Decoding Energy Governance

As the world moves towards a green energy transition, effective, equitable and efficient energy governance is crucial for ensuring that the energy needs of the most vulnerable populations is met and nobody is left behind. This requires multi-level cooperation and stakeholder participation.

The UNDP Global Energy Governance Advisory group has been constituted with this as its purpose. Bharath Jairaj, Director of Energy at WRI India and member of the UNDP energy governance advisory group speaks with us about what constitutes energy governance, the institutional and policy infrastructure that it requires, and the challenges to ensuring stakeholder participation. The following is an edited transcript of the conversation.

Aditi: You’ve been recently selected as a member of UNDPs energy governance advisory council. Energy governance as a field has gained greater significance in the last few years owing to international efforts to curb emissions and the transition to renewable energy but some ambiguity exists around what this comprises of. What constitutes energy governance and why is it important?

Bharath: Energy governance has always been a very important part of the sector. What energy governance is about is really looking at the sector through a governance lens. By that what we mean, and here I rely on some of the earlier work we have done on electricity governance, where we identified four elements: transparency, accountability, participation, and capacity. T, A, P and C, as being the elements that the electricity sector needs to continuously improve upon.

Why? Because eventually the sector is trying to deliver affordable, reliable, and sustainable power for all. And it must address many of the gaps we've continued to have, whether we talk about access, whether we talk about the fossil fuel-based system, and so on. As we think of the sector moving from its current situation to a future situation, we need to make sure we have the right stakeholders on the table, we have the right mechanisms to ensure that eventually we are moving all of society. And the right governance approach that allows us to focus, not just on the “what” of the decisions, which is where we typically talk about fossil fuels or renewables-based energy. That's the “what” part. In energy governance, what we are really focusing on is the “how”. How those decisions are made, who needs to participate, and how do we actually get it done? So, that has always been very important. And I'm very glad that the UNDP has set up this forum to really look at this issue, not just at the country level, but at the global level.

Aditi: At the level of policy infrastructure and regulatory framework to ensure effective energy governance, how is India positioned, where is it headed, and what are the milestones that we need to be working towards?

Bharath: Well, the energy sector in India is quite complex. When we talk about energy governance, by which we're talking about the participation and transparency, accountability, capacity, etc., of all key stakeholders, as with any complex system, the governance of the system is also complex.

In India, traditionally, energy has been mostly a state subject. This includes electricity, but also other aspects of energy. So, there is a Federal-State set of governance issues that need to be grappled with, in not just setting targets, and so on, but also in actual implementation.

Many of the large energy generation entities are owned by the central government of India like the NTPC, or the NHPCs, etc. Then you also have similar structures at the state level. Almost all states have some kind of generation, transmission, and distribution entities. So, there are these federal set of issues which make governance complex and complicated, because different states have different capabilities and capacities to make decisions. Also because of resource availability, since some states have more energy resources than others. They have in the past traditionally supported the growth of the country by mining those resources and then supplying it to the rest of the country.

Now, as we move towards a more renewable-based future, we need to come up with more appropriate mechanisms to ensure that we're really talking about decisions that move the entire society and the entire country, not just parts and pockets of it. So, it is difficult and complex.

One element is, like I said, the Centre and State issues. The second is, within each state, there are multiple stakeholders whose interests need to be balanced. There are the state governments, who are elected, and they have priorities that they need to deliver on. There are the utilities, whose job it is to deliver the energy to the households, buildings, and factories. You also have regulators and consumers. Some of the latter are organized, like big industries. But you also have consumer categories that are not that well organized, like domestic households or farmer groups. So, ensuring that you have a process that collects all these voices, all these inputs, to come up with decisions that are optimal for everyone, in a manner that ensures reliable, affordable, and sustainable energy for everyone, that's not an easy option. So, it is complex, and often difficult to get it right.

As far as the milestones are concerned, I think that has been quite clear. I think India, as a country, has taken on several important milestones, we have the 2070 net zero target, we have a more nearby 2047 energy independence target, and then we have an even closer 50% renewables target by 2030. So, I think that national backdrop is very important, because it helps align different states, different stakeholders, towards a common goal around achieving these interim milestones as the country responds to the global climate change challenge.

Aditi: Transparency, inclusivity, and equity are three important pillars of effective governance. What are some challenges to ensuring stakeholder participation and building trust that we face in India and what are some of the ways in which we have been able to/are working towards bridging these gaps?

Bharath: Right. I mean you're spot on. Since the sector is quite complex, taking decisions in the sector that positively benefit everyone has not been easy. And we've seen that, in the first 70 years after independence, many parts of the country continued to have basic energy access challenges. A lot of that has been overcome with the significant household electrification programs run by the Central government with support from the state governments. But reliability is still a concern and affordability, a challenge. Not because of the sector, but because, we're really talking about large issues around poverty and unemployment which have not been fully addressed. It's, therefore very critical, that equity and inclusivity are made integral to the way you make sectoral decisions. Like I said, I think the four elements that we have tended to focus on, which is T. A. P. and C: Transparency, accountability, participation, capacity, are very important. In a sense, it starts with transparency. That is step one. You need open access to documents, to data, to analysis that tells us, where the gaps are, what the challenges are. Putting all of this in the public domain, allowing different stakeholders to have access to the information, the data, the knowledge, that's the transparency bit. And this needs to be done in an easy manner, because people shouldn’t need to travel 100 kilometres to access something as basic as some of the energy documents.

The next is, capacity, and by that what we mean are the two sides of capacity. First, is the ability of people to understand these documents. Say, through transparency norms, we've created a large pool of documentation and data and analysis. But who's going to be able to read them? So, building capacity of states, of key stakeholders, to comprehend these documents and provide feedback and inputs is integral. Without that, the transparency effort would be almost nullified. The other side of capacity is the ability of the decision makers to be able to receive the feedback and inputs, and then incorporate them in their decision making.

Participation is next, because not everyone in our country is going to be able to read and provide inputs in writing or online. So, how can we create more avenues for participation? How do we ensure that more inputs are able to come in? Designing participatory processes that recognize the challenges we have in our country today is essential. Processes like public hearings, and public consultations that also allow people to send in comments and feedback through other mechanisms, and reaching out to some of these places so people can provide relevant inputs, is necessary.

The fourth is accountability. That's where you sort of close the loop, because we started with opening the information and data up, once people have understood what it is, discussed it, and provided feedback through participating mechanisms, then what? What do you do with this information? This is where accountability comes in. Creating mechanisms that ensure that the feedback provided doesn't find its way to the dustbin, but receives due acknowledgment, recognition, and where relevant, is included in the way we take decisions. So, I think this is sort of the ideal process, and much of this we have been trying to do in our work at WRI.

In terms of challenges, the one conversation that most people are interested in is consumer tariffs. What is my electricity tariff going to be and how can I participate in decisions around this? But that's not the only decision that impacts people's lives. Reliability and quality of supply are equally important. Getting large groups of people to understand how to comprehend quality of our supply issues, those are the sort of challenges that continue to be around. I think some regulators have done a good job of addressing it. Across the country, almost every district today has a consumer grievance or redressal forum that takes on the complaints around electricity supply. There are some efforts that are in place. But several gaps remain.

The important thing isn't just what these decisions are, but equally how we make them. For the energy transition to be truly successful, as a global community, and as a nation, for us to be successful, we need to continue improving governance and the way we make decisions in this sector. Because eventually, it's about moving the entire society, moving the entire economy to a clean energy future, one that is sustainable, affordable, and provides reliable energy to everyone.

All views expressed by the authors are personal.