India needs to strengthen energy security to meet supply bottlenecks

There is a strong case for an integrated energy ministry. We need proactive policies and vastly improved efficiencies across the energy chain, and the way ahead is to have a single Cabinet-rank appointee to oversee policy coordination and rationalisation and effective follow-through action in power, coal, petroleum and national gas, renewable and non-conventional sources, et al.

It does make sense to consolidate power and coal under a minister of state (MoS), as Modi has done: policy must ensure adequate supply of consistent quality coal for power plants. But we also need to assure availability of gas for power generation, which is why the MoS for oil should ideally report to an energy minister.

There is the need for sound, integrative policies right across the energy economy. For instance, we need to rationalise fuel prices holistically, so that different fuels that are substitutes do reflect similar scarcity value, so as to justify inter-fuel choices, boost economic efficiency and reduce distortions.

In tandem, we need to optimise fuel and technology choices to boost production, supply and distribution of energy output, by rationalising and revamping central and state taxes on energy supply, for example. In parallel, there is the need to shore up regulation and oversight across the energy chain, including in the mining and evacuation of coal, our main source of commercial energy.

In parallel, we need to incentivise demand-side management in the entire energy sector and promote research and development for relevant promising technologies, spanning coal, its gasification, power and liquid fuels as well. Further, we need to strengthen our energy security to effectively meet the supply bottlenecks likely as India picks up economic speed. An integrated ministry is the key.