General Studies for Civil Service Exams – 4

Russia steps forward to meet India’s energy and technology needs

As India strives to replace coal with other sources of safe, non—polluting energy, it finds a credible partner in Russia.

Heeding the international call to limit its carbon emission, India has been trying hard to transition to safer and non-polluting sources of energy. Russia sits over a vast reservoir of natural gas that it is ready to sell to needy customers. On the nuclear energy front too, Russia has a well-developed technology base and has been quite willing to set up nuclear power plants in India. Thus, increased co-operation between the two countries could be a win-win situation for both sides. To make the cooperation more productive, both governments have to step up their contacts, so that agreements and their implementation do not get mired in red tape.

In September, the 6th meeting of the Eastern Economic Forum (EEF) took place in Vladivostok in Russia. The Indian Prime Minister Narendra Modi addressed the gathering virtually. He said, “India-Russia energy partnership can help bring stability to the global energy market.”

Indian and Russian Energy Ministers announced that the two countries’ companies want to take the investment in joint projects well beyond the present figure of 32 billion USD. India’s Minister for Petroleum and Natural Gas Hardeep Singh Puri referred to Russia as the largest investor in India’s energy sector.

A push towards ‘green’ energy

As India emerges from the shadow of the pandemic, its energy needs have begun to soar. India is also quite conscious of its commitment to cut carbon emissions and transition to safe energy sources proactively. India has since stepped up its efforts to look for safe energy sources.

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An example of gainful cooperation…

A joint venture between India’s Reliance Industries Ltd. and Russia’s Sibur went on stream in 2019. Set up in Jamnagar, Gujarat, the venture has become South Asia’s largest producer of butyl and halogenated butyl rubber production facility. The facility reached its rated capacity within the first year. Now, the plant is the dominant supplier of butyl rubber in the Indian market. Import of this item has been completely stopped. The joint venture will produce up to 120 ktpa of butyl rubber, 60 ktpa of which could be further converted to halogenated butyl rubber to meet the growing demand from domestic tyre manufacturers.

Overcoming supply chain risk

In an interview, Alexander Petrov, Sibur member of the management board heading the Plastics, Elastomers and Organic Synthesis Division, said, “Reliance Sibur Elastomers is not only supplying most of the butyl rubber consumed in the country, but also is exporting its products.” He added, “Sibur is bringing to India unique technology, which is not commercially available in the market and is the most advanced in terms of its ecological footprint. The project will provide crucial support to the growth of India’s auto industry by securing uninterrupted critical raw material supply. This eliminates the risk of interruption of supplies from abroad due to supply-chain constraints.”
Apart from meeting internal demands, Reliance Sibur Elastomers exports its products to different countries in Asia, Europe, the United States, Brazil and elsewhere. The venture is also promoting halogenated butyl rubber, which is a value-added premium product.

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Russia’s Gazprom and India’s ONGC Videsh Ltd. (OVL) and the Indian Oil Corporation have also signed a memorandum of understanding at Vladivostok to enhance India’s crude refining capacity.

Renewable, nuclear energy

In efforts to transition to green energy, India has completed installing 100 gigawatts of renewable energy, and now eyes a capacity of 175gw by the end of 2022. When achieved, that would be close to half of India’s current total installed power capacity. It is estimated that additional investments of 80 billion USD would be needed by the end of 2022 to meet this target.
Attempts to reach net-zero emissions around the year 2050 could play a crucial part in India’s development.
A recent Deloitte report has forecasted that India could gain U.S.$11 trillion in economic value over the next 50 years by limiting rising global temperature and realising its potential to ‘export decarbonization’. India should therefore accelerate its strides towards renewable energy sources.

Russia as the single-window source of raw material, technology and capital…

Russia has formidable capacity in all the three above inputs. Successful cooperation in the last few decades adds comfort to both sides to take bolder steps towards bilateral ties. The two units of Kudankulam nuclear power plant in Tamil Nadu, built with Russian know-how, have been running smoothly for the last decade or so. The Unit 3 is under construction. President Vladimir Putin has offered to build a dozen more reactors in India over the next 20 years. Additionally, India and Russia have jointly developed the design of reactors especially for developing countries. So, the two countries can build such plants in third countries.

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India’s nuclear present power generation capacity of 6,780 MW can increase to 22,480 MW by 2031 if the two countries move decisively to sign new agreements.
A few years ago, Rosneft invested 12.9 billion USD in India’s second-largest private oil refiner, Essar Oil, renamed Nayara Energy. For the first time, a large investment like this was made by a Russian company in India.

Still coal-centric

Despite significant progress, coal remains India’s mainstay fuel for electricity production. This does not augur well for the future.
To meet its growing energy demand and succeed in transitioning to green energy, India needs approximately 500 billion USD in investments in wind and solar infrastructure, grid expansion, and storage to reach the 450 GW capacity target by 2030. Therefore, more efforts are needed to expand cooperation with such partners as Russia.

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