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India faces huge uncertainties related to fossil fuel revenues.In this case, a stable energy partnership with the UAE will benefit it in the long run
On May 14, 2018, when I sat down to interview Indian Oil and Gas Minister Dharmendra Pradhan, who was on an official visit to the UAE, he highlighted the “win-win agreement” between the two countries. This is related to India’s Mangalore Strategic Petroleum Reserve that has just been agreed upon by the two countries. “Emirati crude will fill strategic storage facilities for the first time,” he said, adding that the UAE will invest in Indian storage as part of a seven-year arrangement in which India retains first rights to the crude.
In the interview, Pradhan also spoke about India’s acquisition of a 10 percent stake in Abu Dhabi’s very prolific Lower Zakum field. The next item on the minister’s agenda during the visit is a roadshow to promote and attract investment in upstream and downstream activities in India. These few disclosures then point to a multi-pronged shift in India’s energy relations with the UAE. In other words, the energy synergies that already exist are reaching a whole new level.
The shift was succinctly defined by the then Indian ambassador to the UAE, Navdeep Singh Suri. “Until recently, it was a very one-dimensional and binary relationship, the UAE is a big oil producer and we are a big consumer, so it’s a buy-sell relationship,” he commented.
He attributes the shift to a comprehensive strategic partnership between the two countries, which incorporates “flesh and structure”. “Energy relations are a key part of that,” he said.
The fundamentals of India’s status as the largest energy growth market in the region have persisted, enough to allow UAE-sized energy producers to participate. Moreover, India appears determined to have large strategic reserves to meet its urgent needs. The UAE is more than willing to be part of this balance of supply and demand. Because of these factors, Ambassador Suri sees “a very bright and dynamic future for our energy relations”.
The push for clean energy India’s fast-growing energy dynamics often resonate with the UAE’s efforts to make firm plans for the coming decades. The country has struggled to achieve a balance. The UAE launched its Energy Strategy 2050 in 2017, becoming the country’s first unified energy strategy based on supply and demand, aiming to increase the share of clean energy in the total energy mix to 50% by 2050. It also set a target of a 70% cut. 1% of the carbon footprint of electricity generation by mid-century.
Targeting an energy mix that combines renewable, nuclear and clean energy, the UAE will invest AED600 billion by 2050 to meet its growing energy needs and ensure sustainable economic growth. In other words, on a similar level, the overall drive for renewable energy and sustainable development has become another aspect of developing energy synergies between India and the UAE.
During last year’s global climate talks, India pledged to achieve net-zero greenhouse gas emissions by 2070. New Delhi also reaffirmed its goal of adding 500 GW of non-fossil power generation capacity by 2030, up from 159 GW in February 2022. Non-fossil abilities. Policymakers in India realize that shifting support from fossil fuels to clean energy is an important step on the road to net zero.
These goals seem ambitious, but doable, as long as the will to achieve them remains the same. Considering how important this is from a sustainability standpoint, there’s no reason not to. Here’s the thing: India faces huge uncertainties related to fossil fuel revenues, despite volatile energy markets. In this case, a stable energy partnership with the UAE will benefit it in the long run.
According to a study by the International Institute for Sustainable Development (IISD), the broad range reflects uncertainty about the pace of policy shifts to clean energy, as well as India’s progress towards net-zero emissions targets. “After 2030, revenues will eventually fall significantly as fossil fuel use begins to peak and decline,” says the IISD report – Mapping India’s 2022 Energy Policy.
Even as India seeks synergies between social protection programmes and clean energy consumption, the country must consider a new investment model under the same umbrella. Many would say this is India’s battle. While this may be true, greater synergy with the UAE would be another step in the right direction.
Short-term developments such as the Covid-19 pandemic continue to drive India’s energy policy. According to one estimate, New Delhi has invested around $150 billion in the energy sector since the Covid-19 outbreak. At least $44.3 billion goes to fossil fuels and $37 billion to clean energy. With stable suppliers and potential investors in India’s energy sector, the UAE remains critical to India’s energy needs.
– The author is a senior journalist and researcher
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