Energy use has almost doubled since 2000, and economic growth and targeted policy interventions have lifted millions out of extreme poverty; but energy consumption per-capita is still only around one-third of the global average and some 240 million people have no access to electricity. Three-quarters of Indian energy demand is met by fossil fuels, a share that has been rising as households gradually move away from the traditional use of solid biomass for cooking. Coal is the backbone of the Indian power sector, accounting for over 70% of generation, and is the most plentiful domestic fossil-fuel resource.
Indian energy demand grows by more than any other country in the period to 2040, propelled by an economy that grows to more than five-times its current size and by population growth that makes it the world’s most populous country. Indian energy consumption more than doubles to 2040, accounting for 25% of the rise in global energy use to 2040, and the largest absolute growth in both coal and oil consumption.
By 2040, around 340 GigaWatt of wind and solar capacity will be added, making India the world’s second-largest solar market. India will achieve its climate pledge that 40% of the installed power generation capacity in 2030 is non-fossil fuel.
The increase in domestic energy production is far below India’s consumption needs, and by 2040 more than 40% of primary energy supply is imported, up from 32% in 2013. Coal production increases at the rate of +4% per year until 2040, making India second only to China among global producers. India becomes the largest importer of coal in the current decade and imports rise to over 400 Mtce (Metric Tons of Carbon Equivalent) by 2040.
India’s oil production tails off to around 700kb/d (Thousand Barrels per Day), as limited resources and relatively high costs constrain new oil projects. The result is a rapid rise in net oil imports, to 9.3 mb/d (Million Barrels per Day) by 2040, boosting the country’s oil import dependency to over 90%, with high reliance on the Middle East. Gas production rises to 90 bcm (Billion Cubic Meters) in 2040 with the balance being filled by rising imports, mainly LNG.
Although, the Indian government has plans for enhancing the exploitation of its hydro power, nuclear energy, and renewable energy resources, the analysis indicates that the impact of these supply-side alternatives is minor when compared with the total requirements of commercial energy by 2031, as indicated in the REN (aggressive renewable energy) and NUC (high nuclear capacity) scenarios. Although the contribution of hydro, nuclear, and renewable energy forms together increases by about six times during 2001–31, these sources can at most contribute to a mere 4.5% of the total commercial energy requirements over the modelling time frame. It is, therefore, evident that the pressure on the three conventional energy forms, that is coal, oil, and gas will continue to remain high at least in the next few decades.
India’s Focus Towards Hydrocarbons:
India’s high dependence on oil import reflected in various scenarios indicates the economy’s vulnerability to oil supply disruptions (emanating from external factors such as wars and political instability) and adverse impacts of sudden oil price shocks. Since the transport sector accounts for most of the oil consumption, it is also the most crucial sector in terms of requiring action for improving efficiency and enhancing possibilities of conservation and substitution through the use of alternative fuels and technologies.
Enhancing the share of public transport and rail-based movement; introduction of alternative fuels such as CNG (compressed natural gas), bio-diesel, and ethanol; and autonomous efficiency improvements in vehicles could reduce the import dependency of petroleum products from about 74%, 81%, and 90% in the BAU scenario to 72%, 76%, and 85% in the HYB scenario for 2011, 2021, and 2031, respectively.
The study clearly indicates that natural gas is a preferred option for power generation as well as for the production of nitrogenous fertilizer. The availability of natural gas, there-fore, needs to be facilitated by removing infrastructural constraints. Besides its high end-use efficiency, it is a cleaner fuel and relatively much easier to handle than coal. It is, therefore, important to enhance natural gas exploration and production from deep sea. Additionally, efforts should be made to source gas from within the Asian region.