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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
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- 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
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- 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
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- 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
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- 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
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- 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
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- 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
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- 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
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- 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
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- 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
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- Fluctuations in renewable supply impact grid stability.
- Advanced storage solutions like BESS and PHS are needed to ensure reliability.
- Land Acquisition Issues
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- High population density limits land availability for renewable projects.
- Land disputes and transmission bottlenecks hinder expansion.
- Financial Constraints
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- $500 billion investment required by 2030 for energy infrastructure.
- Private capital and innovative financing models are needed to meet investment needs.
