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Securing energy is the biggest job of any government. In a country like India which has a booming manufacturing sector, it becomes more important than ever to ensure energy security. Just as it is important, it is also difficult to ensure. India has relied on imports for securing its energy needs. Total installed capacity of India’s power sector as of 31st August 2017 has been:

% of Total
Total Thermal
Hydro (Renewable)
Renewable Energy Sources
58, 303

The table above has been made as per data available from the Ministry of Power, Government of India[1]

It is believed that India’s coal imports will rise by more than 200% and the natural gas imports will also rise significantly[2]. The primary energy consumption of India in the year 2016 (which included crude oil, natural gas, coal, nuclear energy, hydroelectricity and renewable power) stood at 723.9 million tonnes oil equivalent (Mtoe)[3]

Statistics say that 70% of the energy in India is generated from fossil fuels. In the year 2015-16 per capita consumption was 22.042 Giga Joules (0.527 Mtoe). Economic expansion has been rapid and it is expected that India will be the second largest contributor to the increased global demand for energy by 2035. In total India would account for 18% of the rise in energy consumption globally.
India’s primary energy consumption is the third largest falling short of only the USA and China with a 5.5% global share in 2016[4]. The capacity of producing energy in India is also derived primarily from fossil fuels; 70% electricity is produced by fossil fuels.

Following data has been taken from the Energy Statistics report prepared by the Central Statistics Office[5]:

  • Consumption of Coal and Lignite: Consumption of lignite is high for the production of electricity, accounting for 89.57% of the consumption. For coal, 508.25 MT units were used for generating electricity. 
  • Consumption of Crude Oil and Natural Gas: 33.72% of the use of natural gas has been by the fertilizers industry. Electricity generation used 22.76% and domestic use took up 11.42%. When an analysis was done of the industry usage of natural gas, it was found that 55.76% use was for energy while 22.24% was non-energy use. 
  • Consumption of Petroleum Products: 40.42%of the total consumption of petroleum products was in the form of diesel oil, which was followed by petrol at 11.83%. LPG and Petroleum cake were the next in terms of consumption with 10.63% and 10.45% respectively. Naphtha consumption stood at 7.19%. 
  • Consumption of Electricity: Industries counted for 42.30% of the total electricity consumed. 23.86% domestic use was the next highest with 17.30 by the agricultural sector. Commercial sector was the last with 8.59%. In the year 2015-16, electricity consumption stood at 10,02,191GWh. Loss of electricity in the course of transmission stood at 21.81%.


