02-11-2015 16:22:25 Energy Together Sustainable India Secure World Energy Outlook Special Report Special Outlook Energy World Outlook

India Energy Outlook 2015 Power All” for to 7 x 24 www.worldenergyoutlook.org/india ia is set a period for of sustained rapid, growth in energy demand: how the “Make in India” campaign, affect energy India’s outlook. exerts influence. ever-larger Evaluates the energy security and environmental strains that riseaccompany India’s and how they can be addressed. Assesses the implications a global for energy system inwhich India Identifies the investmentrequired generation in and India’s grid orderin provideto universal, secure and affordable electricity supply. Highlightsthe growing of led by renewables, wind role and solar, in energyIndia’s future, alongside the continued importance of coal. Explores new policy how major initiatives, from “ For more information, and the free download of this report, please visit: visit: please of this report, and the free download For more information, „ „ „ „ „ „ „ „ „ „ Ind could this re-shape the global energy scene? This analysis comprehensive assesses the challenges multiple and opportunitiesfacing India as develops it the resources and infrastructure meetto energy its needs. The report: India Energy Outlook World Energy Outlook Special Report Special Outlook Energy World WEO_2015_India_EO_Cover_PRINT.indd 1 02-11-2015 16:22:25 Energy Together Sustainable India Secure World Energy Outlook Special Report Special Outlook Energy World Outlook

India Energy Outlook 2015 Power All” for to 7 x 24 www.worldenergyoutlook.org/india ia is set a period for of sustained rapid, growth in energy demand: how the “Make in India” campaign, affect energy India’s outlook. exerts influence. ever-larger Evaluates the energy security and environmental strains that riseaccompany India’s and how they can be addressed. Assesses the implications a global for energy system inwhich India Identifies the investmentrequired generation in and India’s grid orderin provideto universal, secure and affordable electricity supply. Highlightsthe growing of led by renewables, wind role and solar, in energyIndia’s future, alongside the continued importance of coal. Explores new policy how major initiatives, from “ For more information, and the free download of this report, please visit: visit: please of this report, and the free download For more information, „ „ „ „ „ „ „ „ „ „ Ind could this re-shape the global energy scene? This analysis comprehensive assesses the challenges multiple and opportunitiesfacing India as develops it the resources and infrastructure meetto energy its needs. The report: India Energy Outlook World Energy Outlook Special Report Special Outlook Energy World WEO_2015_India_EO_Cover_PRINT.indd 1 Secure Sustainable Together

India OutlookEnergy

World Energy Outlook Special Report

WEO2015_India_EO_Cover_WEB.indd 3 02-11-2015 16:10:09 INTERNATIONAL ENERGY AGENCY

The International Energy Agency (IEA), an autonomous agency, was established in November 1974. Its primary mandate was – and is – two-fold: to promote energy security amongst its member countries through collective response to physical disruptions in oil supply, and provide authoritative research and analysis on ways to ensure reliable, affordable and clean energy for its 29 member countries and beyond. The IEA carries out a comprehensive programme of energy co-operation among its member countries, each of which is obliged to hold oil stocks equivalent to 90 days of its net imports. The Agency’s aims include the following objectives: n Secure member countries’ access to reliable and ample supplies of all forms of energy; in particular, through maintaining effective emergency response capabilities in case of oil supply disruptions. n Promote sustainable energy policies that spur economic growth and environmental protection in a global context – particularly in terms of reducing greenhouse-gas emissions that contribute to climate change. n Improve transparency of international markets through collection and analysis of energy data. n Support global collaboration on energy technology to secure future energy supplies and mitigate their environmental impact, including through improved energy efficiency and development and deployment of low-carbon technologies. n Find solutions to global energy challenges through engagement and dialogue with non-member countries, industry, international organisations and other stakeholders. IEA member countries: Australia Austria Belgium Canada Czech Republic Denmark Estonia Finland France Germany Secure Greece Sustainable Hungary Together Ireland Italy Japan Korea Luxembourg Netherlands New Zealand Norway Poland Portugal © OECD/IEA, 2015 Slovak Republic International Energy Agency Spain 9 rue de la Fédération Sweden 75739 Paris Cedex 15, France Switzerland www.iea.org Turkey United Kingdom Please note that this publication United States is subject to specific restrictions that limit its use and distribution. The European Commission The terms and conditions are also participates in available online at www.iea.org/t&c/ the work of the IEA.

Page02_2015_16x23_Q.indd 1 07-09-2015 17:26:56 © OECD/IEA, 2015 Foreword academic andresearch organisations Indian leading and industry from as well as study, this throughout India of Government the of parts all across enjoyedhave we that support great the by this encouragedin am I engagement andIamcommitted to theprocess. institutional closer potential for the I see but time, take will realisation full security.Their energy and analysis market technology, energy clean policy, on work our in participant full a as India engaging from benefits mutual clear Agency.are Therethe for partvision my aof key is India with ties stronger even building IEA: the report –that for partner critical bythis a is India confirmed – firm conviction my is It Agency. Energy International the India’s with relationship to me brings This needs. and wants India systemthatenergy affordable sustainable, reliable, the deliver to required be will partnerships International through trade, investment, cleantechnology cooperationmarkets, andother channels. international on influence and dependence India’s intensifying deepen, to set unmistakeableIndia’sOne internationalthat energy the is conclusion with systemties are and itsinteractions withthe wider energy world. India’s own policychoices andto assess what they might meanfor India’s economic growth toseek prescribenot instead, do aim, but to provide data objectiveand analysis informto we report, this In dictate. to outsiders for it is straightforward, nor not is ahead path The of renewable energy andmore efficient technologies. development”.use economic its expandrapidlyto establishedgoals Tohas India end, this follow “a cleanerpath thanthe one followed hitherto by others at acorresponding level of to intention an stating this, acknowledges (COP21) Paris in summit climate forthcoming “You must be the change you Ghandi said, wishto see inthe world”. India’s Mahatma climate pledge for the As more innovative. more sustainable, energy policy-makers; secure, is more that distinctive: sector energy thecountry’s the for forward way of a chart to opportunities major have shoulders they but the on rest responsibilities Major WEO-2015 specialreport, isanatural choicefor anin-depth study. will increasingly influence the global energy economy. In this light, India, the subject of this of what issoonexpected to bethe world’s most populouscountry. What happensinIndia to it, fuel the demand for greater mobilityandto develop theinfrastructurewithout to meet theneeds remain who those to electricity to bring to ambitions, economy, expanding development an India’s support achieving to central is Energy fast. growing is India International Energy Agency Executive Director Dr. Fatih Birol Foreword 3

© OECD/IEA, 2015 © OECD/IEA, 2015 Acknowledgements designed anddirected by It was Agency. of the offices and directorates other with co-operation in Agency Energy This study was prepared by the Directorate of Global Energy Economics of the International o h rpr were: report the to Stéphanie Bouckaert Stéphanie absi Ogar Banbeshie Timur TopalgoekceliTimur Georgios Zazias Georgios Implementation. Programme and Statistics of Ministry the and Cell, Analysis and Planning Petroleum the the Ministry of New and Renewable Energy,we areparticularly the Ministry of Petroleum and Natural Gas and IEA the to data grateful to the Ministry of Power energy and the Central Electricity Authority, submit the Ministry of Coal, that institutions Indian the Among completion. to study this bring to essential were sources Indian of number a from Data gratitude to the many Indian and international research organisations that provided input. our express to opportunity this take also We ministries. relevant among report draft the of review the co-ordinating in assistancePower, her of for Ministry the in Secretary Joint provided their time and invaluable assistance in answering our queries, and to Anju Bhalla, that NITI Aayog, at Advisor Jain, Anil notably and experts, officials manysenior the to also thanks Sincere (TERI). Institute Resources and Energy NITIThe of support with the with collaboration and Aayog in organised Delhi, New in workshop our at addresses keynote for Charge Independent Petroleum with and Natural StateGas, for their support of throughout the study and Ministerfor kindly providing Pradhan, Dharmendra H.E. and Energy Renewable and New Power,Coal, for Charge Independent with State of Minister Goyal, Piyush H.E. Aayog), (NITI for Institution India Transforming National the of Chairman Vice during the preparation of this report. We are particularly grateful to H.E.Arvind Panagariya, We would like to thank the Government of India for the close co-operation that we enjoyed copy-editor. the was Justus Debra graphics. Mayne for Anne and Sadin Bertrand to and production for Dumond Astrid particularly report, final the in producing help their for Information Office IEA’sthe to go and Communication Thanks report. the contributedto also OECD the from Paul Millard, Duncan Hansen, Simons, Jon Melanie Slade, Misako Takahashi, Gaghen, László Varró and Martin Rebecca Young. Isabelle Joumard Frankl, Paolo Alvarez, Fernández inparticular IEA experts, bynumerous Dagmar Graczyk, India programme manager, provided and Philippe Benoit, Kamel Bennaceur, input Carlos from benefited also study The Robert Priddlecarried editorial responsibility. support. More details abouttheteam can befound at , and ae Olejarnik, Paweł , Shuwei Zhang Shuwei , Johannes TrübyJohannes Ian Cronshaw Ian l Al-Saffar Ali Fatih Birol , . Kristine Petrosyan Kristine and co-ordinated by ac Baroni Marco , TeresaCoon Laura Cozzi, Laura , Molly A. Walton A. Molly and Nathan Frisbee Nathan , Christian Besson Christian www.worldenergyoutlook.org. Sandra Mooney Sandra , , Brent WannerBrent , Tim Gould oa Selmet Nora Acknowledgements , Fabian Kęsicki Fabian . Principal contributors. Principal , ms Bromhead Amos , hgr Suehiro Shigeru provided essential provided David Wilkinson David , Ugbizi 5 , , ,

© OECD/IEA, 2015 Saurabh Kumar Satish Kumar Atul Kumar Ken Koyama Shinichi Kihara Radhika Khosla Ajay Khandelwal Madhura Joshi Andrew Jeffries Peter Hilliges Ishwar Hegde Mohinder Gulati Sudeshna GhoshBanerjee Arunabha Ghosh Herman Franssen Naoko Doi Krishan Dhawan Jonathan Demierre Vaibhav Chaturvedi Nick Butler Rina BohleZeller Ritu Bharadwaj Ariadne Benaissa Carmen Becerril Marco Alberti Sanjeev Ahluwalia Prasoon Agarwal of were great value. They include: comments and insights their stage; later a to the at draft the contributions reviewing and to workshop, consultations from process, the to contributed have India of Government the outside from experts and representatives government high-level Many also Consulting) Energy provided valuable inputto the analysis. (Ocal Öcal Uğur and ParisTech) (Mines Kang Seungwoo dESA), of Technology, KTH- Institute (Royal Mentis Dimitris and Nerini Fuso Francesco Analysis), System Applied for Institute (International Rafaj Peter and Cofala Janusz report. draft the the Energy, thank to like alsoClimate & Growth Unit at the British High Commission in New Delhi for their comments on wewould and Kingdom, -United Office Commonwealth The work could nothave been achieved withoutthe supportprovided by the Foreign and 6 Energy Efficiency Limited, Services India Schneider Electric, India The Energy andResources Institute (TERI), India Institute ofEnergy Economics, Japan Ministry ofEconomy, Trade andIndustry (METI), Japan Centre for Policy Research (CPR),India Reliance Industries The Energy andResources Institute (TERI), India Asian Development Bank KfW Group Suzlon Group Sustainable Energy for AllInitiative The World Bank Council onEnergy, Environment andWater (CEEW), India Energy Intelligence Group The Institute ofEnergy Economics, Japan Shakti Sustainable Energy Foundation, India Columbia University, United States Council onEnergy, Environment andWater (CEEW), India King’s College London, United Kingdom Vestas Institute for Industrial Productivity, India Department ofEnergy, United States Acciona Energia Enel Observer Research Foundation, India Global Green Growth Institute (GGGI), India World Energy Outlook | Special Report © OECD/IEA, 2015 Acknowledgements the IEA. orjudgmentsopinions itcontains. Allerrors andomissionsare solely theresponsibility of The individuals and organisations that contributed to this study are not responsible for any Jay Wagner Vipul Tuli TouatiJulien Norman Tannert Christopher Snary Leena Srivastava Ashok Sreenivas Kanwaldeep Singh Anupama Sen Steve Sawyer Dinesh Sarraf Anil Razdan Shin Oya Joachim Nick-Leptin Mohua Mukherjee Vijay Modi Ritu Mathur Joan MacNaughton www.worldenergyoutlook.org. More information aboutthe Email: Telephone: France 75739 Paris Cedex 15 9, rue delaFédération International Energy Agency Directorate ofGlobalEnergy Economics Tim Gould Comments andquestions are welcome andshouldbeaddressed to:

we (33-1) 40576670 [email protected]

Plexus Energy McKinsey &Company Meridiam Federal Ministry for Economic Affairs andEnergy, Germany UK Department ofEnergy andClimate Change (DECC) The Energy andResources Institute (TERI), India Prayas Energy Group Maruti Suzuki Oxford Institute for Energy Studies Global WindEnergy Council Oil andNatural GasCorporation (ONGC), India Energy andEnvironment Foundation, India Japan Bankfor International Cooperation Federal Ministry for Economic Affairs andEnergy, Germany World Bank Columbia University, United States The Energy andResources Institute (TERI), India World Energy Council

World Energy Outlook

isavailable at

7 12 11 10 14 13 17 16 15 18 1 4 3 2 6 5 7 9 8 © OECD/IEA, 2015 © OECD/IEA, 2015 Table of Contents 1 3 2 Executive Summary Acknowledgements Coal Energy supply in India Outlook forIndia’senergysupply Implications for air quality Power sector End-use sectors India: a rising force in global energy demand Outlook forIndia’senergyconsumption Projecting future developments Factors affecting India’s energy development Key energy trends in India Introducing the special focus on India Energy inIndiatoday Introduction andscope Foreword Transmission anddistribution Electricity supply Electricity demand Agriculture Transport Industry Buildings Overview and outlook by fuel Policies Energy prices Economic andpopulation growth Investment Social and environmental aspects Energy prices and affordability Policy and institutional framework Economy anddemographics Energy production and trade Access to modern energy Electricity Demand Costs Coal quality, resources and reserves

Table ofContents 100 100 102 100 11 19 17 99 55 53 75 25 28 20 95 86 82 80 69 63 57 52 51 48 46 43 40 37 30 20 20 96 81 62 56 50 37 5 3 9 © OECD/IEA, 2015 10 4 Annex C. Annex B. Annex A. ANNEXES Implications of the New Policies Scenario What route to centre stage? Implications ofIndia’senergydevelopment Nuclear power Renewable energy Oil andnatural gas Investing in India’s energy future An Indian Vision Case Investment in energy supply Investment in energy efficiency Energy-related CO Bioenergy Hydropower Wind power Solar power Natural gas Oil supply Resources and reserves Coal imports Transport and handling infrastructure Production prospects References Definitions Tables for scenario projections

2 emissions and climate change

World Energy Outlook |

Special Report 139 179 124 113 141 140 135 160 151 183 147 171 133 132 131 126 119 115 113 111 109 103 164 160 © OECD/IEA, 2015 Executive Summary ever-greater role. displacement by alternative fuels in our projections to 2040 is achieved thanks to rising to thanks achieved is 2040 to projections our in fuels alternative by displacement major cause of indoor air pollution and premature death. Its gradual (albeit not complete) 840 some for fuel cooking that doesnotseealarge increase. Thismainstay ofthe rural energy economyforpower, isthe primary energy solar of by source led major renewables,only of the deploymentis fuelwood, its mainly up biomass, steps Solid India mix). 2040. energy overall by 175 to triples also consumption gas Natural market. second-largest world’s the becomes India which 10 country,approachingother any in than more by increases demand Oil use. coal global in largest growth distance, the of source a makesgeneration powerby industry India, in and trends, with all modern fuels and technologies playing a part. Surging consumption of coal energy-intensive phase in its development, India emerges as a major driving force in global With energy use declining inmany developed countries andChinaentering amuchless country.populous world’s most the India makes that expansion demographic a and 2040 in our main scenario, propelled higher by an economy that is more than five times larger in 2040 is still 40% below the world average. in capitaglobal per demand energy so, in eventotal: the of one-quarter rise around demand, energy projected the to country other any than more contribute to set is India India seizes thecentre oftheworldenergystage an plays India which in system energy global a for also but environment, and security be assessed, considering their implications not only for the country’s development, energy can choices India’spolicy which in frameworkcoherent a provide to but India, for path a or planned this of provisionunderway, aim the energy of system India’s of reforms major With power. wind and the country’s commitment to a growing role for low-carbon sources of energy, led by solar far the most important fuel in the energy mix, but India’s recent climate pledge underlined fall in the oil price, means that all oil-based transport fuels are now subsidy-free). Coal is by advantage the taking of 2014, late in prices diesel deregulation of reform(the pricing and removing obstacles to investment in energy supply while also focusing on energy efficiency to ensure that energy is a spur, rather than a hindrance, to India’s advancement, looking to access to electricity. Policy-makers at national and state levels are intensifying their efforts people is huge – first and foremost for the estimated 240 be achieved, the prize in terms of improved welfare and quality of life for India’s 1.3 can supply energy of expansionwell-managed a If manufacturing. its of expansion an and country’smodernisationthe with ahead press to place in are policies and rapidlygrowing enormous. is growth rapid further primary the world’s of 6% only uses energy.India’s energy potential the and consumption almost 2000 has since doubled population, for world’s the of 18% to home India,

mb/d

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million people in India today; its use in traditional stoves is a is stoves traditional in use its today; India in people India’s economy, already the world’s third-largest, is third-largest,world’s the alreadyeconomy, India’s India’s total energy demand more thandoubles (WEO) Special Report is not to prescribe to not is Report Special (WEO)

million Executive Summary that remain today without

billion 11

­ © OECD/IEA, 2015 years, but the poor financial health of many local distribution companies remains a key remains companies distribution local many of health financial poor the but years, year.per almost5% increasesat – grid the to connections new and incomes rising by boosted – that demand electricity with pace keep and up catch to 2040 by size in quadruple almost to needs system power India’s India’s pathto power 185 than250 more adding sector, the transport In difficult. more is 100 than more of industry,consists brick which the as (such sectors 315 additional an trends: energy of driver key a is India’surbanisation bank accounts, rather thanviaanintervention affecting end-userprices. individual to payments via cylinders LPG of purchase the subsidises cash which transfer programmes, largest the world’s of one include these policies; supportive and incomes 12 industries; the task of raising awareness and financing efficiency improvements in other improvements efficiency financing and awareness raising in the energy-intensive of task the industries; growth demand dampen to helps scheme certificate efficiency An innovative initiative. inIndia” “Make by the encouraged manufacturing domestic of growth in output of steel, cement, bricks and other building materials, and by the expansion final consumption rising above 50% by 2040. Industrial energy use is buoyed by substantial upward curve. steepereven an on demand transportkeeps ownership vehicle of level rising the while India’sforneed newinfrastructure strongunderlies fordemand energy-intensive goods, delivery across different branches andlevels of government. waste and mass transportation), although faces the considerable challenge of coordinated power,(including water,services urban of provision and integrated planning on emphasis welcome a puts 2015, in launched programme, Cities” “Smart The comprehensive. from LEDs, butthe with scope of other bulbs efficiency measures for light buildings and appliances, while expanding, is still far inefficient old, to replace programme cost-effective and a huge include initiatives Successful supply. energy on strain undue putting without is met – cooling for notably – services energy for demand future that ensure and standards tighten efficiency and expandto India for opportunity tremendous a is constructed,there be to yet has andstock building 2040 (45% the of most oil Since respectively). total, and 2040 the of electricity 15% towards and today) total the of (two-thirds biomass solid from away use energy sector’s the demand in driving areas, urban energy from comes in buildings residential increase the projected of Three-quarters materials. construction for demand up pushing and ownership vehicle and appliance in rise the fuels, modern to 2040. by India’s cities in live to expected are – today States United the of population the almost mass transport (aswiththemetro rail systems inDelhiandother cities). providingeffectivededicatedencouragingfreightcorridors)and railfreight(via also while nation’s improve the to challenges are infrastructure policy road efficiency The standards. 2040 explains two-thirds of the rise in India’s oil demand, mitigated only in part by new fuel-

