ENERGY MARKETS AND TECHNOLOGIES IN INDIA R.V.

SHAHI
Secretary, Government of India Ministry of Power

80% of global population lives in developing areas. Of the 6.0 billion populations, in the OECD countries the total number is approximately 1.2 billion North America (0.4), Europe (0.6), Asia Pacific (0.2). In the non-OECD countries, the population is the balance 80% and i.e. 4.8 billion consisting of Asia Pacific (3.2), Russia-Caspian (0.3), Middle-East (0.2), Africa (0.8) and Latin America (0.4). By the year 2030, the global population is projected to be 8.0 billion rising at the rate of 0.9% per year and in the year 2030, the OECD countries would consist of North America (0.5), Europe (0.6) and Asia Pacific (0.2), the total being 1.3 from the present level of 1.2 billion. The balance 7.7 billion would be in nonOECD countries. Therefore, during the period 2005-2030, the population rise in the non-OECD countries would be higher than the population growth in the OECD countries. And, as a result, by the year 2030, the global population in the OECD countries would be a little more than 16% and the balance about 84% would in the non-OECD countries. 2. As regards energy consumption, 16% of the global population in the OECD countries, would consume, by the year 2030, more than 40% of energy and the balance about 84% of the global population in the non-OECD areas would consume a little less than 60% of the total energy consumed in the world. No doubt, during the period 2005 to 2030, the rate of growth of energy consumption in the non-OECD countries would be higher than in OECD countries and would vary between 1.3% in the Russian-Caspian area to 3.2% in the Asia Pacific areas, as opposed to the rate of growth of energy consumption during this period in the OECD countries being in the range of 0.6% in North America to 0.9% in the Asia Pacific region. Still as mentioned earlier, by the year 2030, 16% of global population would consume as much as 40% of the energy and the balance 84% of the global population would consume less than 60% of energy. Providing access to adequate energy to their people is really a challenge for developing countries.

Keynote

Address

in

Global

Energy

Dialogue

at

Hanover

(Germany)

on

April

25,

2006

3. India is one of the countries where the present level of energy consumption, by world standards, is very low. The estimate of annual energy consumption in India is about 330 Million Tones Oil Equivalent (MTOE) for the year 2004. Accordingly, the per capita consumption of energy is about 305 Kilogram Oil Equivalent (KGOE). As compared to this, the energy consumption in some of the other countries is of the order of over 4050 for Japan, over 4275 for South Korea, about 1200 for China, about 7850 for USA, about 4670 for OECD countries and the world average is about 1690. 4. In so far as electricity consumption is concerned, India has reached a level of about 600-kilowatt hour (kwh) per head per year. The comparable figures for Japan are about 7,800, for South Korea about 7,000, for China about 1380, for USA about 13,000, for OECD countries about 8050 and world average are about 2430. Thus, both in terms of per capita energy consumption and in terms of per capita electricity consumption, India is far behind many countries, and as a matter of fact, behind even the world average. Therefore, to improve the standards of living of Indian people and to let them enjoy the benefit of economic development, it is imperative that both energy consumption and electricity consumption level is enhanced. India is targeting a growth rate of 9 10%, having already reached a level of almost 8%. To sustain the double-digit growth rate for next 10-15 years, it would be essential that the level of energy availability and consumption, and electricity consumption in particular, is enhanced substantially. 5. In the profile of energy sources in India, coal has a dominant position. Coal constitutes about 51% of Indias primary energy resources followed by Oil (36%), Natural Gas (9%), Nuclear (2%) and Hydro (2%). To address the issue concerning energy consumption, and more particularly, the need for enhancing the energy supply, India has accorded appropriate priority to both - supply side management and demand side management. On the supply side management, while it is essential for India to radically expand the capacities on all the fronts and all the segments of energy, equally important is the need for efficient consumption of energy for which a number of initiatives have been put in place. 6. On the supply side, the mis-match between demand and supply is so large that India can ill-afford to choose one option in preference to the other. For several years, in fact may be for next few decades, India would need to exploit all possible options to create reasonably large capacity base on the energy side. It needs to expand manifold the coal production, extract through all possible means, the oil and gas reserves, wherever possible, resort to import of coal, acquire coal and gas reserves abroad, will need to continue substantial dependence on import of oil, and exploit fully the large hydro electric potential which is of the order of over 1,50,000 MW. Only about 32,000 MW i.e. about 20% of the hydroelectric potential has been exploited so far. Increase in the capacity base of power 2

