Energy Security for India: Renewables hold the Key
With the economy galloping at an average 6.5 percent a year and the population growing at 1.2% India is on way to emerging as the world’s most populous country and the largest energy growth market by 2024. Currently, China holds the distinction of being the most populous country (1.41 billion) with more than a decade of economic growth of 9-10 percent a year, and emerging as the world’s largest energy market. Coal played the most vital part in its growth. But now the country is transitioning towards a more service-oriented economic model and energy demand growth has slowed from an average 8% to 2% a year – which is likely to further whittle down to 1% to 2040 -, according to International Energy Agency.
As part of its battle against pollution, India is also moving towards a greater service-oriented economy, based on digital technology. But it will take a long time to catch up with China, and in the meantime its demand will continue at a significant pace: according IEA’s World Energy Outlook 2017 almost 30% of the energy demand growth will come from India to the year 2040. However, India’s development will not be fuelled by coal. Instead, it will rather be fed more by low-carbon natural gas and environmentally friendly renewables. Coal’s share in India’s energy mix has been steadily declining for the past five years: it dropped from 60% in 2015 to around 57 in 2018.
Of India’s total installed capacity of 344 GW in June 2018, according to figures from the ministry of power, 57.3% (197,171 MW) of the capacity came from coal, 7.2% (24,897 MW) from gas, 14.5% (49,888 MW) from hydro, 9.9% (34,046 MW) from wind, 6.3% (21,651 MW) from solar, 2.6% (8,839 MW) from biomass and 2% (6,780 MW) from nuclear.
In 2016, the country generated 1,423 billion unit (BU) and became the world’s third largest generator and consumer of electricity, after China (6,015 terrawatt (TWh:1 terrawatt = 1 million megawatt) and the US (4,327 TWh), overtaking Russia, Japan, Germany, and Canada, according to India Brand Equity Foundation (IBEF), a trust established by the commerce ministry. The country’s consumption is now set to go up to 1,894.7 TWh by 2022, said the IBEF.
However, these production levels have not been sufficient to meet the rising demand which has consistently outstripped the supply by 7.5%, or more. According to IEA, of the 1.4 billion people in the world who have no access to electricity, some 160 million live in India. The government has allowed 100% foreign investment in the power sector to supply the demand, soaring at double-digit in the wake of an expanding urbanization and increasing prosperity. Over the last 17 years, foreign direct investment (FDI) in the power sector has been to the tune of US$12.97 billion, or 3.52% of all FDI inflows into the country.
Serious efforts are underway to raise the capacity significantly over the next four years to 2022 focusing more on hydro, renewable, and gas–based power, besides looking at the adoption of clean coal technology. It is planned to install further 60 GW of wind power capacity and 100 GW of solar capacity. Nuclear capacity is to be quadrupled to 20 GW by 2020, according to the IBEF. Over the last five years, renewable energy (wind, solar and biomass) has been the fastest-growing segment, but excluding hydropower, it still contributes only 18.8% to the total power capacity in India.
According to National Electricity Plan 2018 of the government India does not see the need for more non-renewable power plant until 2027, for, after the commissioning of 50,025 MW coal-based power plants, which are under construction, and reaching the target of 275,000 MW installed renewable power capacity, it expects, there would be sufficient power available to meet the anticipated demand of the growing population.