million two- and three-wheelers and 30 million trucks and vans to the vehicle stock by This transition has wide-ranging effects on energy use, accelerating the switch the accelerating use, energy on effects wide-ranging has transition This Energy use in industry is the largest among the end-use sectors, its share in Thepower system hasgrown rapidly inrecent World Energy Outlook |

million

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million people – people million small producers)small asne cars, passenger Special Report © OECD/IEA, 2015 Executive Summary of coal procurement and contracting underpin new mining investment and a more efficient China. and Union European the Japan, importer,overtaking coal the world, but in rising demand produceralso means thatcoal India second-largestbecomes, before the 2020, the India world’smakes largest output coal of expansion large A Domestic production strains to keeppace and transport, Indiafaces the riskofadeterioration inurban air quality. without a continuous focus on emissions control technologies in the power sector, industry in energy-related emissions of particulates, fumes and other local pollutants. Nonetheless, growth the limit quality,to fuel help and emissions vehiclestandardsfor higher to moves announced the including measures, brings Other significantly. technologies efficiency more efficient plant tocoal average up A shift generation. power in increase the of half coal-fired meets but power still generation 60%, from three-quarters than mix falls less to power the in coal of share The grid. resilient more much a and projections) by gas-fired our in filled plants role largely (a sources other from flexibility requires growth power demand of one-fifth meet renewables variable which in system power a Balancing scale. and off-grid 90 around solar for account rooftop projects Decentralised financing. and use land networks, with anticipated issues by slowed is deployment of pace the although costs, declining and support wellmanufacturingas installationand capabilities, are galvanised 2040 by to strong policy 340 Some 2030. by sector power the in capacity fuel non-fossil of share 40% a up build to pledge the on deliver to ambition) high equally potential and high has India where(areaspower wind and solar strongon reliancemeans built be can plants nuclear or dams large new which at pace the overtoday. Uncertainty States United of the of that size the four-fifths system power a of addition the capacity, worldwide. andnuclear, renewables from added capacity coal net the of comes half nearly represent India in plants coal-fired new while 2040 to capacity generation new of 50% Over especially inareas distant from existing transmission lines oroflower population density. projections,our in gaining access those to supply electricity the of providehalf morethan continueIndians of to off-grid and mini-grid receive but power grid, their the via solutions 600 nearly account as well as the high policy priority to achieve universal electricity access, India adds Takingcannot.for who those service of quality poor resultsin growthpopulation and into affordinvest can back-upconsumerscostly to in who it those options,obliges country the of parts many in load-shedding regular meantime, the In projects. new forapprovals and requires pressing ahead with regulatory and tariff reform and a robust system of permitting from state varies to situation state, but stimulating The the necessary infrastructure. grid strengthening network and capacity additions in investment much-needed back held and cover thecosts owed to generators. Thishascreated acycle ofuncertainty for generators levels of non-payment for electricity mean that distribution company revenue often fails to structural weakness: low average end-user tariffs, technical losses in the network, and high

million Keeping pace with the demand for electricity requires nearly 900 nearly requires electricity for demand the with pace Keeping new electricity consumers over the period to 2040. The vast majority vast The 2040. to period the over consumers electricity new

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G W of new of W 13 12 11 10 14 13 17 16 15 18 1 4 3 2 6 5 7 9 8 © OECD/IEA, 2015 Putting manufacturing at the heart of India’s growth model means a large rise in the in energy rise needed to fuel a large India’s development. means model growth India’s of heart the at manufacturing Putting “Make inIndia”needsenergyto workandneedsefficiency toprosper capacity inthe Middle East. of refining expansion envisaged the with particularly market, export product competitive is increasingly directed to meet rising domestic demand. Indian refiners face an ever-more output refinery and steadily rise to projected is capacity India’srefinery East. Middle the crude imports rise to 7.2 sector refinery gives efficient it and a surplus large of oil a products, although mainly transport oil, fuels, forcrude export. of In importerour third-largestprojections, world’s the is particular, to the 90 700 our projected to upside potential leaving base, over emissions global in rise the to contribution significant a 2040, in atonnes this period. Nonetheless, relative to the size of the economy, energy-related CO 5 reach CO energy-relatedIndia’s in rise large a behind factor than today by 2040 (although still only around half the projected level in China) is the main higher two-and-a-half-times is that demand Coal 2020. in reached 40% around of peak a is sufficient to bring dependence on imports back down to current levels around 30%, from infrastructure and bottlenecks, but permitting, and industry,use coal land the of of issues concentrated structure the by constrained is production in Growth India. coastal of parts competitively-priced of an expansion consumers,allocationto coal including of in imports 14 energy security.energy forimplications the to as constantvigilance requiring 2040, by 90% above rises imports oil India’s on demand: reliance in growth the behind well falls gas and oil of Production average in2040. by 2030, and, expressed on a per capita basis, emissions remain some 20% below the world fall in line with India’s pledge to reduce its emissions intensity by 33-35% below 2005 levels unwavering pushfor low-carbon energy and high standards ofpollution control. commitmentto energy efficiency a central as India’s of pillar energy strategy, alongside an exacerbatesdemand environmentaland energysecurity strains requireseven-stronger an extra this that avoid To rise. also sector agricultural productive and mechanised more for a and consumption residential freight, road for use Energy equipment. industrial machinery and processing, food textiles, as such campaign India” in “Make the by targeted are that industries other from also but sectors,energy-intensive from only not industry, from primarily come system energy the on demands additional The society. urban an to transition its and development social manufacturingand economic India’s the to impetus in extra give sector opportunities employment new and power of provision reliable Fully supply. electricity round-the-clock universal, for drive All” for Power “24x7 the and manufacturing promote to campaign India” in “Make the of key including targets, policy Indian realisation accelerated of implications the examine we Case, Vision Indian an In more energy per unitofvalue added compared withgrowth sector. led by theservices

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12 11 10 14 13 17 16 15 18 1 4 3 2 6 5 7 9 8 © OECD/IEA, 2015 © OECD/IEA, 2015 Introduction andscope     The report isstructured asfollows: trajectories. price energy the as well as report, this underpins that effort modelling global the for used www.worldenergyoutlook.org/weo2015/ Chapter 1, Introduction and scope, of the the underpin that assumptions overall modelling same and the report policy utilises special This own energy its for only security andtheenvironment, butalsofor thegreater not global energy system. implications with development, its to linked challenges and opportunities the do too so country grows, energy the affairs. global As in centralposition a outlook. This year the spotlight falls on India, as it is increasingly evident that it will command energy global the to significance particular of region or country a of prospects the depth in (IEA) Agency’s Energy International the year Every World Energy Outlook 2015 (WEO-2015) improve energy efficiency. other measures necessary, to help secure the investment to ensure energy supply and analyses the level of investment required, in addition to the regulatory framework and campaign it India” Furthermore, full. in in achieved supply,are electricity “Makeround-the-clock universal and the as such targets, key if evolve would system energy country’s the how examines which Case, Vision Indian an of basis energy the on then, prospective and the of implications Scenario Policies New the of projections wider the of basis the on the First, India. in transition of some out draws 4 Chapter resources andtheoutlookfor international trade. requiredbe futurewhatwill energyexploitationtoenable demand, in domestic its of renewables andnuclear. Itassessesthescale ofthese resources against the increase fuels, fossil of spectrum the covering resources, energyIndia’s on focuses 3 Chapter of sustained lower oilpricesonIndia’s energy system andeconomy. that energy use will have on local air pollution. It also examines the impact of a period an in-depth look at the end-use sectors and the power sector and assesses the impact including 2040, to India in demand energy for outlook detailed a provides 2 Chapter CO prices and affordability, land use, energy and environmental including factors such as decisions, local air pollution, investment and development energy India’s shape that production trends. highlights also It important the economic, social and policy factors energy its and resourcesIndia’s energy of and scale the energy-consumingsectors, other sector power the including architecture, energy existing the details It growth. energydemand accompany and that economic challenges its rapid and opportunities Chapter 1 sets the scene by analysing India’s energy sector as it is today, outlining the the projections that follow. 2 emissions and water availability. In addition, it explains the analytical approach for . This includes all of the overarching assumptions overarching the of all includes This . WEO-2015 as well as for reference on the website: . A detailed. description these of be can in found WorldEnergy (WEO) Outlook Introduction andscope examines 17 © OECD/IEA, 2015 © OECD/IEA, 2015 Chapter 1 • • • • • quality inmany ofIndia’s majorcities. air worsening the as well affordability, as and tariffs end-user use, water and land of sensitivity the by influenced much are decisions investment and strategy.Policy aunified implementing and formulating of task energy, the complicating of aspects other stateoversee several different bodies consumption; and ministries national in growth constrain can that pricing energy and efficiency on policies complementary strenuous efforts to remove making obstacles to investment in are energy supply, policy-makers while moving ahead with Indian governments. state-level the and between central for energy powers distributes system constitutional federal India’s key element ofthegovernment’s expansion plans. hydropower),steepa is which increase fromtoday’s level 37 of 175 reach to target a with area, this in high however, aiming is, India energy. renewable for potential has 45 23 and hydropower of India networks. distribution and transmission the in losses large and forthe outlook sector is clouded by the precarious the financial situation of local distribution but companies years, recent over surged has capacity generation Power also amajorexporter ofoilproducts, thanks to alarge refining sector. is in but 2014, world’sin the wasrecentyears. oil India third-largestcrude grown of importer has imports coal on dependence gas, and oil of case the in as although, resource, fossil-fuel domestic plentiful accounting most sector, the is power and generation of Indian 70% over for the of backbone the remains Coal cooking. for biomass solid of use traditional the fromaway move gradually households as rising Three-quartersenergy ofIndian metis demand by fossilfuels, ashare thatbeen has to expect continued rapid growth inenergy demand. reasons underlying strong are there reform, subsidy and efficiency energy on focus growing a with even circumstances, these In electricity. to access no have people 240 some and average global the of one-third around only still is capita per consumption energy but poverty; extreme of out millions lifted have interventions Energy use has almost doubled since 2000, and economic growth and targeted policy given thepolicypriorityto develop India’s manufacturing base. challenges as India’s modernisation and its economic growth gather pace, particularly international affairs. energy The sector is is but set quickly expanding to further face 1.3 its to opportunities new bringing transformation, major a of stages early the in is India

|

Energy in Indiatoday

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G W 19 © OECD/IEA, 2015 .Ti aayi hs eeie gety rm icsin wt Ida ofcas idsr rpeettvs n experts, and representatives industry officials, Indian with notably during a high-level discussions from greatly benefited has analysis 1. This ( continent African the for averagethe average,than lowerworld slightly the of one-thirdaround only remains and 2000 since 46% modest more a by grown has India in demand energy basis, per-capita a on Expressed growth. further shareof for potential the current of indicator strong a 18% population, global near below India’s well still is proportion this impressive, While century. the of beginning the at 4.4% from 2013 in 5.7% to up demand global in share demand energy country’s global the pushing doubled, in almost has period this increase in demand energy the Its 2000. since of 10% almost for responsible been has India Demand Key energy trends in India environment, aswell asfor theglobalenergy system. out the possible implications of these choices for India’s development, energy security and coherent framework to contribute to the policy choices that India itself will make, drawing a rather,provide is, to intention our India; for path a prescribe to here made is effort No bring. provision energy will of well-managed a expansion that benefits huge the realiseto pressures and show how policies can affect the evolution of the Indian energy sector so as consumption. The analysis and findings in this special focus on India disclose these multiple making complementarywith efficiencyon policies energy and that pricing can are constrain growth in policy-makers Indian challenge, this strenuous efforts to remove obstacles Recognisingtoinvestment in energy supply, while moving ahead energy. for demand in expansion rapid continued of trend a unmistakeably point to industrialisation, envisioned and the of nature economic the and urbanisation as Further such trends structural to years. allied growth, population recent in tremendously grown has sector energy India’s average. international the below well is capita per (GDP) product domestic gross and world’spoor the of third a to home still is India rise, the on are living of standardscorresponding and incomes although challenges: remaining the of size the is so but huge, are opportunities The growth. further unleash to introduced been have policies new and speed gathering been has modernisation India’s economy, third-largest its and population world’s the of one-sixth over to home is that democracy vibrant A interaction. global of areas many in India is in the midst of a profound transformation that is moving the country to centre stage Introducing thespecialfocus onIndia 20 more recent data have been incorporated wherever possible. study is 2013, as it is the last year for which comprehensive historical data were available at the time of writing, though thisfor year base The elsewhere. used those fromdiffermayslightly data the that mean methodology IEAand definitions for instances some in adjustments framework”), institutional and “Policy on section (see 1.3 Box in explained As 2. The data used in this special focus are from IEA databases, which rely on a range of Indian official and other sources. (NITI Aayog) and held in New Delhi in April 2015. WEO workshop, organised in partnership with the National Institution for Transforming India Figure

1.1). One reason is that a significant part of the Indian the of part significant a that is reason One 2 World Energy Outlook | 1 Special Report

© OECD/IEA, 2015 global average. Even so, much energy is lost or used inefficiently, notably in the power the in notably inefficiently, used or lost is energy much so, Even average. global the than lower slightly is India in basis) (PPP GDP of generateunit requiredtoenergy a of the basis of purchasing power parity [PPP]) in 2013 than was required in 1990. The amount energy at end-use directed efforts efficiency. As a result, it took 12% less energy to policy create a unit of Indian GDP (calculated on increased and economy Indian the in sector Chapter 1 3. Bioenergy includes solid biomass, biofuels and biogas. bioenergy period same the over growth Energy demand has almost doubled since 2000, but this is slower than the rate of economic compact fluorescent light bulbs for lessthan five hours per day. per year, is consistent with an average household use of a fan, a mobile telephone and two 50 around at Bihar, in consumption residential Average with access) remains far below the world average and is ten-times lower than OECD levels. OECD average – and other states ( with non- the than consumption higher areawith India of part only the – highestDelhi levels,the in the between range broad a show electricity) to access per with consumption those (for electricity capita residential for figures example, For states. individual with energy responsibilities for importantmanyleaves federal thatstructure size and a of because also of its and both because endowments, resource and levels incomein India, demographics, of terms heterogeneity,in important particularly is it but countries, all of true is This dynamics. energy country’s the understand fully to figures national beyond looking necessitate India within states and regions between differences widespread The Note: toe = tonnes of oil equivalent. Figure to electricity. reach ofthepower system inrecent years, around people Indialackaccess 240million in population remains without modern and reliable energy: despite a rapid extension of the Eu Southeast Asia W ropea Unite orld d av n

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Energy in Indiatoday ⊳

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10 11 11 13 13 14 13 17 16 18 2 1 3 7 6 5 4 9 8 © OECD/IEA, 2015 very uneven, especially in India’s large peri-urban large India’s in especially uneven, very remains service of quality the but higher, much are rates electrification areas, urban In challenge. economic and technical greater a is access extending where areas rural in live – people million 220 some – majority large the access, without total the Of 90%. above well already are rates electrification states, southern of majority the including India, of swathes In large Bihar. and Pradesh Uttar states, north-eastern and northern populous two states: two-thirdsin of are almost concentrated number relativelyis small a access in India’s rural electrification programme, the Rajiv Gandhi Grameen Vidyutikaran Grameen of villages Gandhi to electricity provide to Rajiv aimed and 2005 the in launched was programme, (RGGVY), Yojana electrification rural India’s 8.8 million households(National Sample Survey Office, 2014b). consolidated urban and rural regions (UNICEF, 2012). p of definition the 9. While further. different across examined be discrepancies to needs and of design questionnaire in differences issue to due be the may it recognisesthat stating sources, data national Plan Five-Year 12th The time). that (at electricity without 2014. However, this is a lower figure than that implied by the Census of India 2011, which gave 68 a figure the of 400 from derived is rate electrification India’sfor estimate 8. This ants or more and free electricity to people below the poverty line. The effective ( of access definition the over questions as well as states, between outcomes in strong variations are there and challenges several has faced RGGVY of implementation 100 20%of (Table 1.1). or electricity to access without remain population, the people, 240million around Nonetheless, rates. electrification rural doubled and electricity to access without people of number the halved than more has India 2000, Sinceyears. recent in energy modern to access improving in strides great made has India Access to modernenergy up because thedeveloper was to unable secure landandrights-of-way. thenecessary 2011, the In over clearances. Central Electricity Authority (CEA) estimated notably that over 120 transmission projects obstacles, were held numerous face projects of generation; that behind lagged generally has network the of expansion projects, transmission in the main to close not located privateinvestment,encourageinvestment, including tosteps Despite demand. of centres often are generation power for capacity and resources that given critical, remains and been has links inter-regional and inter-state in progress of a national grid (the five regional grids were interconnected by end-2013) and continued creationcapacity. transmissionThe available of lack a to due capacity below run also has ambient generation cases, some In levels. efficiency lower high in role a play also relatively temperaturesIndia in the and content) ash (high quality coal Poor States. United the or ofChina that below 35%, under is just fleet India’s coal-fired of efficiency average the generation technology,subcritical a and use plants India’s to generate coal of 85% Over power). of unit is required fuel more that that prevail (meaning fleet generation technologies existing India’s of low efficiency much across the by helped not is situation The 28

inhabit eri-urban varies by country, United Nations Children’s Fund defines it as an area between area an as it defines Children’sFund Nationscountry, Unitedby varies eri-urban World Energy Outlook | 9 slum areas that are home to around to home are that areas slum National Sample Survey published in June in published Survey Sample National th 8 The population without population The Special Report Box

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1.2).

