For a semester I traveled in Northern India spending time in Delhi, Jaipur, Mumbai, Mussoorie and Varanasi. I was taking classes on India while also doing research on renewable energy policy. I came to India with a project proposal to examine how India was to craft an energy policy for the future that would be sustainable and more environmentally friendly then there current one. While I realized it was an ambitious project, on arrival this really sunk in and I narrowed this down. I began looking at how the government would accelerate the growth of renewable energy and increase energy efficiency. I identified renewable energy and energy efficiency as being the future of sustainable energy policy and that they need serious help to make a meaningful impact on the country.
While renewables and energy efficiency are growing in India there is a real need to accelerate their growth. This comes from the need to create a more sustainable energy source while also creating more energy security. The future needs to involve renewables to supplement the conventional sources. At the same time the more energy that can be saved means more for use which underlines the need for rapid change in energy efficiency.
India needs to do two things in order for it to accomplish these goals. It must first continue the liberalization that it started in the 1990’s in order to increase competition and reduce subsidies. With this, market driven energy prices will be created, subsides will only be used for emerging technologies, and the government will switch its role as an actor to that of a regulator and guide. These changes will allow renewables to grow rapidly as a more hospitable environment will be created. While this is happening privatization must also occur.
Privatization of the energy sector will spur the input of foreign direct investment (FDI) and will increase entrepreneurship. The FDI that is brought in will bring better technology and lower the capital costs of renewable projects. This will greatly accelerate the sector and produce much faster growth than currently available. Along with FDI, entrepreneurship will greatly be increased, improving efficiency. There will be competition and a greater incentive to improve efficiency and infrastructure.
While this is a rapid departure from current government policy it is necessary to accelerate growth in a sector that still has a 16% deficit in supply to consumers. The government must let the market control energy to a much larger extent then it currently does. While there are still areas where the government should provide support to poorer communities and join in public-private ventures, this should be an exception and not the norm. The key for India’s energy future lies in the government’s ability to release control through liberalizing and privatizing the sector at the same time.
In my senior year I did a thesis with Dr. Grace Huang entitled "State Intervention in India - An Analysis of Bureaucratic Change and its Impact on Economic Growth."