generation through dependence on the coal reserves of the country, which are of the order of 200 billion tones is inevitable. Nuclear programme has proved to be effective and successful. After initial teething problems in mid eighties, from early nineties, the nuclear power plants have demonstrated to be utilized at substantially high level of availability and efficiency and this is one of the important options that India is pursuing. Gratifyingly, a number of companies in India have discovered huge gas reserves, both on the Western, and more particularly, toward the Eastern coast. Besides, a number of LNG terminals have also been developed and are being developed so that the use of gas could be supplemented through import of Liquefied Natural Gas. India is one of the very few countries which has been successful in employing wind turbine technology and today of the total capacity of 1,25,000 MW in the country about 5% is constituted by the various non-conventional sources of generation, wind being the largest contributor. 7. On the Demand Side Management, there exists a substantial scope. On the basis of random sampling studies conducted on various segments of energy consumption, it has been established that over 20% of energy is wasted because of in-efficient consumption. The Government of India enacted a legislation called Energy Conservation Act in the year 2001. The Bureau of Energy Efficiency (BEE) has been put in place in pursuance to implementation of this law. The Bureau has formulated a number of major action plans to make significant dent on various segments of energy consumption in the domestic sector, in the agriculture, in service group and in manufacturing sector. The programmes include Standards and Labeling of energy consuming gadgets, setting and enforcing consumption norms, developing energy efficient building codes, energy audits of large buildings etc. Now, let us examine the various segments of the energy sector and focus on the present status, the areas of challenges and the future perspective. Coal Sector 8. As mentioned earlier, coal constitutes the most dominant constituent of the energy sector. In the year 2005-06, the coal production was over 370 million tones. Power Sector consumes almost 80% of coal that is produced. India has large coal reserves of the order of 200 Billion Tones, most of these are high ash content coal in the calorific value range of 3000 kilo calorie per kilogram to 4,500 kilo calorie per kilogram and ash content in the range of 30 45%. Using the high ash coal for the power sector is a major challenge, from the point of view of achieving high level of efficiency of consumption, and more particularly, from the point of view of environmental management due to fly ash emissions.

9. So far as the institutional framework is concerned, coal industry is predominantly managed through a number of coal companies directly under the control of Government of India. Though the practice of allotting coal blocks for captive purposes to the private sector has been there for quite some time, it is only in the recent past, in the last 2 years particularly, a number of coal blocks have been allotted and are being allotted to both public sector power companies and private sector power plants. The results of these decisions would be forthcoming in next 2-3 years when one could expect that a reasonable amount of coal production would be taking place through organizations other than the state controlled coal companies. 10. (i) (ii) (iii) Some of the issues that are under consideration include the following: In order to extract maximum amount of extractable coal, a substantial portion of which could be within 150 meters of depth, but a good portion could also lie below 150 meters, through insitu coal gasification. Employing latest technologies so that coal is extracted to the extent possible through both open cast mining and underground mining processes. Putting in place alternate institutional mechanism so that the process of coal exploration, which is at present being done only by the Central Mine Planning and Design Institute (CMPDI), a subsidiary of Coal India Limited, is undertaken by a number of other agencies and more and more coal reserves are brought into the category of exploitable reserves with clear and dependable estimate of reserves that can be exploited; Matching with the massive capacity programme in the power sector, the present level of coal production, which is about 370 million tones, will need to be stepped up, and by the year 2030, the projection is of the order of 1500 million tones of coal production.

