India energy outlook

BP released its annual energy outlook and this year’s projections look into the energy markets up to 2035. As expected, there are key projections for oil demand and a significant part of this year’s projections revolve around the impact of Electric Vehicles (EV) on the oil demand which has been portrayed using different scenarios. A significant insight on India’s energy scenario between 2015 and 2035 has been presented.

India highlights

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  • India’s energy consumption to grow by 4.2% every year, faster than all major economies in the world
  • India’s consumption growth of fossil fuels to be the largest in the world.
  • India’s projected energy consumption demand growth of +129% to exceed OECD (52%) and China (47%)
  • India’s share of global energy demand in 2035 to be 9% while China to account for 26%
  • India’s energy production capacity to grow by +122% in 2035 compared to 2015 accounting for 5% of global energy production in 2035
  • Gas demand to expand by 162% compared to 2015.

    Clearly, this figure needs more explanation which is not available. But, just from the power sector perspective, gas based power plants are already operating at 20% PLF on an average due to shortage of gas and this demand for gas is highly unlikely.

  • Coal in the fuel mix to fall from 58% to 52% by 2035 while renewables in the fuel mix to increase from 2% to 8%.

    The projection is a gross neglect of India’s RE plans and INDC which projects a 40% of non-fossil fuel power in India by 2030.

  • Although India and China will account for nearly half the increase in power demand, the per capita consumption is going to be only 1/4th of China’s.
  • India will be the largest growth market for coal with demand doubling from 10% in 2015 to 20%. Nearly two-thirds of India’s increase is to be fed into the power sector.

    The projection seems strange considering the coal power capacity addition is going to be nil post 2022 according to a latest CEA forecast for India.

Indian RE growth in the previous period was ~ 5% and in the period 2015-35 to be ~ 10%.

The projection looks to be an understatement considering India’s targets of 175GW by 2022.

 

Key global highlights

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  • China and India will account for nearly half of the increase in global energy demand
  • Renewable Energy (RE) with hydro and nuclear will account for 50% of the energy increase in this period
  • RE will be the fastest growing fuel source, quadrupling over the next 20 years.
  • Only 20 % increase in energy demand in energy demand compared to doubling of the GDP in this period considering significant gains in energy efficiency
  • RE will grow by over 7% and account for 10% of global primary energy by 2035 (a modest projection)
  • Share of power consumption in primary energy to account for nearly 47%
  • Carbon emissions would rise by 13% in the period when IEA suggests a decline by 30% to achieve the climate goals.
  • Global liquids demand will increase from15Mb/d to 110Mb/d by 2035.

Overall, the energy outlook at India level seems to ignore a few of the scenario projections and forecasts given by Indian agencies.

(Data and image source: BP Energy Outlook; For more info check the BP Energy Outlook)

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