives would provide resilience and "it is important to avoid excessive lock-ins". Flexibility in energy supply and also in demand centre will be a challenge, he said.

According to Energizing India, a report brought out by Shell along with TERI (The Energy and Resources Institute) and Council on Energy, Environment and Water, India is likely to rely on coal for 55 per cent or more of its primary energy needs through the next three decades. "All model scenarios suggest that the contribution of renewables to electricity generation by 2030, even with the best efforts, will not exceed 30 per cent. The use of coal could peak by 2040," it said.

A "no-regret strategy" for the power sector would focus on the rollout of efficient thermal power in the near to medium term and to use it optimally over its technical life. The study points out that transmission of electricity is almost always cheapest than transporting coal. "Also, given the country eventually intends to move to cleaner generation options, investments in coal mining and processing infrastructure must also be judiciously planned for," said the study.

Bentham said India was a significant country in the global transition in the energy system. "With a sixth of world population and as a decent way of life grows from minority to majority, by 2030s, Indian energy development will account for the biggest part of global development. India will not only be influenced by global development, but will also be an influence in global development."

He said technology is driven in a connected world by global development. Having local partners and wisdom is very important for unleashing that potential. "For reasons of sustainability, more than half of all energy will be consumed as electricity by the end of this century. But you can't do everything with electrons, you need molecules," he said.

Bery said the paradox was that pricing intervention was good for altering people's choices but not from fiscal point of view. Further, as people are struggling with how to create a climate for investment given the tremendous uncertainty on global price and technology, there is no easy answer. "Flexibility in energy supply and in demand centre will be a challenge," he said.

The study gives seven scenarios for energy demand including low-carbon inclusive growth and scenario where renewable energy plays an important part. For each of these scenarios, demand prediction for energy has been made.