governance, political economy, institutional development and economic regulation

Posts tagged ‘hydro power’

Netaji-Mulayam’s 30/30 India (U) Vision


Blame it on Nehru. If it had not been for him, India (U-ndivided) would comprise Pakistan, Azad Kashmir and Bangladesh, though regrettably still not Sri Lanka (Galle and Kandulama are so beautiful!).

Now why couldn’t the man have just made Jinnah the PM, who would have been gone soon enough, anyway. Nehru would have been back in the saddle and the rest of history would have unwound as it did, except:

(1) We would have won more hockey matches.

(2) Our cricket and football teams would be stronger.

(3) Our movie stars would be taller and better looking and Imran Khan would be ours.

(4) Indians (U) would no longer feel compelled to cheer cricket teams on the basis of religion.

(5) The delights of Lahore would still be available to the average Punjabi

(6) We would not have the absurd feet stomping, yelling, in-your-face antics between border guards, every day at Attari.

(7) The refined Dilli culture would not have been overwhelmed by exuberant Punjabi refugees.

(8) Bengali would have been a dominant Indian language spoken by 15% and Urdu would never have declined and be spoken by more than 25% of U-Indians.

(9) India (U)’s river water potential would have been better harnessed

(10) Hydro power would still be a major energy source

(11) Cheap gas, piped from Turkmenistan would fuel household energy needs, industry and electricity in the North

(12) Our forest cover ratio would be much worse but our freshwater availability would increase significantly.

(13) The Soviets would still be there in Afghanistan because we would never have given the US a toehold in Karachi, the Panjab or the NW Frontier areas

(14) The Taliban would never have been born, nor would have Bhindranwale.

(15) India (U) would not be a favourite tourist destination for Israeli backpackers.

(16) We would still get cheap Sardas (a juicy, sugary sweet Afghanistan/NW Frontier melon) and exquisite dry fruit.

(17) We would still have to deal with “Afghani” money lenders and their wayward ways of dealing with defaulters rather than having them live here as pliant refugees.

(18) We would be able to visit Kashmir without bullet proof vests and enjoy its cuisine and natural beauty.

(19) Kashmiris would still opt for business, horticulture, hospitality, handicrafts, poetry and cricket rather than AK 47s and football.

(20) North and East India (U) would have remained competitive versus the West and the South with easy access to the sea via Karachi; undiluted Punjabi prowess in agriculture; Sindhi excellence in trade; Bengali competitiveness in “Kolture”, arts, law and the social sciences.

(21) We would have fathered micro credit and Muhammad Yunus would be ours.

(22) With one third of the electorate and dominance in the North, Muslims would no longer feel like a minority

(23) Under competition from a significant Islamic presence, Hinduism would have tended to consolidate, rather than splinter along caste cleavages, as it has today.

(24) The BJP would have been a dominant party of the right from the 1950s and Zardari and Sheikh Hasina would have been its Muslim leaders today instead of Shahnawaz Hussain.

(25) Nawaz Sharif and Khaleeda Zia would be the Muslim leaders of the Congress party, rather than Khurshid, Kidwai and Rasheed Alvi.(26) We would not spend 20% of our fiscal resources on the army.

(27) It is unlikely, Sikkim would ever have resolved to join the Republic, just as Nepal’s main regret is that it borders tumultuous India, rather than placid Sweden.

(28) China would be even more worried and hence more of an existential threat.

(29) The US would have been become friendlier much earlier.

(30) Najeeb Jung would still be Lt. Governor of Delhi


Importing energy insecurity

Shortages make people do crazy things. In the 1970’s a Bajaj scooter was a prized posession because it was most easily available against payment in US$, as were denim jeans, which were smuggled in or sold by the firangi “flower children” flooding India for hash and nirvana. In the 1990’s, the humble Maruti 800 beame a “must have” since the only other options were the gas guzzlers; Ambassador and Premier Padmani. In the 2010s, gold is the the “go to” asset, as the INR crumpled.