© OECD/IEA, 2015 Chapter 1 prices). energy on below section (see fuel cooking alternative an as LPG of availability subsidised the through primarily issues, these address to effort major a made has government The loss. biodiversity and deforestation of result a as degradation environmental as well as death, premature of cause major a are that pollutants air indoor harmful of release the is a host of issues associated with the traditional use of solid biomass for cooking, including – more than the populations of the United States and the European Union combined. There world the relying on the in traditional use of solid population biomass for cooking: largest an estimated 840 million the people has also India electricity, without those from Aside Source: National Sample Survey Office, (2014); Central Electricity Authority, (2014a); IEA analysis. Table acquisition andrights-of-way for transmission linesand roads). land (e.g. projects necessary the for authorisation securing in problems of variety a and solutions adapted to the specific circumstances of the remote settlements without access, local find to need the is electrification with progress up held have that issues the Among metering. and infrastructure, distribution and transmission local strengthening shedding, distribution networks between agricultural and non-agricultural consumers to reduce load of separation the are scheme this of components main The (DDUGJY). Jyoti Yojana Gram In July2015,RGGVY was subsumed withinanew scheme, theDeen Dayal Upadhyaya Jharkhand Odisha Rajasthan Assam West Bengal Bihar Uttar Pradesh Madhya Pradesh Maharashtra Gujarat Chattisgarh Karnataka Other states Total

1.1

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Energy in Indiatoday

state inIndia,2013 Number andshareofpeoplewithoutaccesstoelectricityby Population withoutaccess(million) Rural 221 10 10 11 17 62 80 8 7 6 2 2 1 3 Urban 16 0 0 0 2 2 5 0 1 1 2 0 0 2 Total 237 11 11 12 19 64 85 9 8 6 3 3 1 6 Share ofpopulation withoutaccess Rural 26% 32% 22% 45% 30% 69% 54% 35% 16% 11% 14% 7% 5% 2% Urban 19% 10% 4% 4% 2% 9% 7% 4% 3% 2% 6% 6% 1% 2% Total 19% 27% 17% 40% 22% 64% 44% 27% 12% 12% 7% 6% 3% 2% 29 10 11 11 13 13 14 13 17 16 18 2 1 3 7 6 5 4 9 8 © OECD/IEA, 2015 with economic development and income levels, reflecting the use of additional energy services. line in time, over increase should consumption electricity of level initial The reliable. affordableand be must supplied electricity of level minimum a includes and level household consumption, ranging the from 250 kWh in rural areas to 500 kWh in urban settings per household atper year. The electricityis electricity to access of definition IEA 10. The gas (GHG)emissions. contributes to pressing air quality problems in many areas, as well as to global greenhouse structural dependence ( on imported supply. economies In addition, combustion emerging of coal and major oil products the among lowest the far by is basis, a per-capita on considered fuels, fossil of production domestic India’s This drawbacks. major two with potentiallycomes fuels growing on and – fossil reliance – biomass. high of use traditional the from away move households as time over increase to tend will share this fuels, alternative of favour in push policy strong very a of absence the in and, demand energy primary India’s of three-quarters around supply fuels Fossil Energy productionandtrade Box 30 countries depend critically on how “access” itself is defined. These definitions can data. of sources These various definitions between disparities widely, in varyresulting is defined. itself “access” how on critically depend countries different in electricity to access without or with people of number the of Estimates reasons for ofunaffordability orunreliability (Jain et al., 2015). adopt electricity without any to not (those hadchosen this respondents category of the of two-thirds connection), the remainder among that, and connection, electricity an had actually access of levellowest the categorisedin households the of half that found states Indian six across conducted survey recent A course. of matter a as occurs shedding load and inadequateinfrastructure is the as just, only some but target,this statesMostmeet households. to supplied be should day per electricity of 6-8 of minimum DDUGJY,a to According access. underpin to required service Survey Office, 2014a). In the state of Madhya Pradesh, for example, per-capita villageelectrification for example, findingsrate. important Such the the quality of raise of question Pradesh, of Madhya 100% a almost despite trend, declining slightly a on the been has consumption state electricity In 2014a). Office, Survey Sample (National consumption power actual in rise expected the producing not were electrification of rates reported higher that showed Survey Sample National recent A 96%, while the household electrification rate is only 36%. at stands electrification village Bihar, of state the lower.In much is level household at rate connection the though even electrification, village of levels high reportstates Several electrification. household and electrification village between be large discrepancies can there However, connection. electrical an have households the of 10% least at if or electricity have buildings public if provided, been has lines) distribution and (transformer infrastructure basic if electrified deemed is village a programme,

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hour s © OECD/IEA, 2015 Chapter 1 to leading output, electrical of unit per burned be must coal more that means value heat low The content. ash high and values calorific medium to low has coal hard the of Most country’s rail network. There are also challenges related to the quality of the coal reserves. the electricity,straining to converted is it before (km) kilometres 500 than moreaverage the high-demand centres of the northwest, west and south. A tonne of coal must travel on concentratedareand centralwhich easternIndia, and mines, in and reservescoal hard of Among the other problems facing the Indian coal sector is a mismatch between the location waterand acid runoff. erosion deforestation, degradation, land of form the in footprint environmental adverse has relatively low production costs and is less dangerous than deep mining, but has a large, method This mining. cast open by produced is India in coal of 90% than morepresent, At market.coal the open tomoves some freely,marketcoalnow and arethere mine though to allowed present at not are companies private use; own their for mine that companies coal-consuming large i.e. mining, captive from comes production national of 7% Around large workforce.very a from productivity low very over-relianceand an surfacemining on has an unwieldy CIL output. of India’s structure and is characterised by 80% poor availability of for modern equipment and accounting infrastructure, largest, the is (CIL) Limited India Coal which of companies, state-owned big by dominated is India in sector coal The double thecountry’s coal production by 2020. more than 2015 to early in government the plans imports, announced on limiting reliance toview a With Africa). South fromAustralia,from 13% 21% Indonesia,from (61% imports of coal equivalent (Mtce), but it also imported some 140 tonnes million 340 almost produced India 2013, In needs. burgeoningdomestic with pace keeps that way a in resources coal its of development the to obstacles major faces India and quality low of generally are deposits the lignite. Yet of deposits significant as well as India has the third-largest hard coal reserves in the world (roughly 12% of the world total), Coal Figure toe per capita 10 2 4 6 8

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10 11 11 13 13 14 13 17 16 18 2 1 3 7 6 5 4 9 8 © OECD/IEA, 2015 By contrast, the refining sector continues to strengthen. India has almost doubled its almost has India to strengthen. continues sector refining the contrast, By licensing rounds heldundertheNew Exploration Licensing Policy introduced in1999. ventures with the national oil and gas companies and from blocks awarded under successive joint from comes production remaining the of Most regime. nomination pre-liberalisation a under (OIL) Limited India Oil and (ONGC) Limited Corporation Gas Natural and Oil the by is still dominated by a few state-owned companies: about two-thirds of crude oil is produced arrangements), and a resource base that is still not well-explored and appraised. Thepricing upstreamand termscontract over uncertainty environment(including regulatorycomplex the Rajasthan in notably country, the of part non-state western investors, the sector has underperformed. the Key impediments to investment include in located reserves. total are barrels) of inthe quarter basin a India’s of opening upstream sector the to including production, efforts bolster oil Despite to nearly contains TheAssam-Arakan and basin oil-producing and an Maharashtra. also is (around northeast Gujarat near proven reserves areas the offshore of in most and and resources oil 5.7 modest relatively has India half ofdomestic consumption). oil products, at around 3.8 of consumption current India’s meet to enough than more is turn, sector, in refinery the 4.4 of needs the satisfy to enough from far is ( products refined of exporters net significant being also while oil crude of imports on rely fewthe Unitedof Statesthe one world countries(alongside is the India in Korea) and that Oil andoilproducts companies may beinvited to participate infuture rounds. private that possibility a is there and blocks some re-allocate to held been already have bidding of rounds Twosuccessful judgement. the with comply to order in sector coal the reform to government the for opportunity unexpected an opened also has this although the grounds that these awards had not been made on a transparent and competitive basis, Supreme Court of a result as a decision in 2014 to annul the award of almost all of the coal blocks allocated arisen since 2003 on have supply future concerning questions Other facilities to remove the ash and coal-washing technological limitations insufficient (notably destinations), for underground end-use mining). and centres dispatch mines, connect to and acquisition land permits, environmental rehabilitation and obtaining resettlement issues, in infrastructure constraints delays (limited transport including capacity factors, of anumber to related been has years in recent production coal expanding in difficulty The plant, asthe properties ofblends can widely.vary power the of performance the impact adversely can which types, coal different blend to most In addition, power plants. power plants are designed for of coal-fired a specific coal quality; if not available, operators factor may choose load and efficiency the lowers and higher local emissions. The ash content increases the cost of transporting coal, is corrosive 32 2 than more added has and years ten last the in capacity refining Domestic crude oil production of just over 900 Figure

billion

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mb/d World Energy Outlook | of refinery capacity. The output from output capacity.refinery The of

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© OECD/IEA, 2015 Chapter 1 public Essar, the and while refiners Reliance sectorprivate the from mainly come exports Its countries. Eastern Middle and Asia-Pacific to fuel transport of supplier regular a and Europe to diesel of supplier important an been has India LPG. except products refined all With refinery output exceeding total demand by roughly 1 storage combined a capacity ofabout37millionbarrels, orroughly ten days worth have ofcrude imports. will India 2015, late in expected reserve petroleum strategic the for facilities storage additional of completion expected the With crude. of stockpiles up emergency to build cost-effective a opportunity offered also has oil crude of price the fallThe instrategic2022. by 10% as much toas reducebyimported relianceaim crude on a 2015 March in announced government The Nigeria. and LibyaIran, as such suppliers its of several plagued have disruptions as supply,especially of sources its diversify to sought has India Africa. and America Latin imports), of source largest (the East Middle the from tankers oil accommodate to India of side western the on located are oil crude imported feedstock to meet 80% of its refinery needs for crude oil). The majority of ports that handle United States3.7 about with China, and the behind country, importing oil crude third-largest the become has India that means output, oil crude domestic stagnant with along expansion, capacity refining The Note: Demand for crude oil shows refinery intake. Figure average annualrate, hasbeen slower thanthecapacity boom. refined products, as the growth in oil product demand growth, even at an impressive 4.2% of asurplus India given additions have India’s capacity These production). crude domestic world, Reliance’s Jamnagar complex, with over 1.2 the in largest refinery the include India’s assets refinery Russia). and China States,United the only capacity,refining total behind of terms in world the in fourth now is (India Essar and Reliance as such companies from participation sectorprivate strong with 2005, since Mtoe

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33

10 11 11 13 13 14 13 17 16 18 2 1 3 7 6 5 4 9 8 © OECD/IEA, 2015 from less complex refineries of efficiently inEurope andJapan. capable share market gain to are able were products, quality which high into oil Eastern refineries, Middle processing owned privately modern, more India’s as contributedto refinery capacity rationalisation in both Asia-Pacific and European markets, to gain domestic market share. removaldomesticon subsidiestransport of expectedsituationis the fuels toprivatechange, and refiners are expected the With markets.international on focus to latter the leading excluded, were refiners sector private which from but 11. This two-tier structure is the result of a subsidy system that compensated state refiners for losses on domestic sales variable enable also It can uses. domestic and irrigation control, flood for management bring multiple benefits as a flexible source of clean electricity, and also as a means of water can prudently, hydropower developed If opposition. public and problems environmental or technical delayed by been have plants these of some although construction, under are 14 further A northeast. and north the in potential is remaining the of resource.Much capacity (of which over 90% is large hydro) represents a little under a third of the assessed of hydropower: use current significant its scope 45 its to has expand India Hydropower prices andChapter energy on section (see producers domestic to available price the is issue key a hurdles: significant of number a face to continues India in development gas upstreamHowever, blocks. existing their in resources shale for drill to – OIL and ONGC – companies national two the allows that policy exploration an 2013 in approvedgovernment the gas, shale of anumberof with momentum, to gain private companies, including Reliance and Essar, stepping up their isstarting involvement. In the case activity CBM although off, way some still is scale at production Commercial gas. shale and (CBM) methane coalbed from both potential, unconventional large has also India resources, gas conventional to addition In thelargest is GAIL, player inthemidstream anddownstream gas market. company, gas state-owned majority The regasification terminals. four via imports LNG by since 2011. Production of conventional gasoutput reached 34 gas Indian in decrease overall an to contributed has This complexity.subsurface reported of because decline expected than faster its by then and 2009, in field offshore years has been strongly affected first by recent the start in of record production production at the much-awaited The KG-D6 coast. east the off basin Godavari Krishna the including offshore, are areas promising most the of Some south. the in Pradesh Andhra and Nadu and west Gujarat the northeast, in the in states the Assam in are Tamil of producingfields onshore main been The fields. has domestic offshore from 2000s, output expected early than lower by the dashed in discoveries large some by fuelled expansion, of pace the about Optimism mix. energy domestic the of (6%) share relatively small a has gasNatural Natural gas market. domestic the supply refiners sector 34

3). 11 Growing product exports from India have India from exports product Growing World Energy Outlook |

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G W © OECD/IEA, 2015 Chapter 1 Model bythe used (WEM) Energy World the while MW 25 to up as hydro small defines Energy Renewable and New toa of Ministry 12. The increase a progressive that anticipates to 2009, back dating mandate, blending ambitious an by supported India, in development bioenergy of area another are Biofuels farmers, aswell aspower andprocess heat for consumers. to income of source additional valuable a provide can it where areas, rural in especially picture energy the of part larger much a become bioenergy to modern potential for the – atpresent, recognisedhas policy Indian Nationala of launch the Bioenergywith – Mission small businesses. Although modern bioenergy constitutes only a small share of energy use biomass to produce syngas, including small-scale thermal gasifiers that often support rural residues. The remainder produce electricity via a range of gasification technologies that agricultural use other on based cogeneration is share smaller a and processing) sugarcane of by-product (a bagasse on based is share largest the 2014, in biomass by fuelled capacity 7 around was sector.There agricultural large its from residues on mainly relying applications, bioenergy modern more of range a deploying also is India pollution. air indoor of effects health adverse the notably problems, of number a to rise share of which is the traditional use of biomass for cooking in households. This reliance gives Bioenergyaccounts forIndia’s quarterroughlyof a energyconsumption, largest by the far Bioenergy developed. been had MW) 10 than hydro(less 25 to (up projects by undertaking small-scale projects: India has an estimated potential 20 and concern over the impact on other water users. Some of these concerns can be reduced procedures, as well as significant public opposition arising largely from resettlement issuesapproval and clearance environmental long very faced have projects hydropower Some assessing the effect of multiple and projects acceptance, (often and involvement public in different adequate ensuring states) risks), seismic potential onindividualand river systems. availability water long-term (including impacts environmental monitoring and evaluating of challenge the notably hurdle, another is remote areas, supervision and planning project efficient and is in the potential of a major impediment necessitating new long-distance transmission been lines Much to bring power to consumers. Adequate potential. hydropower have India’s realising financing to with difficulties consequent and markets) capitalIndia’s in limited quite is (which debt long-term for need the costs, upfront High private investors haslikewise proved difficult to realise. in bringing of objective the while programmes, government successive in set targets the totalof and additions generationCapacity output. electricity have routinely short fallen of has its development However, lagged well behind thermal generation capacity, grid. leading to a consistent decline in its share the to contribution greater a make to renewables definition. to meet power requirements inremote areas.

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meg awatt [MW] capacity) (MNRE, 2015). As of 2014, 2.8 2014, of As 2015). (MNRE, capacity) [MW] awatt defines hydrosmall MW.10 than less as GWrefers2.8 The tothen WEM the 12 Such projects are particularly well-suited particularly are projects Such

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© OECD/IEA, 2015 Chapter 1 also but consumption, in rise a it,for pay ratherthan fuelwood collect typically society byof segments poorer the because driven 20%), wealthiest the but all (for increases income as increases bioenergy on spending Here, areas. rural in different is pattern The electricity andtransport fuels. for is expenditure energy of 85% which in but group wealthiest group, the income among 1% poorest roughly only the among expenditure energy of 60% almost for account bioenergy on spending and kerosene Bioenergy groups. income the up kerosenedrastically higher decreasesand areas, urban In electricity. and LPG towards and kerosene and in energy bioenergy in fuels, from away a switch and affluent more become anincrease people as consumption both reflects groups income the across pattern expenditure The Source: Ministry of Statistics and Programme Implementation (2012). D10 being the most affluent 10% withand D1 the poorest.population, urban and rural the of slices) 10% (i.e. decile by are ranges income The rupees. Indian = INR Notes: 300 Figur (Figure much as four-and-a-half-times spend they areas rural in whereas poorest, the as energy on asmuch eight-times than more spend population urban the among affluent most the and areas, rural in than is, centres urban on energy in higher two-and-a-half-times almostaverage, on expenditure household of consumption location: by affected the level also But are choice fuel on energy. the and income their of proportion greater a spend poorestenergyexpenditure,the household segments although all for of quarteraround a is energy expect, energy expenditure would As one and consumption increases system. with income, with the wealthiest energy 10% of the population accounting India’s prices of evolution energy the to levels, fundamental income between relationship The Expenditure Energy prices andaffordability INR

p er e

200 1.13). capita p

1.13 Rural

|

Energy in Indiatoday

100

er month ⊳

India Per-capita energyexpenditurebylocationandincomein

D10 D1 D2 D3 D4 D5 D6 D7 D8 D9

100

200

Urban 300 INR

p er capita per month 400

500

600

K Diesel Pet LPG B El erosene ioenergy ect rol

ricity

43

10 11 11 13 13 14 13 17 16 18 2 1 3 7 6 5 4 9 8 © OECD/IEA, 2015 ( as consumer gasoline shift towards preferences flattening consumption diesel in resulting subsidies, diesel of removal the with lessened recently have differentials Price 2010. in deregulated were prices gasoline when widened gap price this and gasoline of that 70% average, on was, diesel of price the 2002-2010, In consumption. product oil total of 40% around for accounting India, in product petroleum consumed widely most the is Diesel Source: Petroleum Planning and Analysis Cell (2015). Notes: Mt = million tonnes; INR = Indian rupees. Year denotes fiscal year, starting in April and ending in March. Figure Chapter in 2.2 Box (see 2014 since price oil the in fall the also of beneficiaries has main the India of one been oil, of importer and consumer major fuelstothe a As and cooking society. of segments lighting poorest inproviding play fuels that these role slower, much the been reflecting has pricing LPG and kerosene of Reform supply. of cost the below reflect market realities. End-use electricity tariffs for most consumers better nonetheless remain prices gas natural and electricity that ensure to efforts made have governments successive and deregulated, been both have prices (2014) diesel and 2010) (in gasoline India has made significant moves towards market-based pricing for energy in recent years: Energy prices of rural communities. segments poorest the among particularly access, of lack a byconstrainedRural is expenditure areas). urban in 40% almost with (compared expenditure energy of 20% around for accounts electricity on spending rural levels, income Acrossway. limited more a in albeit centres, urban in observed is that switch the resembling groups, income lower of that from different significantly is areas rural in decile affluent most the of expenditure of pattern The wealth. of levels increasing with decreases gradually that inclination an 44 Figure Mt 20 40 60 80

2002

1.14).

