IEA Launches First In-depth Review of India’s Energy Policies

India has made strong progress in providing clean,secure and affordable energy to its citizens, according to IEA policy review

In partnership with NITI Aayog, International Energy Agency (IEA) today released the first in-depth review of India’s energy policies.

The report highlights the achievements of India’s energy policies and provides recommendations to support the government’s goals of promoting well-functioning energy markets and boosting deployment of renewables.

Dr Fatih Birol (Executive Director of the IEA) presented the key findings of the review in New Delhi in the presence of Shri Pralhad Joshi (Minister of Coal), Shri Dharmendra Pradhan (Minister of Petroleum and Natural Gas and Minister of Steel), Shri R K Singh (Minister for Power and Renewable Energy), Dr Rajiv Kumar (Vice Chairman, NITI Aayog), Shri Amitabh Kant (CEO of NITI Aayog), key energy secretaries, ambassadors and think tanks.

IEA regularly conducts in-depth reviews of energy policies for its member and association countries.This is the first review carried out for India, which has been an IEA-association country since March 2017.

Introducing the report, NITI Aayog Special Secretary Shri RP Gupta welcomed and commended the hard work of the IEA. He said, ‘As India builds on the remarkable growth and development of its energy sector, this in-depth review will help the Government in meeting its energy objectives by setting out a range of recommendations in each energy policy area.’

NITI Aayog CEO Amitabh Kant, who had brought up the idea with IEA to conduct the review, said: ‘With clear goals in place, the country is making great strides towards affordable, secure and cleaner energy for all its citizens. India is working hard to move towards its aspirations of transforming the energy sector.’

‘IEA has the privilege of enjoying a close relationship with India. This first in-depth review of the country’s energy policies illustrates the value of our growing collaboration,’ said Dr Birol.

‘The energy choices that India makes will be critical for Indian citizens as well as the future of the planet. This was demonstrated at IEA’s 2019 ministerial meeting, which mandated the Agency to start consultations with India for a strategic partnership that could serve as a path to eventual membership, a game-changer for international energy governance.’

The IEA report congratulates the Indian government on its outstanding achievements in extending citizens’ access to electricity, affordable efficient lighting and clean cooking in record time through historic schemes like SAUBHAGYA, UJALA and UJJWALA,while pursuing energy market reforms and the swift deployment of renewable technologies. The report highlights the strong growth of renewables in India, which now accounts for almost 23% of the country’s total installed capacity. The review also found that energy efficiency improvements in India avoided 15% of additional energy demand, oil and gas imports, and air pollution as well as 300 million tonnes of CO2 emissions between 2000 and 2018.

India is becoming increasingly influential in global energy trends. The country’s demand for energy is set to double by 2040, and its electricity demand may triple, according to the IEA report. Indian oil consumption is expected to grow faster than that of any other major economy. This makes further improving energy security a key priority for India’s economy, says the IEA.

IEA welcomes Indian government policies designed to conduct large-scale renewable energy auctions, open up coal mining to private companies, and promote access to oil and gas markets for foreign investors. The report offers a wide range of recommendations for reforms in support of India’s goal of promoting open and well-functioning energy markets in sectors such as coal, gas and electricity. These include building strong regulators to ensure non-discriminatory access, moving from state allocation to market pricing, and further rationalizing energy subsidies.

In India’s renewables-rich states, the share of variable renewables in electricity generation is already above 15%, a level that calls for dedicated policies to ensure they integrate smoothly into the power system. NITI Aayog can play a strong role in working with the states to implement power sector reforms, advance grid integration, improve flexibility and coordinate energy policy decisions.

The review also strongly encourages India to institutionalise energy policy coordination across government with a national energy policy framework.

Power and Renewable Energy Minister R K Singh congratulated IEA and NITI Aayog for the launch of the report: ‘India’s energy policy is a global story. India has the largest unified power grid that operates in a single frequency. India has moved from scarcity to surplus electricity over the past few years, while implementing the largest and the fastest energy access improvement and energy efficiency programmes in the world.’

Coal Minister Joshi said,‘With the support of Amitabh Kant and Dr Rajiv Kumar, India recently launched commercial mining operations. IEA’s report will be very helpful for designing our future course of action in the energy sector.’

Petroleum and Natural Gas Minister Pradhan said:‘NITI Aayog has already started preparing a National Energy Strategy, and I would like to propose an annual event where NITI and IEA can bring together global energy stakeholders to have a structured energy dialogue. We look forward to engaging with IEA on oil security and on helping India move towards a natural gas-based economy.’

NITI Aayog Vice Chairman Dr Kumar emphasised that India’s energy goals cannot be achieved without a strong coordination of policies and targets between Central and state governments, notably on electricity market design and renewable targets, and that a stronger cooperation is therefore needed on these fronts.

The report will help India to design implementation strategies to achieve secure and sustainable energy access for its citizens.