(iv)

11. Opening up of the coal sector for private investment has been an issue for consideration for some time. The Coal Mines Denationalization Bill, 2000 has been pending consideration by the Indian Parliament. While that is taking time, the Government has decided that, as an interim step, a number of players could be brought into coal production process by setting aside a reasonable amount of reserves to be developed for captive purposes by power producers and other users such as steel, cement etc. As mentioned earlier, since 80% of coal production is consumed by the power sector, if this line of approach is followed to a larger extent, the number of players in the system would increase with consequential increase in the total production of coal also by players other than the Government controlled coal companies. This has the potential of establishing better benchmarks of deployment of new technology, proper utilization of technology, productivity, optimum cost and, therefore, possibility of producing coal at lower rates with consequential advantage to the power producers who can then pass on the benefit of reduced cost of power to consumers.

12. As per the present policy, the pricing of coal, which, for a number of years used to be administered by the Government, has been now left to the coal producers. Though so far power and coal producers have been able to amicably resolve the pricing issue, this has been an area of concern for those who are large consumers of coal particularly in the power sector. Therefore, a need has been voiced by major coal consumers that so long as sufficient amount of competition is not introduced in the coal sector with larger number of players and significant proportion of coal production by players other than the Government controlled coal companies, it might be desirable that a regulatory oversight is facilitated so that coal producers do not fix the coal price in the manner they wish at the cost of interest of coal consumers. 13. Ultimately, coal sector would be developed in a manner that it is the market which would determine the price. But the road map to achieve that destination would be relevant to be blue printed. Till the time substantial amount of competition is generated and a market is created in which both the suppliers and the consumers have options to choose, the need for coal regulator is being experienced. Now, a number of power plant operators are going to have their own captive coal mines. And obviously, if the cost of coal is going to be a pass through for the power cost, a regulatory intervention to see that the price at which it is transferred to the power plants so that interest of consumers is protected, appears to be necessary. At this stage, the coal market does not exist. A large number of pit head power plants which constitute a substantial portion of the installed capacity, depend on the coal produced and supplied locally for all such power plants, it is single buyer model and single seller model, there is one coal company which has to supply coal to the power plants and there are a group of power plants in the area which are the buyers of coal. 14. There exists a scope for major research and development programmes. Some of them have been initiated for more environment friendly use of coal. The Environment Ministry of Government of India has made it obligatory that such power plants, as are located at far off places and need to transport coal through long distances, must resort to using beneficiated coal whereby the ash content of the raw coal could be reduced from 40 -45% to close to 30%. Future power plants will, therefore, have to depend substantially on use of beneficiated or washed coal. Other methods of clean coal technologies such as IGCC, Coal Bed Methane are also having potential, but this would require sustained and concerted efforts so that Indian coal, which is disadvantaged from high ash content, but is advantaged in so far as the sulphur content is concerned, is put to use in a manner that the adverse impact on environment is minimized to the extent possible. 15. India has also joined the global initiative on Carbon Sequestration Leadership Forum (CSLF). As a matter of fact, India was one of the first 15