2). 1 .14

2005

uig h pro i wih rnpr fes ee usdsd te benefits the subsidised, were fuels transport which in period the During ⊳

Diesel andgasolinepricesdemand,2002-2014 Diesel 2008

2011

Demand 2014 40 60 80 20

INR per litre P

rice Mt 10 15 20 5 World Energy Outlook |

2002 (right axis)

2005

line Gaso 2008

2011

Special Report 2014 20 40 60 80

INR per litre © OECD/IEA, 2015 Chapter 1 one-fifth offinal electricity consumption butonly8% of revenue for theutilities. than more for accounts sector,which agricultural the in evident water, use ofboth is and electricity to inefficient lead tariffs low where relationship, inverse The technologies. efficient more for opt or consumption their reduce fuels, switch to consumers spurring gasoline reflect the conventional wisdom that higher prices can act as a brake on demand, The consumption changes spurred by the recent increase in diesel prices relative to those of (TERI, 2015). supply of cost the of 80% than less were consumers averagetariffs Westfor Bengal), and Maharashtra (Gujarat, states three of exception the with 2010-11, of As case. is the this rarely but supply, of cost average the of range 20% a within tariffs set to supposed are (Figure 3). Chapter (see blocks offshore in particularly India, in production and in explorationnew investment forward tobring incentive sufficient offer not do they that argue companies many gas-producing but sectors, gas-consuming domestic to acceptable the of subsequent because fall down in thermal the come reference since British prices. has The million new this arrangements although per have $5.6/MBtu, kept $4.2 around the price to earlier in (MBtu) a range the units from increase price a in resulted this gas; produced domestically most to applicable and prices international of basket a to linked formula, pricing new a introduced government the 2014 October in debate, long a After fertiliser plants, grid-connected power plants) which are entitled to gas at this lower price. defined by the government, as are the priority uses (city gas for households and transport, The Indian gas market consists of two segments: for domestically produced gas, the price is had voluntarily given upthesubsidy. wealthiest the encourage to campaign up” consumers to abandon it their LPG subsidy. As of “GiveSeptember 2015, over three million Indians a launched also government The prices. market at cylinders gas purchased have they after consumers, eligible to directly spread banking to payment monetary a make to authorities the allow increasingly efforts will all, to with recent access service coupled system, “Aadhaar” the efficient: receiveddeciles two top the while averagesubsidies, frommoreon month per capita them make to committed is government the LPG, of case the in as remain, consumption INR around (INR) rupees 20 Indian of tune the benefited to deciles income two bottom the prices, diesel of deregulation the to prior society: of strata wealthiest the to disproportionately accrued part of the gap and the rest being absorbed as losses by state-owned utilities distribution by losses a as absorbed being rest the and gap the covering donot of part subsidies India with government in supply, ofelectricity tariffs cost electricity the reflect end-use adequately average section, electricity the in noted As as well as a subsidy scheme to increase consumption of imported LNG in the power sector. users domestic to accessible more make it produced domestically to gas with LNG pool to proposals been have there higher; significantly be can that prices contractedat available

per

1.15).

|

120 Energy in Indiatoday According to national policy guidelines, the state electricity regulatory bodies

pe cpt pr ot (nn, 03. hr sbiis o i product oil to subsidies Where 2013). (Anand, month per capita r

Imported LNG is LNG Imported 45 10 11 11 13 13 14 13 17 16 18 2 1 3 7 6 5 4 9 8 © OECD/IEA, 2015 18. PM Sources: World Health Organization; IEA analysis. Figure pollutants, more releasing past, fineparticulateincluding the matter (PM in time other any at has it than biomass and fuels fossil more burning is India growth. subsequent the of by-products polluting the as well resources, as other and land, water competitionincrease for mineralsthat and forenergy demand growing meet to need the fromoriginate can environment.These wider the and communities on pressures of number a create urbanisation and growth economic Rapid Local airpollution Social andenvironmental aspects Sources: Power Finance Corporation; IEA analysis. Figur 46 damaging damaging to health as they can penetrate deep into the lungs when inhaled. 3 Dollars per kWh

μg/m 0.02 0.04 0.06 0.08 0.10 0.12 100 120 140 160 20 40 60 80 2.5

e

ees o atclt mte ls ta 25 irmte i daee; hs fn prils r particularly are particles fine these diameter; in micrometres 2.5 than less matter particulate to refers

1.15 1 .16 Delhi 2010/11

⊳ ⊳

$0.015 cities inIndia Average annualparticulatematterconcentrationinselected 2010-2013 Average costofelectricityandaveragerevenueinIndia,

Bangalore 2011/12

Mumbai $0.020

2.5

)

18 andsulphurnitrogen oxides, into the air. Hyde 2012/13 rabad World Energy Outlook |

$0.016

Che nnai

Av Reve Reve Av er age er age cost of s nue (without nue (with ( WHO guide Na ( 10 40 ti μ μ losses onal guideline guideline onal g/m g/m Special Report 3 3 a a p subsidy) ne line ual mean) mean) nnual mean) nnual er kWh upply subsidy)

© OECD/IEA, 2015 Chapter 1 Subsidised electricity tariffs for agricultural users and a lack of often metering have led to hugely livestock, and reserves.groundwater from agriculture drawing and grid in the from powered wells use tube by extracted for is withdrawal water India’s of 90% Around add to their cooling requirements. Globalclimate change could exacerbate these stresses. plants power its of bulk the in used coal quality poor the temperaturesand India’swarm and 2014) (WRI, waterscarce wateror stressed are that areas locatedin example,arefor India’s plants, of power 70% than more sector: energy the implications for major has This (1 stress” “water for threshold defined the passed now has 1 some of resources water renewable With resources. India’s water on strain severe putting sector,are agricultural the in use water of patterns inefficient highly with along growth, economic and population of rates High Water sectors went beyond thestatutory time limits(Chaturvedi et.al, 2014). power nuclear and power,mining hydropower,thermal coal in projects of 40-60% some for process clearance the that showed applications projection of analysis detailed delay: to susceptible particularly are sector energy the in Projects 2014). (OECD, reasons these for stalled were GDP of 7% around at valued projects infrastructure end-2014, Atdelay. of cause major a been has development sustainable environmentalrights, and protection required statutory the clearances obtaining community related to issue, this resolution to local communities, especially farmers, on the other, is proving difficult. In the absence of a of rights the and hand, one the on projects, infrastructure with ahead push to drive the since been attempts to amend this legislation, but finding an appropriate balance between have There partnerships). public-private by acquisitions thefor (70% acquisition in land of families case affected of 80% of consent the secure to need would sector private the in developers potential that stipulated and benefits resettlement and rehabilitation and payments compensation defining acquisition, land for requirementsprocedural stringent fraught with social and tobuild political sensitivity. wishing Legislative changesprivate enterprises introduced or in 2013infrastructure,public from introduced roads and for railways to power plants and steel acquisition mills, is therefore Land an issue use. productive available for have they land of amount the to linked closely is population, total the of 70% The welfare of India’s rural population, which is 850 million strong and accounts for almost Land life expectancy, asaresult, isreduced by 3.2years for each person intheseareas. living which the government’s own national air quality standards are not met. It is estimated that 660 estimated an and most-pollutedcities world’s20 the of 13 forPM guideline 38 of population a Pathanamthitta (with one, ( India for issue alarming an becoming is centres urban growing in quality air deteriorating the fuel, cooking a as of biomass use traditional the linked to pollution air indoor of problem the to addition In

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Energy in Indiatoday 2.5 concentrations. Delhi exceeds this guideline by fifteen-times. India has India fifteen-times. by concentrations. guideline exceeds Delhi this Figure

1.16). Of the 124 cities in India for which data exist, only exist, data which for India in cities 124 the Of

130 000), ui mte pr aia n 03 India 2013, in capita per metres cubic meets the World Health OrganizationHealth World the meets

700

million cubic metres per capita). per metres cubic people in areas in areas in people 47 10 11 11 13 13 14 13 17 16 18 2 1 3 7 6 5 4 9 8 © OECD/IEA, 2015 msin ae xrml lw sadn a js oeqatr f hn’ ad h European Union’s and the one-tenth the and level in China’sthe United States of one-quarter just at standing low, extremely are emissions policy priority. India’s government aims to increase investment in infrastructure (broadlyinfrastructure in investment increase to aims governmentIndia’spriority. policy trend in infrastructure spending, especially energy sector spending, is a major government liberalisation agenda launched by thelandmark Electricity Act in 2003. Maintaining a rising ( 2010 the encouragedby as since demand in increase rapid the by spurred share,largest average the absorbs on billion $77 almost reaching Since 2000, we estimate that investment in energy supply in India has increased substantially, Investment Note: tCO dioxide carbon of ammes average of522 791 to the third-largest country in volume terms of CO is India hand, other the On emissions. GHG historical cumulative of share small a only for CO India’s Carbon-dioxide emissions as dripirrigation networks. they are accompanied by the introduction of systems that use water more efficiently, such relieving some pressures on the grid, could reduce incentives for water conservation unless while pumps, groundwater solar-powered including equipment, efficient more introduce tariff reformmetering, via (linked to more use, reliable supply) and changes to agricultural practices. water Plans to efficient more to encourage sought have initiatives state-level national andof number A forChina. India forin in agriculturalthan purposes alone all use inefficient and consumption electricity of both in 2010, water: more water withdrawn was 48 inefficient subcritical of plants toburnitpushupthe carbon intensity ofIndia’s use power sector the and generation power for coal on dependence Heavy States. United the and Figur tCO2 per $1 000 (2014, PPP) 0.6 0.8 0.2 0.4

e

gr 2

= tonnes of carbon dioxide; PPP = purchasing power parity. 1.17 China 2 emissions can be seen through two lenses. Calculated on a per-capita basis, per-capita a on Calculated lenses. two through seen be can emissions

⊳ g

CO Carbon intensityofGDPandenergy-relatedCO capita inselectedregions,2013 2 /kWh. R ussia

United States

per kilowatt-hour (g kilowatt-hour per

I ndia 2 emissions in the world, behind only China World Energy Outlook |

(Figure Eu

Figure Un C ropean O

1.17), ion 2 /kWh), compared to a world a to compared /kWh),

1.18). while India also accounts 5 10 15 20

h pwr sector power The tCO2 2 emissionsper Special Report (right axis) p Emi inte Emi er capita ssions ssions nsity

© OECD/IEA, 2015 Figure India’s economic growth anddevelopment ambitions(IMF, 2015). inefficient ports and unreliable electricity supply, is widely recognised as essential to meet infrastructure, rail and road poor to related those particularly bottlenecks, infrastructure Chapter 1 investmentinfrastructure of amount co-financed highestwith the private sector the among the low and middle income had countries (OECD, 2014). has India years, five last the sector.In energy the in were over 40% which of partnerships, public-private through made been have billion $330 worth investments 1990, 19. Since further substantial increase. $34 overtotal of a to saw a significant increase in FDI inflows, which rose by 22% compared to the previous year, 2014 Furthermore,States. United the and China behind thirdinvestment,foreign ranking for destinations prospective of list the on high it puts potential India’svast impediments, these Despite business. doing of ease of terms in countries 189 of has out 142 Bank India rankedWorld the which to relation in environment, regulatory complex the as such persist, investment attracting to impediments broader of number a and economy energy investmenttosuch private the opportunities by uneven is sector though across Indian the Access investment(FDI). directforeign including capital,private of amounts increasing of mobilisation the require will needs country’s investment the meeting So etc.). education, of face the in granted, for taken increasing be competition from other cannot areas of sector public spending (including energy healthcare, pensions, the in projects investment As the Indiangovernment hasrecognised, publicfundssufficient tosupportthenecessary Note: T&D = transmission and distribution. investment. private from half around with projects, pipeline gas and oil and a third of this $1 such as schools and hospitals) to 8.2% of GDP, from roughly 7.2% in 2007-2011. More than areas social as communications, energy including networks,defined, well as and road, rail Billion dollars (2014) 100 20 40 60 80

2000

1.18

|

Energy in Indiatoday

⊳

2002 trillion Energy supplyinvestmentbytype,2000-2013

billion in infrastructure spending is to go to electricity, renewable energy, 2004 (UNCTAD,a show 2015 in numbersforPreliminaryFDI 2015).

2006

2008

2010

2013

19 Biofuels Power Power T&D Oil Gas Coal Relieving

p

lants 49

10 11 11 13 13 14 13 17 16 18 2 1 3 7 6 5 4 9 8 © OECD/IEA, 2015 not a judgement of the feasibility of the government’s ambitions or its commitment to commitment its or ambitions government’s the of feasibility the of judgement is a This not reached. always not are objectives and targets government India, of case the in that meaning Scenario, Policies New the throughout taken is implementation of pace the of view cautious A access. electricity reliable universal, provide to push the and coal and regulations as well as India’s New Policies announced policy the intentions, such is as the targets for throughout renewables takeswhich central– our scenario into– consideration Scenario and both existing policies focus primary The implications. their and India facing choices policy the out draw to analysis additional with but scope), and Introduction (see the in used approach overallanalytical same the of means by The projections for the India energy outlook presented in the following chapters are derived Projecting future developments Source: Central Electricity Authority. 100% Figure of costs across thesector. and the priority given to regional social sensitivities often contributes administered, and to the state-controlled under-recovery largely much more are utilities is distribution the Presently system limited. the power of side distribution the in involvement sector Private ( total the of one-third than more quickly,reach increased to has generation of share investors, whose private by financed been has grid the to added capacity net of incentives to increase the attractiveness of projects. of fiscal a range offered has government the and time some for open participation private been to has sector generation power The beginning. just only is investment private to sector coal the opening of process the and concerns state of handful a by practice, in dominated, remain sectors two However,players.these private of range a to open been have which Policy, Licensing Exploration New the under held rounds bidding successive sectors,notablygas and oil takenderegulatethe tostepshavebeen 1990s, late the Since 50 20% 40% 60% 80%

2006

1.19

2007 ⊳

Power generationcapacitybytypeofownershipinIndia

2008

2009

2010

2011

World Energy Outlook |

2012 Since 2006, 6

2013 World Energy Outlook

G 2014 W out of every 10

Special Report Figure Federal State P rivate

1.19).

2015

G

W

© OECD/IEA, 2015 – see Chapter 4 of the an extended period of lower oil prices, compared with the trajectory for oil prices envisaged in the New Policies Scenario examines (which potentialScenario the implicationsPrice of Oil Current Low Policiesa Scenario, and 450 Scenario, the Chapter 1 20. Three of these scenarios reflect results derived from the global modelling work undertaken for in itself India by adopted change methodological the and Fund) Monetary International the by subsequently (and power parity Program Comparison International the of purchasing by 2014 in calculations a revision both reflecting year, a points percentage 0.4 by economicThe growth path for thatthan the higher in is India *CAAGR = compound average annual growth rate. Figure comes from India, leadingto afour-fold increase inGDPper capita. of additional economic output generated in the global economy over the projection period By 2040, the economy is over five-times its current size ( India’s to 2040, period entire economy grows at the a faster Forrate than any 2030s. other in the world, the by an average by of 6.5% per year. year per 6.3% around to gradually before slowing 2020, until 7.5% at remains growthaverage Scenario,annual Policies New India’s changing economy is a fundamental driver of its energy development to 2040. In the Economic andpopulation growth cases for India, alongside the New Policies Scenario. long-term projections, we refer in this special in inherent focus is to that a uncertainty number the of Given alternative faced. be scenarios to and have that – barriers administrative the real-life of reflects view but our constraintsthem, including regulatory, – and financial more rapid development oflow-carbon energy sources andenergy efficiency. and access, universal notably electricity objectives, for policy energy attainment of earlier economy,theits alongside in manufacturing of share the increase to aim India’spolicy of realisation full the reflects which Case, Vision Indian an focus, special India the to specific Trillion dollars ($2014, PPP) 10 20 30 40 50 60

1.20 I

aCiaBai R Brazil China ndia |

Energy in Indiatoday

⊳

World Energy Outlook 2013-2040 Size ofGDPandgrowthbyselectedeconomies,

2015 [IEA, 2015]). aI ussia ndonesia 20 In Chapter 4, we also develop a case Figure Russia B 2013-2040 I Indonesia razil ndia World Energy Outlook-2014

1.20). China

Nearly $1 in every $5 1% 2% 3% 4% 5% 6% 7%

WEO-2015

CAAGR* 2040 2025 2013 , from the

51

, 10 11 11 13 13 14 13 17 16 18 2 1 3 7 6 5 4 9 8 © OECD/IEA, 2015 2040 2013 to be linked to international prices, and those of LPG and convergekerosene and thetowards LPG of those and prices, international tolinked be to assumed are depend onnational kerosene, and LPG except products, oil that all of prices domestic The qualifications policies. important with albeit prices, domestic through into India’s feed price assumptions These Scenario). New Policies the as assumptions price energy international same price the shares Case the international Vision Indian (the from consideration under derived largely are scenarios accordingthe They to vary scope. Introduction and the in trajectoriesdescribed projections these in prices Energy Energy prices implications for the evolution ofitsenergy consumption. important critically has follows India that urbanisation of pattern The combined. Mexico States, and United Japan the in are there than 2040 in India in cities in living people more are there million, 715 at that, means and 45%, to third a than less from rises population equivalent to the entire population of the United States today. The urban share of the total is absorbed into India’s cities: the 315 India’s with population rising2025, to 1.6by billioncountry by 2040.populous Almost allmost ofworld’s the netthe growthas in theChina Indianovertake population to India for enough strong remains growth 0.9%), to 1.6% (from 1990-2012 in rate average the half almost growth to population slowing the 2040 rateDespite to 2013. in people billion 1.25 than more with world, the in country populous second-most the already is India trends. Population growth and changes in the population dynamics is another key driver of energy Figure both at theexpense ofagriculture. the of expansion demand-driven and policy manufacturing sector, a the “Make in India” by initiative. The share higher of services likewise expands, pushed decades, coming over the does increase industries) extractive the and construction manufacturing, includes (which GDP in industry of share the government, the by targeted than rapidly less rising but includes changes to its composition ( growth, of rate the and size to limited not is use energy of pattern the economic on development of effect The methodology. previous the under calculated today than the economy larger that 36% is mean year, base the affect which changes, These early-2015. 52

1.21 S

ervices ⊳ 20%

GDP compositionbysectorinIndia,2013a

51% 58%

40%

I ndustry

million

Figure 60%

increase in India’s urban population is roughly 32%

1.21).

World Energy Outlook | 34% Ag 80% In the New Policies Scenario, though

riculture

17%

8% 100% nd 2040

31 6

883 b

714 b Special Report (PPP terms) onilli onilli

© OECD/IEA, 2015 Chapter 1 that support the attainment of INDC objectives are taken into consideration. beforeshortly Scenario,Octoberwerethey2015, in as announced keypublication, the but measures policy underlying 21. The energy-related pledges in India’s INDC have not been explicitly included in the assumptions for the New Policies New Policies Scenario. in the account into taken are that assumptions and objectives policy domestic India’s of our shape follow. that chapters the in detail more policies in discussed is projections that way The progress. future of its announced speed and as prospects what thismight the and for well mean past achievement as of the record area sector, in each the energy assessing intentions, affecting programmes and regulations India’sextensivereviewof havean conductedexisting policies, we report, special this For renewable sources ofenergy, particularlysolarandwindpower. in favour Its ofstrong push a alongside continued, importantcoal, place for providesa vision mix. energy the in sources low-carbon of share the increase to development need its the with balance needs to seeking is India mix, energy the of terms In policy-making. energy of Indian foundations the form to assured affordability are and alleviation poverty access, of issues is also supply, but of diversity quality, and imperatives, including resilience that growth ensuring also while equitable, its fruits transformation, shared fairly among India’s vast population. growing As a this result, energy security the broader fuel meeting to underpin of requirements challenges urbanisation energy twin large-scale the face and policy-makers Indian class development. middle burgeoning a growth, transformation,economic undergoingand rapidis a social India which strong economic in Policies long-term condition for thesoundfunctioningof electricity market. stateof India’s the reflection This a necessary distribution companies). is policy intentions supply,of reasonablerate a financial ofrestructuring returnincluding by(accompanied of groups) that, but over time, the average low-income end-use tariff reaches consumers, a level that remunerates (agricultural in full the costs groups certain for tariffs preferential continued assume we electricity, of case the In prices. determine to instruments based market- of use increasing the by and costs mining domestic rising by both driven India, in internationalsector, pricesconvergencegradual coal and domestic a betweenassume we efforts to stimulate domestic Similarly,and dependence). import production reduce in the (this reflects a generic assumption in our modelling that import-dependent output countries domestic make for incentive greater a provide to modified is formula this that assume webut trend;graduallyincreasing a produces which 2014, Octoberformulaintroduced in pricing new the with line in latter evolves producers. The domestic to paid price assumed the and 2040) by $13/MBtu almost and 2020 in $9/MBtu over to back beforerising term imported LNG (which, in the New Policies Scenario, remains relatively for low price over the the of average weighted medium a is level price domestic the gas, natural of case the In levels oftheseproducts are replaced by targeted direct payments to the most vulnerable. the price affecting interventions policy that assumption the reflecting price, international

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Energy in Indiatoday 21 is a summary a is Table

1.2 53

10 11 11 13 13 14 13 17 16 18 2 1 3 7 6 5 4 9 8 © OECD/IEA, 2015 Table 54 ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ Continued gradual reforms to energy pricing, promotion of micro-irrigation, groundwater ofmicro-irrigation, promotion pricing, to energy management andcrop diversification. reforms gradual Continued Shift towards metered electricity consumption. Subsidies for LPGasanalternative to solid biomassasa cooking fuel. Extension ofthebuildingcode andefforts to incorporate itmore into local andmunicipal by-laws. Moving from voluntary to mandatory appliance standards; application to a wider range of appliances. Efforts to planand rationalise urbanisation inlinewiththe“100smart cities” concept. support for Trade scheme; and energy audits, aswell asnew financingmechanisms for energy efficiency improvements. Achieve the Perform, with inline measures efficiency Enhanced Efforts to increase theshare ofmanufacturing inGDP, viathe“Make inIndia”programme. Dedicated rail corridors to encourage ashift away from road freight. Policy supportfor biofuels(viablending mandates) andnatural gas, hybrid andelectricvehicles. Fuel-efficiency standards for new cars andlight trucks starting in2016. Expanded efforts to strengthen thenational gridand reducelosses towards the targeted 15%. Move towards mandatory use ofsupercritical technology innew coal-fired power generation. with the aimto reach universal electricity access. supply, electricity lacking ofhouseholds connection and electrification village on efforts Enhanced to reach 175 A strong push in favour of renewable energy, notably solar and wind power, motivated by the target Efforts to expedite environmental clearances andlandallocation forlarge energy projects. existing of loosening through supply, energy restrictions andsimplification oflicensing procedures. in investment private to encouragement Greater Measures to increase fossil-fuel supply, notably ofcoal, inorder to limitimportdependence. A continued on levy coal (domestic andimported) tosupportthe Clean National Energy Fund. energy efficiency) enhanced from the and 2008 National energy Action Plan solar onClimate Change, (on as well Missions as the wind National power energy-related targets. the to attached Priority

