NITI Aayog Collaborates with Top Global Energy Think-tanks

In December, 2015 NITI Aayog signed a collaboration framework with Institute of Energy Economics, Japan. It followed up in March, 2016, with a similar arrangement with International Energy Agency, Paris. Another tie-up is in the offing — this time with Energy Information Administration, USA. These three overseas governmental agencies work across all energy sources, are renowned institutions, and work on both domestic and international issues. Their publications influence national policies and investor decisions. The newly forged relationships may be seen in the light of NITI Aayog acknowledging that India’s future energy pathway will have a significant international dimension, and that we need to step-up our understanding of global energy trends.

It also signifies recognition by the international community, that India is now a major energy player, and that their own strategy is incomplete without factoring-in Indian energy policy actions. The tie-ups are win-win alliances for both sides. Here, we delve deeper into the objectives and collaboration areas between NITI and the overseas agencies.

Energy data related collaboration is at the heart of all the above arrangements. For any policy formulation, we must have reliable and complete datasets. Both IEA and EIA are best known for their high quality energy data gathering, data interpretation and demand/supply projections. We propose to develop a sound energy data management system by learning from these agencies. India’s energy data systems are particularly weak on demand side – consumption of different fuels by consumer types and end-uses. Internationally, surveys are a common tool to understand consumer behavior and project demand. The above information assists in planning a variety of interventions to obtain demand side response (DSR) – an effective energy efficiency tool. Our data agencies have yet to develop demand related data through surveys etc. NITI Aayog proposes to build a robust database in partnership with the Ministry of Statistics and Plan Implementation (MoSPI), which would enhance the quality of our energy policy formulation across fuel and consumer categories.

The second area of our interest is to build robust energy scenarios collaboratively. The latter would be a natural outcome once we have a good data management system. NITI Aayog’s India Energy Security Scenarios, (IESS) tool which offers energy demand and supply scenarios up to 2047 (discussed in an earlier NITI blog), has already seeded good in-house energy modeling capabilities. Now, we need to improve these scenarios and even go for deep dives into individual sectors. Let us say, already being aware that efficient building envelopes and appliances/devices could reduce the residential building’s energy demand by nearly 40% by 2047 (Source: IESS), we may seek a more in-depth understanding. We may like to undertake incisive analysis of energy saving outcomes by size of houses, taller buildings versus flatter ones, saving potential by climatic regions etc. IEA has, perhaps, the world’s best energy scenario building capability, and its flagship annual publication – World Energy Outlook (WEO) – is much looked forward to by energy sector actors every year. We hope to sharpen our energy scenarios with exchange of ideas, sharing of perspectives, and joint modeling exercises.

Undertaking joint projects on energy issues is another common strand of our global engagement. This is consistent with international practice, wherein think-tanks work together for a better appreciation of the issues through knowledge sharing. NITI Aayog took the initiative of developing in-house energy modeling and data handling capabilities, the results of which have been used by agencies world-over when referring to India. We live in an inter-dependent world and have a vested interest in sound understanding of global energy demand and supply projections. With nearly one-third of our primary energy demand being met by imports, India is an active participant in global energy trade. Our energy imports are only expected to keep rising in the immediate future, until over time we ramp up renewal energy supplies, and fully explore our coal, oil and gas deposits. Hence, we have a keen interest in collaborating with expert institutions elsewhere, so that we may be equipped with top quality appreciation of global energy prices, supply and other trends.

In signing these joint programmes with leading think-tanks,NITI Aayog also offers the value proposition of being the single-point of interaction for all energy sources. We are aware that our Ministries have differentiated responsibilities, and there is no one agency that looks across the entire range of energy supply. NITI Aayog’s intermediation is much appreciated by leading overseas think-tanks, who themselves work on overarching energy topics. We are now collaborating on diverse themes such as energy-food-water nexus, de-carbonization scenarios of the transport sector and geo-spatial renewable energy mapping tools, which straddle across Ministries. Competitiveness of fuels has been impacted by technological developments and climate considerations, leading to shifts in fuel mixes across the world. India’s own energy mix is moving away from fossil fuel dominance with emergence of renewable energies in a big way. Hence, the need of the hour is to look at the omnibus energy sector and advise future strategy accordingly.

NITI Aayog bears the responsibility of offering policy advice to the government. In this direction, it is already engaged with framing the National Energy Policy (NEP). The latter will integrate all energy demand and supply sectors. While drafting the above, we are examining energy policies of leading economies of the world, to understand how they have addressed their energy security challenge. Our Statements of Intent (SOI) with IEEJ and IEA, particularly mention sharing of perspectives on integrated energy policy. As per IEA, India will need an investment of over $3 trillion in the energy sector up to 2040. This calls for a competitive, world-class investment regime. NEP must provide the roadmap for realisation of the above ambition, guided by the knowledge that NITI Aayog may develop through its research. Academic learnings gathered through alliances with leading energy think-tanks – Indian and overseas – will be assimilated in our energy policy, as it evolves over time.

Disclaimer: NITI blogs do not represent the views of either the Government of India or NITI Aayog. They are intended to stimulate healthy debate and deliberation.