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IEA – India has the opportunity to build a ‘new energy future’

India is set to see the largest increase in energy demand of any country over the next 20 years, according to a new report from the International Energy Agency (IEA), India Energy Outlook 2021

However, avoiding the kind of carbon-intensive path previously followed by other industrialising nations will require strong policies, technological leaps and a surge in clean energy investment, the report argues. IEA analysis says that, more than any other major economy, India’s energy future depends on buildings and factories that are yet to be built, and vehicles and appliances that are yet to be bought. 

Based on the country’s current policy settings, nearly 60% of its carbon dioxide emissions in the late 2030s will be coming from infrastructure and machines that do not exist today. This, the report says, represents a huge opening for policies to steer India onto a more secure and sustainable course.

The additional funding for clean energy technologies required to put India onto this sustainable path over the next 20 years is $1.4tn, or 70%, higher than in a scenario based on its current policy settings. But the IEA believes the benefits are significant, including savings of the same magnitude on oil import costs.

Based on today’s policy settings, India’s combined import bill for fossil fuels is projected to triple over the next two decades, with oil by far the largest component. 

Domestic production of oil and gas continues to fall behind consumption trends and net dependence on imported oil rises above 90% by 2040, up from 75% today, says the IEA. This continued reliance on imported fuels creates vulnerabilities to price cycles and volatility, as well as possible disruptions to supply.

The report finds that rapid expansion of solar power – combined with smart policymaking – are transforming India’s electricity sector, enabling it to provide clean, affordable and reliable power to a growing number of households and businesses.

‘What our new report makes clear is the 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,’ says Dr Fatih Birol, the IEA’s Executive Director. ‘The energy policy successes of the Indian government to date make me very optimistic about its ability to meet the challenges ahead in terms of energy security and sustainability.’

News Item details

Journal title: Energy World

Countries: India -

Subjects: Net zero - Decarbonisation -

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