According to the International Energy Agency, India’s energy demand is set to grow faster than any other country over the next 20 years and it is set to overtake the EU (European Union) by 2030 as the world’s 3rd largest energy consumer.  

The IEA cited the reasons for such a growth in demand as population, urbanization and industrialization. The IEA India Energy Outlook 2021 report also said that India’s energy needs are thrice the global average under today’s policy. The IEA’s India Energy Outlook 2021 is a report that takes a deep dive into the challenges and opportunities India has ahead of it to ensure the Indian population gets affordable and reliable energy solutions in the future.  

In its report, IEA stated how India’s primary energy consumption will reach up to 1.123 million tonnes by 2040 as the nation’s GDP expands to $8.6 trillion. This is almost double of the current energy consumption India relies on currently. The report also went on to state that at the current GDP growth, India is sure to overtake the EU by 2030 and become the third-largest energy consumer in the world.  

The IEA said, “By 2040, India’s power system is bigger than that of the European Union, and is the world’s third-largest in terms of electricity generation; it also has 30% more installed renewables capacity than the United States.” 

IEA said how India will account for almost a quarter of the global energy demand growth from 2019-2040. This energy demand is the largest for any country in the world. Although, there is a silver lining as India’s share in the growth of renewable energy sources is second-largest globally. Currently, China has the largest share of renewable energy growth globally.  

Steps India needs to take to achieve a zero-emission state

For India to achieve a zero-emission state, IEA suggests that the country’s energy demand by 2040 should fall nearly 30% below the forecasted level. India will also need to pivot from coal to photovoltaic cells. The photovoltaic cells will in a decade take the complete share of electricity generated by coal. 

Additionally, oil demand will have to stop by the end of this decade and the consumption of alternative fuels for transportation, electricity and bioenergy will have to significantly increase. Alternative fuel sources will have to account for at least 35% of the transportation demand by 2040.  

The IEA also suggested that by 2040, fossil fuel as primary energy demand will have to account for less than 60%. Traditional biomass as a source of energy will have to completely drop to zero by 2030.  

Achieving a net-zero emission state means that all the human-caused greenhouse gas emissions have to be removed from the atmosphere. Although not visible to us in our daily life, our planet does react to the gradual increase in the amount of greenhouse gases we release in the atmosphere. These gases must be reduced and brought to zero till the whole system is back in balance.  

“India now needs to focus on reducing the cost of finance for clean energy projects, providing access to capital to finance distributed clean energy systems, driving capital to help small and medium industries become energy-efficient, and exploring innovative financing models for R&D {research and development} for disruptive technologies like green hydrogen to further accelerate the energy transition,” the report said.  

Other highlights of the IEA report 

  • Thanks to rapid industrialization which has triggered a sharp rise in vehicle ownership, oil consumption has grown significantly. Although the country has increased the coverage of LPG in rural areas, there are over 660 million Indian citizens who still haven’t made the transition to clean cooking fuel. 
  •  Currently, India’s solar energy consumption accounts to less than 4% of the entire electricity generation. Whereas coal, which remains the biggest pollutant accounts for close to 70%. Although it’s not all bad since IEA said that India’s power sector is slowly letting go of coal as the power source. By 2040, solar energy will account to 30% of India’s electric generation and reach the target of creating 450 GW of renewable energy capacity. 
  • As the nation went through complete lockdown for more than 3 months due to the COVID-19 pandemic, India’s energy demand dropped to about 5% in 2020. But due to the same lockdown and pandemic, the energy sector also saw a drop in investments which fell to approximately 15%.