World — ISSN 2230-8458 U.S. Library of Congress No.: 80910345 FOCUS — cciorer i ~ India’s Quest For ENERGY SECURITY Securing Energy within and beyond borders Rs. 100 Next Issue US $ 20 India’s Foreign Policy(Series-1) INDOCENTRIC FOREIGN AFFAIRS MONTHLY JOURNAL,qu sepeasteaters The happiness of knowing that reuse the future is full of joy. BINA Neate apne Hat ja for you Behr seeryore ced, Sa, wth ae heat Iurance Medhiise’ pax ‘ecru pase bagless tam ea Advantage: Secien #00 IFECO-TOKIO General Insurance Company LimitedWORLD INDOCENTRC FOREN AFFAIRS MONTHLY JOURNAL Volume XXXV_ Number 10 October 2014 G. Kishore Babu Editor Bhabani Dikshit Managing Editor ‘StutiS. Mandala “Associate Editor WORLD FOCUS takes up every month one fterational issue and gives an analysis of ts various aspects by persons well known for their specialisation inthe subject. The issues covered are topical or near topical, but of an abiding interest. ‘The analysis is simple enough to interest even an inate to word affairs, but without sacrificing depth, ‘The aim is to present an Indocentric view on a particular issue currently facing the word Opinions expressdin the articles are personal views ofthe author and in no way reflect the opinion of ‘World Focus. The author i. solely responsible for the contents in his/her article and the Word Focus takes no responsibility in this rogard ‘The Contents ofthis magazine cannot be reproduced Jn any form with out prior permission from World Focus. Any legal issues pertaining to World Focus willbe settled in NCT region of Delhi ony. Unsolicited articles will not be returned or scknowledged. World Focus reserves the right to estates for brevity and clarity before publication tet, Ove, Pubs Prise {GKinre Bab oe 49 (Guns Fe So Cl 1 Ectenen, Dei 1002 1 Mocs se, 25/13, Pah Etch Bu, Kea ayant Del - 1005 Copy Right: World Focus, Our Address: ‘World Focus B49, (Ground Hloor) Joshi Colony, IP Extension Delhi - 110092, India ‘BL. Tax : 22246905, Mobile No, 8130754555 nail enfworldfocus@ gmail com ‘Website: wnncworkioeusin EDITORIAL In 1980's. Indias ques for energy to roel he growth nd development mad nin the this day we don’ have a National Renewable Energy Policy or an Aco gue an belp wal owrenersy poy architect The nergy crs nds cane attest the ako innovative pinning an myopic ‘ovilize them inan negated and ols mannerif weareocteatean effective sergy security environment anda new enegyondecin Indi Indian economy itis match, Wend balance on eset enegyreauitemet rd cviesament concems. Depenicace oa Nonenewabe cst andclinate age hs pat ‘he focuson ltemative sources of securing enor. According Prime Minister Narra Modi, am Intorntonal movement called "Sons of Si shoal be crested in anseiation harvesting st afodabie costs shouldbe insted, ‘When we look Losey, Energy stor politicized the world over One sch example oft {athe US President amas pragmatic 360° fom Green eet Shale Gis he nterest ‘ofthe natin. The Energy sector hasbeen crucial nthe ansformaton ofthe Rusia Econo. nda can beef fom deccning energy tis andre ener colar with energy and technology rich conti to mest Ii reds. In parle nano work towards crest a crv ronmnet of inerpendence withthe ‘ounce oa tenes ldi's Energy Secu India should pun place a roodmap for ensuring stably i the nergy rich and highly ‘vole Midle-est in an event where the US presence i the next thre devas {oly abgger rae wo protet is ure energy nest. Indistoeld work owards making Ene sor fuera Inhisenevor, we ned ‘mie Neclear power potential Wit gree erst Prime Miner Sia Abe of Tagan es bees puting fora cea rea anh n-cler pespost he Fuktiet sate The developments in Tokyo would npc he couse of ales dhatthe wold ‘over inhading India Unde tne cicumstanccs, we need o actively invest more cms of Reseach nd Development nd we ned to sosiomize the nile plants 9 si out ‘eanreoet We nad ote the nlkn in cofidence by balding consenni al eating thatucr power becomes relly safe Tet ilk of ce-crinton Dtwoon cee ad les nenesy sso, reston ofa Cente State Energy Coun would ere the purpose The policy makers ve fothink ot ofthe box in helping loelaministratons to develop ‘heir ovn energy vision, energy admniseatve lfasractur sad develop energy pole 'y wth he National Energy Poy Inti destin, the Cental Ste ave come {ogstherin lpg tes, towns and viliges ik capaiin Inn sha src nian su hela careny as bsn ‘cid snp vent opie posi anh conta eae ‘eum sperpower itive anglers and pest gare In shin tke ta atoms or ene Atte we pot ron ot ers eig cology moval ts igmed pe uaa ee Ivalice cro nanos nchneeltoneteone ney sk Ne ‘enhepat opener eta ee Uke Bh and Nepal Rok of pve sto an ben very i. The ground aly {nanos pucscercnpnicos he wer in ntsc ese Soultote cae wens ran ong competion ngayon ‘evanng th vtec Reforming PSs Cellnet ‘Shap extn woud ply signa dein oeoning cc stags Shu texan modem oor oy Hii and gran ett dGcgmentwald lpn no scat ancticeteny pected ‘Subs nonce te contemporary andacw watery harvesting chlo Srp gensont cet nm roadway anther tanpratn news ‘Retsil dno mg ony pe cen a {Sensing ction ha wc Te oso itn ect high ‘tincapnneandca topic anda vingswulbeigh stn na {skcoldend nar scons isthe porn etn gy pote WaitorIndia Quest for Energy Security Energy Security: Challenges and Likely Way Ahead Anil Kamboj IG (Retd) ia, China and the Emerging Energy Security Concerns India’s Quest for Energy Securit Dr. Jagdish P. Verm: Energy Security and Sustainable Development in India Dr. Sudhanshu ‘Tripath Japan Cooperation: Energy asa Key Area of Focus Bharti Chhibber. 1's Quest for Energy Securi atish Kumar & Ms. Nisha Shukla. India’s Energy Security and Climate Change: Challenges, Responses and Recommendations Dr. Chanchal Kumai ndia’s Thrust for Energy Security: Sources, Challenges and Impli Dr. Anil Kumar Mohapatra & Susanta Kumar Parida.. India’s Energy Security and the GCC: Challenges and Opportunities Dr. Saleem Ahmad and Ms. Khushbu Gupta. Modi Government's Diplomacy for India’s Nuclear Energy Dr. Rajesh Kumateenne Geothermal Energy ~ An Alternative Source of Clean and Sustainable Energy in India Khyal Chand and Rajender Kumar. India’s Quest for Energy Security: An Analysis of Indi hawna Pokharna. Concerns and Options India-US Energy Cooperatio Ms. Sylvia Mishra Energy Security and South Asian Scenari Abhishek Pratap Singh... India-Iraq Energy Cooperation: Boost with Accomplishments, Twisted with Anoma Dr. Sanjay Kumar Pradhan India and Energy Security Ms. Cauvery Ganapathy... Polities over India-Bangladesh Dr. Prasanta Sahoo. ‘The Role of Unconventional Energy Resources in India’s Energy Security Manish Vaid Energy Secu Ms. Jyoti singh. Energy Cooperation between India and Chi Siba Prasad Sahoo. Ensuring Energy Security in India Dr. Sumant Kumar Swain. ‘Quest for Clean Energy and India’s Nuclear Option Ms, Sukanya Kakot 2 World Focus October 2014 Options for India 100 differing view of Chinese presence Energy Cooperation Concept and Concerns mergy towards SecurityEnergy