India’s coal generation and oil imports are going to peak in 2030, while gas imports will double around the same time, a report – World Energy Outlook 2022 – published by the International Energy Agency (IEA) on October 27 stated.
Talking specifically about India, the 524-page report stated that the primary challenge for the country is going to be about meeting its rising electricity demand. It said India will have to find out ways to meet this increasing demand with renewables and nuclear on a scale that is large enough to reduce the use of “unabated coal‐fired generation”, which provides nearly three‐quarters of electricity supply currently.
It revealed that India became the world’s second‐largest coal producer in 2021 (in energy terms), overtaking Australia and Indonesia, and that it plans to increase domestic production by more than 100 million tonnes of coal equivalent (Mtce) by 2025 from the current levels. At present, India accounts for just over 10 percent of global coal consumption, after China which accounts for 55 percent. Coal demand in India rose rapidly between 2010 and 2019, mainly as increases in electricity demand were largely met through coal‐fired power. Coal use in India dropped by 7 percent in 2020 due to the pandemic, but increased by 13 percent in 2021, therefore already surpassing the 2019 levels.
“India becomes the world’s most populous country by 2025 and, combined with the twin forces of urbanisation and industrialisation, this underpins rapid growth in energy demand, which rises by more than 3 percent per year in the stated policies scenario (STEPS) from 2021 to 2030. It sees the largest increase in energy demand of any country,” the report said.
“Even though India continues to make great strides with renewables deployment and efficiency policies, the sheer scale of its development means that the combined import bill for fossil fuels doubles over the next two decades in the STEPS, with oil by far the largest component. This points to continued risks to energy security. Coal generation is projected to continue to expand in absolute terms in the STEPS, peaking around 2030, though its share of electricity generation falls from just below 75 percent to 55 percent over this period,” it stated.
The IEA cited government programmes such as the Gati Shakti National Master Plan and the Atmanirbhar Bharat (Self‐Reliant India) scheme, and strong economics to state that India will see a robust growth in renewables and electric mobility, notably for two/three‐wheelers.
“Renewables (will) meet more than 60 percent of the growth in demand for power, and account for 35 percent of the electricity mix by 2030: solar PV alone (will) account for more than 15 percent. However, coal still (will) meet a third of overall energy demand growth by 2030, and oil, mainly for transport, another quarter. In the announced pledged scenario (APS), more rapid progress in deploying low‐emissions alternatives in power, industry and transport sectors in particular puts India on a trajectory in line with its goal of net zero emissions by 2070,” read the report.
Coming to oil imports, the IEA found that in the APS, India’s oil imports will peak in the 2030s and fall below the current level by 2050. “In India, natural gas demand in the STEPS reaches 115 billion cubic metres (bcm) by 2030. Most of the growth comes from manufacturing and other industry, helped by the expansion of city gas distribution networks. Gas satisfies less than 5 percent of the increase in total power generation, but this is enough to raise demand by 10 bcm. The use of gas in transport, including both natural gas and biomethane, increase more than twofold, to reach over 10 bcm by 2030. Gas demand trends in the APS are broadly similar to those in the STEPS,” the report stated.
Gas imports, the IEA said, will double and reach nearly 70 bcm by 2030. The growth will moderate thereafter and imports will reach 90 bcm by 2050, it said.
IEA’s report talks mostly in terms of two models - stated policies scenario (STEPS) and announced pledges scenario (APS). STEPS provides a more conservative benchmark for the future, because it does not take it for granted that governments will reach all announced goals. Instead, it takes a more granular, sector-by-sector look at what has actually been put in place to reach these and other energy-related objectives, taking into account not just existing policies and measures but also those that are under development. The STEPS explores where the energy system might go without a major additional steer from policy makers.
APS aims to show to what extent the announced ambitions and targets, including the most recent ones, are on the path to deliver emissions reductions required to achieve net zero emissions by 2050. It includes all recent major national announcements as of September 2022 for 2030 targets and longer term net zero and other pledges, regardless of whether these have been anchored in implementing legislation or in updated NDCs. In the APS, countries fully implement their national targets to 2030 and 2050, and the outlook for exporters of fossil fuels and low emissions fuels like hydrogen is shaped by what full implementation means for global demand. For the first time, the APS assumes this year that all country-level access to electricity and clean cooking targets are achieved on time and in full.
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