The Hindu Business Line : ‘Higher energy demand in India will raise import of oil, gas, coal’

New Delhi, Nov 7 For a country of continental size like India, food security and energy security remain areas of major concerns even as the country’s economy is cruising on a high growth trajectory, making the task of maintaining growth impulses on a robust manner a daunting one.

This year’s World Energy Outlook released in London on Wednesday by the International Energy Agency (IEA) rams home the point in a forcible manner that in the absence of strong policy actions, higher energy demand in India would drive up import of not only oil, gas and coal and with it greenhouse-gas emissions substantially.

Policy on energy

The Planning Commission may be busy with totting up numbers about infrastructure investment running into billions of dollars comprising energy, roads, ports and airports but the rich world’s inter-governmental think tank on energy estimates that in the energy sector alone, India needs to invest about $1.25 trillion (in year 2006 ) in energy infrastructure between now and 2030. What is particularly noteworthy is that three-quarters of this outlay is to be in the power sector, an area that Indian policy planners and administrators have been obsessively talking about to crack the snail pace of progress in private sector involvement in the crucial power segment.

Gross power generation capacity additions exceed 400 GW — equal to today’s combined capacity of Japan, Korea and Australia. No wonder, IEA contends that “attracting electricity investment in a timely manner will be crucial for sustaining economic growth”.

Energy demand growth

IEA says primary energy demand in India more than doubles by 2030, growing on average by 3.6 per cent per year. Coal remains India’s most important fuel, its use nearly tripling between 2005 and 2030. What is interesting to note is that India would continue to rely on imported coal for reasons of quality in the steel sector and for economic reasons at power plants located a long way from mines but close to ports. Hard coal imports are projected to rise almost seven-fold, their share of total Indian coal demand rising from 12 per cent in 205 to 28 per cent in 2030.

Besides, power generation accounts for much of the increase in primary energy demand, given surging electricity demand in industry and in residential and commercial buildings, with most new generating capacity fuelled by coal. Among end-use sectors, transport energy demand sees the fastest rate of growth as the vehicle stock expands rapidly with rising economic activity and household incomes.

According to IEA, gas production is projected to peak between 2020 and 2030 and then fall back, though recent discoveries are expected to boost gas production. A growing share of India’s gas needs is, therefore, met by imports, entirely in the form of liquefied natural gas.

Interestingly this year IEA’s flagshisp publication did not make any reference to nuclear power profile in India, though it deals a major portion of its analysis to energy developments in China and India. The Executive Director, IEA, Mr Nobuo Tanaka, said while releasing the report that “the next ten years will be crucial for all countries including China and India, because of the rapid expansion of energy supply infrastructure.”

Cooperation

He rightly said that IEA countries have long recognised the advantage of cooperation with China and India which is reflected in a steady broadening of the range of collaborative activities through the IEA. It is encouraging to note that one of the priorities of the new IEA Chief is to step up “our cooperation with both countries and in good time this could hopefully pave the way to an ultimate objective of their future membership of the Agency”. This is a good augury for energy-deficient countries like India if it succeeds in carrying out the right policies to make effective use of existing potentials of energy with least waste and inefficiency, energy analysts say.

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