Security: Challenges and likely way ahead Anil Kamboj IG (Retd) Introduction Access to cheap energy has become essential to the functioning of modern economies. India, the world’s third largest oil importer, needs multi-pronged approach to address its energy security. The country needs a ‘well-coordinated approach of focused research in multi= disciplinary fields, There is no single answer to the question of energy security. Energy security is the association between national security and the availability Of natural resources for energy consumption. Access tocheap energy has become essential to the functioning of modern economies. Renewable energy resources and significant opportunities for energy efficiency exist over wide geographical areas, in contrast to other energy sources, which are concentrated in a limited number of countries. Rapid deployment of renewable energy and energy efficiency, and technological diversification of energy sources, would result in significant energy security and economic benefits. It is times like these when refining margins are under stress that brings out the best innovations. The industry needs to focus on renewable sources to achieve energy security. There is need for a time-bound action plans for carrying out futuristic research to improve energy security in all sectors This rapid growth of power capacity and a subsequent rise in demand can be attributed to several factors ‘© Economic growth and increasing prosperity ‘© Growing rate of urbanization ‘Rising per capita energy consumption ‘© Widening access to energy in the country Energy Security Plan Imports of crude oil in India have increased during the last decade from two-third to four-fifth of consumption, but storage has not kept pace, worsening the situation, India needs more tank farms and pipelines to augment its buffer stocks and buy oil when prices are low. This is important because it forms a key part of the country’s energy security plan. Interestingly, India is the Ione exception among the major oil importing nations, which has ignored firming up an energy security plan. Since December 2006, energy ministers of five ‘major oil importing nations, the US, China, Japan, India and South Korea who together account for nearly half the global consumption, have met over half a dozen times to create a joint strategy for oil procurement. ‘These meetings have been primarily held to persuade China and India to increase their oil storage reserves both for national emergencies as well as for commercial purposes. This would help reduce the immediacy of buying and dampen effects of global oil volatility. Aer much prodding by the US and Japan, India started building its underground storages at Visakhapatnam in Andhra Pradesh and Mangalore and Padurin Karnataka to store about 5.33 million tonnes (mt) of crude oil These storages would be ready by this year, but they barely cater to evo weeks of oil consumption of crude. No action was taken to build commercial tank fa like China did, In 2010, China and India had a 20 day and a seven-day buffer stock position, respectively. Today, China has over 60 days’ stock of crude while India’s reserve allows it just 10 days’ comfort. This makes India overly dependent on short-term purchases and the tenders that its oil marketing companies float are very easily manipulated by the ICE cartel at what is, known as the ‘London loophole. As per Sandip Sen, India has played into the hands of the Swiss commodity traders such as Glencore, Trafigura and Vitol, who along with oil majors such as BP, Shell and Total and large banks such as Morgan Stanley, Goldman Sachs and Societe Generale form the ICE cartel atthe London Commodity Exchange and manipulate the markets of Brent, Nigerian and Dubai crude. In 1986, visionary Chinese leader Deng Xiaoping unveiled the historic “State High Tech Development Plan’ prepared by scientist Wang Ganchang and his team of engineers. ‘The Plan was a long-term route map devised to make Fhergy Security: Challenges and likely way ahead 3China a self-reliant nation and focussed on seven core areas, including energy security In the US, Obama’s “Energy Security Trust has adopted a similar approach, pursuing all energy sources with equal vigour with an aim to eliminate dependence on foreign oil and technology and ensure complete self-reliance and energy security for America. The US and Japan, which have ‘tank farms’ that can store oil for 180 days, can resist global supply shocks; they want other big importers do their bit so that it impacts world prices. At least we should learn something from US President Barack Obama’s strategic energy initiative, The lack of a long-term, energy security plan, which includes storage, is being, sorely felt in India in the form of inflationary pressures, Access to cheap energy has become essential to the day to day functioning. However, uneven concentration / availability of fossil fuel in limited areas. and the critical need to widely access energy resources, hhas led fo significant vulnerabilities. Threats to global energy security include political instability of energy producing countries, manipulation of energy supplies, and competition over energy sources, attacks on supply infrastructure, as well as accidents and natural disasters Nuclear fuel is considered by some to be a relatively reliable power source, being available on the earth crust and also as it reduces the carbon emissions. Although a very viable resource, nuclear power can be a controversial solution because of the dangers associated with it. Another big factor in the debate with nuclear power is that many people or companies simply do not want any nuclear energy plant or radioactive waste near them, Currently, nuclear power provides 13% of the world’s total electricity. Challenges to Energy Security Energy plays an important role in the national security of any given country as a fuel to power the economic engine. Some sectors rely on energy more heavily than others; for example, the Department of Defence relies fon petroleum for approximately 77% of its energy needs. Threats to energy security include the political instability of several energy producing countries, the manipulation of energy supplies, the competition over energy sources, attacks on supply infrastructure, as well as accidents, natural disasters, terrorism, and. reliance on foreign countries for oil. Foreign oil supplies are vulnerable (0 unnatural disruptions from in-state conflict, exporters’ interests, and non-state actors. targeting the supply and transportation of oil resources. ‘The political and economic instability caused by war or other factors can also prevent the proper functioning of the energy industry in a supplier country. For example, the present crises in Middle East have disrupted the supply of crude oil and there is a constant threat to the supply chain, India can be hit hard if the crises continue for long. During the Eleventh Five Year Plan, nearly 55,000 MW of new generation capacity (electricity) ‘vas created, yet there continued tobe an overall energy deficit of 8.74 and peak shortage of 9.00%, according toa Cental Statistics Office report. Resources curently allocated to the energy sector are not sufficient 10 harrow the demand-supply gap. As a result, our dependence on imports is increasing. Going further, this demand-supply rift is only set to widen. In fact, according to the World Energy Outlook 2012, global ‘energy demand is likely to grow by one-third over the period to 2035 with China, India and the Midale East accounting for 60% of the increase. Not to forget, India comes fourth after China, USA and Russia in ‘consuming energy. Besides, it accounts for more than 4.6 % of the total global annual energy consumption, IF India isto maintain an average growth rate of about 89% in the coming years, its energy resources will continue to feel the strain Low number of proven hydrocarbon reserves and lack of interest of foreign players in exploration and production is having a negative impact on India’s energy sector, Less than 25% of our sedimentary basins have been explored for energy resources. The rest are oscillating between ‘exploration initiated’ to ‘poorly explored’. The volume of gas imports has been steadily increasing in India, all the more after the once lucrative KG-D6 basin began to see a dip in its production, Our crude oil import bills too are inflating. During the Twelfth Five Year Plan (2012-2017), import dependence on crude oil is expected to increase from ~76% in FY 11 to ~80% in FY 17 and import dependence ‘on natural gas is expected to increase from ~21% in FY11 to 359% in FYI7. To add to the troubles for India, according to the Coal Ministry website, produetion of coul has risen from 70 million tonnes atthe time of nationalization of coal mines in early 1970's to nearly $57.66 million tonnes in 2012-13. The Twelfth Five Year Plan stresses that it is essential to ramp up coal production to 795 4 World Focus October 2014million tonnes by 2016-17. However, Coal India foresees a 20% shortage in the next five years. The coal sector has been facing challenges on the domestic as well as imports front, While production is seen as. going down, imports face infrastructure and cost hurdles. Pricing is a huge concer in the hydrocarbon and coal sector, as domestic prices are often disconnected from global trends. Regulatory "uncertainties come in the way of investments in the oil and gas upstream sector. Other issues that plague India’s energy sector are delays in land acquisition, rehabilitation and resettlement and obtaining environment and forest clearances, New threats to energy security have emerged in the form of the increased world competition for energy resources due to the increased pace of industrialization in countries such as India and China. China follows up its deals with financial might, When itcomes to securing such international deals, itis never as simple as paying for the gas, Indeed, itis about the ‘whole bouquet of services that a customer can provide, As a result, China has been able to develop a well- diversified energy sourcing portfolio, Compare that to India’s embarrassing past at sewing up deals and our growing dependence on imports. Myanmar is perhaps the most outstanding example. For years, India helped. Myanmar to explore its gas reserves. This was the costly bit. Obviously the idea was to get the gas, through a pipeline, to India, From the very beginning, it was matter of energy security, not financial gain. As things turned out, India’s foreign policy was not in syne with its energy interests. India dropped the ball and as a result China, the late entrant, now has cornered the gas through a pipeline, which became operational last in 2013. Another, more recent example of such slippages is Kazakistan, where India lost out encrgy contracts despite bidding higher than China. The story is the same when one looks atthe India-China race for resources in Africa as well, In addition to this recently China and Russia signed a natural gas deal under whieh the Russian oil giant Gazprom will supply China's largest oil company—China National Petroleum Corp.—38 billion cubic metres of gas every year for the next 30 years, beginning 2018, The deal is worth $400 billion land isthe largest contract ofits kind in Russia’s history With such competition the possibility of price rise cannot be ruled out. Increased competition over energy resourves may also lead to the formation of security compacts to enable an equitable distribution of oil and gas between major powers, However, this may happen atthe expense of less developed economies. Long-term measures to increase energy security centre ‘on reducing dependence on any one source of imported energy, increasing the number of suppliets, and reducing overall demand through energy conservation measures, It seems that the Government is still not very serious to tackle the problem. India’s green energy fund, which currently has around Rs.12,000 crore in the bank, runs the risk of becoming another corpus without a cause, unless the government reviews the way the money collected since July 2010 has been put to use. Only an insignificant portion of the National Clean Energy Fund (NCEF), which was expected t0 promote and fund clean energy projects, has been disbursed, according to a government official with knowledge of the matter, and much of it has been used to meet the government's budget shortfall. Of the total funds collected so far in NCEF, only Rs,500 crore has been disbursed for funding clean energy technologies. This is even as projects totalling Rs.10,000 crore have been approved. NCEF was announced in the Union Budget of 2010-11. It involved levying a clean energy cess of Rs.50 per tonne on every tonne of coal mined in India or imported. The cess, which came into effect in July 2010 and was collected by the Central Board of Excise and Customs (CBEC), Mounting pressure on conventional energy sources is making India turn towards unconventional ones. As a result, there has been talk of shale gas, exploration, which has been a huge success in the US. However, it’s still in the nascent stages and will need @ liberal fiscal and policy framework to succeed. The ‘most important is exploiting renewable energy resources as this seems to be the solution for India’s energy problem, Renewable energy resources can go a long away in mitigating in India’s energy woes, however their full potential is yet to be realized. As of now, wind contributes to most of our renewable energy. Renewable technologies can enhance energy security in producing electricity, heat supply, and even in transportation (though, some more research work and development is required in this field). Away ahead India has the fifth-largest power generation portfolio worldwide. The country transitioned from being the Fhergy Security: Challenges and likely way ahead sworld’s seventh-largest energy consumer in 2000 to the fourth-largest one within a decade. India was the first country in the world to set up a ministry of non- conventional energy resources, in early 1980s. Yet it could not do much as was required to be done in this field. India has a power generation capacity of 248,510 megawatts (MW), of which only 13%, or 31,692. 