India’s Energy Challenge, Or Why Paris Climate Pledges Are Meaningless

  • Date: 15/11/15
  • Nick Butler, Financial Times

International Energy Agency predicts India’s fossil fuel demand will more than double in the next 25 years

Optimism, however essential for human progress, can be very dangerous if misapplied or allowed to run to excess. There can be few better examples of this than the new review of India’s energy future published last week by the International Energy Agency. As you would expect, the paper is fascinating in its detailed description of India’s energy economy. But the forecasts are seriously over optimistic. They gloss over the challenges that even a radical modernising government in Delhi is not managing to overcome and they ignore the very real risks of a much less happy outcome.

The IEA’s central “new policies” forecast is summed up by the table below (figures show million tonnes of oil equivalent).

Total energy demand is set to more than double by 2040, with oil use rising by 6m barrels a day; 260m new passenger vehicles will travel on India’s roads. Over the period around 530m people will gain access to electricity for the first time through new grid connections or off-grid supplies. The proportion without access will decline from 20 per cent to 8 per cent in 2030 and to zero by 2040. Renewable power generation — excluding hydro — will grow 12-fold to 720 terawatt hours. All this will be achieved by virtue of $2.8tn worth of investment — that is $110bn a year, 75 per cent of which will go to the power sector for the construction of new plant and transmission lines. There will be a five-fold increase in gross domestic product — at an average rate of 6.5 per cent a year — and by around 2030 India will overtake China as the most populous country in the world, with some 1.5bn citizens.

Of all these numbers I am afraid I only believe the last one.

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