In a bid to provide stable and sustainable energy at a cheaper price to the poor, Prime Minister Narendra Modi, on Monday, said that there is a need for reasonably-priced energy for economic development in the country. “Energy is a key driver of economic growth. Sustainable, stable and reasonably priced energy is essential for the fruits of economic development to reach the bottom of the pyramid. Hydrocarbons will remain the most important source of energy for many years to come,” said Modi in his inaugural speech at the 3-day long Petrotech Summit on Monday here.
The move comes at a time when India needs to raise domestic oil and gas production to cut imports as also establish partnership with regional energy powerhouses. Pushing Indian energy companies to become multinationals, Modi also outlined with a vision - four pillars of energy access, efficiency, sustainability and security - for creating energy corridors to the Middle-East, Central Asia and South Asia.
As the country needs to increase domestic oil and gas production and reduce import dependence, he said, “I have set a target to reduce import dependence by 10 per cent by 2022. This will have to be achieved during the period of increasing oil consumption.”
“On one hand, to meet the increasing demand, we need affordable and reliable sources of energy. On the other, we must be sensitive towards the environment as well,” he added.
The Prime Minister also said hydrocarbons will continue to play an important part in India’s growth, but the country needs energy that is accessible to the poor as also efficiency in use and energy security. “Energy in general and hydrocarbons in particular is an important part of my vision for India’s future,” he said.
Pitching for a strong investment-friendly policy framework to boost domestic hydrocarbon production, Modi said a new hydrocarbon exploration and production policy has been introduced to provide for uniform licence for exploration and production for all forms of hydrocarbons, including shale oil and gas and coal bed methane.
He attributed the $5.6 billion investment in Russian oilfields that will provide 15 million tons of equity oil equivalents, to a proactive foreign policy and energy diplomacy. “I hope that our oil and gas sector companies will take the opportunity to tie up with their foreign counterparts to explore for more equity oil,” he said, adding that our constant efforts have improved India’s ranking in ease of doing business.
The Prime Minister also said that India is poised to account for one fourth of the incremental global energy demand between 2013 and 2040. “It is expected to consume more oil in 2040 than the whole of Europe,” he said, adding that India is the world’s fastest-growing large economy today and is expected to grow five-fold by 2040.
Growth is supported by a series of policy measures that are focussed on improving India’s long-term economic and social prospects rather than short-term headlines. Our efforts are showing results in terms of economic growth and development,” he said while asserting that manufacturing will account for 25 per cent of GDP by 2022 as against 16 per cent now.
As far as the current account deficit (CAD) is concerned, he said that it showed a decade’s low and FDI at the highest level at a time when global FDI has fallen. “According to the Bank of International Settlements, India is less vulnerable to banking distress among the major economies,” he added.
In civil aviation, he said, India is the eighth largest market in the world and set to become the world’s third largest by 2034. “Growth in the aviation sector is expected to raise demand for aviation fuel four times by 2040. All this will impact energy demand,” he said.
For energy access, Modi said that the Government launched the Ujjwala programme to provide 5 crore families free lPG connections and provide piped cooking gas to 10 million houses in the next five years. “Also, the national gas grid network is being doubled to 30,000 km to ensure every village in India has access to electricity by March 2018,” he said.
linking with the Goods and Service Tax (GST), he said, “The long-awaited legislation on a national GST has been passed. By removing physical barriers at state boundaries, the GST will accelerate long haul transport and further increase efficiency,” he added.
Modi spoke about India taking the lead in committing itself to a reduction of 33 per cent in carbon intensity of its GDP from its 2005 level over the next 15 years and its commitment to produce 40 per cent of power from non-fossil fuel by 2030. “I have set a massive target of 175 gigawatt of renewable energy by 2022. Thanks to our efforts, capacities have increased and prices of renewable energy have crashed,” he added.