Private sector must play a bigger role in energy policy

Vol 10, PW 7 (27 Jul 06) Midstream & Downstream
     

India needs integrated and transparent policies across the countrys energy sector, says the countrys Planning Commission.

As we move into the 11th Plan, we need to take an integrated view of energy policy towards different energy sub-sectors, it says. Central and state sectors will continue to dominate the energy sector in the 11th Plan (but) energy policy should not be determined sector by sector where the dominant public sector players often have significant vested interests.

Instead, the Commission sees a larger role for the private sector and wants to ensure an institutional framework that provides a level playing field to public sector and private sector players and provides comparable incentives to producers across all energy sectors. It also wants to streamline tax and regulatory structures across the energy sector.

There is no reason why energy resources should be taxed more than others, says the Commission. Further, coal bed methane must be fully exploited and fossil fuel reserves enhanced through more intensive exploration.

Renewable energy sources such as wind, biomass and bio-fuels account for a very small percentage of total energy but they could increase to between two and three percent in the course of the 11th Plan period, believes the Commission. Institutions to promote and force the pace of energy conservation and improvement in energy efficiency also need to be strengthened.

Notes the Commission: Development and use of renewable and non-conventional energy sources have not progressed to the extent they could have. The 11th Plan will restructure incentives and support from supply driven programmes to demand driven programmes and technologies.

It will also link subsidies and support to outcomes in terms of renewable energy generated, rather than to capital investment.