India’s Primary Energy Evolution: Past Trends and Future Prospects

This paper assesses India’s primary energy mix and changes in consumption and production to identify factors causing these changes and their likely economic and emission impacts. A rising GDP growth rate and the changing structure of the economy during 1980–2013 resulted in a significant growth in energy consumption, though with little apparent impact on the primary energy mix, with coal and oil dominating at unchanged levels. Despite growth in energy consumption, India’s primary energy consumption per capita remains low as compared to the world averages. Industrialization, urbanization, and the energy mix are key factors that will influence growth in India’s energy demand. Going forward, India’s primary energy consumption is expected to grow at a rate outpacing China’s. Coal will continue to dominate the energy mix, though it will lose some market share to gas and renewables. India’s energy and emission intensities have declined over time but mostly due to improving energy efficiency and not due toa change in the energy mix. With the energy mix not changing, the gains from greater shares of more energy- and carbon-efficient fuels are likely to remain limited. Significantly for India, domestic production has been sluggish in responding to energy demand growth, and imports are likely to continue rising, placing a significant burden on the macro economy. A higher GDP growth path and a green growth path are explored to understand their implications for the energy policy environment, improvements in energy and carbon intensities, import dependency, and domestic production.