IT seemed inconceivable at the turn of the century that coal could be replaced by some other fuel source. Then in the 1950s, petroleum replaced coal to become the major source of energy.

This changed the energy landscape for the foreseeable future. With the advancement of technology, miniaturisation and increasingly efficient means of storing electrical energy, it is evident that current energy sources will be replaced by others; which this time will be sustainable and renewable.

With increasing awareness, a focus on clean energy sources and the pressure of reducing our carbon footprint, fossil fuels will not stay on much longer.

The most rapid advancement in the development of renewables occurred when crude oil was trading above the $100 mark, and stayed there for quite some time, which made investment in renewable energy a more viable option.

This was also the period when tapping into some of the non-conventional fuel sources such as shale gas became economically viable. Recently, the oil giant Shell announced it would reduce its involvement in the upstream sector and increase its focus on renewable energy.

It is high time the new government worked on a war footing to create a more comprehensive renewable energy policy rather than introducing piecemeal initiatives

The company’s new climate change target aims to cut the net carbon footprint of its products by half by 2050. This is a relief for a petroleum-importing country such as ours, burdened with balance of payment issues and a mounting current account deficit.

However, looking at the numbers in the economic survey 2017-18 for the energy mix, the situation is far from satisfactory. For a country blessed with many diverse resources it is embarrassing to see us heading in the opposite direction of the changing global energy scenario.

Major reliance on the relatively expensive and environmentally harmful furnace oil — 64 per cent — is not only an outlier in the current global energy trend but also a major cause of the ever increasing circular debt.

The recent ban on independent power producers to use furnace oil was also a temporary measure and the offtake of furnace oil increased during summer due to increased capacity utilisation by the IPPs.

The sudden ban on furnace oil also put pressure on the refineries to adjust yield, and there is a similar drive to upgrade refiners to reduce sulphur contents in high speed diesel to comply with Euro IV requirements.

It has become critical now to ensure that the National Energy Policy (2013) which requires competitive pricing versus upfront tariff should not result in the utilisation of cheap technology to reduce project costs and win bids.

The most tragic situation is the contribution of hydel power — 27pc — towards the country’s power generation portfolio. Whether the cause is a lack of political will and/or funds, the consequences would be disastrous for the generations to come.

It is time for the new government to work on a war footing to create a more comprehensive renewable energy policy rather than introducing piecemeal initiatives. A more investor-friendly environment should be provided to attract investment into the renewable energy sector besides developing political consensus and arranging funds to construct dams.

Published in Dawn, The Business and Finance Weekly, September 3rd, 2018