Energy Resources Management and Energy Pricing policy
By: Amit Bhushan Date:24th May 2014
The media is agog with the guest list and elaborate arrangements for the swearing-in ceremony of the incumbent regime while the ordinary citizen watches with amusement, the rat race for positions of power amongst the new dispensation. What is being clearly awaited in the policy regards energy resources management from the new government, which was raised by incumbent as a noticeable failure of the previous regime??? One of the promises was to set the policy correct to ensure that energy is easily available to people, possibly in an equitable manner where the interests of the consumers and producers are protected and the fine balance will be maintained.
Plunder of mineral resources in the previous regime was most certainly the single biggest reason of its failure. The free-for-all politically connected battle involved almost every notable name no matter of which political colour; one of the prime reasons why even novices in politics could start dreaming of their ‘golden era’. The result is spectacular defeat of the ruling parties including almost all their open and not-so-open supporters. While no one is convinced yet about then ‘opposition’s’ role, nevertheless expectation is that they should rectify the situation which is indeed a complex knot.
Different interest groups with differing expectations are already taking positions to slug it out with the current dispensation. Every possible group except the retail consumer group is putting out data to explain their side of argument in detail manner. While retail consumers are concerned, they do not make any loud noises but the outcome of elections should be taken as verdict and deciphered. Basically, making policy on energy is complex since there is a timeframe involved in which situations keep altering and making commitments over the range of situations is indeed complex. Further the resources within the country are limited and dependency on imports needs to be controlled for energy security. Within domestic resources, there are host of entities with their different expectations which keep changing depending upon market situation. Similarly imports have their own complexity. The cost of energy produced from different sources is different like hydro, solar, wind, coal, petroleum and nuclear. Similarly the cost in commodity in which form energy is consumed like electricity, gas, petrol, diesel etc. also varies. This all creates problems including conversion energy from one form to other depending upon policy and infrastructure also has its ramifications.
Energy is a key input for almost every conceivable sector of industry and the price at which it is available in a given market condition can impact the competitiveness of the industry sector. Retail is other area where bulk energy is needed and industry as well as government wants to milch this sector to control energy consumption as well as to subsidize other areas, if possible. So if the retail is not directly taxed like in case of petrol, it bears indirect burden like having to pay for T&D losses of the electricity boards.
It would certainly be of interest to see hot the new government sets in to balance all these competing interests and concerns not only by domestic players but also by global players because as a country India is already amongst top 7 consumers and its position is likely to improve to number 2 or 3 by the end of the term for this government in all likelihood. So any policy will have bearing on the energy scenario not only within the country but also in the region if not globally.
By: Amit Bhushan Date:24th May 2014
The media is agog with the guest list and elaborate arrangements for the swearing-in ceremony of the incumbent regime while the ordinary citizen watches with amusement, the rat race for positions of power amongst the new dispensation. What is being clearly awaited in the policy regards energy resources management from the new government, which was raised by incumbent as a noticeable failure of the previous regime??? One of the promises was to set the policy correct to ensure that energy is easily available to people, possibly in an equitable manner where the interests of the consumers and producers are protected and the fine balance will be maintained.
Plunder of mineral resources in the previous regime was most certainly the single biggest reason of its failure. The free-for-all politically connected battle involved almost every notable name no matter of which political colour; one of the prime reasons why even novices in politics could start dreaming of their ‘golden era’. The result is spectacular defeat of the ruling parties including almost all their open and not-so-open supporters. While no one is convinced yet about then ‘opposition’s’ role, nevertheless expectation is that they should rectify the situation which is indeed a complex knot.
Different interest groups with differing expectations are already taking positions to slug it out with the current dispensation. Every possible group except the retail consumer group is putting out data to explain their side of argument in detail manner. While retail consumers are concerned, they do not make any loud noises but the outcome of elections should be taken as verdict and deciphered. Basically, making policy on energy is complex since there is a timeframe involved in which situations keep altering and making commitments over the range of situations is indeed complex. Further the resources within the country are limited and dependency on imports needs to be controlled for energy security. Within domestic resources, there are host of entities with their different expectations which keep changing depending upon market situation. Similarly imports have their own complexity. The cost of energy produced from different sources is different like hydro, solar, wind, coal, petroleum and nuclear. Similarly the cost in commodity in which form energy is consumed like electricity, gas, petrol, diesel etc. also varies. This all creates problems including conversion energy from one form to other depending upon policy and infrastructure also has its ramifications.
Energy is a key input for almost every conceivable sector of industry and the price at which it is available in a given market condition can impact the competitiveness of the industry sector. Retail is other area where bulk energy is needed and industry as well as government wants to milch this sector to control energy consumption as well as to subsidize other areas, if possible. So if the retail is not directly taxed like in case of petrol, it bears indirect burden like having to pay for T&D losses of the electricity boards.
It would certainly be of interest to see hot the new government sets in to balance all these competing interests and concerns not only by domestic players but also by global players because as a country India is already amongst top 7 consumers and its position is likely to improve to number 2 or 3 by the end of the term for this government in all likelihood. So any policy will have bearing on the energy scenario not only within the country but also in the region if not globally.