There has been a development on the energy sector front in November that has the potential to shake up the entire domain. In a few markets in the United States, renewable energy is now cheaper than coal or natural gas. If you think that this is due to the subsidies being offered to the renewable energy industry by the US government, think again. A Bloomberg study says that subsidies granted to fossil fuels are almost 12 times the amount of subsidies given to renewable energies. Portugal´s EDP, a major European utility, declared a few months back that the levellised cost of electricity of onshore wind in Europe is 20 per cent cheaper than gas and one-third cheaper than coal.
We surely live in interesting times. As renewable energy technologies develop even faster in the coming years, the cost of generation will plummet... with far-reaching implications for geopolitics and energy distribution.
Back home, the government is going all out to ensure India´s energy security, with the PM sewing up multi-billion dollar deals with various nations.
And of course, India is slowly waking up to its untapped energy potential. For example, the country has only developed around 33 per cent of its hydropower potential of 148 GW. The government has also increased the solar power capacity addition target to 100 GW by 2019 compared to the previous 22 GW installed capacity target by 2022.
The recently-concluded SAARC Framework Agreement on Energy Cooperation also promises rich power dividends for India. The development and integration of a South Asia power grid will help member-countries to manage their electricity needs in an optimum way. Peak demand varies considerably among countries which will be using the grid, which will help power-surplus nations (say, Nepal during the summer) to pump electricity back into the grid and draw power during peak requirement period (India during summer). At present, electricity trade between Nepal and India remains insignificant due to absence of adequate transmission links. South Asia also has a lot of catching-up to do as far as energy cooperation is concerned. In contrast, take the example of the US and Mexico... the neighbouring countries have been dealing in electricity since 1905.
I also believe that India must also firmly declare that it is no longer in favour of the proposed Iran-Pakistan-India gas pipeline. A major part of this proposed line would have passed through Pakistan, which would have resulted in compromising our nation´s energy security. There are alternatives: Feasibility studies have been conducted for a Iran-Oman-India deep sea pipeline, bypassing Pakistan, which will help India source gas from the Arabian Gulf and Iran´s South Pars gas fields. It is time we stepped on the gas and finalise these plans.
With many exciting developments ahead, the year 2015 promises to be really bright as far as the nation´s energy sector is concerned. Keep watching this space as POWER TODAY takes you through the latest developments, and of course, as we chart our journey together as partners in progress.