India’s energy sector undergoing significant transformation: Govt
New Delhi: The government on Monday informed the parliament that India’s energy sector is undergoing a significant transformation, with a growing emphasis on cleaner energy sources. The incumbent regime has set an ambitious target to increase the share of natural gas in the energy mix to 15 per cent by 2030. This vision is being realized through a series of strategic initiatives and policy reforms aimed at expanding natural gas infrastructure, increasing domestic gas production, and promoting sustainable energy alternatives.
In a written reply, the MoS petroleum and natural gas, Suresh Gopi informed the Rajya Sabha that to support the increased use of natural gas, the government has taken several steps to expand the National Gas Grid Pipeline and the City Gas Distribution (CGD) network. Additionally, the establishment of Liquefied Natural Gas (LNG) Terminals is underway to facilitate the import and distribution of natural gas. The allocation of domestic gas to Compressed Natural Gas (Transport) or Piped Natural Gas (Domestic) CNG(T) or PNG(D) has been prioritized, ensuring that essential sectors receive adequate supply.
The government has also introduced measures to liberalize the marketing and pricing of natural gas. Gas produced from high-pressure/high-temperature areas, deep water, ultra-deep water, and coal seams is now subject to market-determined prices, with a ceiling price to ensure affordability. The Sustainable Alternative towards Affordable Transportation (SATAT) initiative has been launched to promote Bio-CNG, further diversifying the energy mix and reducing reliance on conventional fuels.
The junior minister also informed that, in a bid to increase domestic gas production, the government has introduced the Hydrocarbon Exploration and Licensing Policy (HELP). This policy shifts the award of exploration acreages from the production-sharing mechanism to a revenue-sharing mechanism, incentivizing exploration and production activities. The policy reforms notified on February 28, 2019, further relaxed many processes and approvals to promote “Ease of Doing Business” in the sector.
Key reforms include the removal of Revenue Share from Category II & III type of basins, except for windfall gains. A 7-year Royalty Holiday has been granted for Deep & Ultra-deep blocks, and concessional Royalty Rates have been introduced for Deepwater and Ultra-deep water blocks. Fiscal incentives have been provided to encourage the early monetization of fields, along with marketing and pricing freedom for natural gas.
On April 7, last year, the government issued a notification allowing a premium of 20 per cent over the Administered Price Mechanism prices for gas produced from new wells and well interventions of Oil and Natural Gas Corporation Ltd (ONGC) and Oil India Ltd (OIL) from their nomination fields. This move is expected to boost production and incentivize investment in the sector.
He further highlighted the government’s commitment to transforming India’s energy sector by promoting cleaner energy sources and enhancing domestic gas production. The comprehensive reforms and initiatives undertaken by the government reflect a strategic approach to achieving energy security, reducing carbon emissions, and fostering sustainable economic growth. By expanding natural gas infrastructure, liberalizing markets, and providing fiscal incentives, India is well-positioned to meet its 2030 target and lead the way in the global energy transition.
The government’s efforts are expected to have a profound impact on the energy landscape, promoting cleaner, more efficient, and sustainable energy solutions for the future. As India continues to advance its energy sector reforms, the focus remains on leveraging natural gas as a bridge fuel towards a greener and more resilient energy future.
