India’s Energy Policy and Transition: A Roadmap for Security and Sustainability

India’s Energy Policy and Transition: A Roadmap for Security and Sustainability

Energy is the lifeblood of modern economies, and for India, ensuring a stable, affordable, and sustainable energy supply has become a strategic priority. The country faces the dual challenge of meeting growing domestic demand while reducing vulnerability to global supply shocks. To address these concerns, India requires a multi-pronged energy strategy focused on diversification, domestic production enhancement, and infrastructure resilience. Energy security is no longer merely an economic issue, it has become a matter of national security, directly impacting industrial growth, geopolitical stability, and citizen welfare.

Current Energy Dependency

India’s energy landscape is marked by a high reliance on imports, particularly in oil and natural gas. Approximately 85 percent of the crude oil consumed in the country is sourced from abroad. This oil is subsequently refined into gasoline, diesel, and other petroleum products that fuel transport, industry, and agriculture. Similarly, more than half of India’s natural gas demand is met through imports, which exposes the nation to fluctuations in international prices and geopolitical tensions.

The economic burden of these imports is substantial. Combined oil and gas procurement accounts for nearly a quarter of India’s total import bill, estimated at around $170 billion annually. While India has historically depended on Middle Eastern nations for its energy needs, recent years have seen a shift in sourcing patterns. Currently, Russia supplies roughly 35 to 40 percent of India’s crude oil, often at discounted rates, which has helped mitigate costs but also introduced new dependencies. This situation underscores the urgent need for domestic production augmentation and diversification of energy sources to minimize external vulnerabilities.

Lessons from Global Energy Crises

History offers several lessons on the risks associated with over-reliance on limited energy sources. The 1973 oil embargo, which arose from a conflict between Arab nations and the United States, caused a sudden surge in global oil prices. The crisis prompted many countries to establish Strategic Petroleum Reserves (SPRs) and invest in alternative energy sources.

Similarly, the 2011 Fukushima nuclear disaster in Japan forced a temporary shift from nuclear power to coal and gas-based energy. The subsequent re-evaluation of Japan’s energy mix highlighted the importance of resilient, flexible energy systems capable of adapting to unforeseen disasters.

Extreme weather events also stress the vulnerability of energy infrastructure. The 2021 winter storms in the United States caused frozen pipelines and widespread failure of wind turbines, revealing the need for weather-resilient infrastructure capable of maintaining energy supply during environmental shocks.

More recently, the 2022 Russia-Ukraine conflict disrupted European energy supply chains, particularly liquefied natural gas (LNG). Countries reliant on Russian gas were compelled to revert to coal and explore multiple sources to maintain energy security. These crises collectively demonstrate that over-dependence on any single supplier or energy source increases vulnerability, making diversification an essential component of energy planning.

The Reality of Global Energy Transition

Despite significant investment in renewable energy, fossil fuels continue to dominate global energy production. Currently, about 80 percent of the world’s energy is generated by burning coal, oil, or natural gas. Solar, wind, and other renewable sources together account for less than 10 percent of global energy production.

This slow transition underscores the complexity of replacing established fossil fuel infrastructure. While renewable technologies are available, their deployment requires substantial capital investment, technical expertise, and a strategic approach that balances ongoing fossil fuel reliance with long-term sustainable alternatives. For India, this means carefully planning energy expansion while integrating renewables in a manner that ensures both affordability and reliability.

India’s Five-Pillar Strategy for Energy Transition

To strengthen energy security and promote sustainability, India can adopt a comprehensive five-pillar strategy encompassing coal gasification, biofuels, nuclear energy, green hydrogen, and pumped hydro storage.

1. Coal Gasification

Coal gasification transforms coal into syngas, methanol, hydrogen, or fertilizers instead of directly burning it. India possesses over 150 billion tons of coal reserves, much of which is high in ash content, making it ideal for gasification. This technology not only captures carbon emissions but also reduces environmental pollution and contributes to future energy independence. By leveraging coal gasification, India can utilize its abundant domestic resources while minimizing harmful emissions, creating a cleaner alternative to traditional coal-fired energy.

2. Biofuels

Biofuels offer a sustainable means of supplementing fossil fuels. Ethanol blending with petrol, primarily from sugarcane and agricultural residues, is already being implemented. Expanding the network of biogas plants, such as those under the SATAT scheme, could allow agricultural waste to be converted into energy. Scaling biofuel production requires focused research and development, infrastructure investment, and policy support to ensure cost-effectiveness and sustainability. By developing biofuels, India can reduce its oil import dependence while providing additional income streams for rural communities.

3. Nuclear Energy

Nuclear power remains a low-carbon energy source with significant long-term potential. India’s current nuclear capacity stands at 8.8 GW, which has not increased substantially in recent years. Plans to expand nuclear capacity include thorium-based reactors, uranium partnerships with global partners, and the construction of Small Modular Reactors (SMRs). Accelerating these projects is critical for energy diversification and reducing reliance on imported fossil fuels. Nuclear energy not only contributes to a cleaner energy mix but also strengthens national energy security by providing a stable, high-output power source.

4. Green Hydrogen

Green hydrogen, produced by separating hydrogen and oxygen from water via electrolysis, represents a promising clean fuel option. India aims to produce five million metric tons of green hydrogen annually by 2030. However, high production costs, primarily due to expensive electrolyzers, remain a major barrier. Investment in domestic electrolyzer manufacturing and technology development is essential to make green hydrogen economically viable. Integrating green hydrogen into India’s energy mix could decarbonize industrial processes and provide a renewable alternative for transport and power generation.

5. Pumped Hydro Storage

Pumped hydro storage systems help balance the electricity grid by storing excess energy generated from intermittent renewable sources such as solar and wind. This stored energy can be released during peak demand periods, ensuring grid stability and smooth integration of renewables. By employing pumped hydro storage, India can effectively manage fluctuations in renewable power generation, reduce dependence on fossil fuel backup systems, and improve overall energy reliability. This technology is vital for a transition to a sustainable, low-carbon energy grid.

Moving Forward: Policy and Investment Imperatives

Implementing this multi-pronged strategy requires coordinated policy measures, substantial investment, and strong public-private partnerships. Encouraging domestic production, incentivizing renewable energy, and creating flexible energy infrastructure are central to safeguarding India’s energy future. In addition, research and innovation in emerging technologies such as green hydrogen, coal gasification, and SMRs will play a critical role in reducing dependency on imports and strengthening energy security.

Infrastructure resilience, particularly against extreme weather and geopolitical disruptions, must also be prioritized. Strategic storage solutions, such as SPRs and pumped hydro systems, combined with diversification of suppliers and energy types, will ensure that India is better prepared for future crises. Policymakers must also focus on affordability to shield citizens from price volatility while maintaining the momentum of energy transition initiatives.

Conclusion

India stands at a crucial juncture in its energy journey. Ensuring energy security requires proactive measures encompassing diversification, domestic production enhancement, and investment in sustainable technologies. By adopting a forward-looking strategy based on coal gasification, biofuels, nuclear energy, green hydrogen, and pumped hydro storage, India can achieve a resilient and low-carbon energy system. Such a strategy not only mitigates the risks posed by global supply shocks but also supports long-term economic growth, environmental sustainability, and national security. Timely action and consistent policy support will enable India to emerge as a model for energy transition in the developing world.