Countries are no different. The neglect of long term, efficient, development of India’s domestic energy sources (coal, hydro, solar, wind and biomass) have made economic growth artifically dependent on petro products (gas and oil), as the fast and easy option to add electric power capacity. 30% of petro consumption today is for this purpose. Stagnating coal production, increasing coal imports, further bolster petroleum as the “go to option” for power generation. Highly efficient generation technology (developed for gas surplus countries like UK, US and now Africa) adds to the “green” character of gas based generation versus coal. Constrained by domestic supply side issues and seduced by external incentives (climate change and the engineer’s incentive to use the “best” technology) to switch to petro and gas, India fell headlong into the “shortage syndrome”- best recognised by a panic stocking up of goods….in this case gas based power plants (their installed capacity exploded since 2000), diesel fueled generators, diesel powered trains and diesel powered ground water pumps as short term answers since 2000 to the low availability of electricity.

The Mahatma’s concept of “Self Sufficiency” ceded defeat since the 1980s to the dominant, liberal, concept of an “open” economy via international movements in trade and capital (though not people). However, within this mantra “pricing power” has to be contended with by “small” buyers like India. We should learn from the US ( a big buyer) where the rapid expansion of domestic shale gas production was doggedly pursued and has decreased reliance on gas imports, leading to a reduction in international gas price. Even a “big buyer” like the US does not like being beholden to imported energy.

We are too small to move world petro/gas prices by reducing our energy import demand. However, energy security concerns should induce us to tax petro and gas consumption heavily to limit demand. We don’t do this today. The eternal scare has been the fall out of retail energy price induced inflation, but this is really a timing issue. The time to adjust energy prices upwards is when inflation is low or when energy prices dip. Today baby steps are being taken in this direction. What we need is to stride forward.

Our energy strategy is short sighted. (1) It does not limit the use of gas purely for industrial, road public transport in metros and cooking fuel use, as it should (2) It does not cap the use of petro products for power generation to existing generation capacity (3) It does not aggressively pursue hydro power generation where we have exploited only 40% of our potential. (4) It postpones rapid coal mining reform, principally due to political economy constraints. The only bright spot is the growth in renewable generation and market friendly domestic energy trade practices.

A very high Current Account Deficit (shortage of US$ to pay for imports) re-emerged as a major fiscal destabaliser in 2013, after more than a decade of stability in the external account. This is a sharp reminder, that external account stability (and our energy security) is hostage to energy imports. We import a very high proprtion (75%) of the petro and gas we consume. These constitute 40% of our import bill. India’s export performance (and hence its capacity to pay for imports) has been good. Our share of world merchandise exports increased from 0.4% in 1990 to 1.7% in 2010 (WTO 2013). Export of commercial services did even better with our world share increasing from 0.8% in 1980 to 3.3% in 2011. However, none of these export achievements have been enough to overcome the insecurity of having to import energy security in US$. Annual Petro imports (US$110 billion) are a high 50% of our FEx reserves (US$ 220 billion). China imports only 50% of the petro products it consumes and the prospect of this increasing to 70%  by 2020 (IEA) has them worried. This is despite the fact that their annual energy imports amount to only 20% of their FEx reserves. We cannot continue to be hostage to energy imports.

TERI Energy Map 2030, recommends the following steps to reduce dependence on petroleum imports: (1) Electrify rail and save diesel.   Today less than 30% of the rail track is electrified. (2) Switch passenger and freight transport to rail and save diesel by avoiding dependence on road transport. Today only 30% of the goods traffic uses rail and the share of road transport is expected to grow from 70% today to 85%. This trend needs to be reversed. (3) Increase domestic coal production which is one of the three dominant eneregy sources (hydro and solar being the other two) in India (4) Increase hydro based generation, whose share has reduced from 40% in 1980 to 12% in 2012, due to ineffective planning strategies and a defeatist approach to the genuine concerns of citizens with potential environmental fall outs. (5) Price energy competitivey to remove distortions in consumer demand across products (please we don’t need diesel powered motorcycles) and incentivise energy conservation.

Like our defence policy and our diplomacy, our energy policy is too status quoist and backward looking, to serve us well. We are not planning for a secure energy future.

Tag Cloud

%d bloggers like this: