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20 June 2013
Meeting India’s Energy Requirements in 2030
Lindsay Hughes FDI Research Analyst
Summary To eradicate poverty, India requires sustained economic growth at greater than eight per
cent a year over the next twenty-five years, with development distributed equally. To
sustain this growth, it requires access to guaranteed supplies of energy. India is
simultaneously coming under increased international pressure to better control its
greenhouse gas (GHG) emissions, mainly produced by the burning of fossil fuels.
Key Points
With 1.2 billion people, India desperately needs energy to fuel its
economic growth.
Its demand for energy is expected to grow by 95 per cent by 2030.
India does not possess sufficient energy resources to cater to either
current or future requirement.
In 2029 - 2030 at 6 per cent GDP growth demand will peak at
approximately 255,000 MW and 295,000 MW at 9 per cent growth.
India will, therefore, remain a net energy importer for the
foreseeable future.
While coal will remain India’s main energy source, there will be a
growing use of gas.
This situation could be to Australia’s advantage.
Page 2 of 18
Approximately 600 million Indians live without electricity, and 700 million use traditional
bio-mass as the fuel for their cooking. This activity accounts for over 75 per cent of domestic
energy demand. The task of cooking falls directly upon women and girl children. Usually
carried out indoors, this function has a major effect on their health. Overall, the lack of
guaranteed clean energy supplies is a major cause of illiteracy, gender inequality,
disempowerment of women, lack of clean drinking water, health problems and other issues.
India must effectively separate its economic growth from fossil fuel demand while still
ensuring access to sufficient energy, and adhering to enhanced ecological restrictions. It
must manage existing and future energy sources better.
To best gauge India’s energy demands in 2030, this report will: examine its energy estimates
and actual production in the 11th five year plan (2007 – 2012); examine the estimates for the
twelfth five year plan (2012- 2017) including the carry-over from the eleventh plan; briefly
examine nascent estimates for the thirteenth five year plan; and estimate India’s
requirements in 2030.
Synopsis of India’s Five-Year Plans (2007 – 2022)
Eleventh Five Year Plan (April 1, 2007 – March 31, 2012)
Total installed capacity at start of Plan period 132,330 MW
Hydro 34,654 MW
Thermal (inc. gas & diesel) 86,015 MW
Nuclear 3,900 MW
Plan Target 211,030 MW
Peak shortage over Plan period 13,897 MW
Twelfth Five-Year Plan (1 April, 2012 – 31 March, 2017)
Total installed capacity at start of Plan period 199,877 MW
Estimated demand over Plan period 276,000 MW
Planned expansion in Plan period 75,785 MW
Increase in expansion of power generation by type
Thermal (inc. coal & lignite) 59,870 MW
Hydro 10,897 MW
Nuclear 5,300 MW
Imported energy 1,200 MW
Renewables total planned expansion 30,000 MW
Wind 15,000 MW
Solar 10,000 MW
Small Hydro 2,100 MW
Bio-mass 2,900 MW
Page 3 of 18
Thirteenth Five Year Plan (1 April 2017 – 31 March 2022)
Estimated demand over Plan period 369,400 MW
(Based on GDP growth of 9% p.a. and 0.8% variance)
Increase in expansion of power generation by type over Twelfth Five Year Plan
Thermal 63,400 MW
Hydro 12,000 MW
Nuclear 18,000 MW
Total 93,400 MW
Renewables
Solar 16,000 MW
Wind 11,000 MW
Small Hydro 1,500 MW
Biomass 2,000 MW
Total 30,500 MW
Estimated Energy Capacity in 2030 (MW)
GDP Growth
Year 6% 9%
2022-2023 316,148 352,778
2023-2024 327,850 371,467
2024-2025 342,316 391,249
2025-2026 354,549 412,212
2026-2027 368,054 434,455
2027-2028 383,630 458,082
2028-2029 397,443 483,211
2029-2030 413,385 509,967
Estimated Energy Demand and Availability in India to 2030
6% GDP growth 9% GDP growth
Year Met (MW) Requirement (MW) Met (MW) Requirement (MW)
2022-2023 184,651 198,660 201,428 213,059
2023-2024 191,910 206,017 211,575 222,895
2024-2025 199,347 213,539 222,450 233,367
2025-2026 206,964 221,226 234,055 244,477
2026-2027 214,900 229,199 246,253 256,109
2027-2028 223,154 237,458 259,321 268,499
2028-2029 231,591 245,884 273,121 281,528
2029-2030 240,348 254,598 287,791 295,318.1
Page 4 of 18
Analysis
The Eleventh Five Year Plan (1 April, 2007 – 31 March, 2012)
In 2005-2006, India consumed 513 million tonnes of oil equivalent (mtoe), including 367
mtoe of commercial energy. Coal and lignite accounted for 38 per cent of this total, oil and
gas 24 per cent, and hydro- and nuclear-generated power two per cent and one per cent
respectively. The total installed capacity at the beginning of the 11th Plan was 132,330
Megawatts (MW). This comprised 34,654 MW Hydro-electricity, 86,015 MW Thermal power
(including Gas and Diesel), 3,900 MW Nuclear power and 7,761 MW from Renewable Energy
Sources. This was insufficient to cover demand; the country faced peak shortages of 13,897
MW (13.8 per cent) and a total energy shortage of 66,092 MU (9.6 per cent) at the start of
the Plan.
The 2006 Integrated Energy Policy estimated that to sustain a growth rate of 8 per cent until
2031-2032, India would need a total primary energy increase to 1,536 mtoe in the most
energy-efficient scenario. Under the common day-to-day (also known as the business-as-
usual) scenario, however, that requirement would rise to 1,887 mtoe. This equates to a
growth of 5.1 per cent growth in consumption annually. This will be difficult to achieve given
the increasing competition for finite resources and even more so if ecological constraints
such as GHG emissions are considered.
Estimates indicated that an additional 82,000 MW would be required during the 11th Plan,
including the creation of a reserve of 5 per cent of generation capacity. Taking into account
the resources available, the Report of the Working Group on Power for the 11th Plan set the
additional capacity target for the plan at 78,700 MW comprising 15,627 MW hydro, 59,693
MW thermal, and 3,380 MW nuclear power. In the event, an additional capacity of 34,462
MW was achieved between 2007 and 31 March, 2011. The total installed capacity as at 31
March, 2012, was 199,877 MW (refer Appendix A). Even the targeted 78,700 MW additional
capacity, however, was revised downwards due to a variety of problems including delays in
placing orders for maintenance plant and civil works, environmental issues, law and order
issues, and disputes between project developers and sub-contractors.
In the event, an estimated total of 199,877 MW was generated during the 11th Plan. During
the 12th Plan (1 April, 2012 – 31 March, 2017), however, an estimated 4,000 MW is expected
to be lost due to old and inefficient power plants being taken out of the grid. Clearly this
shortfall, plus the growing demand for energy, is holding India’s economy back.
In 2005-2006 India’s imports of energy products amounted to about 24 per cent of its total
primary energy consumption, and approximately a third of its commercial energy
consumption. These proportions will rise to around 28 per cent of total primary
consumption, or 32 per cent of its commercial consumption in 2030 under the most energy-
efficient scenario. The climb is far more drastic under the business-as-usual scenario. In this
case India’s import dependence will rise to 49 per cent of total primary energy consumption
and 54 per cent of commercial energy consumption.
Page 5 of 18
India’s share of the world’s supply of fossil fuels is expected to be between 3.7 per cent and
10.9 per cent by 2031-2032, depending on whether the most energy efficient or business-as-
usual scenario is considered. Importantly, India’s growing demand for commercial energy
could account for 13 per cent of the world’s incremental supply of commercial energy in the
most efficient scenario or, worse, 21 per cent in the business-as-usual scenario. Obviously,
India faces an uphill task to secure these quantities since it will face strong competition for
finite energy sources. Other developing countries with high growth rates, notably China,
have already moved to try to secure their share of the world’s commercial energy supplies.
Furthermore, these countries will wish to further enhance those shares. Given the finite
resources available, the price of energy will consequently increase, until major alternative
sources and technologies become available. India, must, therefore, follow a most-efficient
regime if it is to deliver the growth described earlier.
Page 6 of 18
The Twelfth Five Year Plan (1 April, 2012 – 31 March, 2017)
India’s twelfth five year plans estimates that an additional capacity of 75,785 MW is required
over the plan period, giving a total capacity of approximately 276,000 MW. To decrease the
gap between peak demand and peak deficit and to permit the retirement of older,
inefficient energy plants, the plan target has been fixed at 88,537 MW. To meet this target,
the private sector share of this additional capacity will be increased to 53 per cent, up from
19 per cent in the eleventh plan. If the revised growth rate of 8.2 per cent (against the
original 9.0 per cent) is taken as the target it will allow for around 10 per cent leeway.
