India Energy Outlook Report, 2021

GS-Paper-3 Energy security – Infrastructure development- Prelims & UPSC Interview

Context: The International Energy Agency (IEA) has recently released the India Energy Outlook 2021 report. The report is highly important for UPSC examination topic ENERGY SECURITY.

(1) Energy consumption

• India at present is the fourth-largest global energy consumer behind China, the United States and the European Union.
• It will overtake the European Union as the world’s third-largest energy consumer by 2030.
• It will account for the biggest share of energy demand growth over the next two decades.

(2) Energy demand

• India accounts for nearly one-quarter of global energy demand growth from 2019-40 — the largest for any country.
• Its share in the growth in renewable energy is the second-largest in the world, after China.
• A five-fold increase in per capita car ownership will result in India leading the oil demand growth in the world.
• Also, it will become the fastest-growing market for natural gas, with demand more than tripling by 2040.

(3) Industrial consumption

• By 2040, India is set to account for almost 20 per cent of global growth in industrial value-added, and to lead global growth in industrial final energy consumption, especially in steelmaking.
• The nation accounts for nearly one-third of global industrial energy demand growth to 2040.

(4) Dependence on fossil fuels

• To meet its energy needs, India will be more reliant on fossil fuel imports as its domestic oil and gas production stagnates.
• India’s oil demand is seen rising by rising by 74 per cent to 8.7 million barrels per day by 2040 under the existing policies scenario.
• The natural gas requirement is projected to more than triple to 201 billion cubic meters and coal demand is seen rising to 772 million tonnes in 2040 from the current 590.

(5) Coal trade

• India currently accounts for 16 per cent of the global coal trade.
• Many global coal suppliers were counting on growth in India to underpin planned export-oriented mining investments.

(6) Per-capita emission

• 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.
• India will soon become the world’s most populous country, adding the equivalent of a city the size of Los Angeles to its urban population each year.

About International Energy Agency

• The IEA is a Paris-based autonomous intergovernmental organization established in the framework of the Organisation for Economic Co-operation and Development (OECD) in 1974 in the wake of the 1973 oil crisis.
• It was initially dedicated to responding to physical disruptions in the supply of oil, as well as serving as an information source on statistics about the international oil market and other energy sectors.
• At the end of July 2009, IEA member countries held a combined stockpile of almost 4.3 billion barrels of oil.
• They are required to maintain total oil stock levels equivalent to at least 90 days of the previous year’s net imports.
• The IEA acts as a policy adviser to its member states but also works with non-member countries, especially China, India, and Russia.
• The Agency’s mandate has broadened to focus on the “3Es” of effectual energy policy: energy security, economic development, and environmental protection.

India Energy Outlook 2021

• This report was released by the International Energy Agency (IEA).
• It has been forecasted that India will overtake the European Union as the world’s third-largest energy consumer by 2030.
• At present, India is the fourth-largest global energy consumer behind China, the United States and the European Union.
• It is based on the forecast that India accounts for the biggest share of energy demand growth over the next two decades.
• India’s primary energy consumption would double as the Gross Domestic Product (GDP) expands to USD 8.6 trillion by 2040.
• India accounts for nearly one-quarter of global energy demand growth from 2019-40 — the largest for any country.
• Its share in the growth in renewable energy is the second-largest in the world, after China.