Can the relationship between India and Europe move beyond trade? Trade is certainly important, and EU-India trade grew from 28.6 billion euros in 2003 to 72.7 billion euros in 2013 (though even that is dwarfed by the almost 400 billion euros of EU-China trade each year). The two partners share the ideologies of democracy and multilateralism, and could do more to cooperate on a range of issues beyond trade, from international security to energy and climate change.
On energy, for example, both India and Europe are heavily dependent on imports from politically volatile parts of the world, including the Middle East and Russia. India already imports over 70% of its oil, and estimates suggest it will rely on imports for 53% of its energy requirements by 2030. The EU, meanwhile, is already the world’s biggest energy importer – relying on foreign imports to meet 54% of its energy needs in 2011.
With India and Europe both being highly dependent on energy imports, how can they work together to enhance security of energy supply for both?
To get a response, we spoke to Dr. Pramod Deo, former Chairperson of India’s Central Electricity Regulatory Commission. How would he respond?
Well, India and Europe have been working together for a long time. People may not be aware, but way back in 1989 the European Commission and India had an agreement, and under that agreement the Energy Management Centre was set up to improve energy efficiency in India, with me as the founding Director. That centre has now grown into India’s Bureau of Energy Efficiency…
We have also seen many Danish, Spanish and German companies investing in green energy in India. And, in fact, all these technologies have now been assimilated and India has its own green energy manufacturing capacity. But the fact is that we need to integrate this intermittent green energy into the national grid, and for that Germany has provided a soft loan agreement for one billion euros so we can implement a plan called the ‘Green Energy Corridors’, because unless we can integrate this energy into the grid system it will not be possible to grow at the rate we need – 175 GW by 2022. So, these are examples of India and Europe working together.
To get another perspective, we put the same question to Cora van Nieuwenhuizen, a Dutch MEP with the economically liberal VVD party, and Vice-Chair of the Delegation for relations with India. What would she say?
Yes, I think India is a very strategic partner for us. We already collaborate on many issues, and the European Investment Bank (EIB) is already investing in projects in India that are primarily about energy efficiency, renewables, solar and wind projects, etc… Also, I think there are a lot of similarities [between the energy situation in Europe and India]. You mentioned India will be dependent on imports for over 50% of its energy used by 2030? Well, Europe as a whole is already importing about 50% of its energy, so we also have the same issues considering energy security in the long-run.
But does the impetus to improve energy security still exist when oil is so cheap? On the one hand, both India and Europe rely on imports from politically unstable parts of the world, but on the other hand, the global price of oil has been falling since the summer of 2014.
To get a response, we spoke to Rakesh Mehra, Executive Director (International Trade) at Bharat Petroleum. What would he say?
I can see in Europe there is a big thrust for renewables, particularly bioenergy. But we cannot totally ignore hydrocarbon. Bioenergy is a long-term thing that will happen with improved technology and reduced prices, and solar and wind will also play a big role in times to come. Maybe after 20 or 25 years these energies will play a bigger role. But the dependence on hydrocarbon will continue for a long time, and I don’t see any problem in stability… The major dependence will be on oil, gas and coal. But there will be price pressures because of the development of new renewable energy sources. Hydrocarbon energy prices will have to be competetive.
How can India and Europe work together for better energy security? With India and Europe both being highly dependent on energy imports, how can they work together to enhance security of energy supply for both? Let us know your thoughts and comments in the form below, and we’ll take them to policymakers and experts for their reactions!