nations in the world, which signed the CSLF Charter in June 2003 and it is represented on the CSLF Policy and Technical Groups. Out of the 17 projects, which have been undertaken under the aegis of CSLF for carbon capture and storage, one of the projects has been undertaken by India in collaboration with USA. On a long-term basis. Carbon capture and storage has a future and there would come a time when various technologies that are evolved would come in the cost effective regime so that countries like India, which need to deploy such technologies when they become cost effective in order that they do not have any adverse impact on cost of production of power, is in a position to deploy these technologies extensively. India is also the first country in the world, which has joined the USA for the Futuregen Project, which aims at setting up a power plant, which will have zero emission. Some of the Indian companies are also in the process of joining as alliance partners in this project. OIL SECTOR 16. Oil constitutes over 35% of the primary energy consumption in India. It is expected that this would rise both in terms of absolute amount and proportion. The demand projection is placed at about 200 million metric tones by the end of the 11th Five Year plan i.e. by 2011-12 and over 250 million metric tones by 2024-25. The present level of demand is about 120 million metric tone of oil equivalent. At present. the upstream regulation is by the Director General of Hydro Carbons. They concentrate on the technical aspects and pricing is not under their domain. However, under the NELP contract, the private sector would need to have the price approved by the Government and to that extent, Director General, Hydrocarbons would have a role. 17. Over the last 6-7 years, the sector has been opened up. The Petroleum Regulatory Bill envisages the institution of regulator, which will oversee the down stream aspects of the sector. A major trend in the oil and gas regulation in India is the opening up of this sector to private and foreign investments. 100% FDI is allowed in exploration, pipeline infrastructure, refining and in down stream retailing. With a view to enlarging investment in the upstream side, the Ministry of Petroleum & Natural Gas has introduced a transparent system of international competitive bidding for allotting of oil and gas blocks. The NELP was launched for the first time in 1997 and as many as 120 production-sharing contracts under five such rounds were finalized. Over 700 million metric tones of oil and oil equivalent gas are established through the five rounds. The recent round of NELP tender has also attracted a number of players. However, most of them are from public sector. It is important to bring in technologies and international benchmarks of practices and parameters and, therefore, the Government is keen on larger foreign participation under the NELP.

GAS SECTOR 18. Natural gas constitutes about 9% in the Indias energy profile, as compared to about 25% world average. About 45% of natural gas is consumed by power sector and about 40% by the fertilizer sector. The balance 15% goes for various other consumption. At present about 65 million cubic meters of gas per day is being consumed and it has the potential for increase. 19. Both the Power Sector and Fertilizer Sector have been planning for larger consumption of gas and increased capacities so as to produce more power through this environment friendly fuel. However, the recent trends in gas prices globally has created a dampening impact on the power plant planners both from the point of view of lack of predictability about availability of this fuel and more so on account of lack of predictability of its price behavior. In the power sector, about 12,500 MW of capacity out of the 1,25,000 MW of total capacity is gas based combined cycle power plants. Because of lack of availability of gas, almost 35% of the capacity remains unutilized and these plants then need to resort to naptha as a substitute fuel which is excessively costly. Some of the power plants, which were planned and are in the process of being commissioned face the problem of non-availability of gas. There are couples of LNG terminals in the country each with a capacity of 5 million tones. Their capacities of processing LNG are not fully used in view of the recent excessive rise in the price of LNG, which has made it unaffordable for the power producers to access LNG and use it in their power plants. 20. Some of the issues in the area of gas are as follows: (i) Power and Fertilizers sectors have been provided gas under the Administered Price Mechanism in last over 20 years. Gas producers and supplier desire market determined prices, which could be much higher. Consumers have been saying that when shortages are so acute and producers and suppliers are few, there is practically no competition and, therefore, no market. In such a situation, till market develops to a reasonable level, regulatory intervention could be essential. Obviously, there are differing schools of thought on this issue. (ii) Huge resources of gas which have been discovered by Reliance Industry, ONGC, Gujarat Gas, Cairn Energy and others, when produced and supplied, there will be greater clarity on adequacy of supply and predictability of price. Till then power developers have adopted a dual approach i. for existing capacities of power plants where assets face a situation of idleness, a higher price for gas/LNG is accepted to utilize the existing capacities.

ii. For new plants, they have decided to wait and watch to be better aware of the ground reality, may be in next 2 years or so. (iii) Gas discoveries in KG Basin and in some of the Western Coast areas have created a positive impact. It is expected that these discoveries when exploited - and it is targeted that some time in the year 2008, a substantial amount of production would flow from the KG basin, power plant developers and those in the Fertilizer Sector and other areas could expect to get larger amount of natural gas. If there is predictability about its price, it would be possible to enhance the present projection of gas based power capacity to a higher level. Domestic reserves will obviously not be sufficient. Gas supply will need to be supplemented through LNG import with appropriate enhancement of LNG Re-gasification facilities.

