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Ambitious goals, uneasy path

British Petroleum (BP) has published its 65th edition of the Statistical Review of World Energy. This report is the Bible for the world energy industry that will help inform discussion, debates and decision making. It carries useful data on Indias energy sector.

Ambitious goals, uneasy path

In 2015, India’s total primary energy consumption increased by 5.1 per cent against the GDP growth of 7.3 per cent. Given India’s dependence on non-commercial bio-fuel energy sources like firewood, cow dung cakes, crop residues,... plus the government’s desire to make the poor utilise modern sources of energy, it is reasonable to expect the energy growth to GDP growth coefficient to be greater than one.

Alas, as a result of the slow progress in reducing poverty and the failure of successive governments in giving better access to power more than 25 per cent of the poor do not have electricity and the Energy/GDP coefficient has remained less than one.

While a lower energy to DP ratio reflects the success of government policy in managing the energy sector to reduce greenhouse gasses, the ratio of 0.7 for India is unsatisfactory.

Remember, the share of coal in India’s primary energy consumption has increased from 54 per cent to 58 per cent while oil, natural gas, and hydroelectricity have decreased by 3 per cent, 2 per cent and 2 per cent respectively. Despite all the hype and hoopla about modern renewables like solar and wind, their contribution is still only 2 per cent.

Prime Minister Modi has stated that India will strive to reduce oil import dependence by 10 per cent by 2022. He also wants India’s oil import dependence to fall to 50 per cent by 2030 from the current 77 per cent. There are serious doubts as to whether this is attainable.

Energy imports have been steadily increasing from 36 per cent in 2005 to 50 per cent now. While oil production has stagnated in recent years at around 42 million tonnes, gas production has declined. The only bright spot is renewables and with the NDA government’s plan to have 100,000 MW of solar energy by 2022, renewables are likely to contribute significantly to India’s energy requirement.

But this remains an ambitious goal and achieving it will not be simple.

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