Early November, the 6th High-Level Meeting of the OPEC-India Energy Dialogue was celebrated in Vienna. The event served to reaffirm the good relationship between both parties, which are key players in the global energy market that are committed to work to ensure energy availability, affordability and sustainability. Based on the WOO 2045 prepared by the OPEC Secretariat, this article reviews main figures about India considering its relevance as one of largest global economy and energy consumers in the years to come. Likewise, some comments about the ambitious energy plan implemented by the Indian government are also assessed, concluding that India shows how the efforts to develop renewable energies in the country will live together with fossil fuels, which will continue being the main energy source, in order to meet the increasing energy demand in the country.
Energy dialogue OPEC – India
The OPEC
highlighted the results of the 6th High-Level Meeting of the OPEC-India Energy
Dialogue that took place on 9 November 2023, at the OPEC Secretariat in Vienna,
Austria [1]. The meeting was led by the Secretary General of OPEC, HE Haitham
Al Ghais, and Honourable Minister of Petroleum and Natural Gas and Minister of
Housing and Urban Affairs of the Republic of India, HE Hardeep Singh Puri.
The meeting
sought to strengthen relations between both parties on the basis of discussions
about the oil and energy market and the importance of cooperation to ensure availability,
affordability and sustainability. On the one hand, the OPEC plays a role in
maintaining oil market stability, and on the other, India plays an important
role in the world economy and, as such, in the energy market.
India in numbers
According to
the OPEC’s World Oil Outlook 2023 (WOO), world population is expected to grow
from 7,975 million of inhabitants in 2022, to 9,468 million of inhabitants in
2045 [2]. Regarding India’s population, it will jump from 1,417 million
of inhabitants in 2022, to 1,646 million of inhabitants in 2045. Thus, Indian
population growth leads the single global increments with 15% of the total in
2045.
Certainly,
India’s growth population average rate has been increasing by 6% during the
last years and it seems to continue rising. In this context, first, economic
growth could be encouraged by its significant young and active population, and,
second, energy demand will be definitely impacted.
Looking at
the economic figures, UN data indicates that India’s economy has taken a
great leap to the first places in the world [3]. The India’s GDP registered 3,2
million of USD and it represented by 3% of the global GDP in 2021, India became
the fifth largest economy in the world above France and The United Kingdom.
India, recorded a significant annual increase of 8,7% in 2021, 6,8% in 2022,
and it is expected to rise by 6,1% in 2023 [4].
India would
reach higher positions in the world economic in the years to come. Reviewing
the OPEC outlook, India leads economic growth with the highest rate around 6% per
year until 2045. The sectors driving the economic rise are technology,
pharmaceutical and energy. Nonetheless,
India tackles significant internal challenges, such as, to increase
productivity levels, reducing inequality, stimulate small and mid-size
enterprises.
In line with
the economic forecast, OPEC [2] expects that the single largest primary energy
demand in the world would come from India, which doubles from 19,2 million
barrel of oil equivalent per day (mboe/d) in 2022, to 38,5 mboe/d in 2045, with
and average growth of 3% per year. OPEC estimates global primary energy demand
will rise from 291 mboe/d to 359,2 mboe/d between 2022 and 2045.
To elaborate
more in this matter, see the following Graph, India would keep fossil fuel
consumption continuously increasing and taking around 75% of its energy demand
for the whole period 2022—2045. Nevertheless, it is important to point out the
following: although coal will remain as the first primary energy source in the
country, the demand will decrease progressively to be compensated by oil and
natural gas. Reduction in coal use might be driving the decrease in the energy
intensity indicator by 3% between 2022 and 2045. Additionally, nuclear energy
and other renewables will slowly increase against biomass that shows a downward
trend.
Regarding the
carbon dioxide (Co2) emissions, India is the third country with the highest volume
of emissions of Co2, preceded by The United States (1st) and China
(2nd) [5]. In 2021, the Non-OCDE
countries registered 22,592 million tons of Co2, which represents two thirds of
global emissions from energy, 33,884 million tons of Co2. India is responsible
of 11% of the Non-OCDE countries emissions, it says 2.553 million tons of Co2,
as it shows in the following Graph. The volume of emissions od Co2 by India has
been increasing from 9% to 11% of the total Non-OCDE countries from 2011 to
2021.
In line with
the above, India has some cities classified as the most contaminated in the world.
The IQ Air ranking [6] about the air quality shows as follows: New Delhi ranks second,
Calcutta ranks fourth and Bombay ranks thirteenth.
Notwithstanding, India ranks third in attractive renewable energy country in 2021. The country has a defiance scenario which demands strong efforts to restructure and interlock public policies to introduce the necessary changes in the Indian society having the environment as a core priority.
Energy Policy of India
In India, the
energy policy is closely linked to the challenges faced in economic and social
matters, as well as, to the commitment with the UN and the Paris Agreement,
which implies aspects such as low emission power and transport systems, road
expansions, industrial and urbanization development involving energy efficiency
and low emission systems and CO2 removal. [2]
India has been
working to implement an ambitious energy plan to introduce important changes and
to bring secure, affordable and sustainable energy. The International Energy Agency
(IEA) prepared a report with interesting insights about it in 2020 emphasizing
that India “is vital for the future of the global energy markets”. [7]
Early in 2023,
India allocated 4.3 billion of USD to reach out net—zero emissions by 2070. The
government has also contemplated more than 8 billion of USD to carry out new clean
energy projects [2]. In May 2023, the government also released the National
Electricity Plan (2023), in which the expansion of renewable energy in the
country is notable. Actually, the country planned to enhance renewable energy
generation up to 500GW in 2030. Notwithstanding, fossil fuels prevail in the
energy matrix to satisfy the market and meet the energy requirements, while
developing the ambitious clean energy plan.
Likewise, under
the UNFCCC, developed countries committed to transferring technology on
concessional terms to developing countries. Thus, Indian government also
considers to promote international dialogue and technological exchange [2].
Lastly, to
conclude the Indian market comprises a complex scenario in the years to come. Social
and economic complexities to overcome on one side. Also, there is a great potential
since the country is and will continue to be an important player in the global energy
market as one of the largest consumers, with a growing population and a booming
economy.
In that context,
the policy makers have the challenge to meet the increasing energy requirements
from all available sources. On the one hand, the fossil fuels, particularly
coal, will remain playing an important role in the Indian energy matrix and, on
the other, the country is committed to develop renewable energies projects,
which demand significant technological and financial resources.
Iris Mujica
Sources :
[1] https://www.opec.org/opec_web/en/press_room/7248.htm
[2] The
World Oil Outlook 2045 by OPEC (2023)
[3] https://data.un.org/_Docs/SYB/PDFs/SYB66_230_202310_GDP%20and%20GDP%20Per%20Capita.pdf
[4] https://santandertrade.com/es/portal/analizar-mercados/india/politica-y-economia
[6] https://www.iqair.com/es/world-air-quality-ranking
[7] https://www.iea.org/reports/india-2020
Comments
Post a Comment