STATING that the ‘Make in India’ campaign needs energy to work and efficiency to prosper, a report on the ‘India Energy Outlook’ by the International Energy Agency says that putting manufacturing at the heart of India’s growth model means a large rise in the energy needed to fuel development. The report, released at IIT-Bombay on Tuesday, projects that the country requires a cumulative $2.8 trillion in investment in energy supply, three quarters of which will go to the power sector and a further $0.8 trillion to improve energy efficiency.
“Industry-led growth requires at least 10 times more energy per unit of value added compared with growth led by the services sector. In an Indian vision case, we examine the implications of accelerated realisation of key policy targets, including the ‘Make in India’ campaign to promote manufacturing and the ‘24×7 power for all’ drive for universal, round-the-clock electricity supply. Fully reliable provision of power and new employment opportunities in the manufacturing sector gives extra impetus to India’s economic and social development and its transition to an urban society. The additional demands on the energy system come primarily from industry, not only from energy-intensive sectors but also from other industries that are targeted by the ‘Make in India’ campaign, such as textiles, food processing, machinery and industrial equipment,” it says.
It further says that energy use for road freight, residential consumption and for a more mechanised and productive agricultural sector also rise. The report says to avoid that this extra demand exacerbates energy security and environmental strains requires an even stronger commitment to energy efficiency.
“Opening new, long-term and low-cost financing options is critical to direct investment towards high efficiency and low-carbon technologies. A transparent system of approvals and clearances needs to allow viable projects to move ahead according to a predictable timetable, while safeguarding the consultation and accountability that is essential to win public consent,” it adds.
The report says India’s power system needs to almost quadruple in size by 2040 to catch up and keep pace with electricity demand, which boosted by rising incomes and new connections to the grid increases at almost five per cent yearly.
IIT-Bombay Prof Rangan Banerjee said the country needs to meet requirements in a way that it creates jobs and growth. “Energy is not just for requirement. In the Indian context, we need to look at energy at what price, and its impact in terms of job and the local economy,” he said, adding that “every five-year plan, we have less generation than what we had planned for because we ran short of money”.
According to Dr Ashok Sreenivas, senior research fellow, Prayas (energy group), the least addressed aspect in the country is institutions and how capable they are to formulate, execute and regulate policies. “Institutions in India are not yet mature enough or strong enough to be able to handle some of the transitions we need to make. There is also a significant gap in research and analytical capacities even outside the government. Perhaps the weakest link in our institutional structure are the local municipal bodies. The urban local bodies are weekly empowered, they can only frame policies and not laws…,” he said.