Follow Us:
Friday, July 01, 2022

‘Diversified mix of energy sources’ may be key amid rising fuel prices

🔴 Notably, the government has already started moving on setting up large battery storage system - something that has encouraged multi-million dollar deals in the energy storage technology.

Written by Karunjit Singh , Pranav Mukul | New Delhi |
Updated: February 1, 2022 6:38:49 am
Income tax slabs 2022, Income tax, Union Budget 2022, Nirmala Sitharaman, Taxpayers, budget news, Business news, indian expressUnion Finance Minister Nirmala Sitharaman. (PTI)

In what could signal a policy push in the upcoming Union Budget for 2022-23, the Economic Survey for 2021-22 has flagged concerns with both clean energy sources and increasing prices of conventional fuel sources, calling for adoption of an approach having a “diversified mix of sources of energy of which fossil fuels are an important part”.

On the policy front, specifically, it has highlighted three points that will be pertinent:

1. The pace at which shift from conventional fossil-fuel based sources is made. This pace will determine the extent and mix of investment in renewable sources of energy, it said.

2. It also pointed out the importance of avoiding the risk of being a late comer in the net-zero emission plans given that developed countries are already front-runners. This is pertinent because of the inelastic supply of minerals and metals critical for developing clean energy sources, which is causing the prices to shoot up, even more so in the future.

Best of Express Premium
Explained: What unchanged small savings rates mean for banks, saversPremium
Fadnavis stunned, but BJP clear about reasons, kept Eknath Shinde in loopPremium
Don’t ignore the services sectorPremium
With Shinde in seat, BJP defangs Uddhav, next stop BMCPremium

3. Lastly, it called for encouraging of research and development to ensure effortless switch to renewable sources of energy. This may also include focus on developing technology that recycles, reuses and repurposes minerals, it said.

“The recent surge in prices of natural gas in Europe on account of higher energy demand coupled with cold spells across the region and slower winds to run wind turbines has resulted in lower electricity output. The energy crisis being experienced by Europe brings to the fore the need for having a diversified mix of sources of energy of which fossil fuels are an important part. Simultaneously focus should be laid on building storage for intermittent electricity generation from solar PV and wind farms to ensure on-demand energy supply,” the Survey noted.


Can cut time and red tape

As energy crises are being experienced in various parts of the world, mostly notably in Europe, the focus for India needs to turn to a balanced approach of switching to renewable esources and easing out fossil-fuel based ones.

Notably, the government has already started moving on setting up large battery storage system — something that has encouraged multi-million dollar deals in the energy storage technology, including grid-scale stationary storage applications. The Centre has already announced plans to float tenders to set up 13 GWh grid-scale battery storage systems in Ladakh region, in addition to building a 14 GWh grid-scale battery storage system at the world’s largest renewable energy park at Khavda in Kutch in Gujarat.

Power Minister RK Singh had recently said that the government will soon come out with an energy storage policy which may delicense the setting up of standalone energy storage systems with a view to expand the use of storage systems in the country to enable smooth transition to clean energy. Singh has repeatedly called out western countries for low investments in developing energy storage technology to bring down the price of storage.

Separately, analysts are predicting that crude oil prices to could rise to as high as $125 per barrel due to geopolitical tensions in the middle east and in Europe as Russia has amassed a large number of troops on its border with Ukraine.

Further, key oil producing countries have kept crude oil supplies on a gradually increasing production schedule despite a sharp increase in global crude oil prices. Earlier this month OPEC decided to increase its overall daily production levels by only 400,000 barrels per day in February despite its own forecast that oil demand would rise by 4.15 million barrels per day in 2022. India has repeatedly called on OPEC to increase production to meet the rise in global demand noting that high crude oil prices are undermining the post pandemic economic recovery in emerging nations.

UPSC KEY Have you seen our section dedicated to helping USPC aspirants decode daily news in the context of their exams?

📣 Join our Telegram channel (The Indian Express) for the latest news and updates

For all the latest Business News, download Indian Express App.

  • Newsguard
  • The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.
  • Newsguard