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Every country has to find its own solutions for energy transition and bringing down its dependence on fossil fuels, and India is no different. The country’s dependence on fossil fuel will remain high and the Indian subcontinent will experience the world’s greatest growth in LNG over the next 30 years.
“While we forecast the global dependence on fossil fuels will come down to 50 per cent from the current 80 per cent by 2050, India’s dependence will be higher at 65 per cent by 2050,” said Liv Astri Hovem, Chief Executive Officer, Oil & Gas, DNV GL.
Hovem, who was recently in India for the World Energy Policy Summit, said, “Solutions for energy transition depend on what natural resources are available and the historical infrastructure available in a country. This enables developing an easier route for transition to cleaner energy.”
Norway-headquartered DNV GL provides integrated technical assurance and advisory services to operators, suppliers and regulators across the oil and gas value chain, from project initiation to de-commissioning.
Growth in demand
“What we see in India is that still 65 per cent of the energy demand will be met through fossil fuel in 2050 compared to 80 per cent today, while globally the split between fossil fuels and renewable energy will be 50-50 by mid-century. And the reason for this will be the high growth in energy demand, which India has,” she told BusinessLine .
Globally, according to DNV GL’s recently-published Energy Transition Outlook , the demand for energy will peak in the mid-2030s — meaning that the world will need less energy, mainly due to electrification and increased efficiency. India will not see similar decline due to its growth.
Hovem is quick to point out that there is an increasing understanding that it is very difficult to jump quickly to 100 per cent carbon free energy system.
“Our Energy Transition Outlook takes a practical look at world energy supply and demand over the next three decades. Our model is based on the cost of the energy sources and the thinking that, in the longer run, it is cost that will decide which energy sources will be used,” she said.
Hovem added, “Of course there is an element of energy security and geopolitics, but if we take these away and look at the costs, then our Outlook reveals that in 2050 about 50 per cent of the world’s energy system will be composed of fossil fuels, which is a big shift from today’s reality. Globally, we forecast that the only energy sources that will be in higher demand in 2050 than they are today are natural gas and variable renewables: wind and solar.”
The Outlook shows that gas will become the world’s largest single source of energy from 2034. For the Indian subcontinent, gas and variable renewables will account for half of the region’s energy by 2050, undergoing huge growth from 11 per cent today.
DNV GL’s Outlook predicts a close to four-fold increase in consumption of natural gas in real terms to 2050 in the region, as coal and oil demand declines.
Non-fossil sources
“We have also done survey with senior industry professionals for their sentiment for the year ahead. And when we asked what they think about investing outside oil and gas, 66 per cent of leaders in India said they will do so. Wind and solar was the favoured non-fossil based energy sources to invest in. Of course in India there will still be be huge investments in gas and oil,” she said.
The Outlook forecasts that India will experience the world’s greatest growth in import of LNG (liquefied natural gas) over the next 30 years. Asked whether gas trading hub concept will work for India, she said, “Though I have not studied it much, I do see the dilemma that building an energy system where you rely on import might be considered difficult.”
Another point to be kept in mind when talking about gas is the de-carbonisation of gas itself because it is not carbon-free. “The hydrogen value chain is a good option for India and I say so because, in this, you could hedge when you have built huge capacities of renewables. You can produce hydrogen from renewables, so you can still have gas to balance demand,” she added.
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