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Understanding Energy Challenges in India

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Understanding Energy Challenges in India PARTNER COUNTRY SERIES Understanding Energy Challenges in India Policies, Players and Issues PARTNER COUNTRY SERIES Understanding Energy Challenges in India Policies, Players and Issues Sun-Joo Ahn and Dagmar Graczyk INTERNATIONAL ENERGY AGENCY The International Energy Agency (IEA), an autonomous agency, was established in November 1974. Its primary mandate was – and is – two-fold: to promote energy security amongst its member countries through collective response to physical disruptions in oil supply, and provide authoritative research and analysis on ways to ensure reliable, affordable and clean energy for its 28 member countries and beyond. The IEA carries out a comprehensive programme of energy co-operation among its member countries, each of which is obliged to hold oil stocks equivalent to 90 days of its net imports. The Agency’s aims include the following objectives: n Secure member countries’ access to reliable and ample supplies of all forms of energy; in particular, through maintaining effective emergency response capabilities in case of oil supply disruptions. n Promote sustainable energy policies that spur economic growth and environmental protection in a global context – particularly in terms of reducing greenhouse-gas emissions that contribute to climate change. n Improve transparency of international markets through collection and analysis of energy data. n Support global collaboration on energy technology to secure future energy supplies and mitigate their environmental impact, including through improved energy efficiency and development and deployment of low-carbon technologies. n Find solutions to global energy challenges through engagement and dialogue with non-member countries, industry, international organisations and other stakeholders. IEA member countries: Australia Austria Belgium Canada Czech Republic Denmark Finland France Germany Greece Hungary Ireland Italy Japan Korea (Republic of) Luxembourg Netherlands New Zealand Norway Poland Portugal Slovak Republic © OECD/IEA, 2012 Spain International Energy Agency Sweden 9 rue de la Fédération 75739 Paris Cedex 15, France Switzerland Turkey www.iea.org United Kingdom Please note that this publication United States is subject to specific restrictions that limit its use and distribution. The European Commission The terms and conditions are available online at also participates in http://www.iea.org/termsandconditionsuseandcopyright/ the work of the IEA. Page | 3 © OECD/IEA 2012 Understanding Energy Challenges in India Policies, Players and Issues Table of contents Acknowledgements ................................................................................................................. 6 Executive summary ................................................................................................................. 7 Introduction .......................................................................................................................... 10 Page | 3 1. Country background .......................................................................................................... 11 Political system ........................................................................................................................ 11 Economic development ........................................................................................................... 12 Social context........................................................................................................................... 13 2. Energy policy framework ................................................................................................... 16 Policy context .......................................................................................................................... 16 Institutional arrangements ...................................................................................................... 18 Key energy policies .................................................................................................................. 21 3. Overview of the energy sector ........................................................................................... 24 Energy demand ........................................................................................................................ 24 Energy supply .......................................................................................................................... 26 Carbon emissions ..................................................................................................................... 27 4. Power sector ..................................................................................................................... 29 Policy framework ..................................................................................................................... 29 Supply ...................................................................................................................................... 34 Transmission ............................................................................................................................ 38 Distribution .............................................................................................................................. 40 Sectoral consumption .............................................................................................................. 41 Issues ....................................................................................................................................... 43 5. Coal sector......................................................................................................................... 46 Policy framework ..................................................................................................................... 47 Supply ...................................................................................................................................... 50 Demand ................................................................................................................................... 53 Issues ....................................................................................................................................... 55 6. Oil and gas sector .............................................................................................................. 58 Policy framework ..................................................................................................................... 58 Oil sector .................................................................................................................................. 62 Gas sector ................................................................................................................................ 67 7. Renewable sector .............................................................................................................. 72 Policy framework ..................................................................................................................... 72 Supply ...................................................................................................................................... 75 Energy access ........................................................................................................................... 76 Issues ....................................................................................................................................... 78 Understanding Energy Challenges in India © OECD/IEA 2012 Policies, Players and Issues 8. Nuclear sector ................................................................................................................... 80 Policy framework ..................................................................................................................... 80 Supply ...................................................................................................................................... 82 Issues ....................................................................................................................................... 84 Page | 4 9. Challenges ......................................................................................................................... 85 Players ..................................................................................................................................... 85 Pricing ...................................................................................................................................... 87 Investment ............................................................................................................................... 88 Implementation ....................................................................................................................... 89 Policy ........................................................................................................................................ 91 Political will .............................................................................................................................. 91 Conclusion ............................................................................................................................ 93 Annex: India’s five regional grids............................................................................................ 94 Acronyms, abbreviations and units of measure .....................................................................
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