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India will see biggest jump in energy demand globally: Energy body

The IEA said the world is in the midst of the first global energy crisis. (Representative)

New Delhi:

The International Energy Agency (IEA) in its World Energy Outlook released on Thursday said that India is likely to see the biggest growth in energy demand in this decade, with demand growth of 3 per cent annually due to urbanization and industrialisation.

While the push for renewable energy will meet as much as a 60 percent increase in electricity demand, coal will continue to meet a third of overall energy demand by 2030 and another quarter will be met by oil.

“India becomes the world’s most populous country by 2025 and, coupled with the dual forces of urbanization and industrialization, it underpins the rapid growth in energy demand, which will be reflected in the Scenarios of Policies (STEPS) announced from 2021 onwards. Increases by more than 3 percent by the year 2030,” the IEA said. “It sees the largest increase in energy demand of any country.” Even though India is making great progress with renewable energy deployment and efficiency policies, the sheer scale of its growth means that the combined import bill for fossil fuels is set to double over the next two decades, with oil being the largest component.

“This points to a continuing risk to energy security,” the IEA said.

The IEA said the world is in the midst of the first global energy crisis triggered by Russia’s invasion of Ukraine.

“Market pressure predates Russia’s invasion of Ukraine, but Russia’s actions have precipitated a rapid economic recovery from the pandemic – which has turned all global supply chains, including energy, into a complete energy turmoil. “It said.

Russia has by far been the world’s largest exporter of fossil fuels, but cutting natural gas supplies to Europe and European sanctions on imports of oil and coal from Russia are crippling one of the main arteries of the global energy trade. All fuels are affected, but the gas market is the epicenter as Russia seeks to benefit consumers by exposing them to high energy bills and supply shortages.

In India, coal meets a third of the growth with demand above 770 million tonnes of coal equivalent (MTC) by 2030, and continues thereafter before peaking in the early 2030s.

Oil demand meets another quarter of energy demand growth and is expected to rise to about 7 million barrels per day by 2030, up from 4.7 million bpd in 2021.

Full expansion of coal production is expected to continue, peaking around 2030, although the share of electricity generation has declined from 75 per cent to 55 per cent during this period.

Renewable energy will meet more than 60 percent of the growth in electricity demand, and will account for 35 percent of the electricity mix by 2030 – solar PV alone accounts for more than 15 percent.

“However, coal still accounts for a third of overall energy demand growth by 2030, and oil, primarily for transportation, another quarter,” the IEA said.

In the Declared Pledge Scenario (APS), more rapid progress in deploying low-emission options, particularly in the power, industry and transport sectors, puts India on a trajectory in line with its target of net zero emissions by 2070.

The IEA forecasts India’s oil demand to rise from 4.7 million barrels per day (bpd) in 2021 to 6.7 million barrels per day by 2030 and 7.4 million barrels per day by 2040 in STEPS. Under the APS, demand is projected to increase to 5.9 million bpd in 2030, falling to 5.4 million bpd in 2040 and to 3.9 million bpd in 2050.

However, oil imports have doubled between 2021 and 2050 due to limited local resources.

Natural gas demand is expected to reach 115 billion cubic meters (BCM) by 2030 from 66 BCM in 2021. “Most of the growth comes from manufacturing and other industry, helped by the expansion of the city gas distribution network,” it said.

The gas satisfies less than a 5 per cent increase in total electricity generation, but it is enough to increase demand by 10 bcm.

“The government recently announced a doubling of its license area for oil and gas exploration, which, however, is unlikely to contribute significant amounts in this decade,” the IEA said. Reach 90 BCM by 2050.

Coal demand increased by 25 percent to 2030. “Strong economic growth – the economy expands 90 percent between 2021 and 2030 – with it comes greater demand for coal-fired power generation and the use of coal for the production of iron and steel and cement.” Coal-fired power capacity increased from 240 GW in 2021 to 275 GW in 2030.

India overtook Australia and Indonesia to become the world’s second largest coal producer in 2021 (in terms of energy), and plans to increase domestic production by more than 100 million tonnes by 2025 from current levels.

The IEA said the supply of coal increased from about 450 Mtce in 2021 to 550 Mtce in STEPS and over 500 Mtce in APS in 2030.

(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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