14MW, is contributed by renewable sources. The National Action Plan on Climate Change recommends that the country should increase its power generation from solar, wind, hydropower and other renewable sources by 2015. Developing renewable energy will also help reduce dependence on coal, whieh is in short supply domestically, requiring imports of the mineral to fuel most of India’s power plants. India relies heavily on coal energy to produce electricity. A strong second is hydro power, followed by natural gas. The renewable sector has a great future, India’s cumulative grid interactive or grid tied renewable energy capacity (excluding large hydro) has reached 29.9 GW, of which 68.9% comes from wind, while solar PV contributed nearly 4.59% of the renewable energy installed capacity in India. he deployment of renewable technologies usually increases the diversity of electricity sources and, through local generation, contributes to the Meexibility of the system and its resistance to central shocks. For those countries where growing dependence on imported gas is a significant energy security issue, renewable technologies can provide alternative sources of electric power as well as displacing electricity demand through direct heat production. As the resources that have been so crucial to survival in the world to this day start declining in numbers, countries will begin to realize that the need for renewable fuel sources will be as vital as ever. With, the production of new types of energy, including solar, geothermal, hydro-electric, biofuel and wind power, With the amount of sun that hits the world in one hour there is enough energy (© power the world for one year. Geothermal can potentially lead to other sources Of fuel, if companies would take the heat from the inner core of the earth to heat up water sources we could essentially use the steam creating from the heated, water to power machines, this option is one of the cleanest and efficient options, Hydro-electric which hhas been incorporated into many of the dams around the world produces a lot of energy and is very easy to produce the energy, Biofuels have been researched using many different sources including ethanol and algae, these options are substantially cleaner than the consumption of petroleum, ‘The Fukushima I nuclear accidents in Japan hhave brought new attention to how national energy systems are vulnerable to natural disasters, with climate change already bringing mote weather and elimate extremes. These threats to our old energy systems provide a rationale for investing in renewable energy. Shifting to renewable energy “can help us to meet the ual goals of reducing greenhouse gas emissions, thereby limiting future extreme weather and ctimate impacts, and ensuring reliable, timely, and cost-efficient delivery of energy”. Investing in renewable energy can have significant dividends for our energy security The rising petroleum demand, if left unchecked, would accentuate vulnerability 10 a severe supply disruption and resulting sudden price increases, in consuming countries. Renewable biofuels for transport represent a key source of diversification from petroleum products, Biofuels from grain and beet in temperate regions have a role, but they are relatively expensive and their energy efficiency and carbon dioxide savings, vary, ‘The key drivers for renewable energy are the following: ‘# The demand-supply gap, especially as population ‘*A large untapped potential ‘= Concem for the environment ‘* The need to strengthen India’s energy security ‘* Pressure on high-emission industry sectors from their shareholders ‘©A viable solution for rural elect '* Decrease dependence on energy imports ‘« Sustain accelerated deployment of renewable energy system and devices ‘* Expand cost-effective energy supply ‘+ Augiment energy supply to remote and deficient areas, to provide normative consumption levels to all section ‘of the population across the country ‘And finally, switch fuels through new and renewable energy system/device deployment. ‘Total Renewable Energy Installed Capacity (May 2014) Wind Power - 21,262.23 MW Solar Power ~ 2,647.00 MW 6 World Focus October 2014‘Small Hydro Power ~ 3,803.65 MW Biomass Power ~ 1,365.20 MW Bagasse Cogeneration ~ 2,512.88 MW Waste to Power — 106.58 MW Total 31,933.01 MW As the electricity grid becomes increasingly ‘vulnerable to faults from equipment failure, the risk of 4 major national scale grid failure is rising. The deployment of renewable technologies usually increases the diversity of electricity sources and, through local generation, contributes tothe flexibility ofthe system. The TEA (International Energy Agency) suggests that attention in this area has focused too much on the issue of the variability of renewable electricity production ‘Variability will rarely be a barrier to increased renewable energy deployment. But at high levels of market penetration it requires careful analysis and management, and additional costs may be required for back-up or system modification. Renewable electricity supply in the 20-504% penetration range has already been implemented in several European systems, albeit in the context of an integrated European grid. In 2010, four German states, totaling 10 million people, relied on wind power for 43-52% of theirannual electricity needs. Denmark isn't {ar behind, supplying 22% ofits power from wind in 2010 (26% in an average wind year). The Extremadura region of Spain is getting up to 25% of its electricity from solar, while the whole country meets 16% of its demand from wind. Just during 2005-2010, Portugal vaulted from 17% to 45% renewable electricity. Also in 2009 Minnkota Power Cooperative. the leading U.S. wind utility, supplied 38% ofits retail sales from the wind. The Combined Power Plant, a project linking wind, solar, biomass, and hydroelectric installations throughout Germany, has demonstrated that a combination of renewable sources and more-effective control ean balance out short-term power fluctuations and provide reliable electricity with 100 percent renewable energy Natural gas has been a viable source of energy in the world, One of the biggest problems currently facing natural gas providers is the ability to store and, transport it, With its low density, itis difficult to build enough pipelines (and also to protect them) to transport sufficient natural gas to match demand. ‘The growing dependence on imported gas has become a pressing. energy security issue, renewable energy technologies Fhergy Security: Challenges and likely way ahead can provide alternative sources of electric power production as well as displacing electricity demand through production of direct heat. The IEA (International Energy Agency) suggests that the direct, contribution that renewable energy can make to domestic or commercial space heating and industrial process heat should be examined more closely. Heat from solar, geothermal sources, and heat pumps, is increasingly economical, The solar heating systems which are very good ‘options for India due its geographical location, may be used to heat domestic hot water, swimming pools, or hhomes and businesses. The heat can also be used for industrial process applications or as an energy input for other uses such as cooling equipment. In many ‘warmer climates, a solar heating system can provide a very high percentage (50 to 75%) of domestic hot water energy. Renewable biofuels for transport represent a key source of diversification from petroleum products. Biofuels from sugar cane and other highly productive topical crops though, somewhat costly, but are more beneficial. More effort is required to develop and commercialize second generation biofuel technologies, such as bio refineries and cellulosic ethanol. The hydroelectric power refers to the energy produced from water (rainfall flowing into rivers, etc). Consequently, rainfall can be a good indicator to investors looking for a location to implement ot build a new hydroelectric power plant in India, The dominant ‘annual rainfall is located on the north/eastern part of India: Arunachal Pradesh, Assam, Nagaland, Manipur ‘and Mizoram, and also on the west coast, Ifwe consider the annual rainfall, we see that most of the rainfall ‘occurs from May to November. Consequently, we can predict that hydro energy could be harnessed during the rainy season, Good water management and storage allows for continuous electrical generation throughout the year, In India, small hydro (Less than 25 MW is in the “small hydro” designation) is the most suitable renewable energy source for energy production, There is a large potential of more than 15,000 MW for small hydro, But, unfortunately only 1,520 MW has been installed to date. Though, 4,096 potential sites have been identified and the technology is reliable and readily available, but progress is really slow. More researchwork is required to done on development and up- ‘gradation of water mills Industry. All the new societies that are coming up either for residential accommodation or for commercial purpose, should compulsorily have solar heating system and the same solar panels could be used for developing electricity for lighting purpose (could be as a backup initially) when heating is not required. All the Government buildings, establishments and offices should have the same system. All the security forces campuses should draw at least 50% of electricity power required by them through solar energy system installed within their establishments. Most of the border with Pakistan and Bangladesh has been fenced and floodlit Lot of electric power is required for this purpose. All this power required should be generated by solar energy where ever it is possible, and normal power supply could be used as backup, of course not compromising ‘with national security. Gradually it could be spread all over to Private Sector and other establishments. All the street lights in the cites should function on solar energy. Though initially they may be a bit costly. By this we could save lot of power generated by conventional means. Green buildings, also known as sustainable building are gradually becoming popular. Itemphasizes on less use of water, optimizes energy efficiency, conserves natural resources, generates less waste and. provides healthier space for the occupants. Government should encourage such type of construction both for government as well as for private sector. Cooperation with Japan India, despite having an objective of energy independence through substantially decreasing its crude imports by 2030 is actually becoming increasingly dependent on it. As per BP Energy Outlook 2035, India’s oil imports will rise by 169 per cent, accounting for 60 per cent of the net increase in imports. Therefore itis important for India to find a way out in dealing with its ever increasing energy consumption and imports by implementing stringent measures of energy efficieney and conservation. India-Japan energy cooperation will address the concern of India’s rising erude import bills and falling domestic natural gas production by importing liquefied natural gas (LNG) jointly, bringing down the procurement cost. During Abe’s visit in January this Year, various agreements between these two countries have been signed. To enhance energy efficiency in telecom towers, for instance, memorandum of undertaking (MoU) was signed on a Model Project for Energy Management Systems. To reduce Greenhouse Jas Emissions in coal-fired plant, both countries agreed to use Clean Coal Technologies. They signed a loan agreement to the tone of $430 million. On energy efficiency and conservation front both these counties have agreed upon to extend their partnership under agreement signed. This aims to promote energy eificiency including reduction of greenhouse gas emissions using clean technologies, promoting energy labelling for energy efficient appliances and so on, India and Japan are further willing to give the highest priority o global environment challenges while strengthening their energy security through continuous nd effective action. Both the countries recognise the need to promote industrial cooperation to expand bilateral energy cooperation on a commercial basi. In this regard New Energy and Industrial Technology Development Organisation (NEDO) and The Eneray and Resources Institute (TERI) held Japan-India Energy Forum and are already providing valuable inputs tothe bilateral engagement on energy security, Similar such arrangements have been made between the Confederation of Indian Industry (CHD and NEDO for ‘promoting Japanese technologies needed to help energy issues in India, This cooperation would definitely help India in easing its concern for energy security. Conclusion India urgently needs an energy security doctrine. India is the fourth largest energy consumer in the world and its import dependence is expected to grow to 50% of its total demand by 2030.1n other words India has an energy import bill of around $150 billion. This is expected to reach $300 billion by 2030, requiring a $3.6 trillion pay-out by 2030. India’s foreign policy must aggressively push to secure long-term and stable supply of energy. Thankfully, the global rearrangement also gives India some hope. With US growing more capable of supplying its own fuel as well as that of Europe, India can aggressively court the Middle Eastern and African countries, as they look for newer customers. This is where the Government needs to take some initiative. An energy security plan must be «drawn out independently