The Bible of World Energy published in June 2018 did not get the attention it deserved. After three years of little growth in world carbon emissions from world energy consumption, it has increased by 1.6 per cent in 2017. This despite the energy transition from fossil fuels to renewables.
Renewables grew at a rapid rate of 16.6 per cent. Natural gas was the most significant source of energy growth this year. Major coal consumer China continued to switch from coal to gas. Yet, coal consumption grew last year after declining in the previous three years. Mark it, 76 per cent of the increase in world coal consumption was accounted for by India.
Energy experts and climate scientists should take a deep interest in the latest BP report to explore strategies to reduce carbon emission. Otherwise, the world has little chance to keep the temperature rise to less than two-degree centigrade this century.
No significant drop in the share of coal
BP report’s global power sector findings are even more astonishing. The share of coal in meeting the power sector needs in 2017 is the same as in 1998. The share of non-fossil fuels in the power sector in 2017 was less than in 1998. This was mostly because, despite the growth in renewables, it could not compensate for the reduction in nuclear share. These statistics show the urgency to the world community to take steps to adopt energy-efficiency and renewables on a war footing.
Global oil consumption growth averaged 1.8 per cent, or 1.7 million barrels per day (b/d), heads and shoulders above its 10-year average of 1.2 per cent for the third consecutive year. Brent price increased from $43.73/b in 2016 to $54.19/b in 2017. Coal consumption was up by 0.7 per cent which was the first increase during the last four years.
Global power generation which absorbs 40 per cent of total primary energy grew by 2.8 per cent in 2017 close to its 10-year average. The entire growth came from the developing world. The increase in global power generation was driven by robust expansion in renewable energy, led by wind (17 per cent, 163 TWh) and solar (35 per cent, 114 TWh). It accounted for almost half of the total growth in power generation, despite accounting for only 8 per cent of total generation.
India’s energy scenario continues to differ considerably from the world in 2017. While this by itself is not bad, experts should analyse to find what lessons we can learn from the rest of the world.
Coal is still king in India
It is to the credit of NDA that India has succeeded in developing renewables (19.1 per cent versus 16.8 per cent, see graphic) to reduce global warming. However, it has not succeeded in reducing the contribution of coal. Coal consumption has not only increased by 4.5 per cent but also continuing to have a significant energy share of 56.3 per cent versus 27.6 per cent for the world. It is in the natural gas sector that India has failed miserably. This is because of irrational pricing policy followed by both the UPA and NDA governments. As the gas market gets integrated internationally, India should develop a plan to exploit the opportunities offered by such a gas market by liberalising the gas market.
It will be useful to compare the shares of energy sources in 2017 versus the two cases developed by NITI Aayog in their proposed Draft Energy Plan for 2040.
While redoing the draft energy plan, energy experts at NITI should attempt to draw up plans to reduce coal consumption even more than initially proposed and in its place have an even more ambitious project to develop renewables. They should also be more creative in developing the gas sector to promote more gas import while liberalising the gas market to unleash India’s potential in gas exploration.
