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 ~49.4 GW of large hydropower (June 2025); ~54.5 GW including small hydro
• 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: 120 signatory countries / 107 full members (as of August 2025; US announced withdrawal on 7 January 2026)
• 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: 50 member countries and 10 international organisations (as of 2025; target: 75 countries / 25 organisations by 2026)
• 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?

Recent Developments (2024–2026)

Renewable Energy — 220 GW Capacity, 50% of Total Power Achieved Ahead of Schedule

India's installed renewable energy capacity reached 220.10 GW by end of FY 2024-25, with renewables constituting 50.07% of total installed power capacity of 484.82 GW — achieving the COP26 commitment five years before the 2030 target. Solar capacity alone crossed 105.65 GW (adding a record 23.83 GW in FY25). Wind power capacity reached approximately 47 GW. Solar module manufacturing capacity nearly doubled from 38 GW to 74 GW in FY25 — reducing import dependence.

India's 2030 targets: 500 GW renewable capacity (280 GW solar, 140 GW wind), 50% electricity from non-fossil fuels, and reduction in carbon intensity of GDP by 45% from 2005 levels — all NDC commitments under the Paris Agreement. The challenge: India needs to double annual renewable additions to ~60 GW/year (from the current ~30 GW) to hit the 500 GW target by 2030.

UPSC angle: Renewable capacity (220.10 GW FY25), solar (105.65 GW), renewables as 50% of total power (COP26 target met early), solar module capacity (74 GW), and the 500 GW/2030 target gap are high-priority Prelims data points.

Russia as India's Top Crude Oil Supplier — Energy Geopolitics

Following the Russia-Ukraine war (February 2022), India dramatically increased its import of discounted Russian crude oil. By FY 2024-25, Russia accounted for ~35.8% of India's total crude oil imports — the largest single source — with the value of Russian crude imports rising from $1.1 billion (pre-war) to ~$50.2 billion. Previously, Russia supplied less than 2% of India's oil (before 2022). Iraq (15%), Saudi Arabia (13%), and UAE (10%) are the other major suppliers.

India's pragmatic "strategic autonomy" approach — buying cheap Russian crude while maintaining Western partnerships — has been both economically rational (saving billions in import costs) and diplomatically tested (US/EU pressure for alignment with sanctions). India has primarily paid for Russian crude in UAE Dirhams and Indian Rupees through intermediaries, reducing dollar transaction exposure.

UPSC angle: Russia as India's top crude oil supplier (>33% share), the geopolitical implications for India's "strategic autonomy" doctrine, and the energy-diplomacy nexus are important Mains GS2 (India's foreign policy) and GS3 (energy security) themes.

Green Hydrogen Mission — Rs. 19,744 Crore, 5 MMT Production Target by 2030

India's National Green Hydrogen Mission (approved January 2023, Rs. 19,744 crore outlay) targets production of 5 MMT of green hydrogen per year by 2030, with 3 MMT for export. The Strategic Interventions for Green Hydrogen Transition (SIGHT) scheme — Rs. 17,490 crore — offers incentives for green hydrogen production and electrolyser manufacturing. India aims to capture 10% of the global green hydrogen market (valued at $10+ trillion by 2050) and reduce industrial fossil fuel dependence.

However, green hydrogen production costs (currently $4-6/kg in India) need to fall to below $2/kg to be competitive with grey hydrogen (~$1-1.5/kg). Electrolyser capacity building, renewable electricity availability, and storage infrastructure are key bottlenecks. Budget 2025-26 continued mission funding, with Rs. 600 crore allocated for demonstration projects.

UPSC angle: Green Hydrogen Mission (approved January 2023, Rs. 19,744 crore, 5 MMT target, SIGHT scheme Rs. 17,490 crore), the electrolyser PLI component, and the production cost challenge ($4-6/kg vs target of $2/kg) are Prelims facts and Mains energy security topics.

Nuclear Energy Mission — SMRs and Long-Term Baseload Strategy

Budget 2025-26 announced the Nuclear Energy Mission with Rs. 20,000 crore allocation for developing 5 Small Modular Reactors (SMRs) by 2033. India's nuclear capacity has been progressively increasing — the government's target is to raise it from the current approximately 8,880 MW (25 operational reactors as of April 2025) to 22,480 MW by 2031-32 and ultimately 100 GW by 2047. SMRs (50-300 MW capacity, factory-built, modular) offer faster deployment and lower upfront costs than traditional large reactors.

India's nuclear energy vision is also driven by baseload stability needs — as solar/wind (intermittent) grow, nuclear provides continuous power. The India-US civil nuclear deal (2008) framework is being leveraged to attract Westinghouse (AP1000) technology, while NPCIL plans domestic pressurised heavy-water reactors (PHWRs) at Gorakhpur and Chutka.

UPSC angle: Nuclear Energy Mission (Budget 2025-26, Rs. 20,000 crore, 5 SMRs by 2033), India's current nuclear capacity (~8,880 MW, April 2025), 100 GW nuclear by 2047 vision, and the baseload role of nuclear in the renewables-dominant grid are Prelims data and Mains energy policy discussion points.

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