Experts may differ on how much weight to give to the various reasons cited for the coal shortage earlier this month, but all will agree that the blame cannot be placed on the doors of any particular entity or ministry. India’s Ministry of Coal and Coal must certainly accept that they have slipped somewhere, whether it is in managing the production process, planning supplies, or leaving crucial managerial positions vacant. But they shouldn’t be made to carry the box alone. The Department of Energy / NTPC is also expected to accept responsibility. Because they have allowed coal stocks to fall below the recommended minimum in an effort to better manage their working capital. But they too can rightly pass the buck to each other. They may claim that they had no other choice because the state government electricity distribution companies (discoms) to which they sell electricity do not pay their dues on time or in full. However, the Discoms will not accept responsibility for this shortfall. They point the finger at their political bosses, who force them to sell electricity to consumers in the residential and agricultural sectors at subsidized tariffs that do not fully cover the costs of supply. This cycle of blame is the result of a structural flaw. There is no public body at central or state government level with executive control, responsibility and accountability for the entire coal value chain. This is a loophole that plagues the entire energy sector. It will have to be filled not only to avoid a resurgence of a new coal crisis, but also for the country to achieve its “green” ambition.
India faces an energy and environmental problem. This reality is recognized by all. However, the word “energy” is not part of the political or administrative lexicon. At least not formally. Consequently, there is no energy strategy with the imprimatur of the executive power. NITI Aayog may well dispute this claim. Because they have developed an energy strategy. My response would be that it has no executive authority and, as was the case with the document of the Planning Commission “Integrated energy policy” published in 2006, most of its recommendations will gather dust because their implementation. Implementation will depend on responses from bureaucrats in various ministries (ie petroleum, coal, renewables and electricity) who, in general, have little incentive to change the status quo. The Planning Commission document was approved by Cabinet and yet the majority of recommendations were ignored.
It is in this context that I offer two suggestions. I have already beaten this drum, but the coal crisis and the imperatives of decarbonization justify, I believe, that they are put back on the table.
First, the government should pass a law (possibly) called the “Energy Liability and Security Act”. This law should raise the importance of energy by giving it a constitutional character; it should enshrine in law India’s responsibility to provide citizens with access to safe, affordable and clean energy and, in this context, it should establish measurable metrics to monitor progress towards achieving energy independence , energy security, energy efficiency and “green” energy. Essentially, the law should provide the constitutional mandate and framework for the formulation and execution of an integrated energy policy.
Second, in order to fulfill this mandate, the government should redesign the existing energy decision-making architecture. My preference would be for the creation of an omnibus energy ministry to oversee the currently siled verticals of the petroleum, coal, renewable energy and electricity ministries. Such a ministry existed in the early 1980s (but without oil). The minister in charge should be placed on an equal footing with the ministers of defense, finance, interior and external affairs. I suspect, however, that such an overhaul would disrupt too many apple carts. It would therefore be politically and administratively impractical. So, as a second-rate option, I suggest that the PM creates an executive department within his office; it could be called “Department of Energy Resources, Security and Sustainability”, headed by a person of the rank of Minister of State. The objective would not be to change the existing roles and responsibilities of the various departments or the reporting relationships. ESPs would continue, for example, to report to their line ministry. The objective would be to identify and address all the problems that currently lie between the cracks created by the existing structure. It would be a question of formulating and executing an integrated energy policy, of taking advantage of the weight of “India Energy Inc” and of maximizing the competitiveness of India in its relations with the international energy community: it would be a question of financing and to incubate R&D and innovation in clean energy; that would be to sit at the top of the energy regulatory system and as a ‘regulatory ombudsman’ to streamline the current multiple layers of energy regulations and, finally, to coordinate and implement the communications strategy for raise public awareness of existing and emerging issues. energy issues, in particular global warming. The department would have narrower remits than other energy departments, but due to its location within the PMO, it would be, de facto, the most powerful executive body with ultimate responsibility for navigating the “transition. green ”.
In this latter context, it is important to highlight the positive impact that the above overhaul will have on investor sentiment. Several companies have signaled their intention to invest millions of euros in clean energy. Reliance committed $ 10 billion, Adani $ 70 billion over 10 years; Tata Power, ReNew Power and Acme Solar have also laid their groundwork. Only their management can vouch for the soundness of these commitments, but there is no doubt that the likelihood of making these investments would increase if the current fragmented and opaque regulatory, tax and business systems and processes were replaced by a transparent and centralized executive. . decision-making body for energy.
This column first appeared in the paper edition on November 1, 2021 under the title “The case of an energy minister”. The writer is president of the Center for Social and Economic Progress (CSEP)