PM for better coordination among energy players


New Delhi : Prime Minister Manmohan Singh Saturday called for better coordination among key public sector energy players towards the larger goal of energy security.

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Singh Saturday told policy makers to evolve a mechanism for better coordination among different ministries and departments dealing with the energy sector, where commercial energy is required to grow at 6.8 percent to sustain nine percent economy growth rate.

“Currently, policies relating to individual energy sectors are set by a number of different ministries reflecting historical evolution,” the prime minister told a full meeting of the Planning Commission here.

Prime Minister Manmohan Singh Saturday discussed in detail the Planning Commission’s draft document for an integrated energy policy (IEP), which is likely to be tabled before the cabinet for approval next month.

The draft paper seeks “a competitive” energy market (where no single firm influences price of a product) wherever possible, and prices should be market determined subject to regulation to take care of anti-competitive behaviour.

The prime minister said: “The policies followed in different sectors are not always internally consistent.”

“It is therefore, critical that we evolve an integrated energy policy based on a consistent application of economic principles across different energy sources,” he added.

Towards this end, he asked Planning Commission Deputy Chairman Montek Singh Ahluwalia to constitute an expert committee that will also examine the findings of a similar group under member-energy of the plan panel Kirit Parikh.

“Energy is a crucial input in our development and our energy requirement for growth is indeed very large. From all available information, we are also likely to be increasingly import-dependent,” the prime minister said.

“This makes us vulnerable to uncertainty of international prices and also reliability of supplies.”

Accordingly, he said, it was important to undertake optimal exploitation of domestic energy resources with a view to increasing the country’s energy security and explore the scope for acquiring energy assets abroad.

Agreeing with the prime minister’s suggestion for effective co-ordination, Ahluwalia said there were six to seven ministries engaged in energy sector.

“To have an integrated view, we need to have some principles be established,” he told reporters after the meeting.

Petroleum and Natural Gas Minister Murali Deora, Coal Minister Santosh Bagrodia, Power Minister Sushil Kumar Shinde and Prime Minister’s Economic Advisory Council Chairman Suresh Tendulkar were among others who attended the meeting.

Key Features of integrated energy policy

* Autonomous bureau of energy efficiency for energy schemes.

* Commercial energy has to grow at 6.8 percent per annum.

* India will require 1,667-2,077 (commercial primary energy) million tonnes of oil equivalent by 2031-32 out of which 58-76 percent will be imported.

* Domestic energy prices should reflect global prices to encourage energy efficiency.

* Encourage private investment in energy sector.

* Neutral tax policy across sectors with specific differentials for externality.

* Ad valorem (according to value) royalty on true economic value.

* Launch solar energy mission.

* Accelerate development of fast breeder reactors.

* Expansion of research and development in energy sector.