forall energy resources such as oil, gas, coal, lithium, hydropower, nuclear, solar, ‘wind, biofuels, electric vehicles and other renewable World Focus October 2014sources, with an aim to augment domestic energy sector hamessing India’s renewable energy resources. The India self-reliant, strategy, aimed at contributing (o India’s energy includes schemes such as setting up so-called Minister, in this financial year budget 1ega solar power projects, developing solar parks expanded the scope of NCEF's use to include financing I banks, constructing transmission corridors and promoting clean environment initiatives and funding for renewable energy and energizing 100,000 solar research in the areaof clean environment. The doubling power-driven agricultural pump sets and water: of the cess will result in an inerease in electricity tariffs pumping stations. To encourage the setting up of clean and a collection of about Rs.6,000 crore every year, energy projects, the budget also provided excise duty This year's budget unveiled a detailed road map for exemptions for raw materials for solar and wind power projects, Subscription Form Please enter our New Subscription / Renewal for World Focus from .... ‘The Subscription charges through Demand Draft No.. 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Single Copy: Rs. 70/- For Soft Copy of World Focus isit Magzter weblink mentioned below Fhergy Security: Challenges and likely way ahead 9India, China and the Emerging Energy Security Concern: Exploring the Central Asian Potential Sanju Gupta ‘One significant geopolitical consequence ofthe demise of the Soviet Union has been the rise of intense political and commercial competition for control of the ‘vast energy resources of the newly independent and vulnerable states of the Caucasus and Central Asia ‘These energy resources and, in particular, the oil and natural gas deposits have now added a new chapter in the Great Game of control over Eurasia. The essence ofthis new geopolitical game in Central Asia is twofold first, control of production of the oil and gas, and second, control of the pipelines which will transfer the oil to the Western markets. Following the collapse ‘of communism, the ex-Soviet republies of Central Asia, especially Azerbaijan and Kazakhstan, have been trying to exploit their natural resources, since they consider oil to be the prime means of securing their economic and political independence, According to the estimates of geologists the oil deposits of the Caspian Sea may not be quantitatively comparable to the deposits ofthe Persian Gulf, but they are still considered of excellent quality and able to provide a significant alternative source of energy in the 2Ist century. Within Asia India and China are net importers, of oil and gas at the present and itis only likely that their import needs would increase over the coming years. Since the suppliers of oil and gas are fixe, itis therefore likely that India and China would run into cach other, while trying to secure a stable supply of this resource, Added to the fact that the world reserves of oil and gas are first dwindling, does this mean that India and China are heading towards a potential conflict, or is it that the two Asian giants can find a ‘mutually amicable “middle-path” that will allow them tohave a far shate of the energy pie? At present India’s proven reserves are 5.9 billion barrels (bbl) of erude oil, while the total (estimated, proven and possible) is bout 13.5 bbl India imports more than 60% of its total oil needs and the figures are expected to rise to more than 90% by 20152 For China the proven reserves 18.3 bbl of erude oil and the otal is of the order of 35 bbl of crude oil, China currently imports more than 40% ofits crude ol and they are expected to also import more than 90% of their erude oil by 201541 is clear that both India and China are in fact eyeing the same regions, the same countries when it comes to securing. their energy demands. And since both countries desperately need to secure their energy requirement (0 allow their economies to flourish, is it reasonable to assume that some kind of conflict might happen in the near future? The ideal scenario can be one in which both China and India enter into a cooperative arrangement that will help both of them to secure their needs in a proper fashion. With all energy agency estimates pointing to the fact that these rising Asian economies of China and India are going to lead the energy markets as potential buyers, itis interesting to note that Sino-Indian enerey competition is increasingly leading them toward Central Asia. This paper is hence an attempt to delineate: © The imperative of Energy Security ‘© The Indian and Chinese energy scenario © How the Central Asian republics hold the key t0 diversifying the energy markets. ‘* How beneficial it is for both China and India to cooperate in the Central Asian energy theatre. Energy Security: Explaining the Concept By the 20° century, as more and more countries moved from coal-based economies to oil-based ones, oil began to pervade almost every aspect of life, from big industry to politics. As a result, those who controlled sources of oil also dominated international politics, while those countries that were deficient in oil/energy resources were left at the mercy of the oil-rich countries and cartels controlling the production of oil, This made “oil” the great strategie prize in terms of money, power and development for the control of which individuals; organizations and states struggled and fought each other, Winston Churchill outlining British national interests and security, as early as July 1913, declared in Parliament ‘on no one quality, on no one process, on no one country, on no one route and on no one fuel must we 10 World Focus October 2014bbe dependent, Safety and certainty in oil lie and variety alone”> variety Churchill's judgment that oil would provide the strategic locomotive to power and industrialization and its control would be critical to the geopolitics and. prosperity of those who could exploit it at favorable terms, was proved right repeatedly during the rest of the 20" century. Oil became both the object of, as well as the means to, geopolitics and geo-economics. At the end of the 20 century, oil continued to be central to security and prosperity. Today, well into the new millennium, it is clear that the importance of oil is increasing. To this has to be added Natural Gas, especially as environmental concerns grow and low cost gas is reportedly available. It should be noted that increase in energy consumption worldwide has been keeping pace with economic growth in general, while the population growth in some regions has seen a simultaneous increase in the demand for energy in that region. Conversely, the less the access to energy resources, the slower is the growth rate of a country. ‘The kind of energy resources that is used to fuel this economic growth