Energy was never in such demand as it is today. The hunger of developing nations for energy has increased manifold and there is a heavy shortfall in production. The rising demand for energy has led to prices spiraling up and the deterioration of environment. Escalating fuel prices have put us in a precarious position. Indian industry is becoming less competitive. Furthermore, increasing gas prices question the viability of many major power and fertilizer projects. Our new discoveries of gas are yet to translate into usable fuel for the economy. Major regulatory issues with gas pipelines pertain to open access and fixation of tariffs for private developers (in the context of competitive bidding). These issues throw up a huge challenge as we oscillate from pure market to complete regulation at this nascent stage of development of the gas market. Furthermore, the international prices of coal have increased considerably in the last few years. India has increased its import of coal by five-fold for power growth and prices will only increase with major power projects coming up (UMPP) based on imported coal.
India's burgeoning demand for oil which outstrips domestic production is keeping us increasingly dependent on oil imports. Furthermore, geopolitical developments and fluctuations in exchange rates are also increasing the uncertainty in India's energy security. Moreover Across the world, there is growing concern about global warming and its impact on the earth’s ecosystem. Carbon dioxide levels are at their highest since the industrial revolution and are continuously rising. Today, most scientists agree that global warming in the last few decades has primarily been caused due to human activities which have increased the release of Greenhouse Gases in the atmosphere, deforestation, urbanization etc.. The major unease is the future atmosphere of earth which would be completely different if the rate of environmental pollution is not stalled. There is stress to use clean energy which will not pollute the environment. The conventional fuels – oil, coal, coke, natural gas, etc. – are limited. As the demand for these fuels increase, these resources are diminishing day by day.
Financial uncertainty in the world commodity markets, falling demand, sliding oil prices and the resultant halting of investments in fresh refining capacities, may lead to a hardening of medium to long term fuel prices. Nations adopting protectionist policies to insulate their economies from the impact of these developments may impact India's ability to access fossil fuels.
Coal
Coal is India's primary source for power generation and will be for some time to come. Apart from tremendous environmental flack, coal is facing supply chain constraints and reserves are limited. Indigenous coal production has picked up. However, India's premier coal supplying agency has clearly stated its inability to meet the rising demand. With numerous upcoming Ultra Mega Power Projects (UMPPs) being coal based, India needs to import more coal and step-up mining. However, bottlenecks in pre-mining clearances are severe, progress in imports are very slow, and existing infrastructural support (rail, road, and port) is not able to cater to the required increase in coal imports and its subsequent distribution.
Gas
New gas discoveries are not going to be able to meet the demand. As of now over 5,000 MW of gas fired plants are lying idle due to non availability of gas. This is despite the government's decision to increase gas allocation from the KG basin for existing power generation capacity on a priority basis. Due to the nascent stage of development of the gas infrastructure, gas continues to be a marginal fuel for power generation in the Indian context so far. Considering gas is a priority fuel for fertilizers, city gas networks, and transport, besides power, the development of the gas sector is still to take off in any substantive manner as we are yet to connect small and medium towns with gas grids. We need to formulate a strategy on how we will allow merchant gas to access gas pipelines and the consequent transition from 'contract carriage to common carrier'.
Oil
Falling oil prices reflect a global economy in recession. Indian industry too faces a looming recession due to lack of domestic and global demand. While the cross subsidy burden on oil, borne by the Indian industry will decrease, low oil prices have discouraged the setting up of new refining capacities leading to costlier petroleum products in the long run. Consequently, India needs to come out with strategies to combat the challenges that will emerge from this scenario. Cash rich upstream companies can scout for cheaper oil assets abroad and re-negotiate expensive offshore exploration contracts and study options for alliances in mid-stream or downstream segments of the value chain.
Nuclear Power
With the signing of the Indo-US nuclear deal, India is looking at nuclear power as a major element in moving towards energy independence. The deal gives India access to new technology and enriched nuclear fuel after over 30 years of isolation. With this major development, and keeping in mind depleting fossil fuel resources and global pressure for emissions reduction, India now has a real opportunity to boost its energy generation capability to meet the future demand of its growing economy while simultaneously meeting environmental concerns. As India has a severe capital constraint and nuclear power requires heavy investment, there is an obvious need for significant participation from the private sector, which the state needs to encourage.
Day by day the cycle of climate on earth is changing. Rapid economic development and incessant tapping of natural resources have posed severe problems for the life system on our planet. Mankind now confronts by far the biggest environmental challenge in the form of Global Warming: the gradual increase in the Earth’s temperature, which brings about noticable change in the climatic condition. Global Warming has led to season shifting, changing landscapes, rising sea levels, increased risk of drought and floods, stronger storms , increase in heat related illness and diseases all over the world. Across the world, there is growing concern about global warming and its impact on the earth’s ecosystem. Carbon dioxide levels are at their highest since
the industrial revolution and are continuously rising. Today, most scientists agree that global warming in the last few decades has primarily been caused due to human activities which have increased the release of Greenhouse Gases in the atmosphere, deforestation, urbanization etc. Day by day the cycle of climate on earth is changing. Rapid economic development and incessant tapping of natural resources have posed severe problems for the life system on our planet. Mankind now confronts by far the biggest environmental challenge in the form of Global Warming: the gradual increase in the Earth’s temperature, which brings about noticable change in the climatic condition. Global Warming has led to season shifting, changing landscapes, rising sea levels, increased risk of drought and floods, stronger storms , increase in heat related illness and diseases all over the world. Across the world, there is growing concern about global warming and its impact on the earth’s ecosystem. Carbon dioxide levels are at their highest since
the industrial revolution and are continuously rising. Today, most scientists agree that global warming in the last few decades has primarily been caused due to human activities which have increased the release of Greenhouse Gases in the atmosphere, deforestation, urbanization etc.
