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Home / Analysis / A road map to transforming India’s energy

A road map to transforming India’s energy

India’s achievements should be applauded, but it is just getting started, with a golden opportunity to play a prominent role in global energy as well.

analysis Updated: Aug 29, 2019 18:57 IST
Dev Sanyal
Dev Sanyal
More energy to improve lives, but with fewer emissions to help address climate change — is what we call the dual challenge
More energy to improve lives, but with fewer emissions to help address climate change — is what we call the dual challenge(Pradeep Gaur/Mint)

Today will be the slowest day of the rest of your life; so the futurologists tell us. It certainly feels that way as the pace of change quickens, and nowhere exemplifies this change quite like India.

Forty years ago, the country barely registered as a car manufacturer, was a tail-ender in the space race, and had virtually no IT sector to speak of. Fast forward to today, and India is the world’s fourth largest car manufacturer, is set to become only the fourth country to put a man on the moon, and through the Silicon Valley of the east in Bangalore, is leading the fourth Industrial Revolution.

These achievements should be applauded, but India is just getting started, with a golden opportunity to play a prominent role in global energy as well.

Energy and economic development: Energy, as we know in India, can never be taken for granted. Access to affordable and reliable energy is fundamental to reducing poverty, improving health, increasing productivity, enhancing competitiveness and achieving social justice. Throughout history, energy and economic development have been deeply intertwined. In the last 30 years, as global GDP has more than tripled — from under $20 trillion to well over $70 trillion — GDP in India has increased nearly tenfold. Energy consumption over that period in India grew nearly 400% with around 8% last year.

India to overtake China: Looking at the trends shaping energy over the next two decades we see that global demand seems set to increase by a third. India, on current trends, will overtake China as the largest growth market for energy by the mid-2020s, according to BP’s Energy Outlook scenario. This is significant, given that around 30% of the Indian population does not have access to modern sources of energy. The problem is that more energy consumption tends to lead to more emissions, as seen in 2% rise globally last year, and the projected 10% increase by 2040. At that time, India’s share of global emissions seems set to rise from around 7% to 13%, despite the great ambition shown from the government to address climate change.

Dual challenge: More energy to improve lives, but with fewer emissions to help address climate change — is what we call the dual challenge. Yet, it isn’t cause for doom and gloom as India can play a leading role in helping the world solve it. India has shown itself to have the entrepreneurialism, ingenuity and a can-do attitude to overcome any obstacles in its path. It also has the tools to reset its energy mix with the low-carbon fuel and power, and to in effect, reimagine energy.

There are four ways it can do this.

Growing gas: The first opportunity is with natural gas, to which India has a domestic resource potential of more than 100 trillion cubic feet (Tcf) which includes conventional, unconventional, and yet-to-find gas.

This resource base has the potential to meet up to 50% of anticipated demand for gas through to 2050. So, developing India’s domestic gas production will help reduce energy imports, enable more investment and create jobs. Natural gas also has a lower carbon intensity per unit of energy than coal in power generation, and offers significant benefits for air quality. Longer term, natural gas can be used to produce hydrogen, and decarbonised using carbon capture, use and storage (CCUS).

Ramping up renewables: The second opportunity lies in renewables, where there are large untapped solar and wind resources with the potential to be utilised at costs which are becoming increasingly competitive with fossil fuels. As such, these renewable resources could be further maximised to meet the three to four-fold power demand growth expected in India by 2050. They would progressively displace coal in electricity generation, which is important as coal emits about twice as much carbon emissions than gas.

Decarbonising mobility: There is a third opportunity with vehicle electrification and the substitution of liquid fuels with CNG or LNG. BP’s analysis indicates that light-duty electric car costs (on a total cost of ownership basis) could converge with conventional vehicles from 2035, and EVs (two and three-wheeler) are close to cost parity today. CNG is already competitive in medium and heavy-duty vehicles and LNG is attractive for long-distance trucking.

Driving digital: The fourth and final opportunity for India is in digital innovation, which could help to optimise the energy system and reduce energy demand by as much as 18% by 2050. There are opportunities in the field of transport, through autonomous vehicles, ride-sharing and intelligent traffic management systems. In buildings, through adoption of smart demand management, smart homes, connected infrastructure and energy management systems. In industry, through robotics, connected devices and advanced analytics. And in transmission and distribution, though smart grid technologies, virtual power plants, and demand response systems. With these initiatives, India could position itself as a leader in the energy transition.

Dev Sanyal is CEO, Alternative Energy and EVP of Europe and Asia regions for the BP Group, based in London.

The views expressed are personal