Relevance: GS-3 (Energy, Climate & Economy) | Source: The Indian Express

India’s energy policy has traditionally focused on universal access, affordability and secure supply. These goals have largely been achieved through a mix of public and private sector participation. However, two new forces—climate change and Artificial Intelligence (AI)—are reshaping the global energy landscape, creating difficult trade-offs that India can no longer ignore.

Why the Old Model No Longer Works

Earlier, the challenge was simple: produce more energy or import what was missing. Today, energy decisions are tied to jobs, geopolitics, technology, environmental limits, and digital infrastructure. As a result, India must rethink both its energy mix and its governance structure.

Three Key Trade-offs India Must Navigate

1. Coal Dependence vs Green Transition

• Coal India alone employs ~3.5 lakh people; millions depend indirectly on coal-linked activity.
  
• A rapid “phase-out” risks major economic and political backlash.
  
• But pollution and climate impacts are severe — 6 of the world’s 10 most polluted cities are in India (2024).
  
• Core dilemma: How quickly can India reduce coal without destabilising livelihoods?

2. Cheap Chinese Imports vs Energy Security

• China dominates global green manufacturing:
  
  • 80% of solar panels
    
  • 95% of polysilicon wafers
    
  • 80% of lithium-ion battery processing
    
• These imports make India’s green shift affordable but create strategic vulnerability.
  
• Core dilemma: Should India prioritise cost efficiency or reduce dependence on one dominant supplier?

3. AI Data Centres vs Renewable Capacity

• Big-tech firms planning Indian AI hubs require massive, 24×7 power — often gigawatt-scale.
  
• They promise to run entirely on renewables.
  
• But this needs new transmission lines, battery storage, large renewable parks, and major investment.
  
• Without these, states may extend coal plant operations (as seen in Maharashtra).
  
• Core dilemma: Can India support AI’s energy appetite while staying committed to decarbonisation?

Why India Needs a New Governance Framework

The current system is fragmented across ministries and states. But today’s challenges go far beyond energy engineering — they involve:

• geopolitics (China-centric supply chains)
  
• digital infrastructure (AI data centres)
  
• environmental limits
  
• technological innovation
  

India now needs a coordinated, multi-stakeholder structure that can bring together government, industry, regulators, researchers and civil society to make integrated decisions.