'India needs to invest $10 bn in energy sector'
India needs $10 billion private investment in the next five-six years to bridge the demand-supply gap.india Updated: Apr 03, 2006 17:01 IST
India will have to evolve a clear policy framework in energy sector for attracting $10 billion of private investment in the next five-six years to bridge the demand-supply gap, consulting firm KPMG said on Monday.
The rethinking of India's energy policy would open up private investment opportunities. The country would need $9-10 billion of private investment in next five-six years alone to meet demand, KPMG said in its India Energy Outlook.
More clarity was also required in matters such as energy pricing, market structure, cross-border investments and imports and exports of energy products, it said.
India's energy requirements could jump four-fold over the next 25 years, KPMG said and suggested that the government should enter into partnerships with key nations to diversify energy supply base and improve long term supply.
"With energy requirements expected to grow at five or six per cent per annum, there is an urgent need for India to strategically re-evaluate its supply options," Partha Bardhan, Head of KPMG's Energy practice in India, said.
The report said India's mineable coal reserves could be exhausted in about 40 years.
Bardhan said coal could not be relied on forever while hydrocarbon reserves in India were meagre. Hydroelectric and nuclear power seemed to be the obvious options, but improved frameworks were needed to attract private sector which is so crucial to realise India's potential in these areas, he added.
The report favoured deregulating the coal sector and setting up an independent body to govern investments. India's energy requirements and availability of sources also imply that it would have to build 250,000 MWe of nuclear capacity by 2050, KPMG said.