At a time the country is gearing up to reduce the demand-supply gap in power, The Energy and Resources Institute (TERI), the premier body for analysing and proposing resource policies to the government, has been pointing out the gaps in planning. It’s time to take a long-term view and invest in alternative energy sources, TERI’s Executive Director Leena Srivastava tells Sudheer Pal Singh. Excerpts:
How do you weigh the current energy situation in the country?
The situation is critical and will continue to be like this. We are not only facing huge power shortages, but even the future energy supply presents a dismal picture. The shortages are only going to increase in view of the current pace of growth. We may be able to set up a couple of power plants to take care of our short-term needs but at a larger national level we need to start worrying intensively. We will definitely miss the capacity addition target for the current Plan period due to the already-piled-up shortages and rising international prices of oil.
How can we avert this energy shortage?
We have to aim at energy efficiency and conservation in a more aggressive manner. This requires reviewing all pricing policies, whether in energy forms or related to the efficiency of appliances. In addition, we have to encourage more private investment in large production capacities and in smaller areas like solar rooftops and decentralised energy systems. Otherwise the size of the investment challenge will become a major issue.
What is the kind of policy shift that is required, for example in subsidies for fuels like kerosene and CNG.
Subsidy for kerosene is not well-targeted. There are huge leakages and we are not even meeting the objective of providing energy to the poor. Even the tax differential between petrol and diesel is leading to huge dieselisation of the economy. If you want to provide subsidy to a certain class of people, you have to make good the cost of that subsidy to the utility. The whole purpose of setting up an independent regulatory commission was to distance politics from economics and I think we are failing there because of the nature of the commission itself and the people we are selecting. If we make all our institutions puppets, we can only expect the situation to worsen.
Alternative energy resources are associated with large upfront costs. How do we mitigate this problem?
Yes, it’s a question of structuring the finance and the returns. Even in large power projects like UMPPs (ultra mega power projects), we talk of thousands of crores of upfront investment and returns coming over a period of time. So why can’t we think about it for renewable energy projects? I also strongly believe that we need to move beyond short-term economic viability of energy investments — which are strategic in nature — to protect our long-term growth and survivability. One should not think only from the point of view of whether it makes economic sense to make an investment or not. It’s a very short-term view. It is much like investing in military to protect long-term interests and growth.
The shift towards coal to meet our energy needs looks inevitable, but there are environmental concerns. What are your views?
It’s a complex question. We have been saying that coal-based power generation is our way into the future and will continue to be so unless we start actively exploring other ways of development and start making those investments. There are other sources like solar, which the MNRE (Ministry of New and Renewable Energy) is promoting. If we were to start investing in solar energy and bring down its cost and subsidise it substantially in the initial years, we will have a choice in the future. But if we start building coal-based power plants, we lose that choice. And we can’t achieve this if we continue to have a five-year timeframe. We will have to take 30-50 years as our timeframe for planning.
There are concerns whether renewable energy will ever be able to meeet more than 10 per cent of our energy needs
This is an argument. This is what happened in European countries too. But today, when the countries are facing energy shortage, they have started planning to meet 30 per cent of their needs from renewable energy. And after setting these targets, we have to look for ways to achieve those targets. But if you don’t wish to do that, nothing’s going to happen. European countries don’t have more sunshine than us. They might have more wind than us, though.
How would nuclear power change the energy map of the country?
It’ll take a minimum of another 12-15 years to get something of benefit on the nuclear front. We still have to build capacities and allocate resources, get private companies involved and create consumer awareness and environmental and safety norms. It’s a long way to go. India is a very densely populated country, where are you going to place the nuclear power plants?
