INDIA // India urgently needs to work out how to deal with the huge challenges its energy sector is facing and address growing demands at the same time, a global energy organisation has warned.
The country has to address “which direction to go in terms of the demands of the future energy system”, said Karl Rose, the senior director of policy and scenarios at the World Energy Council, during his visit to the India Energy Congress in New Delhi last week. “In a country such as India, which still has a growth path ahead of it, these questions are actually quite crucial.”
Authorities need to be able to react quickly to put the necessary energy infrastructure in place and work out financing solutions, which could include opening up the industry to more private investment to alleviate the burden on the government, he added.
“The question is where to put the investment so that the future demand of the population of this country can be satisfied, and at the same time how do you take into account affordability of energy as well as the environmental stability? It’s not an easy equation to solve. There is no one solution.”
Hundreds of millions of Indians do not have access to electricity, and blackouts are commonplace across the country.
The appetite for energy is set to surge over the coming years amid an expansion of the economy and urbanisation. Demand for oil, for example, is expected to more than double to 8.2 million barrels per day by 2040, according to the US Energy Information Administration.
“We’re in is still the decade of China, but the next decade will be the decade of India,” Mr Rose said. “Global energy demands are shifting from the West to the East. In the East, it’s now in China and the next decade it will shift to India. That has to do with demography and economic growth. Is India ready for that?”
These comments come after the US president, Barack Obama, visited India and reached an agreement with the prime minister, Narendra Modi, to support the renewable energy sector, in an effort to meet the country’s energy needs and tackle climate change.
The US Trade and Development Agency committed US$2 billion towards development of renewable energy projects in India.
The two leaders last Sunday reached a breakthrough deal over civil nuclear power that could pave the way for more investment into India’s nuclear energy sector.
But while green energy and nuclear power they are certainly options to help India meet its energy demand, the government would need to think about how cost-effective these solutions would be, Mr Rose said.
“Yes, India will need to shift to a more renewable and more sustainable power mix, but how quickly and in what context need to be done with a carefully chosen strategy,” he said. “Renewables at this moment are not [cost]-competitive. They need to be subsidised.”
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