Energy Security — India's Oil, Gas, Coal & Renewable Transition

Introduction

Energy security — the uninterrupted availability of energy at an affordable price — is a strategic imperative for India's economic growth and geopolitical sovereignty. India is the world's third-largest energy consumer (after China and the USA), with energy demand growing rapidly alongside industrialisation and rising living standards.

Key tension: India needs cheap energy for development while simultaneously committed to climate targets under the Paris Agreement. Managing this transition is the central energy policy challenge.

India's Energy Profile

India achieved 50% non-fossil capacity (as a share of total installed capacity) in June 2025 — five years ahead of the NDC target.

Oil and Gas Sector

Import Dependence and Vulnerability

India imports approximately 85% of its crude oil requirements, making the economy vulnerable to global price shocks. Over 60% of oil imports come from the Middle East (Gulf), creating geographic concentration risk.

Major oil import sources: Iraq, Saudi Arabia, Russia (increased sharply post-2022 Ukraine war), UAE, USA.

Upstream Sector (Exploration & Production)

Downstream Sector (Refining & Distribution)

Challenges in Oil & Gas

• High fiscal subsidy burden on LPG and kerosene (though direct benefit transfer reformed LPG subsidies)
• Gas infrastructure underdeveloped; gas share in primary energy ~6% vs world average ~24%
• ONGC declining production from ageing fields; difficult to attract FDI for deep-water exploration
• City Gas Distribution (CGD) network being expanded under PNGRB

Strategic Petroleum Reserve (SPR)

India maintains emergency crude oil reserves to cushion against supply disruptions.

• Managed by ISPRL (Indian Strategic Petroleum Reserves Limited), a SPV under MoPNG
• Total SPR provides approximately 9.5 days of consumption cover
• India also has commercial stocks — combined total gives ~74 days
• International Energy Agency (IEA) recommendation: 90 days' cover (India is now an IEA associate)
• Phase II expansion: additional locations planned but stalled due to funding constraints

Coal Sector

Dominance and Scale

Coal remains India's dominant energy source, accounting for about 69% of electricity generation and ~55% of primary energy. India crossed 1 billion tonnes of coal production in FY 2024-25 for the second consecutive year, reaching 1,047.57 MT.

Coal India Limited (CIL)

• World's largest coal producer
• Navratna PSU under Ministry of Coal
• Has 7 wholly-owned coal mining subsidiaries
• CIL is also setting up 3,000 MW of renewable energy for its own mining operations

The Coal Import Paradox

Despite being the 2nd largest coal producer, India imports coal for:

• Power plants (due to high ash content of domestic coal for super-critical plants)
• Steel sector (coking coal — India has limited coking coal reserves)
• Coastal power plants (imported coal cheaper than inland freight for domestic coal)

Just Energy Transition

• India committed to transition away from coal as part of COP26 commitments (with caveats)
• JETP (Just Energy Transition Partnership): India in discussions; no formal deal signed as of March 2026 (unlike South Africa, Indonesia, Vietnam which signed)
• Key concern: coal employs over 2 million workers directly and millions indirectly; abrupt phase-down risks social disruption
• Planned Coal Mines Closure Policy and just transition funds being discussed

Renewable Energy

500 GW Target by 2030

India's NDC commits to 500 GW of installed non-fossil fuel capacity (RE + nuclear) by 2030.

Government plans: 50 GW of RE bids per year from FY 2023-24 to FY 2027-28 (including ≥10 GW wind annually).

Solar Energy

Wind Energy

• India: 4th largest wind power capacity globally
• Onshore wind target: 100+ GW by 2030
• Offshore wind: policy announced; Tamil Nadu and Gujarat have highest potential
• Challenges: land acquisition, grid integration, RPO compliance

Hydropower

• India has ~47 GW of installed hydropower
• Large hydro classified as renewable since 2019 (reversed earlier policy)
• Pumped Storage Hydro (PSH): key energy storage solution; 63 GW potential identified

Green Hydrogen

National Green Hydrogen Mission (2023)

• Approved by Cabinet on January 4, 2023
• Initial outlay: ₹19,744 crore
• Target: produce at least 5 MMT (million metric tonnes) of green hydrogen per annum by 2030
• Associated renewable energy addition: ~125 GW
• Expected investment: over ₹8 lakh crore; 6 lakh jobs

SIGHT Programme

Strategic Interventions for Green Hydrogen Transition (SIGHT):

• Outlay: ₹17,490 crore
• Component I: PLI for electrolyser manufacturing (₹4,440 crore) — target: 1.5 GW/year capacity
• Component II: Incentives for green hydrogen production (₹13,050 crore)
• Duration: 5 years for electrolyser; 3 years for production incentives

Green Hydrogen Potential

India has competitive advantage: abundant solar/wind potential, existing refinery and fertiliser infrastructure that could switch to green hydrogen. Target sectors: fertilisers, steel, shipping, heavy transport.

