Discover why India is poised for an energy boom in the next 30 years. Explore the factors driving this surge and how it will impact the nation’s future.
India’s power sector is one of the most varied and dynamic in the world. The need for electricity in the country has been growing rapidly and is expected to keep rising in the years ahead. To meet this growing demand for electricity, India must significantly increase its power generation capacity. The Government of India is taking significant steps in this direction.
According to a report from the International Energy Agency (IEA) released on October 24, India’s electricity demand for running domestic air conditioners is predicted to grow ninefold by 2050. The IEA also provided some insights into India’s energy outlook.
Today, we will explore the reasons behind this increasing demand for energy in India and what it signifies for the country’s future.
What’s Happening?
According to a report from Moneycontrol, the International Energy Agency (IEA) has stated in its latest World Energy Outlook that India is set to experience the most significant growth in energy demand over the next three decades compared to any other country or region in the world. In line with current policies, the IEA predicts that India’s energy supply will surge from 42 exajoules (EJ) in 2022 to 53.7 EJ by 2030 and 73 EJ by 2050.
Moreover, under the projected policy scenario, the demand for oil is expected to rise from 5.2 million barrels per day (bpd) in 2022 to 6.8 million bpd by 2030 and 7.8 million bpd by 2050.
The report highlights the use of home air conditioners as a significant driver of increased electricity demand. The IEA notes that electricity consumption due to cooling spaces is projected to grow by 21% between 2019 and 2022, and currently, about 10% of electricity demand is linked to cooling needs.
Temperature plays a crucial role in electricity demand, and as a result, the ownership of home air conditioners is expected to increase ninefold by 2050.
Estimated Reduction in CO2 Emissions
As per the Times of India, the International Energy Agency’s World Energy Outlook also reveals that India’s industries and passenger cars on its roads are projected to emit 30% and 25% less carbon dioxide (CO2) per kilometre by 2023. This reduction in CO2 emissions, which significantly contributes to global warming, is primarily credited to the efforts and policies of the Indian government in line with its climate commitments.
What Does Increasing Energy Demand Mean?
Union Minister Hardeep Singh Puri recently highlighted India’s surging energy demand during the Energy Technology Meet 2023. He stated that India’s energy demand is set to be a driving force for economic growth and will increase rapidly in the years to come. Additionally, he indicated that India is expected to contribute about 25% of the global growth in energy demand over the next two decades.
Previously, Prime Minister Narendra Modi also emphasised the significant growth in India’s energy demand at the India Energy Week 2023 event in Bengaluru. He framed this increased demand as an opportunity for both domestic and international energy companies to invest and collaborate in India’s energy sector.
India’s Power Generation Capacity
To provide a complete picture of the growing electricity demand in India, it is crucial to discuss power generation figures. India holds the impressive position of being the third-largest electricity producer and consumer globally, reflecting its significant role in the power sector. As of the data available up to July 31, 2023, India boasts an installed power capacity of 423.25 gigawatts (GW).
According to the Central Electricity Authority, this capacity includes a substantial 206 GW from coal-based power generation and around 7 GW from lignite-based power generation.
Data shows the installed power generation capacity of India.
As of July 31, 2023, India has made substantial progress in the realm of renewable energy. According to IBEF (Indian Brand Equity Foundation), the country’s installed renewable energy capacity, which includes hydroelectric power, stands at 177.73 gigawatts (GW). This capacity accounts for an impressive 41.9% of the total installed power capacity in India.
What’s Next?
The coming decade, from 2020 to 2029, holds the potential for a significant transformation in India’s power sector. The Indian government has been taking numerous initiatives to ensure electricity reaches every household across the country. Simultaneously, efforts are being made to minimise the use of environmentally harmful fuels.
According to IBEF, a combination of robust demand, policy backing, and increased government emphasis on infrastructure is expected to promote investments in the power sector.
Moreover, the Indian government has set an ambitious target of achieving 500 gigawatts (GW) of renewable energy capacity by the year 2030.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*The article is for information purposes only. This is not an investment advice.
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