Of this added capacity, the Plan estimates that thermal energy derived from coal and lignite
will account for 79 per cent, up from 76 per cent in the previous plan. Hydro-power is
expected to generate 10,897 MW (12 per cent of the estimated additional capacity), and
nuclear capacity 5,300 MW (approximately 6 per cent). Energy imports from Bhutan are
expected to total 1,200 MW (1.36 per cent). It is in the renewables sector, however, that
major increases are planned; the planned total addition to capacity of 30,000 MW comprises
15,000 MW wind energy, 10,000 MW solar energy, 2,100 small-hydro power and the
balance to be derived from biomass (refer Appendix B).
Overall, the projected growth rate in power generation over the period 2012-2017 is
expected to be 9.8 per cent.
Page 7 of 18
Power Generation
Thermal power 79%
Hydro-power 12%
Nuclear 6%
Imported power 1.36%
The Thirteenth Five Year Plan (1 April, 2017 – 31 March, 2022)
6% GDP growth 9% GDP growth
Year Availability
(MWh)
Requirement
(MWh)
Availability
(MWh)
Requirement
(MWh)
2017-2018 151,570 164,801 157,483 169,876
2018-2019 157,806 171,225 165,370 177,716
2019-2020 164,218 177,810 173,706 185,953
2020-2021 170,805 184,557 182,357 194,470
2021-2022 177,571 191,467 191,597 203,506
Capacity additions for the thirteenth five-year plan are estimated below:
Type of Capacity Capacity Addition
(As per Demand corresponding to 9% GDP GR & 0.8 Elasticity)
Thermal 63,400 MW
Hydro 12,000 MW
Nuclear 18,000 MW
Total 93,400 MW
Page 8 of 18
Additionally, estimates indicate that renewable sources of energy will provide an additional
30,500 MW. This will comprise 16,000 MW solar energy, 11,000 MW wind energy, 2,000
MW biomass, and 1,500 MW hydro-power. This additional capacity should allow India to
meet its total energy needs. Shortfalls will be minor and met by localised energy sources or
by the state authorities.
Power Generation
Thermal
Hydro
Nuclear
Renewable Source Energy Generation
Solar 52%
Wind 36%
Biomass 7%
Hydro 1.5%
Page 9 of 18
India’s Estimated Energy Situation in 2030
Estimated Energy Capacity in 2030
GDP Growth
Year 6% 9%
2022-2023 316,148 352,778
2023-2024 327,850 371,467
2024-2025 342,316 391,249
2025-2026 354,549 412,212
2026-2027 368,054 434,455
2027-2028 383,630 458,082
2028-2029 397,443 483,211
2029-2030 413,385 509,967
Estimated Energy Demand and Availability in India to 2030
6% GDP growth 9% GDP growth
Year Availability
(MWh)
Requirement
(MWh)
Availability
(MWh)
Requirement
(MWh)
2022-2023 135,0970 147,5694 147,5557 156,3417
2023-2024 139,8593 153,8556 154,4625 164,3502
2024-2025 146,1028 158,4480 163,2590 170,9702
2025-2026 150,8974 165,3073 171,0152 180,3428
2026-2027 156,3755 171,7948 179,6590 189,5032
2027-2028 162,9881 177,3016 189,8458 198,0141
2028-2029 168,3787 184,7725 199,2190 208,9603
2029-2030 174,9042 191,2633 210,1358 219,2571
Estimated Energy Mix in 2030
Coal 62%
Renewables 14%
Hydro 10%
Nuclear 8%
Gas 6%
Page 10 of 18
The projected change in the mix of generation by fuel source sees a major realignment.
Renewable sources will account for 9 per cent of power generation in 2017, up from 6 per
cent in 2012; they will then increase again to 16 per cent in 2030. On the other hand, power
from hydro-capacity is expected to fall from 15 per cent in 2012 to 11 per cent in 2030, and
nuclear power generation to rise from 3 per cent in 2012 to 5 per cent in 2017, then to 12
per cent in 2030. Overall, the renewables sector is expected to rise from 26 per cent in 2012
to 39 per cent in 2030 (refer Appendix C).
The Australian Advantage
Given Australia’s relative geographical proximity to India, its abundant energy resources,
stable political system and economy, and its developed mining infrastructure which
0
20
40
60
80
100
120
India China Brazil Russia
India's Energy Consumption Growth
India's Energy Consumption Growth
0
100
200
300
400
500
Oil Gas Coal Nuclear Renewables
Increase % in Demand for Energy Sources
Increase % in Demand for Energy Sources
Page 11 of 18
guarantees supply, Australia is in a very advantageous position to sell energy products and
technology to an energy-starved Indian market.
The growth areas in India’s energy mix are power generated by natural gas power, nuclear
fuel and renewables, but coal will retain its top spot as the main supplier of energy up to,
and probably beyond, 2030. Based on its proved resources, Australia can supply each of
these products to any level India requires.
The Bureau of Resources and Energy Economics highlights in its 2012 report,
Australia has around 33 per cent of the world’s uranium resources, 10 per cent of
world black coal resources, and almost 2 per cent of world conventional gas
resources. Australia has only a small proportion of world resources of crude oil. At
current rates of production, Australia’s energy resources are expected to last for
many more decades.
http://www.bree.gov.au/documents/publications/energy-in-aust/energy-in-
australia-2012.pdf)
The main energy products in Australia are coal, gas and uranium. Its energy production
increased by 23 per cent between 1999-2000 and 2009-10. In 2009-10, coal accounted for
61 per cent of total energy production, uranium 19 per cent, and gas 12 per cent. Crude oil
and LPG represented a further 6 per cent of the total, and renewables 2 per cent.
Australia’s energy consumption has not grown to the same extent as its production. The rate
of domestic consumption is growing but at a slowing rate. Between 1999-2009 the rate of
domestic consumption of energy grew at 1.8 per cent, compared with 2.3 over the previous
ten years. In keeping with this trend, in 2009–10, net energy consumption increased by 1.1
per cent, equivalent to 32 per cent of Australian energy production. Overall, domestic
consumption has declined from an average of 49 per cent of total production in the 1980s,
to 42 per cent in the 1990s, and 34 per cent over the past decade.
Consequently Australia has become a major energy exporter; net energy exports represent
68 per cent of total energy production. Coal is the largest energy export earner, with a value
of around $44 billion in 2010–11, followed by crude oil and liquefied natural gas (LNG).
Energy exports accounted for 33 per cent of the value of Australia’s total commodity exports
in 2010–11
Page 12 of 18
Page 13 of 18
Australia’s energy exports to India are dominated by coal. While crude petroleum accounts
for some AU$545 million, gas sales do not appear to register. This may indicate a new
market to be exploited. Given India’s voracious demand for energy it is hardly likely that this
will be an overly difficult proposition.
By selling gas to India, Australia will expand a rapidly evolving market. It should market gas
as the “clean” energy source for India so as to cater to that market’s environmental
concerns. Exporting gas to India, moreover, will develop a parallel energy market to its
current coal sales there.
In short, while coal sales to India will continue to grow, gas sales should be developed to
provide an alternative energy source for India and to increase Australian revenues from a
growing market.
Conclusion
India’s energy demand in 2030 is expected to be double the total at the end of 2011
Its energy mix will evolve to meet that demand
o Coal will remain the dominant source of energy, but its share will decrease
by approximately 25 per cent, to around 62 per cent
o The renewables sector will grow to provide close to 40 per cent of the
energy mix
o Hydro-power is expected to fall to around 11 per cent
o Nuclear power is expected to rise to around 12 per cent
Page 14 of 18
o Overall, the use of oil products will fall in this mix; natural gas is expected to
grow by the same proportion
While the eastern Arunachal Pradesh and Assam regions will provide some of India’s
energy demand, India will remain a net importer of energy products
India faces three major challenges in meeting its energy needs. It
o has limited resources of its own and has to import energy products amidst
increasing international competition for diminishing stocks
o is expected to enhance its energy output, while simultaneously reducing its
greenhouse gas emissions
o must concurrently upgrade its energy infrastructure: its generating,
transmission and distribution capacities must grow in direct proportion to
energy demand, together with the associated port, rail and road networks
These factors could be to Australia’s benefit
o Given its relative proximity to India and its vast reserves of premium
metallurgical coal, liquid natural gas and uranium ore, Australia is well
positioned to become a major supplier of India’s energy demand
o A relatively peaceful environment adds to the Australia’s attractiveness as a
major source of energy products to India
o The scale and likely duration of demand make India a prime energy market
for Australia
India’s ability to deliver an annual growth rate of over eight per cent depends on whether it
can ensure access to reliable and cheap energy sources.
With diminishing oil supplies and greater demands for “clean” energy sources, it is entirely
conceivable that India will turn increasingly to renewable energy sources: solar, hydro and
wind power. Coal, however, will retain its dominance, though its share in energy generation
will diminish by approximately 25 per cent. Nuclear power will not rise to a major extent (in
the overall context) given its start-up costs and current public sentiment. It is likely that India
will turn increasingly to imports of liquid natural gas and shale oil, the latter sourced from
either Russia or the United States for political reasons.
India must address the various threats it faces in ensuring this access and minimise, if not
eliminate, them. It has several options in addressing its energy requirements but cannot
afford to rely on just one. Rather, it must employ a mixture of every available technology to
ensure that it has the energy required to lift 600 million people out of poverty and give them
the standard of living that is rightfully theirs.
Appendix A
Achievements in Power Sector during the Eleventh Plan (2007 – 2012)
Capacity addition during the Eleventh Plan period was 54,964 MW, which is 69.8 per
cent of the original target and 88.1 per cent of the reduced target of 62,374 MW
Page 15 of 18
established by the Mid-term Appraisal (MTA). It is more than 2.5 times that of any of
the earlier Plans.
Total installed capacity as at 31 March 2012, including renewable energy sources,
was 199,877 MW. Renewable energy capacity was about 12.2 per cent of that total.
Approximately 70,286 circuit km (ckm) of transmission line, 150,362 MVA capacity
of alternating current (AC) substations and 3,000 MVA capacity of high-voltage,
direct current (HVDC) substations were added to existing transmission systems.
Total number of villages electrified to March 2012 was about 560,000, or over 93
per cent of all villages in India. A large number of small habitations still remain
unconnected, however.
Various activities under different schemes of Bureau of Energy Efficiency (BEE) and
Ministry of Power (MoP) have resulted in saving 11,000 MW.
Works to extend the life of 18 units aggregating to 1,931 MW and repair and
maintenance on 69 units aggregating 17,435 MW were completed during the
Eleventh Plan.
All-India Cumulative Generating Capacity (as at 31 March 2012) in MW
Hydro Thermal Nuclear Renewables Total
Centre 9,085.40 45,817.23 4,780.00 0.0 59,682.63
States 27,380.00 55,024.93 - 3,513.72 85,918.65
Private 2,525.00 30,761.02 - 20,989.73 54,275.75
Total 38,990.40 131,603.18 4,780.00 24,503.45 199,877.03
Appendix B
Sector-wise and Mode-wise Capacity Addition during the Twelfth Plan (MW)
Sector Hydro Thermal Nuclear Total
Central 6004 14878 5300 26181.6
State 1608 13922 0 15530.0
Private 3285 43540 0 46825.0
Total exc. Renewables
10897 72340 5300 88536.6
Renewables 30,000
Total inc. Renewables
10,987 72,340 5,300 118,536.6
Page 16 of 18
Appendix C
Projected Primary Energy Requirement for India, 2030 (in Mtoe)
Fuel Range of Requirements
Assumed Domestic
Production.
Range of Imports
Import Percentage
Coal (inc. lignite) 632 - 1022 560 72 - 462 11 - 45
Oil 350 - 486 35 315 - 451 90 - 93
Natural Gas 100 - 197 100 0 - 97 0 - 49
Total* 1351 - 1702 387 - 1010 29 - 59
Notes:
Range of imports is calculated across all scenarios by taking the minimum requirement and
maximum domestic production as the lower bound and maximum requirement and
minimum domestic production as the upper bound.
Total denotes the total commercial primary energy
Source: Integrated Energy Policy Report (IEPR), 2006.
Changing Structure of Fuel for Electricity
Capacity Per Cent Generation Per Cent
2012 2017 2030 2012 2017 2030
Coal 56 57 42 70 69 58
Oil 1 1 0 0 0 0
Gas 9 6 3 7 5 3
Hydro 20 15 13 14 12 11
Renewables 12 17 33 6 9 16
Nuclear 2 4 9 3 5 12
Total Clean Energy ( Hydro, Renewables, Nuclear)
23 26 39
Page 17 of 18
Appendix D
References
Emirates Centre for Strategic Studies and Research, China, India and the United States:
Competition for Energy Resources, Abu Dhabi, 2008
Lai, Hongyi, (ed.), Asian Energy Security: The Maritime Dimension, Palgrave Macmillan, New
York, 2009
Planning Commission of India, Integrated Energy Policy: Report of the Expert Committee,
Government of India, 2006
UNDP, World Energy Assessment: Energy and the Challenge of Sustainability, United Nations
Development Program, New York, 2000
*****
Page 18 of 18
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