Why does India need a Ministry of Energy?

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• India needs a Ministry of Energy.

Different Ministries governing India’s Energy Sector

• Ministry of Petroleum and Natural Gas 
• Ministry of Coal
• Ministry of Power 
• Ministry of New and Renewable Energy
• Department of Atomic Energy

Issues with the Energy Sector

• Structural Lacuna:
  • There is no one public body at the central or state level with executive oversight, responsibility and accountability for the entire coal value chain. 
    • This is a lacuna that afflicts the entire energy sector. 
  • It will need to be filled to not only prevent a recurrence of another coal crisis but also for the country to realise its “green” ambition.
• Decarbonisation:
  • India faces an energy and environmental problem. Still the word “energy” is not part of the political or administrative lexicon. 
  • As a result, there is no energy strategy with the imprimatur of executive authority. 
  • A dedicated ministry would help formally introduce the concept of decarbonised energy.
• Lack of bureaucratic will:
  • The NITI Aayog (then Planning Commission) in 2006 published a document titled “Integrated Energy Policy”
  • Its implementation depends upon the responses of the bureaucrats in various ministries (viz petroleum, coal, renewables and power).
    • In general, they have little incentive to alter the status quo.
• Recent coal shortage:
  • Though only one ministry or entity can not be blamed.
  • But the Ministry of Power/NTPC should accept responsibility. 
    • As they allowed coal inventories to fall below the recommended minimum in an effort to better manage their working capital.
  • The Ministry of Coal and Coal India must certainly accept that they slipped up.
    • In managing the production process, planning supplies or leaving vacant crucial leadership positions. 

• Unpaid Dues:
  • Power plants owe a huge quantum of money to Coal India (CIL), so naturally, CIL gets into difficulty.
  • Unless the state-run electricity distribution entities (discoms) mend their ways and pay power companies on time.
    • The latter may be pushed to default on coal payments, and fuel crises like the current one might recur.

• Unsustainable Electricity Tariffs:

• The discoms sell electricity to residential and agricultural sector consumers at subsidised tariffs.
  • That does not fully cover the costs of procurement.

How would a new unified Ministry or a department help?

• India is the world’s third-largest energy-consuming country, thanks to rising incomes and improving standards of living.
• Integrated outlook on energy
  • This would enable India to optimise the limited resources to meet the goals of energy security, sustainability and accessibility.
  • To formulate and execute an integrated energy policy, to leverage the weight of “India Energy Inc”
• Quicker policy response
  • It would identify and handle all of the issues that currently fall between the cracks created by the existing structure.

• Regulatory Ombudsman 
  • It would be to sit at the apex of the energy regulatory system and will streamline the current multiple layers of energy regulations 
• Raising Awareness
  • It would coordinate and implement the communication strategy to raise public awareness 
    • About existing and emergent energy-related issues, especially global warming. 
• Setting up Executive department

• It could be referred to as the “Department of Energy Resources, Security, and Sustainability”, headed by a person of minister of state rank. 
• The department may have a narrower remit than the other energy departments 
  • But by virtue of its location within the PMO, it would, de facto, be the most powerful executive body.
  • With ultimate responsibility for navigating the “green transition”

• It would not alter the existing roles and responsibilities of the various ministries that oversee petroleum, coal, renewables and power. 

Way Ahead

• Legislative intervention:
  • The government should pass an Act dedicated to Energy Responsibility and Security.
  • This Act should elevate the significance of energy by granting it constitutional sanctity.
• Identifying Right to Dignified Life: 
  • India’s responsibility is to provide citizens access to secure, affordable and clean energy.
  • Thus, it should lay out measurable metrics for monitoring the progress towards the achievement of 
    • energy independence, energy security, energy efficiency and green energy.

• Creating a dedicated ministry or department:
  • Government should redesign the existing architecture of decision-making for energy. 
  • The Ministry of Energy would oversee the currently siloed verticals of the ministries of petroleum, coal, renewables and power. 
  • Such a ministry did exist in the early 1980s (albeit without petroleum). 
  • The minister-in-charge should rank on equal footing with the ministers of defence, finance, home and external affairs. 
• Investor sentiments: 
  • Maximising India’s competitiveness in dealing with the international energy community.
    • Would help to finance and incubate clean energy R&D and innovation.
  • Several corporations have already signalled their intent to invest megabucks in clean energy. 
    • Reliance has committed $10 billion, Adani $ 70 billion over 10 years; 
    • Tata Power, ReNew Power and Acme Solar have also placed their stakes in the ground. 
  • The probability of these investments will be realised only if 
    • The current fragmented and opaque regulatory, fiscal and commercial systems and processes were replaced by 
    • A transparent and single-point executive decision-making body for energy.

Source: IE