Green pathways to energy security

As the world wades through the slurry of falling fossil fuel reserves and attempts to prevent an oil shock more acute than ever before in history, arguments in favour of renewable sources of energy are gaining ground. It was to facilitate new ideas towards effective policy making in this regard that TERI brought together a plethora of bright minds for a panel discussion on ‘Green Pathways to Energy Security’. Roshni Sengupta reports.

Matthew R Simmons, on account of the arguments he makes in his book Twilight in the Desert: the coming Saudi oil shock and the world economy, comes across as a visionary. His thesis, though simple, is revolutionary. He predicts that the endgame for Saudi oil supplies has begun and it is likely that the world will see a significant dip in the production index of Saudi oil fields. Now that is a scary prospect, the repercussions of which would rock the world’s economy.

IEA (International Energy Agency) projections are the icing on the cake. Oil demand in 2030 is expected to be 121.3 MBD (million barrels per day) as against 77 MBD in 2002. So, is the desert kingdom ready for an increase in oil production and supply, given the fact that a large part of this boom shall be absorbed by Saudi Arabia? What role will the non-OPEC (Organization of the Petroleum Exporting Countries) countries, such as India, play if the present energy crisis grows beyond proportions? Critical questions without any immediate answers.

India’s engagement with natural gas is a positive way forward. However, considering the current geo-political scenario and the complexities and challenges that exist on the path towards global energy security, attention needs to be paid to the development of markets, infrastructure, and legislation at the domestic level. As negotiations over the nuclear status of Iran and the unresolved conflict between Israel and Lebanon seem continue unabated, the stakes for the rest of the world in terms of energy requirements keep rising.

The dark shadow of the burgeoning energy crisis – premised very starkly on the dark colour of oil – is growing by the day. This approbation of the approaching doomsday has prompted everyone, from energy experts to social scientists and policy makers, to look inward and come up with a workable strategy for the future, based on renewable forms of energy.

The panel discussion on ‘Green Pathways to Energy Security’ provided a forum for such necessary deliberations. ‘Green pathways, to my mind, should be built on two guiding principles. The first is energy conservation by way of adopting efficient tools and techniques in the entire energy cycle of extraction, conversion, transportation, storage, and consumption. The second guiding principle is to use renewable energy resources, such as solar, wind, biomass, and hydro-power for a variety of applications,’ said Mr Jyotiraditya Scindia, Member of Parliament, speaking on the occasion.

His views were seconded by Dr R K Pachauri, Director-General, TERI who stressed the need for reducing the dependence on oil and related products, such as petroleum, both, at the global as well as the local level. ‘A failure to undertake such a step,’ said Dr Pachauri, ‘will lead to irreversible environmental problems, which would be difficult to overcome’. Global developments bear out this statement. Natural gas has emerged as the fuel for the 21st century. Not only is it cleaner and more efficient than fossil fuels, such as coal and oil, it is also abundantly available. Ensuring the development of international, interdependent gas markets; hinged on investor confidence, reciprocal access, financial capital, and government backing; is the key to receding dependence on fossil fuels.

The current trend of resource nationalism only serves to speed up the impending energy shock. Countries have tended to respond to high energy prices by acquiring oil and gas reserves, when not available domestically, or using the available resources as a cover to flex geopolitical muscle, when required. Energy, thus has emerged as a powerful tool for international political and economic maneuvering, a development that might acquire extremely dangerous dimensions for the world at large.

How has India responded to this urgent international energy crisis? ‘The Government of India, in its Integrated Energy Policy Report, has set a vision of securing future of energy in India,’ explained Mr Scindia, adding that ‘the government has also, through the policy document, made sure that the energy services should be safe, reliable, techno-economically viable, and sustainable considering different fuels and forms of energy, conventional as well as new and alternate sources’.

The distinguished speakers discussed various ways in which energy regulation and efficiency could be brought about. Energy-efficient design and construction of buildings was identified as one such step towards a greater level of energy conservation. ‘The fast-developing SEZs (Special Economic Zones) could turn out to be a death warrant for the environment unless legislation is put in place at the central level so that the buildings of the future are not replicas of the current crop,’ warned Dr Pachauri.

