Energy Security – Significance & Challenges – Explained Pointwise

Introduction:

• Energy security refers to the uninterrupted availability of energy sources at an affordable price. It involves ensuring a reliable supply of energy to meet the growing demands of a nation, while managing risks such as geopolitical conflicts, supply chain disruptions, and environmental challenges.
• For India, energy security is crucial for sustaining economic growth, reducing dependency on imports, and achieving long-term sustainability.
• India currently relies heavily on fossil fuels, primarily coal, for its energy needs, which poses environmental challenges and increases dependence on imports. Renewable energy (RE), including solar, wind, and hydropower, accounts for 44% of the installed capacity but contributes only 23% to energy generation. Despite progress, the need for a diversified energy mix is critical to address rising demand and reduce carbon emissions.

Current status of India’s Energy Sector:

• Total installed power capacity reached 476 GW by June 2025.
• Thermal power accounts for 50.52% of total installed capacity.
• Per capita electricity consumption increased to 1,395 kWh in 2023–24 from 957 kWh in 2013–14.
• India achieved 100% village electrification by April 2018.
• Non-fossil fuel sources contribute 49% of total capacity by June 2025. 
• India ranks 4th globally in Renewable Energy Installed Capacity, 4th in Wind Power, and 3rd in Solar Power capacity.
• Solar capacity increased to 110.9 GW.
• Installed wind increased to 51.3 GW.
• Installed nuclear capacity grew to 8,780 MW, across 25 reactors.
• Hydro capacity increased to 48 GW.

Significance of energy security:

1. Economic Stability & Growth:
   • Reliable and affordable access to energy fuels industrial production, transportation, agriculture, and services, supporting GDP growth and job creation.
   • Energy security shields the economy from global supply shocks, volatile prices, and supply disruptions, ensuring sustained development.
2. National Security & Strategic Autonomy:
   • Reduces vulnerability to geopolitical risks, embargoes, and external supply disruptions by diversifying energy sources and suppliers.
   • Maintaining strategic reserves (petroleum, gas, critical minerals) enhances resilience during international crises or conflicts.
3. Technological Advancement & Competitiveness:
   • Stable energy supply encourages investment in advanced manufacturing, digital infrastructure, and innovation in sectors like AI, data centers, and green tech.
   • Promotes Make in India initiatives and supports export competitiveness.
4. Sustainable & Inclusive Development:
   • Ensures universal access to clean and affordable energy, vital for alleviating poverty, improving healthcare, and providing education in rural and remote areas.
   • Drives energy transition towards renewables and cleaner fuels, supporting environmental sustainability and meeting climate commitments.
5. Social Security & Quality of Life: Universal, reliable access to electricity and clean cooking fuels enhances health, reduces indoor pollution, and improves standards of living, particularly for vulnerable populations.

Challenges to India’s energy security:

1. Import Dependency: India imports over 85% of its crude oil and more than 50% of its natural gas, over 25% of the total import bill in FY24, puts pressure on rupee, inflates the trade deficit, and compromises macroeconomic stability.
2. Strategic Imbalance: India’s reliance on Russia for 35%-40% of its crude imports, up from 2% before the Ukraine war, highlights the vulnerability of single-sourced reliance. Diversification, not substitution, defines true sovereignty.
3. Global Market Volatility: Geopolitical conflicts, such as the Russia-Ukraine war and the Gaza crisis, and international sanctions cause sharp fluctuations in global oil prices, impacting India’s oil import bill, fiscal balance, and foreign exchange reserves.
4. Financing Needs for Energy Transition: According to the International Energy Agency (IEA), India requires $160 billion per year to meet its energy transition goals by 2070.
5. Rising Energy Demand: Driven by economic growth, population increase, urbanization, and industrialization, India’s energy demand is projected to double by 2040; increase imports if domestic production cannot keep pace.
6. Renewable Energy Intermittency: Renewable energy sources, like solar and wind, pose challenges due to their inherent variability, uncertainty, and concentration, require continuous balance to maintain grid stability.
7. Infrastructure Gaps: Storage options for excess renewable capacity have not developed as quickly as renewable generation, leading to market stabilization issues.
8. Inadequate Strategic Petroleum Reserves: Limited buffer against supply disruptions, and their coastal concentration makes them susceptible to attacks and natural disasters. 
9. Access to Critical Inputs: Securing critical minerals (e.g., lithium) is challenging due to their geographic concentration and long mining gestation periods.

