India's integrated Energy Policy is a comprehensive policy on Energy which is drafted to explore alternative technologies and possible synergies that would increase energy system efficiency and meet requirement for energy services. The Planning Commission of India (which is now NITI Ayog) estimated that the country will need to increase its primary energy supply by 3 to 4 times, and electricity generation capacity by 5 to 6 times (2003-04 levels) if it is to meet the energy needs of all its citizens by 2032 and maintain an 8% GDP growth rate.
Despite a continuous increase in total installed capacity, the gap between supply and demand continues to increase. The underlying reasons for such a demand are a growing population, urbanisation, industrial production and incomes. It is estimated that anything between 400 and 600 million Indians comprise the energy poor—those who have little or no access to basic electricity.
Coal dominates India's energy supply at present with 70% of power generation coming from coal fired thermal power plants and planners expect this to continue into the future. The country also depends heavily on imports to meet existing energy demands and this dependence is estimated to increase to 92% by 2020. Similarly, natural gas and electricity demands will grow in the future. The vision behind the Integrated Energy Policy therefore, is to create an environment that can help reliably to meet the energy demands of all sectors.
Recommendations of the expert committee
The report of the expert committee appointed by the Planning Commission to improve energy efficiency itself contains the following key recommendations:
1. Coal will remain a primary energy source until 2031-32.
2. Rationalise fuel prices through the Integrated Energy Policy. Promote efficient fuel choices and facilitate substitution.
3. Improve energy efficiency, reduce energy intensity.
4. Augment fossil fuel resources by increased exploration for coal, oil and natural gas.
5. Augment the role of hydro and nuclear power in India.
6. Push for increased renewable
7. Energy in the energy mix
Aims and Objectives of Integrated Energy Policy
1. Provide appropriate fiscal policies to take care of externalities, independent regulations to address anti-competitive market behaviour
2. Tax and regulatory structures should provide a level playing field for all sectors and all players.
3. Taxes should be neutral except in cases specifically intended to counter externalities such as environmental costs
4. Transparent and targeted subsidies
5. Promoting energy efficiency by enforcing standards effectively
6. Promote competitive energy markets in order to promote energy efficiency and leverage investment in the energy sector. Remove entry barriers to new players and imports.
7. Correct pricing of energy, in order to send the right signals to producers and consumers.
8. Incentive for renewable energy production to be linked to output and not just capacity addition (outlay).