Nuclear Energy

Three-Stage Nuclear Programme

• Stage 1: Pressurised Heavy Water Reactors (PHWRs) using natural uranium (U-235)
• Stage 2: Fast Breeder Reactors (FBRs) using plutonium-239 from Stage 1 spent fuel; prototype at Kalpakkam
• Stage 3: Advanced Heavy Water Reactors using thorium-232 (India has world's 2nd largest thorium reserves)

DISCOMS Crisis

Distribution companies (DISCOMs) are the last-mile entities connecting consumers to the grid — and the weakest link.

Problems

RDSS Scheme (Revamped Distribution Sector Scheme)

• Launched: July 2021
• Outlay: ₹3,03,758 crore (GBS: ₹97,631 crore from Centre)
• Targets: Reduce AT&C losses to 12-15% pan-India; ACS-ARR gap to zero by 2024-25
• Key components: Prepaid Smart Metering (20.46 crore consumer meters sanctioned); System Metering; Distribution infrastructure upgrade
• Duration: FY 2021-22 to FY 2025-26

International Solar Alliance (ISA)

• India's initiative, co-founded with France; launched at COP21 Paris (2015)
• Secretariat: Gurugram, India
• Membership: 124+ countries (as of 2025)
• Objective: Mobilise $1 trillion in solar investments by 2030; 1,000 GW solar across member nations
• Treaty-based international organisation since 2017

CDRI (Coalition for Disaster Resilient Infrastructure)

• Launched by India at UN Secretary General's Climate Action Summit, September 2019
• Promotes resilient infrastructure in climate-vulnerable nations
• Membership: 43 countries, 2 international organisations
• Secretariat: New Delhi
• Special Initiative: Infrastructure for Resilient Island States (IRIS)

India's NDC and Climate Commitments

India's updated NDC (2022):

India's 2035 NDC (submitted 2025): India submitted its next NDC for 2031–2035 with enhanced targets aligned with Viksit Bharat 2047 goals.

Energy Storage

Previous Year Questions (PYQs)

Prelims

1. (UPSC 2016) The term 'IndARC' sometimes seen in the news, is the name of: (A) An indigenously developed radar system; (B) India's satellite to provide services to the countries of Indian Ocean Rim; (C) A scientific establishment set up by India in Arctic region; (D) India's underwater observatory to scientifically study the Arctic Ocean.

2. (UPSC 2018) Consider the following statements about 'the International Solar Alliance': 1. ISA is an alliance of solar resource rich countries lying fully or partially between Tropic of Cancer and Tropic of Capricorn. 2. It is a treaty-based inter-governmental organisation. Which is/are correct?

3. (UPSC 2020) In India, the 'National Clean Energy Fund' is used for funding/promoting: (A) Clean energy projects in rural India; (B) Research and development in new and renewable energy sector; (C) International agreements on climate change; (D) Nuclear power projects

4. (UPSC 2022) Consider the following: 1. Biomass combustion 2. Hydroelectric power 3. Solar power. These are examples of which type of energy?

Mains

1. (UPSC 2013, GS3) What do you understand by 'coalbed methane' and 'shale gas'? How do they differ from each other? What is India's approach to develop these energy resources?

2. (UPSC 2016, GS3) Critically examine the success of India's renewable energy programme in the context of the targets set in Nationally Determined Contributions under the Paris Agreement.

3. (UPSC 2020, GS3) How is science and technology contributing to energy security in India? Discuss the role of renewable energy in India's energy mix with specific reference to solar energy.

4. (UPSC 2023, GS3) 'Green Hydrogen' is being touted as a clean fuel of the future. What are the challenges to its mass adoption? What is India's National Green Hydrogen Mission?

Exam Strategy

High-yield for Prelims:

• SPR: 3 locations, 5.33 MMT total, 9.5 days cover
• National Green Hydrogen Mission: Jan 2023, 5 MMT target, ₹19,744 crore outlay
• SIGHT: ₹17,490 crore; electrolyser PLI under Component I
• ISA: India-France initiative, Gurugram HQ, treaty-based since 2017
• CDRI: India's initiative, 2019, secretariat New Delhi
• NDC: 45% emissions intensity reduction; 50% non-fossil electricity (achieved 2025); net-zero 2070
• RDSS: AT&C loss target 12-15%, ₹3.03 lakh crore outlay

For Mains (GS3):

• Use the trilemma framework: Energy Security + Affordability + Sustainability
• India's dependence on coal for base load vs renewable intermittency — need storage
• Just Transition argument: coal sector employment vs climate targets
• Link PM Surya Ghar Yojana to energy democratisation (prosumers)
• Three-stage nuclear programme as long-term energy security (thorium angle)
• DISCOMS as the Achilles heel of the energy sector — reforms essential for RE integration

Mnemonics:

• SPR locations: Visakhapatnam + Mangaluru + Padur = VMP (Very Major Pipeline)
• SIGHT components: Electrolyser manufacturing + Production of green hydrogen