1.2

⊳

Selected policyassumptionsforIndiainthe New PoliciesScenario

GW ofinstalled renewable capacity (excluding large hydro) by 2022. Cross-cutting policies Energy supply Power sector Agriculture Transport Buildings Industry World Energy Outlook |

Special Report © OECD/IEA, 2015 Chapter 2 • • • • • o oto eeg-eae eisos f ae, ut n fms rm h pwr sector,industry andtransport, Indiawillface acontinued deterioration power inairquality. the from fumes and dust gases, of emissions energy-related control to policies stringent without Nonetheless, online. broughtcapacity new of 50% than more for capacity,accountsources nuclear these thatin large increasemeans a togetherwith from 34% to 38% by 2040. Led by solar and wind power, the rapid growth in renewables, up efficiency plant coal average brings technologies efficient more to shift the although Nearly half of the net increase in coal-fired generation capacity worldwide occurs in India, 300 below from surges capacity power Installed new by boosted which, demand, burgeoning with connections to thegrid,increases at 4.9%per year. pace keep and up catch to supply power allow to pivotal are expansion capacity major and strengthening grid approvals, and permitting of system robust a reform, tariff and Regulatory regions. for cycle of uncertainty many a in service of quality poor created and infrastructure under-investmentgenerators,in has sector poor The the distribution of outlook. economic health and financial energy India’s for pivotal is sector power The their coverage across othersectors remains incomplete. for standards fuel-efficiency include passenger vehicles and an innovative to certificate trading scheme years in industry, although recent in broadened have policies shows the fastest growth, both for freight and for personal mobility. Energy efficiency infrastructureconsumerand goods boosts foroutlook the manufacturing. Transport Industry remains the largest among the end-use sectors, as India’s strong demand for demand intheresidential sector increases by more thanfive-times. 580 and incomes rising With materials. energy-intensive other and cement steel, for demand and ownership, up vehicle pushing and appliance in rise the and fuels modern to switch the accelerating use, energy in changes the of many underpins urbanisation and 2040, new passenger vehicles are added to the stock and as LPG substitutes for 315 extra An fuelwood asacooking fuelinhouseholds. 260 6 A demand. to2040, with the rise in coal use doubles making India by than far the more largest source consumption of growth Energyin global coal world. the in country populous most it the makes that growth population and size current its five-times than more energyIndia In propelledis demand upwards to 2040 by economy an that grows to

million

|

Outlook forIndia’s

mb/d mil Outlook forIndia’senergyconsumption lion people are anticipated to move to India’s towns and cities by cities and towns India’s to move to anticipated are people lion rise in oil use is likewiselargestprojectedthe is foranycountry, use oil in as rise

million energy consumption additional electricity consumers by 2040, electricity 2040, by consumers electricity additional Highlights

G W today to over 1 over to today W Is theskylimit?

000

G Chapter 2 W in 2040. 2040. in W 55 © OECD/IEA, 2015 Box around 60%oftheglobalaverage, upfrom 33%today. growth, consumption per capita falls slightly short of doubling; the level reached in 2040 is India’s population strong of Because 2040. to period the over consumption energy global in increase total the of one-quarter around represents still but 2.1), (Box (GDP) product domestic gross in increase the than slower is use energy in rise The 2.1). (Figure 2040 by 2025. Energy use more than doubles to reach anda 1 2040 by size current by its demographic boomthat five-times sees Indiabecome themost populouscountry intheworld propelled by than decades, more coming reach to the grows over that soar economy an to projected is India in demand Energy India: arisingforce inglobalenergy demand 56 strong growth in manufacturing, it is these latter effects that dominate, with the dominate, that effects from India’s – economy of intensity energy overall the in reduction latter gradual a of result these is it manufacturing, in growth strong relativelyimprovementsefficiency.energy with by in even India, projections our for In loosened further be can consumption energy and GDP between relationship the and growth from GDP hand, other the On vehicles. individual to buses or trains from habits transport growth is concentrated in energy-intensive whenindustrial sectors or when output people shift their economic than rapidly more grows also demand Energy conditioners). air fans, cookers, refrigerators, lighting, (e.g. appliances of number increasing an of purchases prompting electricity, reliable to access get people as income household economic, structural and of technological afactors. range Energy demand tends by to affected rise faster is than demand energy and growth GDP between relationship The Note: PPP = purchasing power parity. Figure 0.11

1 1 Mtoe2

2.1

500 000 500 000

tonnes ofoilequivalent (toe) per$1 1990

⊳ 2.1

The couplinganddecouplingofGDPenergyuseinIndia

the services sector of the economy tends to require relatively little energy ⊳

2000  New PoliciesScenario GDP andprimaryenergydemandgrowthinIndia the

2010

2020

000 in2013to 0.05toe per$1

900 2030 World Energy Outlook |

million

2040 tonnes of oil equivalent (Mtoe) 10 20 30 40

Trillion dollars (2014, PPP) GDP (right axis) Scenario New Policies

000 in2040. Special Report

© OECD/IEA, 2015 Chapter 2 * Compound average annual growth rate. Table by solarandwindpower. led technologies, renewables modern of deployment the in growth strong is other,there falls cooking, from almost energyquarter thea on primary tobut, of 2013 2040; in 11% in mostly used biomass, solid of proportion the hand, one the On fuels. non-fossil of use the in arehowever largestchanges higher. the slightly edgeof gas Some and oil of shares fourby declines coalwheretrend, global the (bucking 2040in to49% 2013 overallenergyincreasingin its frommix, 44% primary the share in in and inthe whole as a relative different the weight of sectors end-use (Figure Coal 2.2). retainsa central position the system through in flows changes noticeable some are there although 2.1), (Table mix energy the in shift dramatic a into translate not does Scenario Policies New the in system energy Indian the for anticipated change rapid of period The andoutlookbyOverview fuel of the European currently Unionis around 1 installed entire capacity the (for comparison, 2040 to period the generationover capacity 880 than more build to needs India demand, this meet to growth that averages 4.9% per year puts all other major countries and regions in the shade: than more for 45% of the projected net increase accounts in global consumption. In the electricity sector, India demand oil, of case the In 2040. to consumption global in growth to contribution largest the far by makes India in demand in increase the coal, of case the In gas. natural and nuclear,hydropower to solar and wind from markets, other of series a in player significant a becomes and 2040 to period the in oil and coal for both demand rising of sourceenergy.largest single global the of as takesareasmany China It from over in force driving major a as emerging is India development,less its much in a phase energy-intensiveinto moving China and countries OECD many in declining use energy With Total Oil Natural gas Coal Nuclear Renewables Fossil fuel share Hydropower Other renewables Bioenergy

2.1

|

⊳

Outlook forIndia’s

Primary energydemandbyfuelinIndiathe New PoliciesScenario 2000 155 64% 441 112 146 149 23 0 4 6 2013 204 72% 775 176 341 188 45 12 4 9 energy consumption 1 018 2020 237 75% 229 476 209 13 58 17 15 (Mtoe) 1 440 2030 274 78% 329 103 690 217 35

43 22 000

GW). 1 908 2040 81% 458 149 934 297 209 60 70 29

per 100% centage points to 25%), and the and centage25%), topoints 2013

23% 44% 26% 24% 72% gig 6% 1% 2% 0% Shares awatts (GW) of new power new of (GW) awatts

100% 2040 81% 24% 49% 16% 11%

8% 4% 1% 3%

Change 1 133 282 104 592 2013-2040 56 8% 61 93 20 16

CAAGR* 11.0% 3.4% 3.6% 4.6% 3.8% 7.9% 1.4% 0.4% 3.2% n.a. 57

11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 industries). This makes India, by a distance, the largest source of additional global coal demand global additional of source largest the distance, a by India, makes This industries). 265 additional an feed (to generation power between split is use coal in increase projected The terms. more than the combined demand of all OECD countries and second only to China in global 1 of consumption coal Indian losses. distribution and transmission and *** production electricity of process the in consumed or lost generation use, (excludessectors consuming final the in used ** be ovens).can cokethat form a and intorefining) oil furnaces (e.g. blastfuels fossilransformation of * Re Re Figure 58 Na Na

T ne newa tu tu

Nuclear Nuclea Includes wa ra ra lg Coal lg Coal bles bles Oil Oil as as

r 2.2 (Figure energy demand from blast furnaces and coke ovens, as well as petrochemical feedstock.

⊳

G

2.3). W of coal-fired plants) and industry (primarily for iron, steel and cement and steel iron, for (primarily industry and plants) coal-fired of W India domesticenergybalance,2013and2040 11 70 14 31 8 9

Includes 404 126 447 529 69 79

0 1 4 168 118 223 300 28 0 4

fuel consumed in oil and gas production, transformation losses and own and losses transformationproduction, gas and oil in consumed fuel million Tr Tr ansformaon* (f Electricit and he ansformaon* ossi (fossi Electricity and he lf lf uels tonnes of coal equivalent (Mtce) in 2040 is 50% is 2040 in (Mtce)equivalent coal of tonnes 2013 2040 at uels y at ) ) World Energy Outlook | Co Losses ow Co 24 nv ossand Losses 74 37 ow nv 27 179 nu er nu er 451 sion and se** sion se** losses losses 29 3 1 35 110 (Mtoe) 14 32 Special Report 520 269 135 60 38 68 97 8 154 141 44 30 21 73 0 Buildings I Other Tr Building I Othe Tr ndust ndu ansport anspor stry** r ry*** s t * © OECD/IEA, 2015 Chapter 2 Figure global oilmarkets andpricesevolve (Box 2.2). and the implications for India’s oil security and import bills, depend greatly on the way that encouragingmoveawaya forfromtrajectorybiomass cooking. The solid India’s of use,oil (LPG) – is in strong demand also gas in the petroleum residential liquefied sector, of largely form thanks to the policies aimed at in with policy – mainly allied Oil fuels. alternative promote standards, to efforts fuel-efficiency of introduction the for not it were greater even be would demand fuel transport in rise The growth. of ratefaster a shows gasoline vehicle stock. The pattern of transport fuel use remains weighted towards diesel, although theto added arevans and trucks new million 30 nearly three-wheelersand and two- new Transport accounts for 65% of the rise, as 260 million additional passenger cars, 185 6.0 by 2040, toworld the in region or country other any in growth the than more by increases India in oil for Demand Figur - - - mb/d Mtce 300 300 600 900 0 3 6 9 6 3

0 United States

e - European

4.2 2.4 2.3 Union

|

Outlook forIndia’s European ⊳ ⊳

Union

-

3.9 the NewPoliciesScenario,2013-2040 Change incoaldemandbyselectedcountriesandregions New PoliciesScenario,2014-2040 Change inoildemandbyselectedcountriesandregions inthe

United States

Japan - 1.8

million China Russia - 0.1 energy consumption

barrels per day (mb/d) to reach 9.8 reachto day(mb/d) per barrels

Japan Africa South 0.3

Indonesia Korea 0.6

Brazil Indonesia 0.8

Middle

East 3.5

Rest of world

China

mb/d 4.9

India ( Figure India 6.0

million

2.4).

59

11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 Box 60 Figure government the fourteen-times budget allocation to to thehealth sector. equivalent is reduction That mid-2014. until comparedaveragethe with aboveprice, oil $100/barrel, prevailedwhich from 2011 billion $70 of bill import its in savings annual makes India economy.$60/barrel, IndianAt the to important 2.5). fundamentally therefore (Figure are products) price oil oil the of in exports Fluctuations net by part small in offset (although 2011 oil crude value, since By year a billion world. $135 around averaging imports, the total of one-third in for accounts oil crude of importer third-largest the is India gas importsthat reaches almost $480 and oil for bill a is result rapidly. increases The still demand mobility,although based oil- India’s thirst for off edge takesthe 2040, by terms real in $128/barrel to price, in rise The output). in lower cuts into as through latter feed eventually (the spending back upstream falls non-OPEC growth supply and up picks demand global as rise In the New Policies Scenario, these gains are expected gradually to dissipate: oil prices lower economy-wide inflation. translateintoprices oil lowerIndex, Price Consumer Indian the of largestcomponent worth been has that consideration $3.5 around a subsidised, are that products oil for burden reducingwhile demand, country’sthe current account deficit. They alleviate fiscal the domestic stimulates that income up freeing diesel), and gasoline allocated to is cities reduce household expenditure on energy (around 30% of energy expenditure They ways. in India’s of number a in economy the to positively back feed can prices oil Lower Sources: Ministry of Petroleum and Natural Gas (2014); IEA analysis. *

Estimate.

Billion dollars (nominal) 200 160 120 2.2 80 40

⊳

2.5 2007

India inaLowOilPriceScenario

⊳ billion Crude 2008

in the case of LPG. As well, with fuel accounting for the fourth- the for accounting fuel with well, As LPG. of case the in 2009

oil

imports 2010

2011

as

billion by 2040, upfrom $110

a

share 2012

World Energy Outlook |

of 2013

the

trade 2014

2015* deficit

billion today. Special Report imports Crude de Total trade fi cit

© OECD/IEA, 2015 Chapter 2 and the bulk of the contribution coming from other renewable sources, excluding sources, renewable other from coming components hydro contribution and the nuclear of its gas, bulk its the of 31% and coal, its of 65% around including Around 36% of India’s primary energy supply is used today as an input to power generation, does notallow itto otherforms displace ofenergy more rapidly. price high relatively its coal, with compared footprint, environmental low and versatility its industry. despite fertiliser But, feedstockthe fora as roleimportant an retaining while transport, to generation power from sectors, many in in-roads make to Gas projected is 2.6). use (Figure averages NewPolicies non-OECD the and world in the mix with compared energy certainly Indian Scenario, in the role minor relatively a plays gas Natural needs to take to guarantee security ofsupply. implications measureswith India the – for Scenario Price Oil Low the termin long the lower cost oil, whose increased production is instrumental in keeping prices down over of source main the East– Middle the from supply fosterson strongrelianceThis very (0.6 output domestic 10.3 reaches (which demand oil higher of combination The by international production oil 10% down is compared New the with Chapter (see Scenario Policies 3). expensive is relatively which standards, is hit hardgas production, by lower prices. With many new positive. projects no longer viable, India’s all means and no by oil are interestsDomestic Indian on scenario this of impacts the Yet the government to invest inphysical andsocialinfrastructure. for easier it making reduced, is subsidies on expenditure as deficit, fiscal the contain by lower is – oil $135 for volumes import higher 6% oiland with even total – India’s 2040 in whole. bill as a import gas economy Indian the for benefits the macroeconomic and effects price energy indirect and direct of range a of because rise incomes mix. Average household Indian relatively the low,a larger in foothold find gas helping stays and down comes imports (LNG) India’s natural gas liquefied of price The prices. electricitymobility.transport, on keepingproducetoand lid cheaper slightlya is Coal of cost lower the of advantage take consumers as transport, particularly sectors, all quickly in more rises Oil consumption growth. additional stimulating economy, the across expenditure energy reduces scenario consumer,this oil major a as India, For to beresilient even inalow-price environment. of the market and output in some key non-OPEC countries (notably US tight oil) proves resource-holding countries in the Middle East pursue a policy of increasing their share main the as supply, low-cost of availability the about assumptions favourable more much from primarily results trajectory This 2040. by $85/barrel reach to rise slight a before start mid-2020s, they the range$50-60/barreluntil the in prices sees scenario This prices. lower of period protracted more much a of implications the examine to In the

billion World Energy Outlook2015

|

Outlook forIndia’s (almost 30%) than in the New Policies Scenario. Lower oil prices also help

mb/d in 2040) means a very rapid increase in net oil imports. oil net in increase rapid very a means 2040) in energy consumption (IEA, 2015), we also model a Low Oil Price ScenarioPrice Oil Low a wemodel 2015),(IEA, also

mb/d in 2040) and lower and 2040) in 61

11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 solar photovoltaics (PV) makingthesecond-largest contribution after coal. with renewables, other nuclear,fromhydropowerand come 2040 to period the over India in from gas-fired power, more than half of the electricity generation capacity additions anticipated has a growing impact. Despite the large expansion in the coal-fired fleet and steady growth also demand for any of the individual fossil fuels; this is also the area in which non-fossil fuel energy conversion efficiency of 100%, i.e. zero conversion losses. in the IEA methodology, many renewable energy technologies, including hydropower, wind and solar, have an assumed whereas fuels, fossilfrom is this of most energy; electrical to energytransformation primary the from in lost is energy of deal great a shows, 2.2 Figure As fuels. various of efficienciesconversion different the of because mix, generation 1. The share of primary energy going into the electricity sector does not provide a good indication of the eventual power absolute terms, whichtranslates into afalling share ofthetotal. and agriculture). The amount of bioenergy used in Indian end-use sectors remains stable in (Figure energy in the Indian economy. The main fuels contributing to this end-use demand growth in overall consumption and consolidates the position of industry as the largest end-user of botheconomy, growingof industry,the share byin the increasesunderpinned and sector oe, by which time it overtakes the level of final consumption in the the Europeanway Union energy is consumed by the main sectors (Table 2.2). Strong growth in the transport reconfiguration in material a is there demand, in increase sizeable the from today.Apart reach to doubling 1 than more 2040, to average on year per 3.3% around by increases – Consumption across India’s end-use sectors – buildings, industry, transport and agriculture End-use sectors Notes: Other renewables includes wind, solar, geothermal and marine. Non-OECD excludes India. Figure bioenergy. 62

275 2040 2013 Non Non

Mt - -

World World OECD OECD 2.7)

India India 2.6 1 n h Nw oiis cnro eetiiy osmto gos oe ucl than quickly more grows consumption electricity Scenario, Policies New the In

are coal (in industry), oil (in transport), and electricity (in buildings, industry buildings, (in electricity and transport), (in oil industry), (in coal are

⊳

Coal New PoliciesScenario Primary energymixinIndiaandbyselectedregionsthe

Oil 20%

Gas

Nuclear 40%

Hydro World Energy Outlook |

60% Bioenergy

Other renewables 80%

Special Report 100%

© OECD/IEA, 2015 Chapter 2 Table almost 65% of the 214 the of 65% almost sectors services and residential the (both sector buildings the in use Energy energy demand from blast furnaces, coke ovens and petrochemical feedstocks. Buildings * Figure consumption) and petrochemical feedstocks. *** bitumen). and lubricants * 2. The services sector includes, among others, public buildings, offices, shops, hotels and restaurants. the impact of of rising incomes on the the influence ownership of appliances. From a situation in 2013 under when decades coming population growth, the the trend towards over urbanisation, growth dramatically in access to modern change energy and to projected is transformation*** Industry, incl. Industry Transport Buildings Agriculture Non-energy use** Total

Includes Compound

Mtoe Road 100 200 300 400 500 600 700

2.2

2.7 2013

average annual growth rate. ** rate. growth annual average |

Industry* ⊳

Outlook forIndia’s ⊳

2040 Final energyconsumptionbysectorinIndiathe New PoliciesScenario the NewPoliciesScenario Energy demandbyfuelinselectedend-usesectorsIndia

2000 111 158 315 83 32 28 15 27

Includes Mt 2013 oe consumed in the buildings sector consisted of solid biomass, solid consistedsectorof buildings the in consumed oe Transport 2013 217 185 214 527 75 68 energy demand from blast furnaces and coke ovens (not part of final energy final of part (not ovens coke and furnaces blast from demand energy 24 29

