Why has India chosen to become a member of the International Energy Ag...
May 05, 2017
Why has India chosen to become a member of the International Energy Agency?
The International Energy Agency (IEA) is a Paris-based autonomous intergovernmental organization established in the framework of the Organisation for Economic Co-operation and Development (OECD) in 1974 in the wake of the 1973 oil crisis. The IEA was initially dedicated to responding to physical disruptions in the supply of oil, as well as serving as an information source on statistics about the international oil market and other energy sectors.
India IEA relation
India joined the ranks of the IEA’s membership on March 30, 2017, albeit as a “Member by Associate”, it was seen inevitable, as one can’t talk about the future of the global energy markets without talking with India.
Long before India formally came on board the IEA, it had been engaging with the organisation. As early as 1998, India had signed the Declaration of Cooperation covering issues related to energy security and statistics.
The priority area for co-operation had been in oil and gas security and, to that end, the IEA and India’s Ministry for Petroleum and Natural Gas (Mo&PNG) signed a Memorandum of Understanding (MoU) in 2011, the first time that the IEA signed one with a key partner country in the area of emergency preparedness.
Interestingly, despite the cooperative nature of the relationship, India has been wary in committing itself to the IEA’s agenda.
The rationale then was that while interacting and cooperating with the IEA would allow India to maximise the strategic depth of its crude oil reserves as well as benefit from the IEA’s technical assistance in the energy sector, it would preclude it from taking on the obligations entailed by membership.
However, over time, and with the increasing move towards greater integration with the global energy market, the government has been interacting more frequently with the Agency, holding high level policy dialogues and workshops, joint research and analyses projects on energy sectors and markets, and exchanging technical know-how and information on future projections.
The IEA’s rationale for inviting non-OECD countries to join it is evident, as the agency benefits from the growing association of emerging economies by gaining access to their data and by adding to the oil stockpiles in the event of supply disruptions, which is its raison d’etre.
Second, given the IEA’s growing role in combating climate change, it allows the promotion of clean energy technologies in some of the world’s largest carbon emitters.
Advantages for India
Current government’s goal of not only providing access to electricity for the people under its “24x7 Power For All” initiative but also in meeting its climate change targets undertaken under the Paris Climate change agreement may be a giant leap.
Moreover, it will provide India the geopolitical platform to take the lead in climate and energy issues.
It would also give India an opportunity to become the voice of the developing world. International Solar Alliance (ISA) initiative in particular. For India, the ISA provides it with a platform to position itself as a leader on the world energy and environment stage.
However, given that the success of the initiative will depend largely on the number of countries coming on board, collaboration with other multilateral bodies, including the UN, IEA, IRENA (International Renewable Energy Agency) as well as corporates and industry, among others, is critical as these will assist in adapting the technologies needed by developing member countries to their specific conditions and economic realities.
Given that over 70 per cent of the world's energy consumption comes under the IEA umbrella, the association with the IEA will substantially increase India’s relevance in global energy governance. Finally, and more importantly, the IEA can encourage financial institutions to support India’s energy, particularly, its solar energy programme.