is equally important, a it has several implications and repercussions. Shirley Ann Jackson comments “with more intense competition for oil, also comes greater ‘vulnerability to the use of oil and similar resources as a political tool” Talking about “energy” as “political currency” she states, “Energy security has a direct relevance-not only to economie security, but also to civil security. An importing country, sensing its ‘yulnerability to the loss of oil or natural gas imports, ‘may feel pressure in its relations in areas other than energy with a supplier country. Supplier countries have great sway over the economies of importer nations ‘This has widespread political effects". Truly enough, “energy” (especially of oil and natural gas) has increasingly come to inform polities among nations. Energy security refers to a resilient energy system. This esilient system would be capable of withstanding threats through a combination of active, direct security ‘measures-sich as surveillance and guards~and passive or more indirect measures such as redundancy, duplication of critical equipment, diversity in fuel other sources of energy, and reliance on less vulnerable infrastructure, Energy security matters to state policy makers, because of the effect that a security breach could have on the economy, public health and safety and the environment. According to Girish Luthra the term energy security is much broader in scope than merely safeguarding the production and distribution of various energy resources.’ He points out that in recent decades; cenergy has also become a key element in international power relations, with Asia having a central role. He places energy security within a conceptual framework that emphasizes the protection of interests, however the latter are defined, These interests, in turn, are influenced by considerations related to different types of energy resources, The conceptual framework which is proposed, and which is aimed at the development of 4 strategy to enhance energy security, is built around two central considerations ~ the assessment of energy security needs and the adaptation to those assessed needs. Girish Luthra further argues that the assessment of energy security needs requires an understanding of the varying expectations of different consumer and producer states, the perception of energy interdependence among consumers and producers and determination of specific vulnerabilities for suppliers and consumers, The central divide in approaching “energy security” is between energy-exporting and cenergy-importing states. Prior attempts to tackle energy security challenges and to propose win-win solutions have not been very successful. The East West Institute (EWI) believes that the international community, together with the private sector and civil society, should take the lead to develop mutually-beneficial international energy strategies, foster greater cooperation between energy producing and consuming states and rebuild confidence in international energy markets on the basis, of cooperative approaches. EWI suggests launching debate on reshaping the definition of “energy security” and energy “sovereignty”-with the goal of promoting cconfidence-building international approaches especially at the highest political levels, Asia is central to the current global debate on energy security, due to the rapidly changing supply ‘and demand sides of the equation, which inevitably impacts upon the nature of competition, Rapidly rising demands as well as the emergence of new sources of supply in the region, in particular Central Asia, have forced many countries, both inside and outside the region, to re-examine their respective strategies. It is true that the new competition in the region is not insular and is inextricably linked to the global equation, yet the salience of intra-regional dynamics related to energy has very substantially increased. While concerns about ‘energy security have led to subtle posture and policy India, China and the Emerging Energy Security Concerns: Exploring the Central Asian Potential yychanges in respect of many countries, the issue is viewed very differently by different states, based on. their perceived strategic interests and relationships within the overall grand strategy. As more and more countries industrialize, they will naturally want more energy to quench the growth thirst, This Would entail ‘more involvement in international affairs. Geopolitical issues, old and new wil therefore arise. Energy security ccan hence be comprehended as an umbrella term that covers many concerns linking energy, economic growth and political power, The energy security perspective varies depending upon one’s position in the value chain, Consumets and energy-intensive industries desire reasonably-priced energy on demand and worry about disruptions. Major oil producing countries consider security of revenue and of demand as integral parts of any energy security discussion. Oil and gas companies consider access to new reserves, ability to develop new infrastructure, and stable investment regimes to be critical to ensuring energy security. Developing. countries are concerned about the ability to pay for resources to drive their economies and fear balance of payment shocks. Power companies are concerned with, the integrity of the entire network. Policymakers focus fon the risks of supply disruption and the security of infrastructure due to terrorism, war or natural disaster, They also consider the volumes of security margins — the amount of excess capacity, strategic reserves, and. infrastructure redundancy, Throughout the value chain, prices and supply diversity are critical components of energy security. In earlier periods, oil was used as a “weapon,” and there is concern that natural gas could, also be used to gain political leverage at some time in the future, The traditional elements of energy security have therefore included supply sources, demand centers, geopolitics and market structures (and responsiveness of related institutions). Over the past 30 years, the characteristics of each of these four energy security elements ~ supply sources, demand centers, geopolitics and market structures - have changed, and new elements have emerged. The current focus on energy security began with a disruption in Venezuela in 2002 and then the Tag war in 2003. That focus was much amplified by a demand shock ereated both by rapid Asian economic growth and by the best global economic performance in a generation. When the anticipated incremental supply from Irag did not materialize, the global oil supply system was stretched to its limits, its flexibility limited by sophisticated integration that had squeezed efficiency. As the debate over energy security continues, there is general agreement that energy per se is less likely to be a source of conflict between nations or regions. It is the acquisition of “energy” which impinges on security, For