2040 energy consumption

Includes 2020 317 263 108 100 242 686 31 40 (Mtoe) 2013 petrochemical feedstocks and other non-energy uses (mainly uses non-energy other and feedstocks petrochemical Buildings 2030 507 417 176 165 274 968 43 58

2040

1

2040

275 691 572 280 264 299 51 72 2013 Agriculture 100% 2013 35% 14% 13% 41% n.a. 5% 6%

2040 Shares 100%

2040 45% 22% 21% 23% n.a. 4% 6%

Change Coal Oil Gas Electricity Bioenergy Other renewables 748 474 388 205 196 85 27 43

2013-2040

2 i India in ) CAAGR*

3.3% 4.4% 4.3% 5.0% 5.1% 1.2% 2.9% 3.4%

63

11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 The Energy Resources Institute (TERI) and the Bureau of Energy Efficiency’s Star Rating scheme that targets existing targets that scheme commercial buildings have Rating also gained traction, but Star remain voluntary. launched by Efficiency’s Energy of Bureau (GRIHA) programme the and (TERI) Assessment Institute Resources Habitat Energy for Integrated The Rating Green as the such initiatives, 3. Other Box 64 of states, and the aim is to extend coverage across the country by 2017. alreadyhas it but adoptedbeen for centralall government majoritya in and buildings by individual state governments, who can also amend it to suit local climatic conditions; requirements above a certain threshold). The code is voluntary until made mandatory that sets minimum energy standards for new commercial buildings (those with energy With this in mind, in 2007 India launched an Energy Conservation Building Code (ECBC) capital stock for thelongterm. in inefficient locking torisk is alternative The cities. “smart” efficient for drive its of part as check, in cooling for demand keeping on focus the sector,with buildings the also creates an opportunity for India to impose more stringent efficiency standards on materialsorderother tosteel,producerequired.in and the itcement,aluminium But consumption energy up pushes construction in growthpolicy-makers. Strongfor and energy our for implications enormous has that consideration a constructed; be to yet has 2040 in India in stock building anticipated the of three-quarters Some New 2030, energy consumption in buildings would be 50 eieta) n eitn vlnay plac sadrs eae oploy by compulsory became standards appliance voluntary and commercial existing (both and buildings new residential) all for mandatory made were ECBC the to reduced energy consumption, is significant. We estimate that if of standardsterms equivalentin prize, the But codes. building of elements energy the ensure with compliance to capacity the build to particular, make in to efficient, order more in buildings measures residential relevant the of scope the extend to time take will It opportunities to all. housing providing of objective the incorporates it that is initiative cities smart the of feature important One Gujarat. in project (GIFT) Tec-City Finance International these of examples positive generally; approaches include the more redevelopment of East Kidwai constructionNager in Delhi and the Gujarat new of efficiency the aretoexistingreduceenergy of retrofits, the demand via buildings, toenhanceand of smart meters or by using waste to produce energy. Other objectives of the mission improve energy, water and waste management, for example through the installation to opportunity an is This India. across cities smart 100 develop to aim the is which of centrepiece the Mission, Cities Smart the launched officially India 2015, June In buildings, althoughthere islittleinthe way ofmandatory regulation forthissector. residential multi-storey energy-efficient for guidelines released has Efficiency Energy

2.3

Policies Scenario by 2040.

⊳

What Indiabuildsiscrucialtothefutureofenergyuse World Energy Outlook |

Mt oe, or 17%, lower than in the 3 The Bureau of Special Report Outlook © OECD/IEA, 2015 Chapter 2 used for cooking account for some of the main changes in residential energy demand over fuels the in Changes 85%. than more to demand energy cooking in biomass solid of share low efficiency of this cooking method, compared with LPG or electric stoves, pushes up the the affordable; and available similarly are that options of in OECD countries). lack the to due 2012), India, of demand energy of residential 5% Two-thirds (whereas of the Indian cookingpopulation rely on for solid than biomass as their is cooking fuel less (Government India in constitutes households cooking in used energy of 70% than more Today fuelwood, charcoal, dung and agricultural residues. coversbiomass (biogasSolid pellets).biomass and of uses renewablesNotes:modern Other also figure includes this in Figure 315 additional estimated an accommodate which cities, and towns India’s in growth by underpinned is projection This (16%). oil or 299 the of 60% than more 2040 by Solid biomass and coal larger andmore varied (Figure 2.8). the residential sector, in demand projectedgrowth).The in of shifts contrast, by muchare moderateratetoperformancestandards energythe serving minimum and codes building forspace demand jump in a India’s(with electricity on based predominantly be toprojected are – buildings in cooling –including sector services the in consumption energy in increaseselectricity. Future on dependent kerosenelargely already is areas, be urban concentratedin cooking, to tends for which sector, (LPG services The electricity. second by distantfollowed lighting) a and cooking oil for with biomass, solid on mainly relies sector residential the today In India consumption. different of patterns veryhave sectors) services and residential (the sector buildings the in use energy of components two The entrench inefficient patterns ofenergy use that canbe difficultvery todislodge (Box 2.3). – planned well not if – also can it but LPG, and electricity as such fuels, modern to access to improve helps Urbanisation rural areas). in people of number additional the (ten-times Other renewables

2.8

Electricity | Kerosene

Outlook forIndia’s ⊳

LPG Gas in theNewPoliciesScenario,2013-2040 Changes inenergyconsumptionthebuildingssectorIndia -

60

- 40

- 20 energy consumption

0

Mt

e sd n h sco i ete eetiiy (45%) electricity either is sector the in used oe 20

million 40

60 epe vr the over people

80

100

Mtoe 120

Outlook

Residenti Rural Urban Services period

al:

65

11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 access to clean cooking facilities (Box 2.4) complete of achievement partial a only though access, electricity universal includes that society.netThe result transformationa is nature the of of residential energy consumption urban increasingly an to rural predominantly a from transition broader a against set are reliable supply. These shifts happenround-the-clock, at differentto speeds inelectricity differentunavailable parts of theor country and unreliable from and LPG to kerosene from and biomass solid from away transitions, of series a by marked is Scenario Policies New From the starting point that we describe in Chapter 1, the residential energy outlook in the oshls fe rl o mr ta oe ul o coig a hnmnn nw a fe sakn: hn i prices oil when stacking: fuel as known phenomenon a cooking, fluctuate for or LPG delivery fuel is not available, one households can choose to than go back to the more use of cheaper (or on free) solid biomass. rely often households from fuelwood andkerosene to LPGasacooking fuelisconcentrated inurbanareas. Buteven asLPGuseisincreasing, shift the that show data, energy recent more in confirmed and 2011 in census recent most the 6. Trendsin indicated solar water heaters is negligible today but is set to increase, both for residential and commercial buildings. most the are needs household for popular option, where affordable: sized otherwise most households rely on heatersthe stoves used for cooking waterto heat water. Electric Use of buildings. residential in installed system centralised no usually is There region). the on (depending year the of months four to two for used systemsare 5. Waterheating lower altitudes, heating is required for around one month per year. Atheating. space for and cooking for both biomass solid on mainly relyyear. typically per areas months fourThese or moreprevalenttypicallyregions,mountainousthe India,only forhilly heatingnorthern is or 4. Space of three parts in Box 20 than average higher on are areas populated most its temperatures in daytime as India, in heating space for call much not is There appliances. and equipment cooling for demand in increases large meet to consumption electricity rising electricity,and to areas) rural in (mostly kerosene from purposes lighting for switching fuel alongside 2040, to period the 66 use LPG), compared with more than 85% of households in rural areas. rural in households of 85% than more with compared LPG), use to moving (many cooking for biomass solid using households urban of quarter a only with households, rural and urban between widely varies share This cooking. for fuel primary the as fuels solid on rely population Indian the of two-thirds Todayaround distribution networks for LPG are limited in rural areas and, even with the subsidy, the with even and, areas rural in limited are LPG for networks distribution as PaHalscheme), subsidies the to havesubscribed they (if account bank related their paymentsdirectto the receive to and year per cylinders LPG 12 buy to entitled is household each and alternative an as promoted is LPG although and fuels other to transitionforces a it which at level the at yet not is scarcity Biomass cooking. for fuel In most rural areas in India, it is a challenge to displace solid biomass as the dominant 30 hoursper on average, month collecting cooking fuel(Practical Action, 2015). spend, women Indian that says estimate one firewood: worst the suffer who collecting time more spend also environmentand indoor children, smoky the of effects health and women on predominantly fall consequences

°C.

2.4 4 Water heating inlarge partsofIndiaislargely aseasonalneed.

⊳

Transition towardscleanercookingfacilitiesinIndia World Energy Outlook | 5

6 The adverse The Special Report © OECD/IEA, 2015 Chapter 2 states, while Indraprastha Gas Limited supplies almost 600 000 households in and around Delhi. 7. Gail Gas Limited reports to have already connected 650 000 households in Uttar Pradesh, Madhya Pradesh and other rise, incomes However,as fan. a as electricity much as twice consumes cooler,which air evaporative an is cooling space for used appliance predominant the present, at striking: n rrl oshls ( households rural between urban and substantially varies again ofchange rate the although conditioners, air and appliances of purchases increased via consumption, electricity household in increase rapid a see to set is India reliable, more becomes supply electricity and rise incomes As lessons learned, anew National BiomassCookstove Initiative waslaunched in2009. Incorporating the 2011). al., marketcommercialimprovedforcookstoveset (Shrimali local a of emergence the hindered supply subsidised the that evidence some is there and time) over fire open traditional the to back revert to tended users (many hoped as on catch not did these but 2000s, improved early the until million 1980s the from stoves 35 biomass approximately distributed Chulhas Improved on Programme health the reducing of National The way cookstoves. biomass efficient more one to switch a encourage fuel, to is impacts cooking a as stay to here is biomass solid If Note: Other renewables in this figure is mainly solar cookers and biogas stoves. Figure in some instances, pipednatural gas andelectricity ( biomass by 2040 (and from kerosene as well) as a cooking fuel, using instead, LPG and, solidfromswitch all households Urban ruralareas. in living all 2040, in million 480 to access to clean cooking facilities is projected to decline from around 840 million today entirely displaced by 2040. In the New Policies Scenario, but, in the number of peoplebe without to unlikely is biomass solid that fuels means challenge the to of alternative scale the judgement, our transition the accelerating are measures Government promote it, butlessthan1%ofhouseholdsusebiogas cooking astheirprimary fuel. to efforts long-standing been have there and residues) agricultural ample on (based the cost can deter the poorest households. Biogas seems a promising avenue for India Electricity 20%

2.9 |

Outlook forIndia’s

Gas ⊳ 40%

Rural the NewPoliciesScenario Primary fuel/technologyusedbyhouseholdsforcookingin

LPG

60% Figure Kerosene

80% 2.10). energy consumption

Other 100% h ices i dmn fr oln i particularly is cooling for demand in increase The

renewables 2040 2013

Improved cookstoves 20% Figure

40% 2.9). Urban

7 60%

Tradi 80% ti onal stoves

100%

67 11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 nry osmto pten, nldn hw uh s sd n i wa fr, are form,India in what households to available in income disposable and of level used the by is influenced heavily much how including patterns, consumption Energy Affordability Note: kWh = kilowatt-hours. Figure buildings sector incheckwillrequire asteady tightening ofappliance standards. the in growth consumption electricity future Keeping litres. 265 now is it litres, 165 around refrigerators15 of sizeaverage the thesizeand market: the in on appliances the increase of power by an offset somewhat is consumption on effect the that shows refrigerators and colour televisions are expected to become mandatory. However, experience direct-coolheaters,water electric forstandards the 2015, of end the By acceptance. public sufficient is there once made being standards mandatory to switch more efficient a then and appliances tochoose consumers encouraging initially labels voluntary with scheme), mandatory the by covered already are conditioners air and refrigerators of types (specific standardsfor programme The appliances. other focuses mostthe on appliances used widely morebut are expected to become mandatorythe coming in years there and areto plans add and labelling for appliances in 2006. Only 4 out of the 21 standards are currently mandatory, standards of a programme up set Efficiency Energy of Bureau the agriculture), in and industry also (but sector buildings the in consumption electricity in growth the ease to order In (Chaturvedi andSharma,2015). as 50 as high sales annual putting estimate one with expected, is growth further strong very and 2014) Shahh, Abhyankarand (Phadke, 2010-2011 in units 1 around of sales rapidly: growing already is conditioners air for market The cooler. air evaporative an as electricity much as five-times consume can which conditioners, afford air to position a in are people more 68 Chapter (see kWh per electrified household 1 2 3 4

000 000 000 000

2.10

1).

⊳

2013 Over the projection period, average household disposable income in income disposable household average period, projection the Over household inIndia,2013and2040 Annual

Rural

2040 electricity

World average, 2013 average, World 2040 average, World

million

consumption units in 2003-2004 rose to more than 3 than more to rose 2003-2004 in units

2013 World Energy Outlook |

Urban

per

2040

rural

and

million

urban Special Report

units by 2050 by units y

electrified ears ago was ago ears Hea Cooking Ligh Appliances Cooling ti ti

million ng ng

© OECD/IEA, 2015 Chapter 2 consumptionenergyindustrial steelin of shareincreased the explains which cement, and steel by replaced being increasingly are bricks, hub. clay as such Traditional materials, building manufacturing important an for becomes demand India the which for drive materials, decades energy-intensive next the over needs infrastructure huge India’s today. 40% from up 2040, by consumption final of 50% than more for account to as so 2040, to annually 4.4% by rapidly,increase to projected is sector industry the in demand Energy coal and natural gas used in the residential sector, and biofuels, electricity and natural gas used in transport. Industry * Figure of theeconomy. $400 absorbs expenditure energy household annual in increase $1 each level, aggregate an At economy). the of are that saved amounts and thereforeon potentially (or available to services support productive and investment goods in other partsother on spending consumer of expense the at comes expenditure energy in rise any economy,as wider the as well as welfare for implications important has whole) a as system the across recovery cost overall for allowing still (while control under costs energy these Keeping losses. network high in for electricity is restrained by an efficient expansion of power generation and a reduction increasestariff of scale the whether particular in – evolve prices end-user thatway the share a as expenditure energy that meaning push year,up appliance ownership and use). Expenditure per patterns are naturally $900 contingent on almost to incomes ear increasing (as electricity of consumption and mobility) for demand increasing the r (reflecting transport road for consumption oil by driven is expenditure in increase This 2.11). (Figure 2040 in 4% under to 2013 in 3% from increases just income disposable total of from increases energy on spending $200 household while dollars), 2014 (in $22 almostreaching four-timeslevel,current almost its to rise projectedto is India

Includes Dollars (2014) 1

000 200 400 600 800

pe

2.11

2013

y |

Outlook forIndia’s

⊳

2020 disposable income,2013-2040 Average energyexpenditurebyfuelandhousehold

2025

million

2030 energy consumption that could be spent, saved or invested in other parts other in invested or saved spent, be could that

2035

2040

5 10 15 20 25

000

000 000 000 000

Dollars (2014) expenditure: Average energy income (right Household disposable Oil (transport) Oil (residen Electricity (residen Other*

ti

al) axis)

ti 000 al) 69

11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 represent anincreasingly costly products way of providing heat to industry. oil while biomass, of use traditional the from away move a encourages in domestic policy growth thesubdued National infrastructure. by distribution limited and prices import high relatively back production, held is consumption total industrial Gas of shares decline. their demand but terms, in absolute grow consumption biomass and oil gas, Natural 2040. in 56% to grows coal of share the fuels, alternative with compared of industry, branches including steel, different bricks and from cement, bolstered demand by the consideration increasing that coal With is less expensive use. energy industrial of 50% almost for accounting industry,for energy of source dominant the currently is Coal Figure prosperous society. equipment are increasing their production quickly to satisfy the needs of a larger and more ( 70 Aluminium Aluminium Figure Tex Tex Paper, 1% Paper, Paper, 2% Paper, ti ti le, 2% le, le, 4% le,

2.12).

, 2% , 2.12 , 2% ,

In addition, industries ranging from chemicals, textiles and food to transport

⊳

by sectorinIndiatheNewPoliciesScenario Estimated currentandprojectedindustrialenergyconsumption Other 23% Steel 21% Steel 29%

Other

29% 217 Mtoe 691 Mtoe

Cement 8%

Brick

16% Brick 10%

Sugar Cement Chemicals 8% Chemicals

6%

14%

18%

Sugar

5% a) 2013 b) 2040

World Energy Outlook | Chlor Chlor Ole Ole chemicals aroma aroma chemicals Fer Fer Other Other fi fi ti ti ns and ns ns and ns - - liser Alkali liser Alkali ti ti

cs

cs

20 40 60 80 100 Special Report 40 10 20 30

Mtoe Mtoe

© OECD/IEA, 2015 blast furnaces. becomethatwill means moreIndia reliant moreon expensive imported coking coal for its steel-making primary towards production coal non-coking domestic on relying DRI from shiftThe intensity. energy in decrease projected the to contribute metal scrap of share steel blastfurnaces, in finishing and exploiting the waste heat potential in DRI (particularly production), and amodestly higher gains, efficiency energy increasing with combined blastroutefurnace for steel-making supply. electricity on less depending so and shift,This traditional the towardsmore turning DRI, on reliant less become will India in sector steel where the scope for energy efficiency gains islimited. In the future, it is anticipated that the and input energy an as electricity use which 2014), (JPC, furnaces induction small-scale in small scale. their to due Roughly a third of India’s steel is produced in electric arc furnaces and plants a similar proportion of larger levels efficiency energy the reach cannot that furnaces blast of mini number a significant and plants steel public efficient less alongside plants, steel sector private large, efficient relatively of consists India in industry steel The content. coal, necessary for traditional pig iron production, is of relatively low quality, with high ash intensive, that India does not have access to low-cost natural gas and that domestic coking capital- less and small are they general in as build, to easy are facilities DRI that facts the natural gas (JPC, 2014). The high production of coal-based sponge iron is a consequence of domestic of availability low to due 2013, in 30% below of rate utilisation an at ran which as high as that of gas-based DRI (IEA, 2007). India has three major gas-based DRI producers, twice to up be can DRI coal-based of consumption energy The production. large-scaleDRI forgasnatural of instead coal uses that world the in country only the is India scrap.steel and furnaces blast from iron pig traditional being rest the with [DRI]), ironreduced direct a limited extent.Currently, steelironspongeconsistcoal-basedtothe industry(or of inputs of 20% to only growth production domestic Indian reduce to projected are India into however, imports capacity; production steel existing large its of use good make to order in markets export seek to expected is China demand, domestic in decline anticipated an and the United States, but it overtakes both the United States and Japan before 2020. With five-times). India is already the fourth-largest steel producer in the world after China, Japan Chapter 2 46 current the from 2040, to period the over use energy industrial in increase projected sourcelargest the the of also is and India in user energy industrial largest the is sub-sector steel The is certificates efficiency energy for mandatory (Box scheme trading market-based innovative an in efficiency energy The 2015). India, governmentIndian the of policies focus largethe on consumers, for participationwhom of Chamber (SME output manufacturing of 45% about for total in account performance, energy poor generallylatter, with The (SMEs). enterprises medium others, and small enterprises; of thousands large of consist by industry, brick dominated the particularly are steel, extent, some to and, aluminium cement,chemicals, energy-intensivedifferent:including verysome industries,are India in branches industrial various the in consumption energy of patterns and structure The

|

Outlook forIndia’s

Mt

2.5). oe to around 200 aroundto oe energy consumption

Mt oe (supporting output that increases by more than more by increases that output (supporting oe 71

