Fast-growing India has developed an intensive focus on dealing with its energy security challenge, which has emerged as a constraint on the Asian giant’s industrial competitiveness, India’s Ministry of External Affairs joint secretary and spokesperson Vishnu Prakash told Engineering News Online this week.

In a briefing with South African journalists in New Dehli, Prakash said the country was strongly focused on increasing its energy capacity, as well as other infrastructure, such as roads, ports, airports and telecommunications, the lack of which was limiting the economy’s growth and development aspirations.

With a $1-trillion-plus economy, two-thirds of its population below the age of 30, 400-million of its citizens regarded as ‘middle class’, and accelerating urbanisation, the world’s second-fastest growing major economy has particular challenges on the energy front as strongly rising demand places strain on its physical infrastructure.

As part of the mid-term appraisal of the country’s eleventh five-year plan from 2007 to 2012, it is projected that an additional 62 374 MW of electricity capacity should be added, as opposed to an initial target of 78 700 MW.

Prakash told Engineering News Online that the country also aimed to increase the use of clean energy technologies, as well as upscaling nuclear energy. About 5 000 MW of electricity has been generated from civil nuclear energy and it was anticipated that this capacity could increase to 60 000 MW by 2035.

The Indian government had adopted a policy that aligned energy prices with world prices for energy, but the policy has not been fully implemented. Prices for electricity are set by independent State regulators, but there is a resistance to selling prices at economic levels that will cover costs, India’s Planning Commission deputy chairperson Montek Ahluwalia said recently.

“We need to evolve a growth strategy that is much more energy efficient, thus reducing the energy intensity of GDP. We will also need to take steps to increase domestic supply of energy from all sources, conventional and non-conventional.

“What is required is to align domestic energy prices to world prices, but with energy prices below world prices, it is difficult to believe that the full scope for energy efficiency can be achieved,” he said during the K R Narayanan Oration at the Australian National University, in Canberra, last year.

Energy efficiency would also be encouraged through mechanisms such as regulation and standard setting for appliances, equipment and buildings.

Meanwhile, Prakash added that Bric, with the official inclusion of South Africa from April, transforming the unofficial bloc into ‘Brics’, would collaborate closely on issues relating to energy security, with a strong focus on green and renewable energy technologies.

SA AND THE BRIC BLOC

Prakash also insisted that South Africa would be an important member for the grouping that hitherto had included only Brazil, Russia, India and China. In fact, the inclusion of South Africa has raised a number of eyebrows, owing to the relatively modest size of South Africa’s economy and population when compared with those of the other members.

South Africa’s membership would be formalised in April at the Brics Leader Summit – this after South Africa received an invitation to join in December.

India’s Multilateral Economic Relations joint secretary Akhilesh Mishra believed that South Africa’s inclusion would further promote the development of the emerging economies and allow for the sharing of expertise in a number of industries, beyond the current, and more formal, Ibsa grouping, of India, Brazil and South Africa.

Mishra pointed out that Brics also aimed to complete a study by year-end on the state of the world economy and the role it could play. The grouping also aimed to establish a Bric encyclopaedia.

But despite South Africa’s accession into Brics, Mishra stressed that Ibsa remained relevant, arguing that it played a different role in terms of political coordination, sectoral cooperation and poverty alleviation.

Intra-Bric trade was a key focus, with bilateral trade between India and South Africa having reached $7,5-billion in 2008/9. It was proposed recently that a target be set for trade between the two countries to increase to $15-billion a year by 2014.

But such figures are dwarfed when compared with trade aspirations between the two giants of India and China. Prakash said that India aimed to increase trade between the two countries to $100-billion by 2015. Trade between the two countries was $60-billion in 2010.

“While we will continue to cooperate and compete with China, as competition is healthy, China is a foreign policy priority. We continue to look at China with great admiration and rejoice in its success as our neighbour,” he said.

Creamer Media’s Brindaveni Naidoo is in India on a tour hosted by the Indian government.