Powering Resilience: India's Energy Ecosystem and the Quest for Energy Security

Energy security has become one of the key priorities of states worldwide due to geopolitical tensions, supply chain issues, and ongoing market instability. The consequences of this for a rapidly developing country like India, with over 1.4 billion people, are significant, as the country needs to achieve more than just having access to energy, i.e., to have consistent, dependable, and resilient access to energy to support continued economic growth and meet the demand requirements of its large population.

Illustration by The Geostrata

Importantly, global energy systems are re-arranging due to climate change and environmental constraints, and so is how energy is produced and consumed, being shaped by these structural changes. The way forward, therefore, is not temporary or conditional but a long-term evolution of how to govern energy. This shift towards a sustainable energy ecosystem in India is not just about the environment, but is a strategic move towards energy independence and reducing vulnerability to external supply shocks.

RISING ENERGY DEMAND AND STRUCTURAL DEMAND

India faces an increasing need for energy. This is partly because of their increasing energy dependency due to increasing needs relating to imports of fossil fuels for the generation of energy. The problem exists as India is now the third largest consumer of energy in the world. They use a lot of materials to power their manufacturing facilities, transportation system, and their new growing urban centre due to all their population growth and migration to the cities.

Over 88.6% to 90.8% of crude oil and a major portion of natural gas are imported into India, making them reliant on both external markets for energy as well as geopolitical relationships affected by global market fluctuations of energy, and the interruption of supply delivery.

Events such as the Middle East tension and sanctions applied to major energy-producing countries can quickly cause India to have an increase in the cost of energy, affecting the economy. Therefore, reducing dependence on the importation of energy, as well as diversifying the sources of energy, has become a critical strategic interest for policymakers.

RENEWABLE ENERGY AS A STRATEGIC PILLAR OF ENERGY SECURITY

Renewable sources provide essential energy security for countries like India because they help reduce the demand for energy imports. The increased use of renewable sources to generate energy supports the creation of a cleaner, energy-efficient environment through the use of domestic resources. Over the last 10 years, India has become one of the leading renewable energy markets in the world due to its rapid deployment of utility-scale solar farms and the increase in installed wind generation capacity, in addition to increased investment in hydropower and biogas energy generation.

India's exceptional solar energy capacity is an important factor in its transition to renewable energy. India has almost three hundred sunny days a year; therefore, India has the ability to increase its production of solar electric power substantially through government programs like the National Solar Mission.  In 2026, India had 140 gigawatts of installed solar power capacity; it is now one of the fastest-growing solar markets in the world and stands as the third-largest producer of solar electricity in the world.

This is a great measure of the progress India has made in the deployment of renewable energy.  In addition to this, the country plans to have 500 gigawatts of total non-fossil fuel electricity generation capacity by 2030, with a large solar component that showcases India’s expanding renewable energy facilities at home to achieve a faster transition to renewable energy and create a more secure long-term energy future. 

DIVERSIFICATION OF ENERGY SOURCES AND SUPPLIERS 

India has been dependent on relatively few source countries for its energy import requirements. Traditionally, most of these source countries have been located in the Middle East. As a result, over the last few years, India has been trying to go outside traditional suppliers by looking instead to Russia, the US, and Brazil as alternative suppliers and expand its base of sources to maximise its diversification and thus minimise the risk of disruption in supply because of regional political reasons.

Some examples of this are increasing crude oil imports from Russia, establishing long-term expansion of LNG and energy trade with the US, and increasing energy cooperation with Gulf nations. As well, diversification intends to increase India’s ability to negotiate in the international energy market as it will have many suppliers it can turn to for oil rather than only a few.

Additionally, India has improved its energy resilience by building up a strategic infrastructure diversified supplier base. With Strategic Petroleum Reserves (SPRs), it has the capacity to keep crude oil available for emergency situations or disruptions to supply chains. The SPRs therefore will provide an important cushion for India to mitigate sudden increases in oil prices or unexpected interruptions of their supply chains.

Additionally, as more liquefied natural gas (LNG) terminals come online such as Dahej and Hazira, as well as expanding pipeline networks under the National Gas Grid project, India will also diversify its LNG supply. This will allow for more flexible sources of energy to be included in the total energy supply mix.

STRUCTURAL OBSTACLES TO OVERCOME

India's energy transition is a work-in-progress; however, there are still several structural obstacles to overcome. The country continues to utilise coal as the primary fuel used for generating electricity due to its low cost and availability. Coal provides an extremely reliable form of base-load power generation for the national electricity grid; however, transitioning to coal-free electricity generation will require careful planning and gradual installation timelines.

Another challenge associated with integrating large amounts of renewable energy into the national electricity grid is that it creates technical obstacles that will require substantial investment in new infrastructure and storage technologies.

In addition, the country needs access to critical minerals that are required for renewable energy generation and for developing energy storage systems. Just as in the past, the majority of supply chains for these critical minerals are located in a small number of countries, particularly China (rare earth processing), the Democratic Republic of Congo (cobalt), Chile and Argentina (lithium), and Australia (lithium and other minerals); thus, if India wants to ensure its long-term energy security, it will need to establish diverse supply chains for these minerals as well as develop capacity to process them domestically.

TOWARD A RESILIENT AND SECURE ENERGY FUTURE

Through its evolving energy systems, India is creating a balance of prosperity, sustainability, and security whilst ensuring that energy does not rely on traditional fossil fuels or fast decarbonisation, but instead on developing a diversified and resilient energy system which includes renewable energy expansion, technical innovation, strategic reserves, and international cooperation. India, to provide for its energy future, continues to contribute towards creating a more secure and sustainable global energy, this transition will require continued efforts to reduce dependence on coal, to build stronger infrastructure for the grid and to have access to important minerals to win long-term investments.

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BY MUSKAN GUPTA TEAM GEOSTRATA

info@thegeostrata.com