11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 Indian brick industry will decline by around 30% by 2040, through a combination of energy projectedis it While thatenergy2013). intensity(Maithel, savingthe more20% in of than 0.8-1.1 around to (MJ/kg) kilogram per megajoules 1.4 to up from Box 72 More modern techniques, such as zig-zag firing, can reduce specific energy consumption energy specific reduce can firing, zig-zag as such techniques, modern More 2013). Maithel, and (Lalchandani pollution air local of source productionmajor a also inefficient is that method relatively a kilns, trench bull chimney fixed in made are year per produced bricks billion 250 estimated the efficiency. of energy Approximately 70% higher for potential significant has industry brick the methods, production traditional on relying when the weather gets warmer from mid-March until June. Given its small-scale character, from mid-October to end-December and are subsequently dried in formedthe areopen. They bricks are green fired months: six about to limited and seasonal very is industry brick GEF,India, of UNDP,(Government plants small India’s000 2012). 100 than more over out spread is production and biomass of large consumer a is it conditions), working poor very in labour-intensive (often very is India in production Brick perforatedbricks. or hollow of production the for kilns tunnel automated on rely which countries, OECD in encountered the also and second-largest China) energy (after consumer afterworld ironthe and steel.in Itssecond-largest structure isthe very differentis fromIndia that in industry brick The these clusters, energy use assessments, efficiency manuals and capacity building textile or brick food, and capacity the as such SMEs, energy-intensive particularly to provided manuals are efficiency assessments, use energy clusters, these In resources. available locally around themselves based have SMEs where industrial clusters, has targeted Efficiency of Energy Bureau The costs. transaction high and capital of lack technologies, efficiency some of risk perceived the awareness, lower Implementing energy efficiency policies for SMEs is difficult due totheir diverse nature, distribution companies and refineries. electricity railways, industries: additional three adding and threshold the consumption lowering by companies more includes and 2016 April in starts PATscheme the of cycle second The target. their meeting not of result a as penalty a face or market in the certificates buy to have which and target their achieving over for certificates savings efficiency receive to are companies which determine to savings energy the Efficiency evaluated Energy of Bureau the mid-2015, In 2013). (CDKN, 2015 March in 6.7 of savings energy targets scheme The industries. textiles and paper fertiliser, steel, chlor-alkali, cement, aluminium, the in 30 than more of consumption energy an with facilities 478 targets for saving energy specifies It 2012. in introduced was scheme, (PAT) Trade and Achieve Perform, the called certificates, market-based a Act, Conservation Energy the trading programmeUnder efficiencyfor and low-interest loans are available for selected energy efficiency measures and measures efficiency energy management systems selected funded inSMEs(partially by development banks). for available are loans low-interest and 1.8 saving of objective the with companies,

2.5

⊳ India’s

thousand

policies tonnes of oil equivalent (ktoe) (lower for some industries) some for (lower (ktoe)equivalent oil of tonnes

on

energy

efficiency

Mt

Mt oe (or 4%) at the end of the first cycle first the of end the at 4%) (or oe World Energy Outlook | oe in 2016/2017. Financial assistance Financial 2016/2017. in oe

in

industry

MJ/kg , i.e. , Special Report

an energy © OECD/IEA, 2015 (Department of Fertilizers, 2015). Subsidies for fertiliser producers make up a substantial up make producers fertiliser for Subsidies 2015). Fertilizers, of (Department Chapter 2 the use of natural gas. for subsidies indirect as seen be can subsidies fertiliser of billion $12 entire the words, other In cost.zero at available production of urea. Consequently, in order to break-even at current regulated prices, natural gas effectively needs to be the in componentcost relatedproduction non-energy entire the toequivalent roughly is retailprice maximum 8. The currently 0.19 around is feedstock, plants urea practicebesta use energy for and 0.26 as limited more become reductions intensity energy 0.64 around to 2008) Goswami, and (Nand 1990 in from0.84 urea significantly decreased has production urea of intensity energy The on compensating farmers directly. concentrating instead producers, from away scheme subsidy the shift to is now intention inclusion of the fertiliser sector in the PAT scheme have addressed these inefficiencies. The the and rules subsidy the to changes although costs, their to attention close paying from producers discouraged also Subsidies 2015). Banerjee, and (Gulati soil the of chemistry but, for example 4:2:1, in the case of Rajasthan, the around ratio reached 45:17:1in 2012, is damaging the use fertiliser in (K) potassium and (P) phosphorus (N), nitrogen of ratio ideal The other fertilisers. over-consumption urea, relative to to of haveled subsidies The production ofother, more complex fertilisers. this the and urea import of to rest the with urea, of production domestic the on part spent is subsidy large A 2014). Gas, Natural and Petroleum of (Ministry GDP Indian of 0.7% portion of all subsidies in India (26% in 2012), totalling INR tonne per ($87) (INR) rupees Indian at fixed currently is price retail maximum the where urea, of see agriculture section). The prices for all fertilisers are now unregulated with the exception farmers, but come at a significant cost (similar to electricity subsidies provided to farmers, havefertilisers1970s made the more since industryprovided availablethe Subsidiesto to met almost one-third ofthefertiliser industry requirements in2013. access to domestically produced gas (which is available at a regulated price). Imported LNG priority sectors with the of one is industry fertiliser the line, first in longer no is it Though 13.5 about consumed industry fertiliser the 2013, In 2015). Fertilizers, of (Department home at produced are fertilisers urea nitrogen-based the of three-quarters about while imported, are fertilisers 100 available to than more of nutrients India’s broad categories three the Of security. food ensure to India’sefforts of a pillar as well as consumer energy a major is industry fertiliser domestic The various efficiency policies, including capacitybuildingandfinancialassistance. through projections our in overcome gradually financing are hurdles of appropriate These banks. lack local by a means and projects efficiency energy with associated payback the high periods of awareness, alack of because difficult be will gains efficiency these realising bricks, perforated and of hollow manufacture the towards a shift and efficiency

|

Outlook forIndia’s 8 , significantly below world market prices (around $300/tonne in 2014) $300/tonne (around prices market world below significantly ,

Mt

million oe (15.8 oe amr, ot f h popou- n potassium-based and phosphorus- the of most farmers, energy consumption

billion cubic metres) of naturalmetres)feedstock.of cubic gasas for use

t

oe/tonne of energy is needed as needed is energy of oe/tonne

t 660 etne ra n 03 Future 2013. in urea oe/tonne

billion ($12 billion) in 2012,

t t oe/tonne oe/tonne

5

360 73

11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 nesv, nrae fu-od y 00 Aon 8% f ni’ auiim etr is sector aluminium 20% is India’s remaining the and of technology smelting 80% available best world’s Around the using already 2040. by four-fold increases intensive, 16 to increase 4 around consumes currently India in production Aluminium but hasrecently alsolooked to importethane from the United States. industry refining important its from naphtha domestic on heavily relies India in industry 13 to 2013 in (Mt) tonnes million manufacturing.3 from petrochemical domestic for increase to expected is petrochemical, boost basic important most the ethylene, a of Production provide will and others, among but at present, sub-sectors, packaging products food and manufacturing textile, car the fromincreasing is demand petrochemical of consumption per-capita low very has India by 13%)driven by ahigher availability ofblast furnaceslagfrom the steel industry. from the current 0.74 to 0.62 in 2040 (reducing the energy intensity of cement production the use ofmodern clinker-to-cement the energy-intensivefor future, the declinesclinker In ratio production. and units large production technologies;relativelya uses it share high blast and a substitute ash fly as of slag furnace with relatively the world, in most energy- of the one efficient is already India in industry cement The urbanisation. ongoing and spending infrastructure heavy to related demand the meet to strives it as 2040, by aluminium industries. The cement industry is projected to almost treble its energy demand Other large industrial consumers of energy include the cement, petrochemicals, paper and Sources: Department of Fertilizers (2014); IEA analysis. Figure to asituation ifthere were nofuture efficiency gains. representing a reduction of 4 decreases production of urea 0.55 to further intensity energy the projections, our In 2.13). (Figure urea o 74 expected Energy intensity (toe/t) 0.2 0.4 0.6 0.8 1.0 1.2 1.4

0

2.13

t

be

⊳

t upgraded by 2040. However, paper production in India is significantly more Mt oe/tonne urea by 2040 (a further 15% improvementtoday),15% comparedwith further (a 2040 byurea oe/tonne

Energy intensityofureaproductioninIndia oe in 2040. Primary aluminium production, which is very electricity- is very which production, aluminium Primary 2040. in oe 4

Mt oe (4.8 8

bcm)

Mt in the amount of natural gas required compared in 2040. For feedstocks, the petrochemicals the feedstocks,For 2040. in 12

World Energy Outlook | Urea produc

Energy use of best new plant new best ofuse Energy 16

Mt

Energy oe, a figure projected to projected figure a oe, ti on (million tonnes) - saving poten saving 2008 Feedstock use Feedstock

Special Report 20

2012 ti al

© OECD/IEA, 2015 Chapter 2 which transport, is road by dominated heavily picture now is India different. the markedly in Transport Today, however, 2015). (TERI, freight of 14% and movements passenger India’s of 15% only carried roads world, the of parts many in be transport road to by satisfied increasingly started demand travel when 1950s, the By (1876). China and (1872) rail,first introduced long not 1853, after in India to Western Europe and well before Japan by transport mass by dominated long was it that in distinctive is sector transportIndia’s Note: Aviation includes fuel use for domestic travel only. Figure demand reaches 280Mtoe in2040,dominated by road transport ( demand from transport continues to outpace growth in all other sectors, and transport fuel of other emerging economies (Airbus, 2015). In the New Policies Scenario, growth in energy of theworld average; andthenumber offlights, at 0.07trips per capita, is well below that average;energyof use the capitaper for transportation purposes, 0.06 at one-sixth is toe, vehicle passenger in demand: 1 per vehicles 20 than increases less at ownership, significant further to point indicators the All the transport. road in all use oil from of coming fastest-growingincrease the of the 90% around with sectors, become end-use has it 2000, since year per 6.8% averaging rate growth a With countries. other many in than share lower much a – consumption energy 75 at sector, transport India’s in use Energy Transport are expected to moderate (TERI, 2015). feedstocks (as opposed to more common wood-based pulp), future energy efficiency gains on of pulp change it significantly agro-based production one-fifth relies more and than for least twenty-times as much. As the structure of the Indian paper industry is not expected to average size is less than 15 energy-intensive than in other parts of the world, because its mills are currently small: the Naviga Avia Road ti ti Rail on on

2.14

|

Outlook forIndia’s

⊳

40 1

Transport fueldemandbysectorinIndiathe New PoliciesScenario

80

2 000

tonnes per year, while large-scale modern plants produce at energy consumption 120 3

000 160 4

Mt inhabitants, is much lower than the world the than lower much is inhabitants, e n 03 acutd o 1% f final of 14% for accounted 2013, in oe 200 5

240 6

Mtoe Mtoe Figure 280 7

2.14). in 2040 Addi 2013 ti

onal

75

11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 India’s cities that are already characterised by urban sprawl and rapid, often informal, rapid, and developmentsat periphery.their Even effectivewith sprawl development public of thetransport, urban by characterised already are that cities India’s of those in particularly infrastructure, necessary the build to challenge huge a be will It individual towards trend the slowing vehicles, particularlyincities, through the provision of effective public transport (Box in succeeds India whether on depend will Much hassignificantwhich potential tocurbdemand growth. measure a vehicles, heavy-duty for standards fuel-economy developing of stage early an at is government Indian The operators.commercial small of number large a with market competitivehighly fragmentedbut very a is freightRoad 2040. to growth demand energy contributing transport, important road in demand an energy of component remains projections, our in sector industrial the by added value the with line in 2040, to 7.5% of rate average annual an at grows which activity, Freight 2040. in Scenario, we assume average fuel consumption per new vehicle drops further to 4.3 100 kilometres (l/100km) in 2022/23 (from around 6.0 l/100 km today). In the New per litres 4.8 of vehicle new per consumption fuel average an mandate which standards, fuel-economy adopted recently the by moderated partially is demand fuel in growth The Note: PLDV = passenger light-duty vehicles. Figure transport isinlinewiththehistorical development trend inmany other countries. 1 per vehicles 175 nationwide a to rises ownership car as transport, personal for demand fuel road of 54% for account they time which by 2040, by sharply increasing cars passenger of share the with changes, this projectionsour three-wheelers.In and two- of use of level high the of because partly and buses) (i.e. transport road of modes collective by made travelis individual much because partly system, transport overall India’s in role minor relatively a play still cars Passenger used for passenger transport. road transport fuel demand has grown rapidly to 68 Mtoe in 2013, around 60% of which is accounts for 86% of passenger and almost two-thirds of freight movements. Consequently, 76 25%

2.15

43 Mtoe 2014 52%

⊳ 

New PoliciesScenario,2014and2040 Road fueldemandforpersonaltransportbytypeinIndiathe 23%

Bus PLDV Two/three 000

inhabitants ( inhabitants - wheelers World Energy Outlook |

Figure

2.15). 24% more than half of the total the of half than more 22%

This shift in modes of modes in shift This 132 Mtoe 2040

Special Report

54%

l/100km

P olicies

2.6). © OECD/IEA, 2015 Chapter 2 Box urban airquality(see last sectionofthischapter). transport sector (particularly diesel trucks) is also a major contributor to India’s worsening four minutes, India’s road accident fatality rate is among the highest in the world. The road every killed person one i.e. 2014, in accidents road in killed people 000 140 around With concerns. primary the among is safetyRoad transport. road in problems pressing already some amplify to set is fleet vehicle commercial and passenger the of growth anticipated Smart Cities Mission. fuel-efficiency with points, the systemsand metro of these build-up increasing the vehicles, passenger standardsfor of several on moving already is India in Policy networks.transit public and pedestrians for spaces dedicated ensure to envisaged, is system metro public a of development the where particular in planners, traffic and urban co-ordinationbetween requireearly will travelmodes Shifting mobility). thereand tomayopportunities avoid be also travel through tele-working virtual(or growthtransport slow to help can planning city mobility.Good of terms in smarter India in cities make to order in tackled be to need areas these of All technologies. fuel to and vehicle travelof efficiency the “shift” “improve” that thatthose and modes; those efficient more “avoided”; be to broad travel three allow into that grouped those be categories: can transport urban for policies efficiency Energy accessing someofthebusplatforms. in experienced were difficulties and lanes bus the using by rules the violated owners vehicle frustrated Delhi, In easy.from far is projects these of development the that haveAhmedabad, in proved successful, experiencethe although showscities other of per day along bus corridors of a combined length of almost 170 km. Some of these, as implemented in eight Indian cities and accommodated more than 400 option is the development of systems for rapid transit by bus. Such systems have been of India’s other large cities such as Lucknow, the capital city of Uttar Pradesh. Another many in authorities the consideredby being example Kolkatais an that Chennai), and in systems earlier (following system rail metro Delhi’s of development the through as such made, being are Attempts trends. such – moderateleast at or reverse– to is One of the most difficult challenges facing India’s drive for smart, well-connected cities air pollution. to satisfy demand for mobility, amplifying problems such as congestion, accidents and the Indian population – in particular in urban areas elsewhere,– increasingly as uses development personal of patterns vehicles same the following But, cars. individual than train and bus. These are typically significantly more energy-efficient modes of transport by transport mass of tradition long a has mobility.India personal including lifestyles, people’s class of aspects all middle on impacts burgeoningsignificant have will growth, a economic strong and with India, in development economic and social Rapid

2.6

⊳

|

Outlook forIndia’s Smart cities–movingmobilitybackintime? energy consumption

000 passengers 77 11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 fuelled passenger cars. There are a number of reasons for the high share in India. In road In India. in share high the for reasons of number a are There cars. passenger fuelled diesel- of share high the to attributable is it where Union European the in only matched is (1 demand overallin transportoil diesel of share high featurenotablevery a the 2.16), (Figurebeing oil by dominated heavily is – world the in elsewhere as – India in transport fuels, of terms In on average. year per 1.9% by increasing demand fuel transportoverallrail with 2040, in 37% todayto in the New Policies Scenario increases the share of electricity in total rail fuel use from 33% totalrailway further The networkelectrified. electrificationbeen of has expansion India in the of ground. 38% date, gaining also To is cities Indian major betweentracks high-speed ofbuilding idea the and continue efforts electrification but diesel, by dominated heavily still is use fuel transport Rail world. the in highest the still is trillion, 1.2 almost at train, by India in travelledpassenger-kilometres of number the though even decades, past the overtransport freight and passenger in dominance its lost has India in railwaysector The could Organization, dampen further demandgrowth inIndia. Civil Aviation the International through adopted consumption fuel India are directed at reducing aviation fuel demand, but of global intargets a proliferation policies for reducingspecific aviation No market. the seen enter GoAir has and SpiceJet IndiGo, that like airlines low-cost liberalisation of process a by spurred been has travel by the Airports Authority of India. Matching India’s increased global connectivity, domestic recently, with double-digit rates of passenger growth handled at the 125 airports managed growing particularly rapidly been has India aviation in industry The PoliciesScenario. New and travel air the in 2040 domestic until 4% than more of averagerate an annual for at increasing shipping domestic use fuel with modes, these among growing fastest the are navigation and Aviation pace. rapid a at grow to continue they though even transport, in growth demand energy total to 4% navigation only aviation, contribute and combined rail Domestic Scenario. Policies New the in low remainssectorstransport other in use Energy below thelevel ofother countries. but the average annual mileage per heavy truck, at 210 km per day in 2040, still remains In the New Policies Scenario, we assume these problems are moderated, to some extent, than half of the commercial fleet in India, travel on average only around 130 and multiple checkpoints (mostly at state borders). Older vehicles, which represent more day,per km around270 roads,only heavytraffic, of quality poor stationstolltheto due achieve to able are India in vehicles commercial heavy new even that estimated been has day,it per km 400-500 travel easily countries OECD most in trucks while economy: inadequate road infrastructure could remain an corridors),important bottleneckfreight in a dedicatedfast expandingof development the with (andrailways to network back highwayfreight shift national to a develop to efforts Despite paved. are roads the of half about only States), United the (after world the in network roadsecond-largest the has India although constraint:potential another is roads of availability and quality The 78 transport, freight vehicles (around 60% of road transport diesel use) and buses (around

mb/d of diesel use representinguse diesel of the 70%of total level This 2013). in use diesel of World Energy Outlook | Special Report

km per day.

