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Energy is a crucial input in developing economies for three main reasons a competitive economy, energy utilization affects the environment, and energy use may affect the national security. Sustainable development depends upon the implementation of energy policies which incorporate Environmental needs while at the same time providing for social and economic growth. The important thing in this challenge is to optimize the use of world energy and supply options, including renewable energy sources. To achieve this careful planning and formulation of coherent and suitable energy policies that fulfills nation's goals without compromising the environment and the international commitments to safeguard in a sustainable development standard.

We need not know how the electricity is produced, the electrical tariffs we pay, its reliability and the quality of air we breathe is a result of certain policies that influence the electric utility's choice of fuels, generation technologies, and investments in pollution controls.

Appropriate energy policy and planning that comply with both economic and environmental consideration. The key objectives of Energy policy are

i) To provide energy security and to work towards the eradication of fuel poverty so as to meet the goals of sustainable development.

ii) To ensure reliable and affordable energy services and conditions required to fuel stable economic growth.

iii) To encourage cleaner, more efficient forms of energy supply and use of renewable energy sources.

iv) To limit the adverse environmental impacts associated with energy production, distribution and use from the available energy supply options.

v) To maximize energy productivity and improve the quality of life.

Problems of poverty and environmental degradation in developing countries degradation in developing countries makes it difficult for progressing further. Hence providing environmentally accepted and assured energy supply is one of the key requirements for economic growth and improving living standards. The rate of use of the energy fuels is higher than the rate of use of regenerations like example is fuel wood, the energy balance for fuel wood in India is highly negative. Hence all these factors need to be mitigated which in turn add to the difficulties of the policy makers.

Another requirement is greatly expanded production of electricity and most of the electricity in developing countries comes from fossil fuels which are major contributors of green house gases, hence till other alternatives are available the policies and incentives will be needed to limit the fossil fuel consumption and green house gas emissions.

Hence the policies will impact the

i) Rates of extraction of fossil fuels such as coal and petroleum

ii) Design, construction and operation of fossil fuel power plants,

iii) Evaluation of energy sources other than fossil fuels.

iv) Consideration of biomass as a source of fuel and as a carbon sink.

v) Trade in energy production.

There is always confusion in the developing countries whether to rely on the fossil fuels or go for alternative methods for a better future, be a wiser policy option for supplying sustainable energy. Environmental impact of commercialization of energy is not addressed simultaneously in the policies the energy policy may be defeated. Controlling energy related environmental problems in urban areas is a difficult task for the policy makers where handling and disposal of hazardous waste for example if ash from the energy industries are not handled properly.

Pricing is also an important part of energy policy. Low energy prices discourages indigenous energy development and unnecessary utilization of energy.

Hence when an energy policy is made all these things are to be taken into consideration.

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