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Came across an excellent analysis of the challenges faced by India on the energy front and whether we are ready to meet these. The article was written in Oct 2007, so a few things could have changed since then, but well, not too many things!

The primary challenges facing India’s energy sectors are:

* Coal depletion and pollution. Coal accounts for more than half of the country’s energy consumption. The poor quality of Indian coal, coupled with a lack of infrastructure to clean it, poses a major environmental threat. Corruption and poor productivity dog the industry. Although it is the world’s third biggest coal producer after the United States and China, India’s coal reserves could run out in forty years, according to the Brookings report by Madan.
* Rising oil imports. Oil consumption, which accounts for roughly a third of India’s energy use, has increased sixfold (PDF) in the past twenty-five years. India now imports about 65 percent of its petroleum.
* Natural gas demands. India’s limited domestic gas reserves spell a need for foreign dependency in this sector as well.
* Inefficient electric systems. Although 80 percent of the country has access to electricity, unreliable power grids cause regular blackouts. Furthermore, inefficient electric systems result in at least a 30 percent loss of power along the delivery chain. State electricity boards that run the infrastructure behind the country’s power distribution are in poor shape.
* Energy-related water shortages. Indian farmers have access to heavily subsidized power to pump water for irrigation. The low costs lead them to wasteful water use, depleting the water tables. As water tables lower, larger pumps require more power to access deeper water supplies.
* Limited nuclear energy. With fourteen nuclear power plants run by state-owned companies, nuclear energy accounts for just 3 percent of India’s energy consumption. (Of course, the recent developments could well change this to a significantly higher % soon enough)