Energy Why India Takes the Spotlight with Global Energy Projects

Editor: Dominik Stephan

India heading for the centre of the global energy stage, says the IEA: The country needs more than US $140 billion per year in investment to meet its rapidly growing energy needs and its development ambitions.

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(Picture: PROCESS)

New Delhi/India – India is set to contribute more than any other country to the rise in global energy demand over the next 25 years, underlining its ever-greater influence in Asia and on the world stage, says the International Energy Agency (IEA). Yet, even so, its energy demand per capita in 2040 would still be 40 % below the world average.

Although its energy demand has almost doubled since 2000, India today still faces some important energy and development challenges. Some 240 million people – one in five Indian citizens – lack access to electricity. To ensure that energy is a spur, rather than a hindrance, to India’s advancement, policy makers must redouble efforts to bring capital into the sector, particularly in more efficient and low-carbon technologies. In the main scenario of the India Energy Outlook 2015, India needs more than US $ 140 billion in energy investment per year to 2040, around US $ 110 billion per year in energy supply – 75 % of which is required to meet India’s burgeoning need for electricity – and a further US $ 30 billion per year to improve energy efficiency.


Three Requirements for India's Energy Transformation

“India’s energy transformation requires three things: investment, investment and investment,” said IEA Executive Director Fatih Birol. “A lot is being done already to overhaul the energy regulatory system and get the incentives in place; this is vital, as India will need to call upon a wider range of investors and sources of finance than it has in the past.”

A slew of recent policy initiatives aimed at improving the business environment and attracting investment point to a growing momentum that will need to be sustained. Rising incomes and population, increased access to electricity and clean cooking facilities, urbanisation and industrialisation are the key factors underpinning the rise in energy demand. Taking into account the achievement of universal electricity access and anticipated demographic trends that will make India the most populous country in the world, India has to make provision for nearly 600 million new electricity consumers by 2040.

How to Provide 315 Million People with Energy?

Over the same period, some 315 million people, almost the population of the United States today, will be added to India’s urban population. This will accelerate the switch to modern fuels and the rise in appliance and vehicle ownership while pushing up demand for construction materials. The “Make in India” programme that aims to transform Indian into a manufacturing powerhouse can help modernise the economy and create jobs for the growing workforce, and also has major implications for energy use.

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