India's Energy Security: Energy Diplomacy is the Way to Go

Perspective By Dr Vinitha Revi

A century ago, Sir Winston Churchill recognised that 'safety and certainty in energy lies in variety and variety alone.' Energy diplomacy goals should crucially go beyond engaging energy partners and must include India’s entire neighbourhood, both immediate and extended.

There are several economic challenges to India’s energy security - demand and supply issues, gas pricing issues, high costs of installing power plants, inefficient allocation of resources, need for reform, and challenge of deregulation and (over)dependence on imports are just some of these.

As the coal sector opens up to private investment and many claim it brings more efficiency and competitiveness, the challenges of a private-public partnership model and how that would work also need to be addressed. Then there are technical challenges - India’s power grid suffers from uneven and spotty power (as little as 3-4 hours a day), frequency fluctuations, load generation imbalances, shortage of equipments such as generators, boilers and turbines. India’s aging and overburdened power infrastructure is a technical nightmare, and this was demonstrated by the 2012 power grid collapse that left 600 million people without electricity for two days. It raised important questions about supply, load imbalances, inefficiency, administration, grid compliance, and responsibility and so on.

Regrettably, as Nobel Laureate Amartya Sen and Belgian-born Indian development economist Jean Dreze point out, “What was not however much discussed at all was the fact that 200 million of those 600 million without electricity had never had any electricity at all, since these non-affluent people were not and had never been connected to power.”1 There is in India “a powerful bias in public discussions towards focusing mainly on the lives and concerns of the relatively privileged…than the bulk of the Indian people.”2 Integral to the identity of being the world’s largest democracy is the need for India’s energy security to address more than just the lives of its privileged classes. As with all aspects of India’s development, concerns about energy security are underpinned by this challenge of inequality.

Coal Conundrum

India’s energy crisis comes with a massive environmental challenge, essentially what is now being referred to as the coal conundrum; its implications will impact on not just India but the whole world. The dominance of coal in India’s energy mix, the dirtiest of fossil fuels, makes it the fourth largest carbon emitter. For an emerging power, with big plans to expand its manufacturing sector, as well as a growing population, with a massive affluent, aspirational, consuming middle class, India’s energy demand, particularly its need for uninterrupted power supply is only going to get more desperate. The big challenge for India, therefore, is this - “Can India modernise its manufacturing economy and supply electricity to its growing population without relying heavily on coal - and quite possibly destroying the global climate?”3

Increasing the supply of energy from renewables through solar plants, wind farms and hydropower installation is, therefore, crucial. While India is looking to increase its low carbon energy sources through an aggressive pursuit of renewables, the government is simultaneously explicit about its plans to double coal production by the year 2020. This sort of policy incongruence undermines India’s commitment to address both energy security and climate change simultaneously.

There are equally ethical challenges and normative considerations to India’s crisis. Although the increase in energy demand means that India has to invest in oil fields overseas, it needs to consider what role it is playing in emboldening regimes that are guilty of human rights violations. Both India and China have been criticised for supporting the government of Sudan - “Beijing and New Delhi, with their huge investments in Sudan’s oil fields, have no desire to sacrifice their energy interests to compel Khartoum to change its behaviour. Support from China and India has undoubtedly emboldened Sudan to defy the international system.”4

Politics of Energy Security

It is clear that India’s energy crisis is multidimensional, but these seemingly different aspects are also intricately interconnected. Inherent to these challenges is an overarching political aspect to the crisis and this is not specific to India. Energy is and has always been a deeply political issue. This was understood profoundly by the international community in 1973, during the Arab-Israel War, when several Arab countries imposed an oil embargo against the US, to protest its support for Israel.

Energy goals and security goals are often intertwined. This is essentially because of the interconnectedness of international relations. As regions shrink in geostrategic terms, threats from the choke points have far-reaching impact. From a security/strategic perspective, a crisis or the threat of crisis is always around the corner. The motivation for energy diplomacy comes from this principle. As India deals with an acute energy crisis in an unenviable neighbourhood, its energy goals are quite visibly defined within the larger framework of its foreign and security goals.

Security & Self-sufficiency

From a security perspective, a significant goal for all sovereign states is to achieve self-sufficiency wherever possible. In the energy sphere, this will mean that Indian government will look to rely as little on imports and as much on domestic production to meet its energy needs. Unfortunately, this will mean an increased domestic production of coal, despite the environmental costs of this choice. Power Minister Piyush Goyal had said in a tweet, “Increasing domestic production of coal will be a big step towards long-term energy security of India.”

Unlike oil and gas reserves, existing coal reserves and production capacities are largely located in the same countries that consume most of the coal, namely China, US, India and former Soviet Union. What this means is that, “the supplies of coal are less likely to be disrupted for such geopolitical reasons that are much feared in the cases of oil and gas.”5 Therefore, the motivation for increasing coal production could well be strategic more than anything else, and if this is the case, it is likely that it will override all other concerns, including environmental ones.

