Feb 9, 2021 - Energy & Environment

India's energy surge makes it pivotal for the climate

Reproduced from India Energy Outlook 2021, IEA; Chart: Axios Visuals
Reproduced from India Energy Outlook 2021, IEA; Chart: Axios Visuals

India is projected to see the biggest increase in energy demand of any country over the next 20 years, a new International Energy Agency report finds.

Why it matters: It's already the third-largest energy-consuming nation, even as per-capita energy use, car ownership and other metrics are far below the global average.

  • There's a "tremendous opportunity for India to successfully meet the aspirations of its citizens without following the high-carbon pathway that other economies have pursued in the past," said IEA head Fatih Birol.

Yes, but: While renewables have been growing, right now coal, oil and solid biomass meet 80% of the country's energy demand, IEA said.

Speeding the transformation of its energy sector is key as new infrastructure is built and huge numbers of people buy new appliances, air conditioners and cars.

The big picture: A couple of snapshots capture the scale of India's expected energy growth.

  • “To meet growth in electricity demand over the next twenty years, India will need to add a power system the size of Europe’s to what it has now.”
  • Under their projections of what happens under existing and announced policies, another 25 million trucks will be on India's roads by 2040, and 300 million vehicles of all types are added.

What we're watching: Future policies and investment. On just the power side, India already has a target of reaching 450 gigawatts of renewables capacity by 2030.

  • But under IEA's climate-friendly "sustainable development scenario," between now and 2040 an additional $1.4 trillion for clean energy tech overall is needed beyond expected investments under current plans.
  • The SDS models expansion of energy access with a mix and policies consistent with the Paris Agreement's goals.
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