(iv)

NUCLEAR POWER 21. India has established its capability in design, engineering, construction and operation of nuclear power plants. The installed capacity is 3310 MW, less than 3% of total installed capacity of power, consisting of two Boiling Water Reactors and twelve Pressurized Heavy Water Reactors, eight more reactors (total capacity 3420 MW) are under construction. 22. India believes that nuclear power could be a good source of its power profile and therefore its proportion should increase from 2.6% to say 7 to 8% by 2030 which will mean a capacity of over 55,000 MW. Department of Atomic Energy, therefore, has evolved an approach and perspective which includes setting up of Pressurized Heavy Water Reactors in the first stage, Fast Breeder Reactors in the second stage and Reactors based on Uranium 233 Thorium 232 cycle in the third stage. Construction on two units of 1000 MW at Kudankulam in Tamilnadu, as per the agreement between India and Russian Federation marks the beginning of introduction of Light Water Reactors (LWR). 23. At present, entire development of nuclear power plants is through Nuclear Power Corporation of India, a company under the control of Government of India. As per the Atomic Energy Act, private sector is not permitted to develop these plants. Tariff determination for power generated in these plants is also not under the jurisdiction of the Regulatory Commission; the Government of India decides it. 24. Management and disposal of waste has been carried out fairly satisfactorily. These plants have demonstrated good track record of safety and

waste management. To deal with the issue of safety and related matter, there is an independent Regulatory institution. Non Conventional Energy Sources 25. Indian Government has accorded very high priority to develop and expand installed capacity base through non-conventional sources of electricity generation. There is a separate Ministry in the Government of India to exclusively focus on this important area of power generation. National Electricity Policy notified in 2005 in pursuance of the Electricity Act, 2003, prescribes that State Electricity Regulatory Commissions should prescribe a proportion of power which should be produced and supplied to the grid through the non-conventional sources. Some of the Regulatory Commissions have come out with specific policy guidelines with a different approach on tariff for these plants in order to encourage these technologies and plants. National Electricity Tariff Policy mandates that State Commissions should fix such minimum percentage latest by April, 2006. India has very high potential for these capacities: Potential (MW) Wind 45,000 Existing capacity (MW) 4,400 1,700 Very little 3.8 million Very little

Small Hydro (upto 25 15,000 MW) Solar (PV) 20 MW/Sq.Km Biogas plants Urban/Industrial based plant 12 million waste 2,700

It may be seen from the above that India has achieved substantial success on wind turbine based power generation. Ministry of Non-conventional Energy Sources (MNES) has set a target of achieving at least 10,000 MW capacity through various non-conventional sources, by the year 2012. 26. Electricity Act 2003 has a special provision to promote stand-alone decentralized distributed generation and supply in rural area. To encourage these technologies and to mitigate the challenge of rural electrification, for these areas, not only generation is delicensed but generation as well as distribution is fully delicensed. This enabling framework aimed at removing entry barrier has a tremendous potential for technologies like biomass, biogas, micro-hydel etc.

