Ensuring uninterrupted energy supply to power economic activity should be a domestic policy priority for India. However, there is a plethora of challenges that hinder such policy efforts and reveals the soft underbelly of the country’s energy sector. Dependence on imported petroleum fuel has been a long-standing policy concern for economic, geopolitical and environmental reasons. Even with considerable energy imports, a quarter of the Indian population still do not have access to electricity. The use of fossil fuels also affects environmental health.

Challenges are not limited to the conventional fossil fuel sector. Intermittency issues, huge capital costs and storage issues continue to be an impediment to renewable energy. To address the widespread lack of confidence in the ability of renewables to meet energy demand, the renewable energy sector needs to develop stronger policies, regulatory frameworks and legally monitored provisions for financial support and incentives. With regard to nuclear energy, International Atomic Energy Agency estimates shows that nuclear electricity accounts for only about 3.6 per cent of total electricity production in the country. The effects of post-Fukushima anti-nuclear public opinion continue to pose major hurdles to the expansion of this sector, which is slated to become an integral part of India’s energy mix.

Solving India’s energy dilemmas is critical for achieving the nation’s long-term global political and economic ambitions. There are four interrelated questions that must be tackled.

First, there are questions about the suitability of the current energy policy in meeting long-term energy demand. Though the Integrated Energy Policy framed by the Planning Commission in 2006 advocates the development of mixed fuel types, the remarkably low benchmark for achieving energy security remains a weak point. The definition of energy security must go beyond meeting a bare minimum of energy access. A ‘solar lantern for every household’ may make effective advertising material for sustainable development, but it is not an indicator of energy security. In order for more ambitious targets to be contemplated, India’s energy sector must expand much more rapidly than at present, with technological innovation the driving force.

Second, power shortages can be detrimental to industries and can affect their investment decisions. Another widespread power failure resulting from an overburdened power grid, like the July 2012 blackouts that affected half of the Indian population, would be a huge challenge to the national economy. While excess demand must share some of the blame, the efficacy of transmission and distribution (T&D) facilities must also be addressed. T&D losses in India amounted to around a quarter of all power generated in 2010-11, one of the highest rates in the world. In some states, these losses are close to one half of total generation. Addressing these issues require strengthening T&D facilities and improving the overall efficiency of governance in the power sector.

Third, energy sector reforms that restructure governance mechanisms for domestic petroleum discoveries are required in India. Though the last decade has seen many new oil and gas discoveries, the country still is embroiled in debates about transparency of production and the supply capabilities of these new sources of energy. Unless the sector is governed by strong legal and institutional mechanisms, challenges to domestic energy sector will continue to haunt the country.

Domestic challenges to India’s energy security are more urgent than those posed by external geopolitical factors. In this context, reforms in the domestic energy sector that strengthen governance and legal mechanisms are necessary measures to enhance India’s energy security, which in turn, is pivotal to achieve the country’s larger political ambitions on the global front.

Nanda Kumar Janardhanan is a Fellow of the Institute for Global Environmental Strategies, Kanagawa, Japan, and an Adjunct Fellow of the Institute of Chinese Studies, New Delhi, India. The views expressed are personal.