<div>There are cries from all quarters that Narendra Modi led Union Cabinet should have less number of ministries to improve the policy making and implementation under the new government. <strong>BW|Businessworld </strong>has taken up the case of the energy sector and has argued both for and against a combined ministry. While <strong>Neeraj Thakur </strong>has argued against doing away with all the energy-related ministries in favour of a single one, <strong>Moyna </strong>has pointed out why renewable energy could be the biggest beneficiary of an integrated energy policy. The verdict remains undecided and we have to wait till the next week when the BJP government completes its cabinet formation. Meanwhile, decide what you want</div><div> </div><div><strong>Why Having Seperate Ministries For Energy Sector Makes Sense</strong></div><div>While there is no doubt that in the past 15 years many of the ministries were created just to please the leaders of the coalition partners, but the importance of having separate ministries to provide enough voice to each sector cannot be ignored.</div><div> </div><div>Take for example, the existence of five different ministries in the energy sector- Ministry of Petroleum and Natural Gas, Ministry of Coal, Ministry of Power , Ministry of Mines and Minerals and Ministry of New and Renewable Energy. Even as there is a demand of clubbing all these ministries into one, to improve efficiency, a fresh look at the argument gives a different picture.</div><div> </div><div>While it is good for the country to have an integrated energy policy and the Planning Commission has even come out with one such document, but at the implementation level, there has been a conflict of interest between all these ministries in the past few years.</div><div> </div><div>Take for example, the issue of natural gas pricing in the country. While the Ministry of Petroleum and Natural Gas under the UPA government left no stone unturned to increase the price of gas twice in its tenure, the ministry of power always stood against such a move. Reason being, every penny earned by the natural gas companies in the country resulted in a loss to the power generation companies.</div><div>At the time when the Ministry of Petroleum was preparing to increase the price of natural gas in the country, the ministry of power had fought tooth and nail by clubbing with the ministry of fertilizers against the proposed hike. It had even made presentations to the ministry of finance saying $ 1 increase in the price of natural gas will cost additional Rs 1,040 crore burden on the power sector. Even though the Ministry of petroleum went ahead with a hike in the natural gas price, but the voice of the power sector was raised by the Power ministry because it had an independent minister.</div><div> </div><div>Conflict of interests existed the ministry of coal and the ministry of power, as well. The Power sector companies –private as well as public- had several issues with Coal India Ltd, a Company that reports to the Ministry of Coal. The issues range from the quality of coal to pooling of imported coal with domestic coal to meet the increasing fuel demand of the sector. While Coal India has been supported by its parent ministry on all issues, the voice of the power sector companies has been raised by the Minister of Power at various platforms.</div><div> </div><div>While having one minister for all the ministries will allow the government to take quick policy decisions, but at the same time it will also mean that there would not be any voice of dissent, which may prove to be detrimental for the growth of certain sectors.</div><div> </div><div><strong>Why Renewable Energy Could Gain From An Integrated Energy Policy<br /><img src="/image/image_gallery?uuid=4a8096c1-55f1-486b-abc7-b6950810cd9e&groupId=36166&t=1400781815637" width="600" height="310" vspace="3" hspace="3" align="middle" alt="" /><br /><br type="_moz" /></strong></div><div>The perennial sidekick within the energy sector – the renewable energy segment – could be the biggest beneficiary of the BJP government’s integrated energy policy if Modi decides to adopt a holistic approach to ensure energy security for the country.</div><div> </div><div>Irrespective of being administered under a separate ministry, renewable energy sector have hitherto felt ignored as compared to oil and gas, coal and power sectors when it comes to implementation of policies and incentives that are meant to fuel growth in the overall energy.</div><div> </div><div>Experts believe that a change in perception and a holistic approach is all that is needed to enforce the existing renewable energy purchase obligations. With the kind of centralisation of power the Prime Minister’s Office (PMO) is expected to enjoy, and the talks of merger of ministries that are functioning in related areas like that of the energy sector, experts are hoping that the new government could take into account a larger picture that ensures competitive tariffs, and weighs environmental concerns associated with fossil fuels and renewables before taking a policy decision.</div><div> </div><div>Currently, the secondary status of renewable energy is visible through the delay in connecting it to the grid, increasing the pie-share or even enforcing the priority due to the sector. Considering renewable energy addresses two of the most important concerns plaguing the power sector – fuel shortage and environmental degradation, the authorities need to give it more space than being currently accorded, experts feel.</div><div> </div><div>In fact, the wind energy, which has been a part of the Indian power sector for over a decade, and the solar energy, in use for half a decade, got connected to the grid only two years ago. However, authorities like the Power grid and Central Electricity Regulatory Commission or Central Electricity Authority have failed to give the priority due to the renewable energy sector – evident from the recent waiver requested by distribution companies (discoms) of Delhi, Gujarat, Tamil Nadu etc in the last six months. In the past, many of the complaints of project developers are examples of the step-motherly treatment given to renewable energy. Even if grid connected renewable power is generated, distribution agencies prefer to take fossil-fuel based power.</div><div> </div><div>The troubles and concerns of the renewable energy sector are well known and well documented by now. While the sector has been plagued by policy indecision, flip-flops, foreign dumping, unmet targets, poor evacuation, low implementation on ground, investor troubles etc the biggest failure has been the non-implementation of renewable energy purchase obligations. As with most sectors, the blame game may continue regarding whose fault it has been especially since the capacity addition last fiscal was almost a 1000 mw below the set target.</div><div> </div><div>Often the seasonal and day variations of renewable energy are cited as reasons for lack of reliability and renewable energy not being the first choice of Discoms. But project developers as well as seniors officials in Ministry of New and Renewable energy have shown and developed technologies to combat this hurdle. The fact that many RE project developers are facing investment crunch is also blamed on RE not being purchased, with the result that projects fail to show assured returns.</div><div> </div><div>With the ambitious target of 55,000 MW of renewable energy capacity addition in less than 8 years, attitude to renewable energy needs an overhaul. Internationally renewable energy is now close to 50 percent of the total energy pie in some countries, which has been largely made possible by reducing fossil fuel subsidies and giving preference to power generated through renewable sources. For this to become a reality it would be required to ensure the implementation of renewable energy purchase obligations, meeting renewable energy targets of capacity addition and power generation.</div>
