Unified Ministry of Energy - Background Context
Five various ministries, coupled with the vastness of regulators govern and control the Indian energy segments. India has a Ministry of Power with regulatory bodies appointed at the state level to maintain, regulate electricity distribution companies, and practice fairness in regulation. Most popularly it is known as DISCOMS.
- Ministry of Petroleum and Natural Gas
- Ministry of Coal
- Ministry of New and Renewable Energy
- Ministry of Nuclear Energy
- Ministry of Power
Now considering the wide variety of regulators for each type of different ministries for each type of energy source makes it a cumbersome and tedious job for businesses operating in the segment. Moreover, the segment petroleum and natural have two more verticals, the Directorate General of Hydrocarbons and the Petroleum and Natural Gas Regulatory Board.
Argument with data collected: Data restrictions
An occasional survey is conducted at periodic intervals, to get an aggregate of the data collected from various sources, this action is performed by the Ministry of Statistics and Programme.
No single entity (institution or agency) collects all data, rather gets collected from various sources and then integrated together as wholesome.
Data concerned with the consumption or utilization are rarely available while suppliers' or providers' data collected by agencies of respective ministries is ambiguous and irregular.
From the context of Energy Efficiency; the Bureau of Energy Efficiency is the only authorized institution with a protocol to regulate energy efficiency on the utilization side. There is no establishment or institution for the same task on the supply side.
This is contrary to the other nations, where there is a wide variety of developed governance models in energy sectors.
Developed countries such as the USA, UK, Germany, France, etc. have their own version of the energetic, diverse, and productive energy sectors governed by a single ministry or department.
There have been situations of energy ministry in co-occurrence with the ministry of climate change, environment, industry, and mines. The unified ministries seem effective and obvious.
Varied Committee Drafts and Reports: Unified Energy Ministry
Kelkar Committee in its draft titled “Roadmap for Reduction in import Dependency in the Hydrocarbon Sector by 2030”, the year 2013 mentioned “More than one ministry and agencies are currently participating to address energy-related problems, presenting the challenges of systemization and excellent resource utilization, hence compromising efforts to increase energy security.
National Energy Policy (NEP) Draft:
The NITI Aayog recommended that a single unified Ministry of Energy is ideal and should be created by consolidating the following ministries;
- Ministry of Coal (MoC)
- Ministry of Petroleum and Natural Gas (MoPNG)
- Ministry of New and Renewable Energy (MNRE)
- Ministry of Power (MoP).
The respective proposed ministry is expected to have six agencies to handle various aspects of energy-related issues such as;
- Energy Research and Development Agency
- Energy Regulatory Agency
- Energy Schemes Implementation Agency
- Energy Data Agency
- Energy Planning and Technical Agency
- Energy Efficiency Agency
The year 2020 to observe substantial investment into the country’s energy sector
Hydrocarbon Exploration and Licensing Policy (HELP)
The Hydrocarbon Exploration and Licensing Policy (HELP), which embraced the Revenue Sharing contract model, is a giant leap towards enhancing the “Ease of Doing Business”, in the Indian Exploration and Production (E&P) sector.
This comes with lucrative and easy terms such as the reduction in royalty rates, no oil tax, freedom on marketing and pricing, auction and bidding round the year, and most importantly investors are allowed to slice out the blocks of the interest.
During the entire contract period, a single license is enough to cover exploration of both conventional and unconventional hydrocarbon resources coupled with easy transportation, auctioning or bidding, and awarding process.
A news draft proposal has been made by the Ministry of New and Renewable Energy (MNRE) to supply Round-The-Clock (RTC) power to DISCOMS, which would ultimately be a mix of Thermal Energy (power generated in coal bases plants) and Renewable energy.
The goal is to address the issue of irregularities in clean energy. Wind energy and Solar energy are not available throughout the day, hampering the continuous supply and limiting their use in the modern grids.
A single entity (single ministry of energy) would be an ideal composition to have a unified or non-discriminatory outlook on energy, that would allow us maximum utilization of our limited resources to meet the goals of energy availability, accessibility, sustainability, and energy security.
With increasing energy demands from both commercial and non-commercial sectors, the single unified ministry of energy would be a more accurate option in terms of immediate and quicker policy response.
To device, an interconnected or consolidated sustainable energy policy with the existing governance structure is a cumbersome, time-consuming, and challenging task due to a lack of communication and coordination between segregated ministries.
Also due to the absence of good quality consumption data and an accidental or unintentional promotion of their own fuels, which is definitely not an ideal practice and not always the best option.
From the current scenario, it can be seen that Govt seem to take steps toward the unification of the energy ministries and governance structure, the evidence of this is the appointment of a single minister for both Ministry of New and Renewable Energy (MNRE) and Ministry of Power (MoP).
Having one person (single minister) leading two different ministries will help identify and resolve long-standing problems faced by renewable power generators and conventional power generators such as power balancing and power transmission infrastructure planning.
The most important and very debatable topic of non-payment of dues by DISCOMS to the power generators will be taken care of and resolved by such synchronization in governance and administration.
Earlier in the government's initiatives of the village electrification (Unnat Jyoti, UDAY scheme), the government appointed the same minister for MoP, MNRE, and MoC, and this achieved phenomenal results. This was a great demonstration to reform of in the energy sector through ministry unification.
Consolidation of Ministry: The ‘Jal Shakti’ example:
They have already shown their temperament toward the Unification of Important Ministries.
The appropriate example here is the newly formed Ministry of Jal Shakti, which was formed by an amalgamation of the Ministry of Water Resource, Ministry of River Development and Ganga Rejuvenation, and Ministry of Drinking water and sanitation.
The main goal of these initiatives is to consolidate the water management functions, address the issues of water management in a comprehensive manner, and better communicate and coordinate efforts.
Unification of Water Mgmt. Functions were the critical and very fruitful decision because 600 million Indians went through heavy water crises and 75% of the regular household did not even have water delivered through the tap to their premises.
Although these initiatives are heading in the right direction, we have a long way ahead.
Recommendation made in the National Energy Policy Draft about restructuring the governance in the energy sector, which needs the cabinet ministry’s approval has to be negotiated properly before hard-hitting the bureaucratic hierarchy.
These changes are important from the perspective of energy security, energy accessibility, energy availability, and energy sustainability.
With increasing globalization and in the global age of energy transition, this needs a chair for quicker decision making and transition through many levels of varied fuels, this can only happen through the Unification of Energy Ministries and only one minister handles all energy sectors.
This will help us climb the ladder of energy-efficient countries and be scalable to adopt cleaner energy sources ahead in the future.
The extent of energy security has also widened, with growing importance on dimensions such as energy efficiency and environmental sustainability.
The Government of India has an aspiring goal and is determined to develop 5 Giga Watt (GW) of offshore capacity by the year 2022 and take it further to 30 GW by the year 2030. To materialize these ambitious figures mentioned, the Single Unified Ministry of Energy should be formed without any further delay.