India as a Global Energy Hub: A Roadmap for Energy Security and Dominance

Context:

As India aspires to become a global superpower by 2047, it requires a robust energy security strategy. Current dependence on fossil fuel imports exceeds $130 billion annually, impacting rupee stability, inflation, and borrowing costs. The transition to renewable energy can help India become a clean electricity exporter, ensuring energy security and global dominance.

India’s Oil and Gas Dependency

India is highly dependent on oil and gas imports, making up nearly 85% of crude oil and 50% of natural gas consumption.
Annual fossil fuel imports cost India over $200 billion, creating trade deficits and economic vulnerabilities.
Global crude oil price fluctuations impact India’s macroeconomic stability and energy security.
To reduce dependency, India must diversify its energy sources and boost domestic renewable energy production.

Global Energy Landscape: Need for a Seamless Grid

Global energy markets are transitioning from fossil fuels to renewable electricity.
Unlike oil, electricity prices vary regionally, requiring integrated power grids for efficient trade.
High-Voltage Direct Current (HVDC) transmission, battery storage, and submarine cables are making a global electricity grid feasible.
India’s One Sun One World One Grid (OSOWOG) initiative aims to connect renewable power networks across nations, boosting global energy trade.

Factors Supporting India as a Global Energy Hub

Strength in Renewable Energy

- India has an interconnected power grid with Nepal, Bhutan, and Bangladesh, forming a base for expansion.
- $100 billion planned investment in grid expansion and modernisation over the next eight years.
- Potential 50 GW energy corridor linking Saudi Arabia to Japan, integrating Europe and Asia.
- Saudi Arabia-Egypt-Europe interconnection could connect India with Europe within five years.
- Eastern grid interconnection with Japan could help utilise India’s solar surplus.

Technological Advancements and Cost Competitiveness

- HVDC transmission reduces losses, enabling long-distance power transfers.
- Battery storage costs have declined by 30%, improving renewable energy reliability.
- Pumped Hydro Storage (PHS) complements battery solutions for managing intermittency.
- India’s solar power costs are among the lowest globally, projected to drop to 1.5 cents per unit.

India as the OPEC of Renewables

- A global electricity grid can ensure cost-effective power supply across regions.
- Dollar-denominated Power Purchase Agreements (PPAs) can position India as a global leader in clean electricity exports.
- Solar energy from Rajasthan could power Saudi Arabia and Greece, while Indian wind energy could supply Tokyo at night.
- By 2047, India could transform from a $130 billion energy importer to a $100 billion clean electricity exporter.

Scaling Up Infrastructure for Global Energy Trade

- Domestic manufacturing of HVDC converters, submarine cables, and storage technologies is essential.
- HVDC transmission corridors must expand by 10 GW every three years.
- 50 GW of intercontinental capacity is necessary for positioning India as a global electricity hub.

Energy Storage as a Key Enabler

- Global net-zero targets by 2050 require 4,000 GW of energy storage, demanding $177 billion in annual investment.
- India must install 50 GWh of battery storage and PHS annually over the next decade.
- A unified Indian grid with General Network Access (GNA) can enable seamless energy trade with neighbours.

Role of Renewable Energy in India’s Transition

Current Renewable Energy Status

As of October 2024, India’s non-fossil fuel energy capacity stands at 203 GW:
- 92 GW Solar
- 47 GW Wind
- 51 GW Hydro
Targeting 500 GW of non-fossil fuel-based capacity by 2030.

Key Renewable Energy Initiatives

Large-scale renewable parks and offshore wind projects.
Hybrid projects combining solar and wind.
National Solar Mission and state-specific policies.
International partnerships and foreign investments in renewables.

Cross-continental electricity trade via Indian power exchanges can benefit Europe, the Middle East, and Asia-Pacific.

Integrating Energy Markets and Clearing Mechanisms

- Global electricity trade could lead to a unified international electricity price.
- India’s strategic location enables it to supply power across time zones, ensuring 24/7 renewable generation.
- By 2035, interconnections with Russia, Europe, and the US could facilitate global electricity trade.
- India could pioneer an electricity clearing and settlement system, similar to UPI in digital payments.

Need for Energy Transition in India

Rising Energy Demand

- India’s population exceeds 1.4 billion, making energy security critical for economic stability.
- Ensuring a sustainable energy supply is essential for continued industrial and infrastructural growth.

Climate Commitments

- India is a signatory to the Paris Agreement, targeting 450 GW of renewable capacity by 2030.
- Committed to net-zero emissions by 2070 and reducing emissions intensity by 45% by 2030.

Energy Security and Economic Benefits

- High fossil fuel imports make India vulnerable to geopolitical risks.
- Increasing the share of renewables enhances energy security and lowers long-term energy costs.
- Renewable energy is cheaper than fossil fuels, strengthening India’s economic resilience.

Challenges in India Becoming a Global Energy Hub

Grid Stability and Energy Storage

- Fluctuations in renewable supply impact grid stability.
- Advanced storage solutions like BESS and PHS are needed to ensure reliability.

Land Acquisition Issues

- High population density limits land availability for renewable projects.
- Land disputes and transmission bottlenecks hinder expansion.

Financial Constraints

- $500 billion investment required by 2030 for energy infrastructure.
- Private capital and innovative financing models are needed to meet investment needs.