India should rapidly expand the use of electricity in its economy, mainly from renewable sources, to cut its vulnerabilities to global oil and gas price cycles, said Tarun Kapoor, the chief of petroleum and natural gas ministry’s energy transitional panel. He said the government should use tax as a tool to encourage electric vehicles (EVs) and discourage vehicles powered by petrol and diesel.
“The most effective way to reduce our vulnerabilities to global oil and gas price cycles is to rapidly increase the share of electricity in our country’s final energy consumption. And the new electricity supply should predominantly come from renewable sources,” Kapoor, the head of the ministry’s Energy Transition Advisory Committee.
The committee is expected to submit a broader energy transition plan for the petroleum sector by June.
The share of electricity in India’s final energy consumption is set to rise from the current 17% to 24% by 2040, according to a key scenario by the International Energy Agency. Kapoor said India should set a more ambitious target.
India depends on imports for 85% of its oil and half of its natural gas needs. The oil price spike in the past few months has pushed up domestic rates of fuels, feeding inflation in the economy.
“The government should work towards substantial electricity demand creation, especially in cooking and transport, which is where we could have a quick and direct shift from oil and gas,” said Kapoor, who retired as petroleum secretary last November and has spent more than a decade in the electricity sector policymaking.
“We must use tax as a tool to incentivise EVs and disincentivise petrol and diesel vehicles. To begin with, we must target taxis. It makes immense economic sense to use EVs where daily travel comes to around 100 km,” said Kapoor.
Electric two-wheelers are only beginning to gain popularity In India while passenger cars are yet to find favours among buyers whose preference is increasingly shifting to big cars like fuel-guzzler sport utility vehicles.
“EV makers will have to chip in with more models to make it attractive for buyers. And, of course, safety must be a top priority,” said Kapoor.
Recent incidents of some electric two-wheelers catching fire have set off debates around the safety of vehicles.