Draft National Energy Policy

  • A draft national energy policy proposing aligning energy prices with international rates will be put up for the approval of the Cabinet.
  • If approved, energy prices across sectors would become market-driven and subsides would be limited to identified beneficiaries via direct benefit transfer, much on the lines of the LPG subsidy.
  • The government think tank Niti Aayog in June released a draft National Energy Policy (NEP), on which it had been working since 2015.
  • Prime Minister had chaired interministerial consultations on the policy after the coal ministry expressed reservations over market-driven prices that would pose a threat to the monopoly and margins of Coal India.
Highlights of draft NEP:
  • The policy will help India integrate with the global energy world without compromising on the energy needs of the poorest of the poor, who will continue to get subsidy on all forms of energy directly into their bank accounts through direct benefit transfer.
  • The outward-looking policy is against any kind of subsidies at the production and distribution levels as it distorts the system.
  • Instead, it has strongly vouched for DBT as the technological platform to transfer subsidies to the poor after the success of LPG.
  • In its draft policy, Niti Aayog said India’s energy demand was likely to soar around three times by 2040, leading to increase in overall primary energy imports.
  • It had also made a case for a single regulator to govern India’s energy market to make ‘India’s economy energy-ready’ by 2040.
  • The NEP will replace the Integrated Energy Policy of the UPA regime and lay the road map for government push towards clean energy and reducing fuel import.
  • According to the draft NEP, the period 2017-2040 is expected to witness a quantum leap in the uptake of renewable energy, drastic reduction in energy intensity, doubling of per-capita energy consumption and tripling of per-capita electricity consumption.

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