According to reports, India’s demand for green energy is expected to grow by seven times in 2035, according to the latest BP Energy Outlook released on Wednesday.
Accordingly, the share of renewable energy in the country’s fuel mix will increase from the present level of 2% to 8% in 2035.
However, the green surge will be inadequate to meet India’s growing need for energy with the country’s demand growth expected to be more than double the non-OECD countries’ average of 52%.
OECD countries refer to the 35 nations that are signatories to the Convention on the Organisation for Economic Cooperation and Development, or OECD, and mostly comprise mature economies.
This comes in the backdrop of investors seeing enormous opportunity in India’s emerging green economy.
India, the world’s third largest energy consuming economy after the US and China, plans to achieve 175 GW of renewable energy capacity by 2022 as part of its commitments to the United Nations Framework Convention on Climate Change adopted by 195 countries in Paris in December 2015.
“The global energy landscape is changing. Traditional centers of demand are being overtaken by fast-growing emerging markets. The energy mix is shifting, driven by technological improvements and environmental concerns. More than ever, our industry needs to adapt to meet those changing energy needs,” said Bob Dudley, BP group chief executive in a statement.
According to the report, an annual feature published by British energy firm BP Plc, the growth in India’s energy demand is expected to outpace the other so-called BRIC (Brazil, Russia, China, India) countries.
India’s energy demand is expected to grow by 129%, while China and Brazil’s energy demand will grow by 47% and 41%, respectively. Russia’s energy demand is expected to grow by 2%.
India’s energy consumption is expected to grow by 4.2% annually, faster than all major economies in the world. As a result, India’s share of global energy demand will increase to 9% by 2035, accounting for the second largest share among the BRIC countries with China at 26%, Russia at 4%, and Brazil at 2%.
“Coal remains the dominant fuel produced in India with a 65% share of total production in 2035. Renewables overtakes oil as the second largest, increasing from 4% to 14% in 2035 as oil drops from 10% today to 3% by 2035,” the report said.
In India, which is the biggest greenhouse gas emitter after the US and China, renewable energy currently accounts for 15%, or 45,917 MW, of the total installed capacity of 3,10,005 MW. According to the government, India has a renewable energy potential of around 900 GW from sources such as wind, solar, small hydro and bio energy.
The National Democratic Alliance government’s focus on renewable energy stems from India’s energy import bill of around $150 billion, expected to reach $300 billion by 2030. India imports around 80% of its crude oil and 18% of its natural gas requirements. The government aims to effect a 10% cut in energy imports by 2022 and a 50% cut by 2030. India imported 202 million tonnes of oil in 2015-16.
According to BP Energy Outlook’s prediction, India’s oil imports are expected to rise by 165%, followed by a 173% and 105% increase in gas and coal imports respectively. “Energy in transport grows by 5.8% per year and oil remains the dominant fuel source with a 93% market share in 2035,” the report added.