  1. Coal production is the most important source of energy: Coal is visibly the staple to India’s need of energy and a look at the way energy is produced and consumed, it will remain so for the foreseeable future. The problem with this is that coal is only available in limited quantities, and is demand is only going to increase in the future. With the growing demand, it might become difficult to sustain the demand. At the same time, labour strikes and natural disasters are other factors that are likely to affect coal production. Therefore, being dependant on coal is one of the biggest challenges India faces. 
  2. High dependence on Oil and Petroleum: India is one of the largest consumers of oil and petroleum in the world. With increasing urbanization, the middle class is expanding and the facilities and luxuries that were earlier unavailable to them have now become available. This has lead to a further increased demand since estimates say that a significant number of families in the urban areas now own 2 vehicles (2 wheelers included). Therefore the demand for petroleum and oil is only going to increase. To acquire these resources, we rely most heavily on imports from the Middle Eastern countries. However, in the last few years, India has also increased its investments in South Africa and the Caspian Sea in a bid to diversify its sources of oil and petroleum. The real problem here is that India has very limited oils and petroleum reserves; furthermore, they are mostly unutilized or underused. Production and refining the available reserves have been restricted to Oil India Limited (OIL) and Oil and Natural Gas Corporation (ONGC). However, reforms allowing foreign investment are expected to change this. 
  3. Shortage of Skilled Human Labour: Retirement and lack of interest have led to a severe shortage of skilled labour in the industry. Students are other members of the workforce are unaware of the employment opportunities that the energy industry offers. Therefore, the industry has been unable to attract the workforce required. At the same time, work conditions can be difficult, which is another reason behind lesser people
  4. Shortages in electricity: Apart from non-renewable resources like coal, oil & petroleum and natural gas, India depends for the rest almost entirely on electricity. Given that the industrial sector is booming and houses requiring electricity are ever increasing, the demand for electricity is extremely high. The problem is that despite several means of electricity production, India still faces a severe shortage of electricity. This shortage is often due to low production, but equally often, the problem is caused due to loss of electricity during transmission.
    Electricity shortages affect industries and business the most since day-long blackouts reduce the productivity of such establishments. Production gets slowed down or shut down for days altogether. For those establishments that cater to power back-ups like generators, there are the added costs of using and maintaining them.
  5. Inequality in energy availability: Like most other sectors, there is an inequality in the availability of energy as well. There are still many houses, mostly rural, that depend on kerosene and cow-dung for lighting and cooking in their households. Estimates say close to 40% houses in rural areas still do not have access to electricity. In other areas, electricity supply may be present but it may not be uninterrupted and people may have to face irregular supply.
  6. Poor Infrastructure: The ground reality in India is that infrastructure is extremely poor and not up to required standards. Where infrastructure is poor, it becomes difficult, almost impossible, to provide energy as per requirement. The problem is that poor infrastructure isn’t easy to build upon, and therefore improving it isn’t easy either. There are several problems with improving the infrastructure. The most complex one is that of geographical difficulty. The terrain and geography of India are such that building up and improving it can be difficult as well as costly. 
  7. Shortage of Skilled Human Labour: Retirement and lack of interest have led to a severe shortage of skilled labour in the industry. Students are other members of the workforce are unaware of the employment opportunities that the energy industry offers. Therefore, the industry has been unable to attract the workforce required. At the same time, work conditions can be difficult, which is another reason behind lesser people wanting to take up careers here. The remuneration offered in these companies is not usually very high, especially when compared to private sector, which is a why a lot of the eligible people choose to go to the private sector. There will be a requirement of around 25,000 additional professionals over the next few years due to attrition, retirement and increasing activities in the industry[6].
  8.  Increased Competition to Procure Oil Equity Abroad: Acquiring oil assets abroad is becoming a challenge for India as we face strong competition from other countries looking to acquire as well. For example, China gives India stiff competition given the backing it gets from the sovereign wealth fund which possesses a corpus of around US$37 billion[7]. Indian companies look at overseas investment as a commercial activity, taking it as assets to be acquired on the basis of their value in terms of returns. Chinese on the other hand look at acquiring energy assets with the perspective of ensuring energy security.  

There can be no denying that India as a state has enormous energy demands. We are not only a developing nation but also a developing nation with industries forming the basis of its economic activity and resultant development. Therefore it is imperative for the reorganization of the energy sector in such a manner that it becomes more efficient. This increased efficiency has to be in terms of both productions as well as consumption.

Energy production needs to be revamped, with more focus on renewable sources since these are inexpensive in the long run, giver higher output (especially in case of atomic energy), are environment-friendly and serve the ideals of a modern developing nation. At the same time, newer technologies, both domestic and foreign should be explored. Investments into research and development in this field are a prospect that the government must look into.

With regard to consumption, stringent regulations and policies must be affected. Standardization of fuel economy in vehicles, use of solar energy at home and in government offices, more careful  consumption so as to avoid wastage, etc. are moves that could lead to improved habits of energy consumption for both public as well as private individuals.

Tough times lie ahead unless urgent measures are taken. For India energy is everything, and a lack of energy, for even as little as an hour has the capability of causing significant losses to both private and public sector. At the same time, as a nation, we do not have the luxury of consuming energy as we want, without putting in due thought into our actions, for the present and the future. 


Written By:
Harshita Chaarag
IV Year

Disclaimer: The views and opinions expressed in the article are those of the author and do not reflect the views and opinions of the Blog.

[1] Power Sector at a Glance, Government of India, Ministry of Power. Available at (Last accessed on 15th September 2017).
[2] Government of India Expert Committee on Coal Sector Reform, 2006. and Jackson, Michael. “The Future of Natural Gas in India: a Study of Major Consuming Sectors”, August 2007. Available at http://iis‐ (Last accessed on 15th September 2017).
[3] BP Statistical Review of the World Energy, June 2017, 8. Available at (Last accessed on 15th September 2017).
[4] Ibid.
[5] Energy Statistics 2017, Central Statistics Office, Ministry of Statistics and Programme Implementation. Available at (L ast accessed on 2nd October 2017).
[6] India’s Energy Security, FICCI – Earnst & Young, 2011.
[7] Ibid.


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