Dependence on Imports

India’s dependence on imports is definitely seen as undesirable for energy security; however, self-sufficiency in energy is not easily achievable. The challenge posed by high dependence on imports is that these have to manoeuvre through difficult neighbourhoods. Disruption of supplies has always been a big concern for India. In 2011, it was found that the problems “especially in Libya and Egypt triggered a drop in crude oil production in the region, resulting in increased crude oil prices driving up inflation in India. In addition, the increase in oil prices could result in fluctuations in foreign exchange reserves”6, which then has the potential to disrupt economic development and infrastructure plans.

Apart from the increasing volatility of the neighbouring West Asia, the geopolitical challenges of India’s immediate neighbourhood also create energy vulnerabilities that its diplomacy needs to address. This is particularly true of the import of hydrocarbons from Russia and the Central Asian countries, which are affected by India-AfPak dynamics. Therefore, while these Central Asian countries are high on India’s energy diplomacy agenda, it is equally important to link these to the larger foreign policy goals of engaging the neighbourhood.

The other challenge for India is to move away from this image of import dependence and reframe the relationship with its energy suppliers as one of interdependence. This can be observed in India’s energy diplomacy, as Prime Minister Narendra Modi visits the oil rich countries of Central Asia, particularly Kazakhstan and Turkmenistan trying to sell India as an alternative energy market of growing importance rather than a nation struggling to meet its energy demand.

Changing Nature of International Relations

The changing and dynamic nature of international relations means that energy security will remain a challenge for many years to come. In some cases, these changes will bring relief to India’s energy challenges. For instance, when Iran signed the nuclear deal, ending its international isolation, the implications for India’s security were immensely positive. Under pressure from the US, India had slashed its oil imports from Iran, which was at that time the second largest supplier of crude oil after Saudi Arabia. Renewing and boosting these energy ties will achieve a key element of energy security, which is to diversify energy suppliers. The other big game changer for India will be Chabahar port, which will give it greater connectivity bypassing Pakistan.

Neighbourhood Policy Crucial to Energy Security

The constraints related to India’s neighbourhood will however continue, particularly its volatile relationship with Pakistan, increasing closeness that China enjoys with India’s neighbours, aftermath of diplomatic missteps in Nepal and the Maldives, tenuousness of its relationship with Sri Lanka and Bangladesh depending on who is in power - all of these will necessarily continue to add to the vulnerable conditions that affect energy security. However, this is what makes energy diplomacy a key part of India’s foreign policy goals; or to put it in another way, the goals of energy diplomacy very much reflect India’s larger foreign policy aims.

Despite claims of India’s abandonment of non-alignment, what we see in reality is more a policy of multi-alignment as India engages equally with the US, China, Russia, Japan, Iran, Israel, Saudi Arabia and so on, and at the same time emphasising the centrality of South Asian stability and security through the Neighbourhood First policy.

The goals of energy diplomacy are essentially the same; given the changing nature of international relations, there is no effective way to mitigate security risks, other than to diversify energy options as much as possible, which ultimately means to engage all energy partners - both existing and new; and at the same time to ensure the stability of its neighbourhood. Without a stable South Asia, India will neither achieve its energy goals nor its foreign policy goals.

Challenge of Policy Incongruence

India’s energy security faces several challenges. The biggest challenge, however, is one of policy incongruence. While aggressively looking to increase renewables in the energy mix, India’s production of coal is set to double. This means that while governments embrace climate change goals and rhetoric, the goals pursued more urgently will be those related to security. It is simply power politics.

This is also part of challenge before India - an emerging power, as well as the world’s largest democracy. How will India deal with its energy crisis, how much will it imitate the great powers that came before it? The incongruence in policy is something that India needs to address.

India cannot address energy security issues one after the other, such as energy access first and climate change after. It needs to address all aspects of the problem, urgently and simultaneously. While the rhetoric of an integrated approach appears to have been adopted quite aggressively, this needs to take shape in reality, because it seems illogical and counter-productive to address the goal of energy security by ‘merely trading one vulnerability for another.’7

It means greater investment in renewables, realising India’s solar dream and addressing the problems associated with domestic gas production - mainly overhauling the gas infrastructure, which is underdeveloped with the lowest pipeline density in the world as well as attracting investment for the domestic exploration of gas.

Energy diplomacy will remain an important tool for dealing with India’s energy security challenges - aiming to reduce security risks through continuous engagement of all existing energy partners. Diversifying and looking for alternatives should extend to both energy suppliers as well as energy technologies, fuels, supply routes and so on. A century ago, Sir Winston Churchill recognised that ‘safety and certainty in energy lies in variety and variety alone.’ Energy diplomacy goals should crucially go beyond engaging energy partners and must include India’s entire neighbourhood, both immediate and extended.

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Diplomatist Magazine was launched in October of 1996 as the signature magazine of L.B. Associates (Pvt) Ltd, a contract publishing house based in Noida, a satellite town of New Delhi, India, the National Capital.