Conventional Sources of Electricity Generation 27. Fossil fuel based thermal power, hydro-electric, and nuclear constitute the conventional sources of power. Non-conventional sources are less than 5% of total installed capacity in India. The present installed capacity (as in March 2006) is about 1,25,000 MW, consisting of coal based plants (56%), gas based plants (10%), hydro-electric (26%), nuclear (3%) non-conventional (5%). 28. Indian Power Sector was opened up for private power generation in 1991. In terms of ownership structure, the profile consists of Central Government owned companies (32%), State Government owned companies/Electricity Boards (57%) and Private Sector (11%). 100% FDI is permitted in all segments of electricity industry viz. Generation, Transmission, Distribution, Trading. 29. In the last three years far-reaching structural changes have been introduced in the Indian Electricity Sector. Electricity Act 2003 is an historic legislative initiative with powerful potential to transform the power sector industry and market structure. The Preamble of the Act says: An Act to consolidate the laws relating to generation, transmission, distribution, trading and use of electricity and generally for taking measures conducive to development of electricity industry, promoting competition therein, protecting interest of consumers and supply of electricity to all areas, rationalization of electricity tariff, ensuring transparent policies regarding subsidies, promotion of efficient and environmentally benign policies, constitution of Central Electricity Authority, Regulatory Commissions and establishment of Appellate Tribunal and for matters connected therewith or incidental thereto 30. Most important features of the Electricity Act 2003 are as follows: The Act creates a liberal and transparent framework for power development It facilitates investment by creating competitive environment and reforming distribution segment of power industry. Entry Barriers have been removed/reduced in following areas: Delicensed generation. Freedom to captive generation including group captive Recognizing trading as an independent activity Open access in transmission facilitating multi buyer and seller model. Open access to consumers above 1 MW within five years commencing from 27th January, 2004 (date of enforcement of amendment to Electricity Act) Regulators have been mandated to ensure this.

10

Multiple licenses in distribution in the same area of supply so that competition could yield better services to consumers. Regulatory Commissions to develop market and to fix tariff. 31. Implementation of the Act Most of the Rules (required to be framed by Central Govt) have been notified National Electricity Policy has been announced Central Electricity Regulatory Commission and State Electricity Regulatory Commissions are in place and are fully functional. Electricity Appellate Tribunal: Operational Guidelines for determining tariff through competitive bidding notified Regional Power Committees for all the 5 regions established Tariff policy notified CERC has notified open access in transmission and several other rules and guidelines Several SERCs have initiated action on open access in Distribution 32. National Electricity Policy (2005) aims at Total village electrification by 2010 By year 2012: Per capita availability 1000 units Installed capacity over 200,000 MW Spinning reserves 5% Minimum lifeline consumption of one unit per household per day Inter-regional transmission capacity 37,000 MW Energy efficiency/conservation savings about 15% Quality and reliable power supply. 33. Electricity Tariff Policy was notified by Government of India in January, 2006. The main features are: Tariff of all Generation and Transmission projects in Private Sector through Competitive route Public Sector to complete transition in five years. Reduction of cross subsidy to (+)(-) 20% in next five years. Emphasis on facilitating Open Access in Distribution; clear formulation on cross subsidy surcharge. Transmission Tariff framework sensitive to distance and direction. Strict implementation of Performance Standards. Agriculture Tariff to leverage sustainable use of Ground Water Resources Time bound introduction of MYT.

11

34.

Demand Projection Peak demand estimation: End of XI Plan (2007) 157 GW End of XII Plan (2012) 213 GW For next 30 years, capacity will need to be doubled every 10 years. Full development of Hydro potential has been taken up as a national priority. There is growing recognition of the position that India has taken that all hydro is renewable irrespective of size. World Energy Congress has also now recognized this. 50,000 MW Hydro Initiative was launched in August, 2003. 73 projects with capacity of 33,000 MW have been taken up for DPR preparation. Thermal power generation capacity is required to be enhanced to meet the growing demand. 100,000 MW Thermal Initiative was launched in 2004. Under the Initiative, shelf of Feasibility Reports (FRs) for setting up thermal power projects is to be prepared at feasible sites with all clearances in place. Projects totaling 60,000 MW have been identified. The latest initiative of the Govt of India to set up a chain of large size ultra mega projects of 4000 MW each at mine mouth and coastal locations aim at using latest supercritical fuel efficient technologies.

35.

