Securing Green Digital Prosperity

‘Energy Security’ is of critical importance to a nation. Development in today’s energy-driven world is strongly linked to the common man’s access to energy at the lowest cost. Today’s wars are mostly fought not on land but from the air. Stealth bombers and killer drones are being used to attack humans and resources. Chip war has truly become a war with chips. The ongoing war between Ukraine and Russia has shown the strategy of each trying to cripple the other’s energy resources. European countries, despite their intentions, could not really stop the gas flow from Russia to their own countries because their energy resources are critically linked to such gas supply.

Prosperity is linked to access to energy in modern times as never before. Norway, which was a modest economy with fisheries and shipping as its major activities, could bring about a complete change in its landscape of development after the discovery of North Sea oil. This development has enabled Norway to traverse the path of prosperity and has also provided its citizens with an excellent social security net. Similarly, the OPEC member countries could handsomely leverage their oil and gas in a world hungry for them and ensure unprecedented economic development. Today, Dubai and Abu Dhabi are household names as international infrastructure and FINTECH hubs. With huge surpluses, these countries are now investing heavily in green power to protect and secure their economies from the sunset effects of the black and brown energy economy. The United States of America acquired Alaska from Russia but kept the reserve of mineral wealth, including oil, unexploited as a measure of fallback security.

India, which does not have a significant oil reserve, could manage tremendous growth in power demand by utilising its abundant reserve of cheap coal. With restructuring of the power sector over time by making the generation sector unlicensed, encouraging private investment, making long-term power purchase agreements legally enforceable, streamlining the power market, and enabling mega mines, India’s generation, transmission and distribution grew significantly to the remotest corners to meet the aspirations of its population. India today is an acknowledged leader in implementing UNFCCC–COP resolutions on green energy transformation by hugely augmenting the installed capacity of green power.

Now India needs to take more aspirational steps to ensure that our energy and other mineral resources required for emerging frontier technology growth are securitised.

The global focus is on securing supplies of rare earth elements (REEs) and critical minerals considered essential for energy security, the digital economy and green prosperity. Unfortunately, these resources are economically available only in a few parts of the world. India has taken certain important steps through launching the National Critical Minerals Mission to build a domestic value chain by promoting exploration, mining, processing and recycling, R&D, and including exploration and acquisitions abroad.

But India needs to expeditiously explore and utilise its existing energy and critical mineral resources in addition to setting clear timelines for ensuring secured tie-up arrangements with countries having these resources. India’s progress in the exploration of resources needs to be boosted by proactive policy adoption. The New Exploration Licensing Policy (NELP) was India’s answer to beefing up our oil and gas availability. The strategy was combining exploration and extraction and giving blocks of economic size to international and national companies competent in the field. A similar approach needs to be adopted for critical mineral extraction. Exploration needs to be given a big push by putting in place a very attractive policy designed to gain the attention and enthusiasm of domestic and international players. Experience in some African, Asian and Latin American countries shows that uncertainty of regulatory clearances and unavailability of proper mineral data could be the biggest stumbling blocks to attracting investment. India’s route of development of generation through ultra-mega power projects (UMPP) provides a somewhat replicable path. Special Purpose Vehicles (SPVs) can be constituted for the purpose. The economic size of the mining block proposed for allocation is an essential requirement. The SPV could have both the Central and State Governments on board. The SPV will obtain all prior clearances and then transfer the lease only through a process of transparent bidding. The interest of the State Governments could be ensured by giving a higher share of taxes and incentive royalty.

The Government of India could consider funding the exploration of potential blocks to bring them to the UNFC standard. This strategy will ensure better returns on investment and quicker availability of the targeted minerals. Integrated development of mining, processing and refining within India and recycling in the long term will be the tenets of the policy rollout. This will be in sync with the vision of the Government of India for significantly enhancing the contribution of the mineral sector to GDP and the securitisation of the emerging technology economy.

Views expressed are personal. Sutirtha Bhattacharya is Chairman, West Bengal Electronics Industry Development Corporation Limited, and former Chairman, Coal India Limited; D.N. Prasad is a Former Adviser, Ministry of Coal