Mr Scindia further emphasized the vast potential of renewable sources of energy. ‘In India, renewables contribute over 8 000 MW of power generation presently. The Integrated Energy Policy Report, however, has projected over 1 00 000 MW capacity to come from renewables’. He particularly singled out facilitating mechanisms, such as state-of-the-art and cutting edge technologies, a conducive policy and regulatory regime, fiscal and financial incentives, among others that could aid the achievement of these targets.

Dr Pachauri seconded the view by stating that misplaced subsidies are the key. ‘Instead of targeting fuels like kerosene for subsidies, the price mechanism has to be geared towards renewable energy-powered products, such as a solar lantern. Innovation can leads to solutions. Why not adopt a system of smart cards for the poorer sections of the society?’ he said raising a pertinent question in light of the debilitating energy crisis looming over large parts of the world.

In light of the fact that oil prices have spiraled out of control and supplies continue to walk the tightrope, one must look back over the events of the last five years. Technological advances, such as seismic imaging and reservoir management, in the 1990s, led to investments by international companies in areas, such as Russia and the Caspian. As a result, supplies grew while prices remained moderate. In April 2000, driven by the need for revenues by countries with a burgeoning population, the OPEC member-states set a price framework for oil at around 25 dollars a barrel.

The other fundamental change came about on the demand-side. The demand for oil over the past two years has grown by almost 5 MBD. Chinese imports alone grew by 1.4 MBD and demand increased by 70%, primarily due to economic growth and prosperity. The overall impact of this development prompted experts the world over to contemplate a delayed return to the calm and balance of the 1990s. High prices, coupled with an anticipated increase in the demand for oil and the dwindling reserves of the most preferred fossil fuel, are the primary causes of the energy insecurity pervading the world. Even though soothsayers predict that the world has enough oil to last another 40 years of continuous supply at the current rates of consumption, the countdown to the fuel downslide has begun in earnest.

To make a case for the rapid adoption of renewable sources of energy, keeping this scenario in mind, would make things simpler, more efficient, and pollution-free. Emphasizing the need to make rapid strides towards renewables, Mr Scindia said, ‘The Integrated Energy Policy Report has projected over 1 00 000 MW capacity to come from renewables. This would constitute 12–15% of the total power generating capacity that would be required by 2032 to support an 8% rate of growth’. Not only did he quantify what has been in the pipeline for a very long time, he categorically propagated a greater role of renewables for a cleaner future.

Global facts and figures amply bear out what Mr Scindia painstakingly stressed upon. Total renewable power capacity in the year 2005 stood at 182 Gega watts supported by an investment of 39 billion dollars. The technology leaders were bio-diesel production, which grew to almost double its capacity in 2004, followed by solar photovoltaics, which posted a growth of 60%, and then wind at 24%, the country leaders being Germany and China (each investing 7 billion dollars), followed by USA, Spain, and Japan.

Moderating the discussion, Ms Mythili Bhusnurmath, senior columnist put forth arguments that summed up much of the deliberations taking place on the issue of green pathways to energy security. ‘There are three issues of utmost importance. Firstly, there is less hope pinned on renewables in India. Secondly, dependence on fuels, such as coal, does not seem to be financially feasible. Lastly, but most importantly, there is an urgent need to reduce dependence on fossil fuels,’ said Ms Bhusnurmath. She also held India’s ‘regional hegemon’ status responsible for the energy crisis in South Asia.

The enriching nature of the deliberations on a green future of India, in particular, and the world, in general, contributed a great deal to the fast-growing knowledge base on renewable forms of energy. The fact that the dependence on fossil fuels must be reduced to whatever extent possible was borne out by the lively interactive session that followed the panel discussion. A small step towards creating awareness actually went a long way in getting some of the brightest minds in the country together to formulate what might well be the blueprint of a better tomorrow.