India 2020 Energy Policy Review India 2020 Energy Policy Review INTERNATIONAL ENERGY AGENCY
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India 2020 Energy Policy Review India 2020 Energy Policy Review INTERNATIONAL ENERGY AGENCY The IEA examines IEA member IEA association the full spectrum countries: countries: of energy issues including oil, gas Australia Brazil and coal supply and Austria China demand, renewable Belgium India energy technologies, Canada Indonesia electricity markets, Czech Republic Morocco energy efficiency, Denmark Singapore access to energy, Estonia South Africa demand side Finland Thailand management and France much more. Through Germany its work, the IEA Greece advocates policies Hungary that will enhance Ireland the reliability, Italy affordability and Japan sustainability of Korea energy in its 30 Luxembourg member countries, Mexico 8 association Netherlands countries and New Zealand beyond. Norway Poland Portugal Slovak Republic Spain Sweden Switzerland Turkey United Kingdom United States The European Commission also participates in the work of the IEA Please note that this publication is subject to specific restrictions that limit its use and distribution. The terms and conditions are available online at www.iea.org/t&c/ Source: IEA. All rights reserved. International Energy Agency Website: www.iea.org Foreword India’s achievements in the energy sector in recent years have been outstanding. Led by Prime Minister Shri Narendra Modi and his ministers, the Government of India is implementing reforms towards a secure, affordable and sustainable energy system to power a robust economic growth. The country has made huge strides to ensure full access to electricity, bringing power to FOREWORD more than 700 million people since 2000. It is pursuing a very ambitious deployment of renewable energy, notably solar, and has boosted energy efficiency through innovative programmes such as replacing incandescent light bulbs with LEDs (under the Ujala scheme). And it is addressing the serious health problems caused by air pollution for its major cities, providing 80 million households with liquefied petroleum gas connection (under the Pradhan Mantri Ujjwala Yojana scheme), thereby reducing the exposure from biomass cooking stoves, a major cause of respiratory diseases. India is also introducing important energy pricing reforms in the coal, oil, gas, and electricity sectors which are fundamental to further opening the energy market and improving its financial health. It is taking significant steps to enhance its energy security by fostering domestic production through the most significant upstream reform of India's Hydrocarbon Exploration and Licensing Policy (HELP) and building up dedicated oil emergency stocks in the form of a strategic petroleum reserve. The scale of these achievements is hard to overstate. Building on co-operation that goes back to 1998, India joined the IEA family in March 2017 when it became an Association member, a major milestone in our bilateral collaboration. This relationship has flourished since then with co-operation across all energy sector-related ministries. The IEA benefits greatly from this partnership given India’s importance in global energy markets and the remarkable insights it provides to other IEA members. The IEA has been conducting in-depth peer reviews of its member countries’ energy policies since 1976. As the IEA opens its doors to emerging economies, our in-depth policy review process is playing a bigger role in our bilateral collaboration with Association countries, and draws upon the unique expertise of the IEA family at large. In January 2019, a team of senior international energy experts visited India to discuss the challenges and opportunities of India’s energy sector with stakeholders from government, industry and academia. This report is the product of those discussions and intensive exchanges between the IEA, the review team and the Indian government throughout the year. This review for India provides a crosscutting overview of India’s energy policy and real-world policy advice and makes recommendations for all areas of India’s energy sector. I would like to thank the Government of India, notably NITI Aayog CEO Mr Amitabh Kant and his team for the excellent collaboration on this project. My gratitude goes to Ambassador Noé van Hulst from the Netherlands, for leading this review, and to the peers from Canada, Sweden, Switzerland, the United Kingdom, the United States and the European Commission. reserved. rights All 3 IEA. FOREWORD Reports like this in-depth review highlight India’s excellent achievements and best practices, while at the same time guiding India in its ambitious energy transition, supporting energy policy development, and learning from international experience. I look forward to working even more closely with the Government of India and supporting them in taking their energy policy forward. Dr. Fatih Birol Executive Director International Energy Agency reserved. rights All 4 IEA. ENERGY INSIGHTS 1. Executive summary .....................................................................................................13 India is making great strides towards affordable, secure and cleaner energy ................. 13 Major energy reforms lead to greater efficiency ............................................................. 13 India is making energy security a priority ....................................................................... 14 CONTENTS Significant progress in sustainable development ........................................................... 15 Energy technology and innovation enables “Make in India” ........................................... 17 Key recommendations .................................................................................................. 18 2. General energy policy .................................................................................................19 Country overview .......................................................................................................... 19 TABLEOF Major energy supply and demand trends ....................................................................... 20 Energy consumption ..................................................................................................... 21 Political system and energy sector governance ............................................................. 26 Governance of public companies in the energy sector ................................................... 28 Economy and the energy sector .................................................................................... 30 Energy and climate policy ............................................................................................. 33 Energy taxation and subsidies ....................................................................................... 35 Energy data and statistics in India ................................................................................. 37 Assessment .................................................................................................................. 38 Recommendations ........................................................................................................ 43 ENERGY SYSTEM TRANSFORMATION 3. Energy and sustainable development.......................................................................45 Overview ....................................................................................................................... 45 Energy, environment and sustainable development: An integrated policy response in the context of SDGs ............................................................................................................ 46 Assessment .................................................................................................................. 69 Recommendations ........................................................................................................ 73 4. Energy efficiency .........................................................................................................77 Overview ....................................................................................................................... 77 Supply and demand trends ........................................................................................... 79 Energy consumption by sector ...................................................................................... 79 Policy framework and institutions .................................................................................. 86 reserved. rights All 5 IEA. TABLE OF CONTENTS Policies and programmes .............................................................................................. 87 Assessment .................................................................................................................. 94 Recommendations ...................................................................................................... 101 5. Renewable energy .................................................................................................... 107 Overview ..................................................................................................................... 107 Supply and demand trends ......................................................................................... 108 Institutions ................................................................................................................... 110 Policy and regulation ................................................................................................... 111 Assessment