UPSC Syllabus: Gs Paper 3- Infrastructure ( Energy)
Introduction
For more than a century, industry has depended on burning coal, oil and gas for heat and motion. This fuel-based model is now giving way to an electricity-based system. Clean and reliable power is becoming the main source of industrial competitiveness. Countries that move faster from molecules to electrons gain advantages in exports, jobs, capital flows and energy security. In this shift, China is far ahead, while India is still catching up.
Understanding the Electrons vs Molecules Shift
- Meaning of molecules and electrons: Molecules include coal, oil, gas, LPG and biofuels that are burned directly in engines, boilers and furnaces. Electrons refer to electricity supplied through the grid to run machines and industrial processes.
- Shift in the role of coal: Coal is increasingly used for centralised power generation instead of direct combustion at factory sites. This allows industries to rely more on electricity rather than fuel burning.
- Efficiency advantage of electrification: Electric motors convert over 90% of input energy into useful work, while internal combustion engines convert less than 35%. Each rise in electrification replaces more fuel than raw energy numbers suggest.
- Ease of decarbonisation and control: Electrification enables better automation, precise process control and easier integration of clean energy. This makes emissions reduction simpler over time.
Why China Is Ahead Through Strategic Industrial Electrification
- High industrial electrification levels: Nearly half of China’s industrial energy use comes from electricity. India’s share is closer to one quarter, creating a large competitiveness gap.
- Leadership in green electrons: China has the highest share of green electricity in industrial use. The United States and the global average stand near 12%, while India is around 7%.
- Strategic focus on industry: At the economy level, China, the U.S. and the European Union are all near one-third electrification. China directs far more electricity into industry than its peers.
- Export-oriented design: As a major manufacturing hub, China ensures reliable and cleaner power for factories. This strengthens export competitiveness where carbon intensity is closely examined.
China’s Industrial Transformation Model
- Grid-first approach: Since 2010, China has invested heavily in power generation, ultra-high-voltage transmission, flexible substations and grid-scale storage. This created a strong base for industrial electrification.
- Steel sector electrification: Electric arc furnace (EAF) steel production rose from about 44 million tonnes in 2010 to 106 million tonnes in 2024. Even after this increase, EAF steel makes up only around 15% of China’s total steel output.
- Role of policy incentives: Scrap recycling support and preferential tariffs encouraged the shift to electric steelmaking. This shows deliberate policy direction.
- Cement sector measures and its limits: Grinding mills, material handling and digital controls are electrified. Waste-heat recovery provides 30–35 kWh per tonne of cement, improving efficiency. However, Calcination emissions in cement cannot be avoided. This makes carbon capture, utilisation and storage pilots necessary.
India’s Current Status and Industrial Electrification Roadmap
- Present level of electrification: India has doubled grid capacity in a decade and leads in solar additions. Still, industrial electricity use is only about one quarter, with green electricity at 7–8%.
- Reasons for slow transition: Legacy dependence on on-site fuel combustion locks industries into molecules. Power quality and reliability remain uneven. Policy attention focuses more on generation than industrial use.
- Steel sector opportunities: Around 30% of India’s steel is produced through electric arc furnaces, compared to about 70% in the U.S. Improving scrap collection and trading systems can raise this share.
- Trade pressure from carbon rules: Renewable-linked incentives for electric steel are important due to carbon-based trade measures targeting steel exports.
- Cement sector pathway: Support is needed for electrified kilns, large-scale waste-heat recovery and CCUS hubs. A 20% reduction in fuel use per tonne is targeted this decade.
- MSME transition needs: Most MSMEs depend on coal boilers and diesel generators. Concessional finance, pooled renewable procurement and technical support are essential.
- Role of digitalisation: Advanced controls in new industrial clusters reduce power waste, enable demand response and provide reliable carbon data for global buyers.
Why the Transition Matters
- Competitiveness in global markets: Export competitiveness is shaped by carbon intensity, and green electrons embedded in supply chains influence contract outcomes.
- Energy security gains: Electrification reduces exposure to imported oil and gas price shocks by shifting demand to domestically produced electricity.
- Industrial sovereignty: Industries can locate based on skills and logistics rather than fuel availability, strengthening economic independence.
Conclusion
The global industrial race now depends on green electrons rather than fuel molecules. China’s strategy shows that directing clean power into industry creates lasting manufacturing strength. Without a rapid rise in green industrial electricity, India risks trade penalties and lost export opportunities. Policy must focus on power flowing into factories, not just capacity addition. The next industrial phase demands fast and deliberate electrification.
Question for practice:
Discuss how the shift from fuel-based industrial processes to electricity-based systems affects industrial competitiveness and what lessons India can draw from China’s experience.
Source: The Hindu
