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Gujarat sets agenda for energy security

According to reports,

A hot political debate in Argentina some weeks back was on the Argentinian Government’s decision to nationalise a Spanish-owned oil producer. The move came after that oil company had doubled its estimate of shale oil reserves in Argentina, putting the country behind only China and the United States. The Argentinian debate is not a lone exception. Writing in the Financial Times last month, Sylvia Pfeifer argues that shale could bring energy independence to many nations, freeing them from reliance on imports. Drawing a parallel with the sentiment in the 1950s on how atomic power was viewed with the same promise, Ms Pfeifer makes a poignant observation on how the debate on shale reserves is recasting geopolitics and influencing national investment decisions.

Little wonder that the same debate also found its way to India in April. Speaking on April 16 at the Chief Ministers’ conference on internal security, Gujarat Chief Minister Narendra Modi made a strong pitch on what he termed the “serious security implications” of our “current energy dependence”. Curiously enough, the remarks by Mr Modi not only found their echo within social media but also made their way into a blog post on the Reuters by Myra McDonald who went on to the extent of saying that Prime Minister Manmohan Singh’s Pakistan policy now faces a Narendra Modi veto. The reason being the pitch Mr Modi made on energy independence had its heart a call for exploring the potential for hydrocarbon reserves in Sir Creek including shale gas. Mr Ashok Malik, writing in The Pioneer, on April 14, a couple of days before Mr Modi’s speech, while dwelling on the proposed Pakistan visit by Manmohan Singh points to how advances in fracking and the accessibility to shale reserves in Sir creek make it a potential game-changer.

These one-off remarks on shale reserves in Sir Creek have to be viewed in combination with the sequence of events in Gujarat in what appears to be an emerging political roadmap for energy independence.

It began first with the launch of one of the largest solar farms to come up in barren land with the promise of producing more than 500 megawatts of solar power. Next, there was a unique pilot project from Chandrasan village  of Kaditaluka in Mehsana district of Gujarat on generating about one megawatt of solar power. The power generation capacity may be small but the innovation of the pilot project lay in covering up real estate over the Narmada branch canal with solar panels to simultaneously generate power and conserve water. It may be early days but the estimate is that up to 90 lakh litres of water would be prevented from evaporating annually with this dual use of technology. This may be scratching the surface on the potential of distributed power generation, with the many pilot projects across Gujarat on roof-top power generation that allow consumers to become produces of power by selling back energy into the grid.

There is a long way to go before we address all the challenges around renewable sources of energy in general and solar power in particular. But it is in order that this emerging roadmap is put into perspective. Since 2009, the number of commercial and residential installations that generated solar power grew by 75 per cent. In the United States alone, distributed power generation using solar is estimated to be at least a $ 30 billion market over the next 15 years. Taking the lead on energy independence, the US Department of Defence is looking at solar taking a five per cent slice of its multi-billion dollar spend on renewable sources of energy for its non-combat facilities. Major American cities like Los Angeles are also undertaking massive city-wide initiatives, with electric vehicles in mind. The speed with which concept to commissioning of the solar park happened in Gujarat is a credible demonstration that India can leapfrog and play catch-up with the West.

There is a political contrast, however, in this energy independence that must be highlighted. This political contrast is relevant as some people have sought to link the Gujarat public sector undertaking firm, GSPC’s troubles in KG Basin with Mr Modi’s penchant for thinking big while deriding the various experiments towards energy independence as hype.

Back in his first term, Prime Minister Manmohan Singh had staked political capital he did not possess to push through a promise of energy security in the form of the India-US civil nuclear deal. Halfway into his second term, it is clear that he is far from even laying the foundation on which that promise was to be built on. The contrast could not have been starker between Gujarat that has become the mainstay of sorts for the BJP and Andhra Pradesh which is the mainstay for the Congress. While Gujarat is looking at a power surplus, Andhra Pradesh is not just suffering a serious power shortage but has had a steep hike in tariff, making it a double whammy on entrepreneurs.

At a time when shale reserves and renewables are spurring a global debate on the race towards energy independence, it is a shame that this debate is occurring along the margins in India. We are no closer to making energy independence a potent political issue for the Congress. Its  extended ecosystem of Left liberal NGOs and activists inside and outside the media has been successful in labelling any debate on investing for the future as being hype, elitist and anti-poor.

In a political climate where polemics of the past dominate the political discourse in the present, even the worst of Narendra Modi’s critics will have to grudgingly admit that he is setting the agenda for the future on energy, unmindful of such labelling.

One comment

  1. 1) Irrespective of Party, we need to create policies with a business case and financial numbers highlighting the margins and the benefits to all stake holders with transpareny on project costs, NO BRIBE in awards.
    2). Let the stake holder as Common man be honestly and specificaaly be mentioned with a greater transparency. Obviously, the project margins will be less and the risks of escalations will be well understood by common man who shall feel the importance of variants.
    3) With reduced margins, large companies, CUT seeking politicians or Govt Babus will realise that only hard working small entrepreneurs will bid and the Easy Money (read as BRIBE or corruption) will find its least importance as no one will execute projects with such bribes or any hidden agend of cost SUCKING costs from common man in the name of no coal, shut down of few good PSU thermal plants on lame excuse to buy energy at higher tariff from their friendly company with a created power shrtage (in the name of shut down or maintenance dueing peak summer etc) will be vanished.
    4) Thus, new and non greedy promoters with long term strategy will find their way and the national wealth will be distributed with many small and new entrepreneurs with sustainable margins, rather than cartel pool of large corporate cos which think that SUCKING common man is their objective by using the mafia called Policy makers or Policy implementors without making the business plan very clear without highlighting the benefits to common man.
    5) Any business shall earn reasonable margins to the promoter, but, not at the HIGH cost (robbing the national property) of common man. Therefore, this suggestion of making the business plan with financial numbers on the public domain for many entrepreneurs who can copy and replicate (who can be happy with less margins).
    6) When the policy is made, let the policy makers also mention these numbers for the benefit of entrepreneurs to bid with such less or reasonable margins, which can be willingly supported by the consumers / all stake holders at reduced costs.
    7) Only those will survive, who have the national spirit of distribution of wealth with a business plan with NO CHARITY or free service, as the business is about money making, but, not SUCKING as is happening.

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