India’s Plan for Energy Security:

1. Diversification of Energy Sources: India aims to diversify its energy portfolio by increasing the share of renewables like solar, wind, and hydropower, along with exploring other alternatives such as nuclear energy, biomass, and waste-to-energy. The goal is to achieve 50% of installed energy capacity from renewables before 2030.
2. Expansion of Nuclear Energy: India is expanding its nuclear energy capacity as a clean and efficient alternative. With 25% of the world’s thorium deposits, India is exploring thorium-based nuclear reactors and small modular reactor technology to enhance operational flexibility and safety.
3. Boosting Hydropower and Cross-Border Energy Trade: Hydropower remains a key part of India’s energy strategy, with plans to expand cross-border energy cooperation with neighboring countries like Nepal and Bhutan. By importing hydropower, India seeks to enhance its energy mix and ensure stable supply, particularly during peak demand periods.
4. Strengthening Transmission Networks: India is focused on enhancing transmission networks to efficiently absorb and distribute increased renewable capacity. This includes expanding inter-state transmission lines and developing energy corridors to connect renewable-rich states with energy-deficient regions.
5. Promoting Distributed Energy Generation: India is investing in distributed energy solutions such as rooftop solar, biogas, and small-scale wind projects. These decentralized energy systems can reduce transmission losses, support rural electrification, and increase energy resilience.

Various Government Initiatives for ensuring Energy Security:

1. Target of 500 GW non-fossil fuel capacity by 2030: Includes solar, wind, hydro, and nuclear sources. As of 2025, installed non-fossil fuel capacity crossed 225 GW (solar 97.9 GW, wind 48.2 GW, hydro 46.9 GW, nuclear 8.2 GW). India ranks 4th globally in renewables.
2. Solar Parks Scheme & PM-KUSUM: Boosts grid-connected and decentralized solar power, with 50 solar parks sanctioned and solar pumps for farmers.
3. National Green Hydrogen Mission: Aims for 5 million tonnes annual production of green hydrogen by 2030, with incentives for electrolyser manufacturing and use in refineries, transport, and fertiliser.
4. National Bioenergy Mission & SATAT Scheme: Promotion of biogas, CBG, waste-to-energy plants to diversify energy sources and utilize agricultural waste.
5. Strategic Petroleum Reserves (SPR): India maintains reserves at Mangalore, Padur, and Vizag (5.33 million tonnes), with expansion plans at Bikaner, Mangalore (additional), Bina, Padur, and Chandikhol. These will buffer supply disruptions and build resilience. Private participation in SPR policy is encouraged.
6. Nuclear Power Expansion: Ambitious plan to increase nuclear capacity to 100 GW by 2047, operationalizing Bharat small modular reactors, and strengthening long-term baseload supply.

Way forward:

1. Further Diversify the Energy Sources & Mix:
   • India should reduce dependence on any single source or supplier by promoting alternative fuels and increasing sourcing from various global regions (e.g., Russia, Africa, U.S., Latin America).
   • India should continue to explore underutilized energy sources such as tidal, geothermal, and hydrogen fuel, which can provide sustainable alternatives. Expanding research and development in these areas can unlock new opportunities for energy security.
   • Secure the supply of critical minerals through international collaboration, long-term stockpiles, and financial strengthening of entities like KABIL.
2. Invest in Energy Storage Solutions: Improving energy storage technologies, like advanced batteries and pumped hydro storage, is crucial for balancing supply and demand, especially with the increasing share of renewables. Enhanced storage capacity can stabilize the grid and ensure a reliable power supply during fluctuations.
3. Focus on Energy Efficiency and Conservation: Adopting energy-efficient technologies and practices across industries, buildings, and transportation can significantly reduce energy demand. Policies promoting energy conservation, retrofitting, and smart grids can optimize energy use and lower dependency on imports.
4. Strengthen International Energy Cooperation: India should strengthen its partnerships with global energy leaders to secure access to advanced technologies, invest in joint ventures, and develop cross-border energy projects. Collaborating on research, sharing best practices, and participating in global energy markets can enhance India’s energy resilience.
5. Expand Infrastructure for Alternative Fuels: To reduce reliance on conventional fuels, India should invest in infrastructure for alternative fuels like compressed natural gas (CNG), liquefied natural gas (LNG), and biofuels. This includes setting up fueling stations, pipelines, and processing facilities to support the adoption of cleaner alternatives.
6. Expand Biofuels Potentials: Ethanol blending program reduces crude imports and transfers over ₹92,000 crore to farmers, foreign exchange savings.
7. Strengthen Nuclear energy Roadmap: Revive thorium roadmap, secure uranium partnerships, and localize Small Modular Reactor (SMR) technologies. Nuclear power offers zero-carbon energy.
8. Advance Utility Reforms: Strengthen governance in distribution companies by empowering boards, enhancing financial independence, and listing state-owned utilities on stock exchanges to attract private investment.
9. Strengthen Ecosystem: Adopt a “whole-of-government” approach with enhanced inter-ministerial coordination and a high-level committee on resilient supply chains for energy transition.

Conclusion:
Energy security is vital for India’s economic growth and environmental sustainability. By diversifying its energy mix, enhancing infrastructure, and exploring new technologies, India can build a resilient energy system that meets growing demand while reducing carbon emissions. Continued investment in renewables, nuclear energy, and cross-border cooperation will be key to securing a sustainable energy future.