The International Energy Agency (IEA) has conducted its first comprehensive examination of India’s energy policies, revealing key insights and recommendations to enhance the country’s energy markets and promote renewable resources. This review marks a milestone for India, having joined IEA as an association country in March 2017.
Applause for Policy Achievements
The report lauds the Indian government’s major strides towards citizen empowerment via electricity access, affordable and efficient illumination, and clean cooking with the roll-out of historic schemes such as SAUBHAGYA, UJALA, and UJJWALA. Energy efficiency enhancements from 2000 through 2018 have curtailed an extra 15% of energy demand, oil and gas imports, and air pollution, reducing CO2 emissions by 300 million tonnes. Innovative policies have facilitated extensive renewable energy auctions and incentivised private companies to delve into coal mining, apart from encouraging foreign investment in oil and gas markets.
Rise in Renewable Energy
India is experiencing a robust upsurge in renewable energy, now comprising 23% of the nation’s total installed capacity. This growth signifies a promising trend towards sustainable power generation methods.
Surmounting Energy Demand
India’s energy demand is projected to double by 2040, with a potential tripling of electricity demand. The nation’s oil consumption growth is projected to outpace other key economies, including China, emphasising the paramount importance of bolstering the country’s energy security. Despite an expected rise in domestic oil production, India’s oil demand, projected to reach 6 million barrels per day (bpd) by 2024 (up from 4.4 million bpd in 2017), would substantially outweigh output, intensifying dependence on crude imports, particularly from disruptive supply regions such as the Middle East.
Table of Key Facts
| Fact | Value |
|---|---|
| India’s Oil Demand by 2024 | 6 million bpd |
| India’s Oil Consumption in 2017 | 4.4 million bpd |
| Projected Rise in India’s Oil Refining Capacity by 2024 | 5.7 million bpd |
| India’s Global Rank in Oil Consumption | 3rd |
| Percentage of Imported Oil Needs | Over 80% |
| Major Source of Imported Oil | Middle East (65%) |
Guiding Recommendations
The NITI Aayog is positioned to collaborate with states on executing power sector enhancements, optimising grid integration, augmenting flexibility, and coordinating energy policy actions. With variable renewables constituting over 15% of energy generation in some states, fortified policies are needed for smoother incorporation into the power system. The report also urges India to institutionalise a cross-government energy policy framework and boost its Strategic Petroleum Reserves (SPR).
About the International Energy Agency
Established in 1974, the IEA was devised as a response mechanism to significant disruptions in oil supply. It is composed of 30 member countries and 8 association countries, functioning as an autonomous intergovernmental entity within the Organisation for Economic Co-operation and Development (OECD). Led by its Executive Director, the IEA’s headquarters are located in Paris, France.
