India will be the biggest driver of global energy demand over the next 20 years as its population continues to increase fast and affluence spreads, the International Energy Agency said in a new report.
This growth in energy consumption will provide opportunities for renewable energy developers as the country needs “to add a power system the size of the European Union to what it has now,” while reducing its reliance on fossil fuels and solid biomass, the IEA said.
“On a per capita basis, India’s energy use and emissions are less than half the world average, as are other key indicators such as vehicle ownership, steel and cement output,” the report said. “As India recovers from a Covid-induced slump in 2020, it is re-entering a very dynamic period in its energy development.”
This development will see the country’s energy demand by 2030 rise by between 25 percent, under what the IEA calls its Delayed Recovery Scenario, and 35 percent under the IEA’s Stated Policy Scenario.
“This is underpinned by a rate of GDP growth that adds the equivalent of another Japan to the world economy by 2040,” the IEA said, adding that India’s GDP could hit $8.6 trillion by 2040.
As a result, the country could see a solar boom, with solar coming to account for as much of the power mix as coal within 20 years. Currently, solar accounts for just 4 percent of the energy mix while coal reigns supreme with 70 percent. By 2040, these could both account for about 30 percent of the country’s energy mix. This could happen even sooner under the Sustainable Development Scenario the IEA devised for the country.
India has set itself a target of 450 GW in renewable energy capacity, to be built by 2030. A lot of this could be solar because of its inexpensive nature, even when paired with storage, the agency noted.
By Irina Slav for Oilprice.com
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