instance, instability arising out of sudden increases or decreases in the price of oil can have serious consequences for consumers and producers. As a result, if supplies from cone region are disrupted, prices will rise at Ieast in the short term or until the market adjusts. Itdoes not matter how much energy resources a particular country imports from a supplier, the international market, as a whole, will be affected if suppliers from any one region! country are reduced or their transport endangered. Moreover it is the industriatizing countries, which will bbe more affected, as they have neither the mechanism nor the infrastructures to adjust to major price fluctuations, For instance, the short-term spike in oil prices as a direct result of the 1990-91 Gulf war caused the oil price account deficit in India to soar and pushed up petroleum product prices, leading to disastrous consequences for the economy, Such a scenario essentially has widespread political and security consequences, Energy Fact File: In ‘The energy scenario in India poses increasing challenges for its future energy policy. With an installed generating capacity of less than 150000 MW (megawatt) and a per capita consumption of a mere 650 units of electricity per annum, India is suffering from huge estimated shortages of nearly 10% in energy terms and almost 17% in terms of peak demand (2007/08). Energy and peak shortages in 2003/04 were 7.1% and 11.2%, respectively. These shortages in the system are inereasing rapidly because of increasing demand and our inability to have met more than 40%-50% of the targeted capacity addition required in the last three Five-year Plan periods. This isthe situation when over 50% of India’s rural population does not even have access to electricity.8 The country has also had limited success in establishing new oil reserves. While it has had considerably higher success in establishing natural gas finds, the lack of adequate delivery infrastructure has significantly limited the expansion of, and spread of benefits from, this source. Accordingly, gas consumption has increased at a meagre growth rate of 2% per annum. 12 World Focus October 2014Due to rapid economic expansion, India has done of the world’s fastest growing energy markets and is expected to be the second-largest contributor to the increase in global energy demand by 2035, accounting for 18% of the rise in global energy consumption. The total primary energy consumption from crude oil (29.45%), natural gas (7.7%), coal (54.5%), nuclear energy (1.26%), hydroelectricity (5.0%), wind power, biomass electricity and solar power has been $95 Mtoe (million metre tons of oil equivalent) inthe year 2013, In 2013, India’s netimports wwere nearly 144.3 million tons of erude oil, 16 Mtoe of LNG and 95 Mtoe coal totalling to 255.3 Mtoe of primary energy which is equal 42.99 of total primary energy consumption, About 70% of India’s electricity generation capacity is from fossil fuels ‘with coal accounting for 40% of India’s total energy consumption followed by erude oil and natural gas at 28% and 6% respectively. India is largely dependent 6 fossil fuel imports to meet its energy demands — by 2030, India’s dependence on energy imports is expected to execed 53% of the country’s total enerey consumption. 9During the financial year 2012-13, the production of erude oil was 37.86 million tons and 40,679 million standard cubie meters (nearly 26.85, rillion tons) natural gas, The net import of crude oil & petroleum products stands at 146,70 million tons ‘worth of Rs 5611 40 billion. This includes 9.534 million tons of LNG imports worth of Rs. 282.15 billions, at huge foreign exchange out go.10 ‘The dependence on imported oil is not going to end it may well inerease, judging by the Integrated Energy Policy, which projects import dependence in excess of 90 per cent for crude oil, up to 50 per cent for natural gas, and up to 45 per cent for coal. These are huge numbers, particularly for crude oil ‘Subsequently, this has led to a search for secure sources. of overseas supply. With skewed dependence on West Asian oil (70% of total oil imports), it is in India’s interest to search for alternative markets, other than ‘West Asia, Here the Central Asian republies ean present a viable and potential alternative. However, it is significant to note that India is very likely to meet their Chinese counterparts in all their endeavors for exploring. these regions, Hence itis significant to take cognizance of China’s energy profile and to acknowledge as well as learn from their multi-pronged energy strategy. As has been aptly said by the Oil Secretary Saurabh Chandra,” “The country needs a multi-pronged and. coordinated approach of focused research in multi disciplinary fields. There is no single answer to the question of energy security’ Energy Fact File: China CChina’s two decades of rapid economic growth have fueled a demand for energy that has outstripped domestic sources of supply. China became a net oil importer in 1993, and the country’s dependence on energy imports is expected to continue to grow over the next 20 years, when itis likely to import some 60 percent ofits oil and at least 30 percent of its natural ‘£28.11 China thus has to abandon its traditional goal of, energy self-sufficiency — brought about by a fear of strategic vulnerability — and look abroad for resources. To improve China’s energy security, the country’s state-owned oil companies are investing in ‘overseas oil exploration and development projects. In China, energy security has been categorized as a domestic economic development issue rather than a patt of foreign poliey for several decades, except for rare strategic issues such asthe location of pipelines in Central Asia or border disputes related to energy resources. Coal, which is abundant in China, has been the dominant energy resource in domestic consumption for several decades, and before the 1990s there was weak economic development and relatively lower demand for. Though China's ol self-sufficiency ended in 1993 when it was forced to begin importing oil to meet domestic demand, China did not realize the urgency and importance of energy security until the late 1990s. China’s energy consumption reached a record high in recent years due to China's rapid economic development, expanding middle class population, motorization, and urbanization. China became the world’s second largest consumer of oil after the United States and the third largest net importer of oil in 2008, Currently China depends on foreign imports for over fifty percent of the cil it consumes, ‘and half of this imported oil is from the Middle East. China has many reasons to worry about its energy security:12 with 16 billion barrels of domestic proved reserves - only 1.2 percent of world total reserves - an RIP ratio 3 of 11-1 in the domestic market, lack of a sufficient Strategic Petroleum Reserve (SPR), severe pollution conditions and environmental problems,