National Grid

The energy potential in the country is concentrated in certain pockets. Coal reserves are located in a few states and similarly huge hydro-electric potential is located in a few states. This poses a challenge to embark upon massive inter-regional transmission capacity. Augmentation of National Grid Intra-regional expansion of transmission capacity is linked to generation projects. Inter-regional connectivity has been planned with hybrid systems, consisting of HVDC, Ultra High Voltage AC (765 KV) & Extra High Voltage AC (400 KV) lines. Present Inter-regional transfer capacity is 9,500 MW, being enhanced to 17,000 MW by 2007. 37,000 MW by 2012.

12

36.

Projected Capacity Addition for 2007-12 (XI Plan) Central Sector State Sector 21,000 11,000 10,000 5,000 3,000 34,000 16,000 Private Sector 12,000 12,000 Total 44,000 15,000 3,000 62,000

Fuel-mix Thermal Hydro Nuclear Total

May be revised to 67,000 MW, depending on the availability of Gas/LNG in required quantities and right prices. In addition, 5000 MW through Non-conventional Energy Sources. Captive capacity not included. 37. Clean Development Mechanism India is emerging as one of the largest potential source of Carbon Emission Reduction (CER) Designated National Authority is fully functional Focus areas in Energy Sector: R&M of old plants Conversion of LT to HT lines Supercritical Thermal Power Projects Hydro projects 38. Distribution Sector Reform

The Government of Indias Accelerated Power Development and Reform Programme (APDRP) being implemented through the X Plan (2002-07) aims at comprehensive reform of electricity distribution in urban/industrial centres. Revamping, augmenting and modernizing the distribution network and system for improved reliability of power supply, reducing technical and commercial losses, and improving financial health of distribution utilities are the main objectives of the scheme. 39. Rural Electrification

56% of Rural households (about 78 million) do not have access to electricity. Government of India has launched a massive programme called Rajiv Gandhi Grameen Vidyutikaran Yojana to provide electricity access for all by 2012 and electrify all villages by 2009. The scheme aims at creating Rural electricity infrastructure to cater to the requirements of: Household needs Agriculture and irrigation pumpsets Cold Chain 13

 Small and medium industries Social services Health, Education Decentralized distributed generation for such villages where grid connectivity is either not feasible or not cost effective. Decentralized management by Franchisees, Co-operatives, etc. 40. Energy & Environment

India believes that while energy development, at a rapid pace, is essential for providing to its people a reasonable standard of living, it is equally important that all issues concerning environment protection and enrichment are addressed adequately and sincerely. There is a full-fledged Ministry of Environment and Forests, which has set out policies, rules and procedures and project developments, happen only after proper scrutiny and clearance by this Ministry. India has also associated in most of the global initiatives aimed at mitigating climate change related challenges. India is a founder member in the Carbon Sequestration Leadership Forum (CSLF), Methane to Market Partnership, and International Partnership for Hydrogen Economy, and Asia-Pacific Partnership for Clean Development and Climate, Indo-EU Cooperation etc. India has also signed a Framework Protocol with the USA for cooperation on the development of Zero emission Futuregen Project. 41. Conclusion

India targets 9 10% economic growth rate in a sustainable manner over next 10-15 years. Adequate availability of energy would be sinequanon for this objective to materialize. There are shortages in all the energy segments. Substantial expansion of capacities in coal, petroleum, gas and electricity is, therefore, the thrust of the Government policies and programmes. Ultimate goal is to develop these markets and facilitate, through various policy initiatives, their matured functioning in a competitive manner. Skillful development of road maps to reach the goal is a challenge. During the period of transition, therefore, regulatory interventions to harmonize the interests of investors, developers and consumers, is an approach, which is being pursued by various energy groups. In most cases, development of energy sector, in various segments, has happened under government-controlled organizations. Over last 10-15 years, private investments are being encouraged, particularly in petroleum, natural gas and power. While India is fully committed to develop and expand its energy markets, it is equally committed to ensure environmental safeguards. Using latest cost effective technologies in all the energy segments forms an important part of policy and strategy.

14