35%)

© OECD/IEA, 2015 by diesel,onthebackofastrong increase infreight activity. they were negated by the increasing proportion of diesel use and by the sheer growth in growth sheer the by and use diesel of proportion increasing the by negatedwere they met, generally were targets stated the While pollution. air combat to Mumbai, inand Delhi particular in 1990s, the since promoted been has transport in gas natural of use The remains limited. sales of 42 of sales reported officially scooters, with to confined largely been far ofso has vehicles uptakeelectric pure market transport, road of modes all encompasses target by the year Although per 2020. vehicles electric and hybrid million 6-7 of sales of level subsidiestarget a providing support by to transport road Indian in electricity of use the promote to 2020, equivalentoil of dayper Nationala has also India (mboe/d). Plan Mission Mobility Electric Chapter 2 demand fuel liquid transport road in biofuels of share the projections, our In climbs only slowly to 3% in 2040, from about 0.2% today, replacing some 0.18 Chapter and biodiesel will not be achieved, primarily because of constraints on biofuels supply (see ethanol of blending a 20% – indicative targets reach to albeit – ambitious the thatproject electricity and natural gas. Promoting the biofuels, use of biofuels has as a long history such in India; but fuels, we alternative of use the promote to policies of adoption the to led has sparked concerns over the consequences for oil security and air pollution in India. This growth, further of expectation the and demand, energy transport of growth strong The Figure projections, India’s transport oil demand climbs to 5.3 energy consumption is diesel, despite several decades of work on electrifying railways. In our railwaysector,of the two-thirds too, In subsidies). these of removal the following Scenario, diesel passenger cars in total car sales (although this proportion diminishes in the New Policies share increaseduntil 2014 the of place forsubsidiesin the diesel while dominate use, diesel in 2040, and displacing oil consumption of 7 of consumption oil displacing and 2040, in three-wheelers and two- of sales total in 2% almost of share a further,reachingincrease mboe/d 1 2 3 4 5 6

2.16 3). 2014

|

000 in 2012/2013. In the New Policies Scenario, the sales of electric scooters electric of sales the Scenario, Policies New the In 2012/2013. in 000

Outlook forIndia’s

⊳ 2020

Transport fueldemandbytypeintheNewPoliciesScenario Oil

2030

2040 energy consumption

2014

kboe/d; but the spillover to passenger cars passenger to spillover the but kboe/d; 2020 Other

mb/d in 2040 and remains2040 and in mb/d dominated 2030

2040

O Other: il:

million barrel LPG Oth Biofuels Natural gas El Gaso Diesel

ect

er oil

ricity line

79 11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 and irrigation practices (requiring in turn a strong consultative and educational effort educational and consultative strong a turn in (requiring practices irrigation and agricultural in changes by accompanied not are they if but perspective; policy energy of uptake aneffortsfrom laudable are the pumpswater solar introduceto and of improvepumps water efficient to risk push significant The a others. example, For among high. Bengal, is results West unintended and Gujarat Pradesh, Andhra in reform at effortsof resultsmixed the by witnessed as – integratedcarefullyapproach a requiring policy-makers,for task challenging a is this but consumption;water reducing as well as sector the in electricity of over-use the reduce to help would issues two Tacklingthese freshwaterannual withdrawals).of remarkable90% a for responsible is agriculturewhy reason significant (a method used widely most the remains 35-40%, only of efficiency efficiencyMoreover,2009). (BEE, (20-35%) irrigation,flood estimatedan with water use lowvery of Agrawal,mostly and 2015]), operation[Ghosh in pumps stockof the of 70% (around pumps electric on heavily relies system The farmland. of intensity cropping in irrigation India’s within had be system, to mostthe of one extensive worldthe in thatone and supportedhas increasethe gains efficiency energy significant also are There which ownership, land reduces theeconomies ofscale that mechanisation can bring. of nature fragmented the by limited be will change of pace the although higher, consumption energy push to expected generally is mechanisation Farm compared with an indicator of 211 in Italy and 461 in Japan (Ministry of Agriculture, 2013). 1 per 16 under is use tractor example, Foris significant gains. further for scope there productivity, in improvements large to led already have techniques modern although mechanised: increasingly become likelyto also is sector agriculture The section). industry (see fertilisers for need the increasing grows, population the and rise standards living diversify,as and grow to expected is food for demand hand, one the On projections. in our demand energy of agricultural evolution the affect elements Different diesel) afurther30%. (overwhelmingly products oil and share 2040 the of 68% for accounting electricity with 27 increases agriculture by in projections, energy consumption our irrigation performance.In poor tariffs) and subsidised highly of (because electricity of particularly an inter-related knot of issues around inefficient pump byaround sets, sector, over-consumption energy increased the to relevant challenges has multiple faces India still agriculture 2000, in since 35% production grains food total energy Although electricity,consumer, of respectively. and diesel an important of consumption final total the is also of 18% and 15% for and responsible population country’s the of half directly engages GDP, India’s still it to contribution sector’s agriculture the in decline the Despite Agriculture inour moderately expands road transport in projections, accounting for0.2 gas of use The cities. several in network refuelling established an and buses, and taxis of composed mostly world, the in vehicles todaysixth-largestvehicles.Nevertheless,India the naturalof numberhas of fleet the gas 80

mboe/d ofdemand by 2040. World Energy Outlook |

Mt oe to 50 to oe

000

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Special Report Mt ares in India in ares oe by 2040, by oe © OECD/IEA, 2015 Chapter 2 energy sources. load shedding and difficulties in meeting obligations to purchase power from renewable to leads This plants. peaking costly from electricity canpurchasing from distributors it deter as supply, power for implications operational has also situation financial Their to invest as much as they should to upgrade ageing and loss-prone parts of the network. unable are utilities distribution resources, financial Lacking companies. generating the frombuy they electricity the of utility the tocost the than lower typically is sold power have been utilities accumulating large losses because the average distribution revenue per kilowatt-hour The (kWh) of distribution. is outlook, future the to vital component, missingkey The grid. transmission national the of extension and strengthening the and electricityto improving access in rise sharp potential,powera solar and intolargewind tap to policies of introduction sector,the private the by measure, large in undertaken, was that capacity generation in expansion rapid a including India, in sector power the Chapterrecentin 1, outlined yearsAs have markedbeen impressiveby achievements in Power sector Figure ( solar-powered by met being pumps demand growing of share for a irrigation,rapidly with use energy the of 90% to close meets electricity period, projection the of end the By 2.5. offactor a by sets pump diesel of exceedsales sets pump electric of sales the currently – ones electric by replaced are sets pump diesel more and more as flat, essentially remains for irrigation consumption Oil irrigation. for gains efficiency further to leads techniques by is improved pumps of electric around 25%, compared efficiency with today’s average levels, and the more widespread Scenario, adoption of drip Policies irrigation New the In water consumption. farmers),with potentialthe of some on theyout missing risk gains, wellas increasingas Mtoe Figure 35 40 10 15 20 25 30 5

2.17).

2.17

| 2013

Outlook forIndia’s

⊳

Energy demandforirrigationbysourceinIndiathe New PoliciesScenario 2020 energy consumption 2030

2040

Diesel G Solar rid connected pumps pu mps

pu mps 81

11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 which does offer reasonable incentives for investment in generation andtransmission capacity, in generation sufficient to keep pacewithIndia’s rapidly growing needs. for investment incentives reasonable offer does which a system is result net The implementation. their state-by-state in persistentvariations of likelihood the and involved challenges the of scale the about judgement our reflects that andthe points these all to projections in in relation the New Policies Scenario assume progress expressed in all been these areas – albeitalready at a pacehave intentions Policy utilities include: revenuethe On equation,the measuresof side improve to distribution the of position the ■ ■ ■ ■ ■ ■ ■ 3 to period the over triples 2040, rising by 4.9% per year on average than from 900 terawatt-hours more (TWh)in 2013 to almost demand electricity Scenario, Policies New the In Electricity demand full cost recovery, for example: A suite of measures, with strong inter-linkages can move the system progressively towards the affordability of electricity is a question of understandable political and socialbecause sensitivity. least –not isolation in solution a offer cannot they but necessary,are increases tariff End-user sector. distribution the facing problems the to answer single no is There 82 roughly amount an 2040, to 2013 from demand electricity global in increase the of 17%

■ ■ ■ ■ ■ ■ ■ 300 to improving their performance, while also providing an efficient and transparent and governance framework efficient for thesystem asawhole. an providing also while performance, their improving to attention consistent to pay independent utilities distribution the and compels that bodies, well-trained regulatory well-staffed, by policed environment, regulatory A state to be offered to specific groups, suchasagricultural andvulnerable consumers. with adequate compensation from the state for any below-cost tariffs required by the sectors, residential and commercial industrial, between cross-subsidisation Reducing andnon-collection ofpaymentsand non-billing, for electricity consumed. non-payment theft, from arising those i.e. losses, non-technical of issue Tacklingthe new generation andtransmission projects, withapredictable timeframe. to hearing transparent and a robust gives that approvals and permitting of system A andlicensing regulatory the conditions for investors. and capacity, additional secure choice of to of the used instruments terms in both renewables, allied tosupport generation, policies power cost-effective with for environment competitive a to commitment Reliable transmission anddistribution network. across the arise that electricity physical of the effortsConcerted down losses bring to supply rights for coal (discussedinChapter 3)andamore openmarket for gas. Reliable and efficient procurement of fuel for the power sector, including auctioning of

TWh by the end of the projection period ( period projection the of end the by World Energy Outlook | Ida cons o almost for accounts India Table

2.3). Special Report © OECD/IEA, 2015 ag-cl cpie oe i te nuty etr o bteis ls netr o small or inverters plus diesel generators inbuildings. batteries or sector, industry the in power captive large-scale progressivelyultimatelyfor,relianceand need less upon, less back-up systems, whether demand, has widespread implications for the level of power consumption. It would lead to The anticipated increase in the reliability of power supply, including during times of peak electricity demandremains well below the world average in2040. Chapter 2 the as (CEA) Authority Electricity Central the by reported data the than different is 9. This final total of share a as expressed shedding from people without access to electricity. load Other energy sector is not shown as it is negligible. from resultsdemand potential include not does it that because least not demand, unmet of deficit measureconservative a is It consumption. energy the is demand Unmet Notes: Figur consumers. industrial and commercial residential, existing from consumption in growth strong and electricity to access of levels rising by system the on put are that pressures additional 4.0%. of rate growth annual average year,an per 710 over Africa combined. from and grows consumption East electricity Per-capita Middle Japan, in consumption power today’s to equivalent and disappears entirely by the mid-2020s the by entirely disappears and years coming the over steadily diminishes – supply electricity today’s in shedding load of incidence the to linked amount estimated an – demand unmet this projections, our In used. reliably be can they that knowledge the in appliances, of range their expand 0 h Cnrl lcrct Rgltr Cmiso hs siae a isald aaiy f 0 W f ml diesel small of GW 90 statistics. However, of IEA estimates the fuel capacity (diesel) consumption of these generators installed as part of power generation an fuel mix. estimated generatorsacross generatorsThese India. has are largely unmonitored coverednot and byregulation officialin included or Commission Regulatory Electricity Central 10. The by population. As such, CEA data for per-capita consumption are 957 kWh (2013/14). generation electricity gross divides CEA the while population by divided demand electricity as consumption electricity TWh 1 1 2 2 3 3

500 000 500 000 500 000 500 2000 e

2.18

|

U Outlook forIndia’s nmet de

⊳  New PoliciesScenario Electricity demandbysectorinIndiathe mand 2010

10 energy consumption It also releases some pent-up demand, as households as demand, pent-up some releases also It 2020

(Figure 9 Despite the growth, India’s per-capitaIndia’s growth, the Despite

2.18). 2030

kWh This occurs despite the large the despite occurs This

o oe hn 2 than more to

WEO calculates per-capitacalculates 2040 I T Residen Serv Agr ndu

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11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 ead s lcrc eils ae ey ml i-od it te nin akt vr the over market Indian the Outlook into in-roads small very make vehicles electric as demand sector’selectricitythe of all forresponsiblenearly rail is 2040: totalin the of 1% than less at small, relatively is sector transport the in demand Electricity 2040. by 12% to 2013 in meteringstart taketo from 18% demand falls electricity effect. agriculture in share of The more and measures efficiency as period projection the of 3.5%end peryear the of towards temperedrise is the overall but rises; also end-users agricultural by Consumption some oftheevening loadto thedaytime). transfereffectively present at (which inverters and batteries for role diminishing the and phenomenon; a development eveningthat is reinforced an by the remain increased reliability to of power expected supply is demand, residential by driven electricity, for demand Peak cooling. for demand and ownership appliance incomes, rising with line in 2040, by of electricity in residential energy consumption rises very quickly, from 10% in 2013 to 41% year.per average5.8% sharesystem,an of The bythe on demands their increasesteadily to supply electricity of quality improved the of advantagetake consumers services), and largest increases The residential includes (which sector 2040. buildings the In consumption. in rise the respectively of by 9% and 39% 18% for responsible to are which sub-sectors, aluminium and steel in2013 the from come 42% from slightly falls consumption more than triples over the demand electricity Industrial India. in electricity largestof the remainsconsumerIndustry but does not include imports, which are minimal. losses network (T&D) distribution and transmission and other) and transport(industry, usesservices, residential,final * Table 84

Demand

Industry Transport Services Residential Agriculture Other energy sector T&D losses Gross generation** PG own use Compound

2.3 period. averagerate.growth ** annual

⊳

Electricity demandbysectorandgenerationinthe New PoliciesScenario 2000 376 158 570 155 46 79 85 40 Outlook 8 0 1 2013

897 193 375 133 207 160 220 Gr period, though the overall share of industry in electricity 15 82 oss generation includes own use by power generatorsinpower bydemand use (PG), owngeneration includes oss 6 (TWh) 1 1 2020

766 351 565 207 329 222 107 313 20 8 World Energy Outlook | 2 2 2030

241 848 904 332 647 324 160 452 24 10 3 4 1 1 2040

450 115 277 288 124 401 229 613 30 13 Change 2 2

390 930 318 908 902 241 147 393 Special Report 14 2013-2040 7 CAAGR* 4.9% 4.7% 4.6% 6.4% 4.6% 2.5% 3.5% 2.7% 3.9% 3.9% © OECD/IEA, 2015 Chapter 2 Figure through andoff-grid mini- systems. 580 around 200 additional an where India, of areas rural in particularly made, be to expected achievements important the disguise not should this 2030, by access universal of target All for Energy Sustainable the of short fall to scenario this in projected is India though Even Africa. sub-Saharan in than rapid more much and elsewhere than fastergenerally is general) in Asia developing in (and progressIndia as in 2030, in aroundto8% 2013 in from20% declines electricity to access without people for figure global the in shareIndia’s Scenario, Policies New the In monthly fees that come with it, particularly if supply is unreliable and outages are frequent. the of because electricity of adoption forgo voluntarily might households some addition, costly. very be areas can surrounding In the in households last remote the connecting but today,connection electrical some have villages Indian most reach: to hardest the be to tend households remaining the as access, universal to gets India closer the difficult more place all the necessary connections, mini-grids and off-grid systems becomes progressively the to expand Moreover, in materialise. putting to time some take system distribution and transmission Investments timeframe. medium-term envisaged the within achieve to difficult is target the but action; accelerated for spur important an is households all for in 2030 ( the by reached is mid-2020s, but slower in ruralaccess areas, where universalsome 60 million people remain without where access areas, urban in fastest is change of pace The period. projection New Policiesthe of end the by electricity to in the access universal achieves and Scenario electrification household full towards progress major makes India Access to electricity Million 100 150 200 250 50

Figure 2.19 2013

|

million Outlook forIndia’s

⊳

2.19).

million 2020 in IndiatheNewPoliciesScenario Population people gain access to electricity either through grid connections or connections grid through either electricity to access gain people The government’s goal of providing round-the-clock electricity access

people gain access by 2030. Over the entire projection period, projection entire the Over 2030. by access gain people 2025

without energy consumption 2030

access

2035

to

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20% 40% 60% 80% 100%

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11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 the reliability and quality of supply and integrate variable renewable energy technologiesintegrateenergyrenewable variableand supply of quality and reliability the improve time, at any demand meet to fleet the to added be to need plants power flexible and capacityPeaking shedding. load regular causes which shortagesovercome tothe and Power generation serve growing be powerto rapidly demandexpanded to needs capacity The power system in India has to cope with a number of challenges over the Electricity supply an become businesses important source ofeconomic activityand revenue. as these sustainability, financial to strongly contribute also can businesses, small for i.e. uses, productive support to electricity for provision in Building tariffs and better targeted subsidies for the poorest households can all help in this respect. of sustainedin welfare:electrification bring benefits terms if is to metering, differentiated criterion essential an is households poorest the power for affordability of The monitored. and implemented financed, sustainably be can plans electrification state that ensure to wellco- Renewableand NewEnergy, RuralElectrification Corporation Boards) and Electricity State and an integrated of the existence ordinated is strategy among the various as public bodies involved (Ministry of Power, electrification, Ministry of with progress faster to achieve is important technologies off-grid and on-grid of roles respective the Defining costs (Palit, 2014). transaction reduce to adopted been has systems standardised possible) as far (as using operators. In Chhattisgarh, a cluster approach involving structured maintenance networks, because successful be level local the support to involvementtechnicians qualified forthe of made provision was to proved developments mini-grid instance, for Bengal West In maintenance. and operations mini-grid for necessary is knowledge technical Moreover, essential. remains projects small-scale for organisations non-governmental or states the fromTargeted subsidies.support without pay to ability the have consumers where areas banks and private equity. While this is promising, private investors tend to invest mainly in now by financed is models, service” sectorfor “fee through private usually role, The commercial greater enterprises.a playing social and private by run are or projects based community- are mini-grids Most projects. off-grid against calculation economic the skew important some for on-grid supply, often faces well below-cost recovery levels, constitutelow India tariffs a majorbut barrier, innovation, as they rural technology and model business in for an area is systems This difficulties. off-grid and mini- of development The economically more costly thanmini-gridsoroff-grid solutions. or difficult technically be might extension grid areas, rural in living population remaining and around the centres of villages, tend to gain access through the grid as well; but for the density, in population i.e. high relatively of areas to close Households option. economical more the is this as extensions grid exclusivelyvia access gain areas urban in living people Scenario, Policies New the In plans. these realise to financing of availability the and grid the extend to current plans the systems, the distribution and transmission including the of coverage factors, and state multiple on depends provided is that access of type The 86 World Energy Outlook | Outlook Special Report period. © OECD/IEA, 2015 Chapter 2 factor that could seriously impedeinvestment. power off-takers, weak by financially a compensated insufficiently being of risk significant a year. Plants fulfilling such a balancing role, with their relatively high variable costs, face a plants (typically gas turbines or large engines) that might run for only a few hundred hours power of number the in increase substantial a require projections the capacity, peaking Moreover,shine. not shortage indoes the effort sun reduce an to the in or blow not does thermal plants, meaning that additional capacity is needed to meet demand when the wind thanfactors capacity lower have power solar and Wind system.power Indian the of part large part to installations of variable renewables, which become an increasingly important EuropeantodayUnion ( over1 290 from three-and-a-half-times, grows India in capacity power Installed Power generation capacity 16 over by grows power generation global Scenario New investment Policies the investment In and finance. world, including fuel procurement, technology co-operation and imports, as well as flows of the of rest interactions the rangeof with a on dependent also is – countries neighbouring trade power with little being theredespite – sectorpower Indian the developmentof The presented trends inthissectionare sensitivevery tothesuccessful implementation long-term of reforms. the policy; of question a primarily is challenges these addresses India How electricity. to access without people of millions grid the power to connect in and generation volatility increasing with deal losses, high notoriously the down bring power, of amounts growing transport to investments massive require networks distribution and energy security reflect to needs mix concerns, affordability and environmental generation compatibility. Moreover, the electricity transmission of evolution The system. the into s netd n ni oe te rjcin eid Rpdy rwn pwr generationa significant India contributor tomake growing power carbon-dioxidealso (CO generation for growing choice of fuel Rapidly the as period. coal on reliance projection continued and the over India in invested is the New Policies Scenario one out of ten dollars invested in the power sector worldwide Outlook the overinvestment generation power global cumulative in thereforeIndia’sshare and countriesOECD in than costlower a at comes typically India stationpowerin a Building installed PV capacity intheworld to 2040. newly of one-sixth for PV, accounting solar utility-scale of terms in playerkey a becomes these plants – before 2020 India becomes the largest coal importer in the world. India also fuel to coal traded internationally of share growing a on relies and capacity plant power coal-fired global in increase the of 50% nearly for accounts India Similarly growth. this of in the world. a-half-times; making its power sector the second-largest emitter from power generation In the period to 2040, India’s CO

075 period is lower than its share in global power demand growth. Nonetheless, in Nonetheless, growth. demand power global in share its than lower is period

| G

W in 2040, the latter being roughly equivalent to the installed capacity in the installed in equivalentlatter the being capacity roughly the to 2040, in W Outlook forIndia’s

000

TWh Capacity increasesfasterCapacity generation;than in due is this Table over the over

2.4). energy consumption 2 emissions from power generation grow nearly two-and- Outlook period and India accounts for almost a fifth a almost for accounts India and period 2 ) emissions from the power sector.

G W in 2014 to 2014 in W 87 11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 Box 88 Figure 20 last the during built was fleet the of 15% only level, global a on while, old, years 20 power is similarly striking: nearly two-thirds of the Indian nuclear capacity is less than of the coal fleet is less than ten years old). The comparison of the age profile of nuclear Indian coal capacity has been added during the last ten years (while globally only 38% their technical lifetime over theOutlook powergeneration of end that the means relatively will reach plants fleet of these few ( two-thirds is share this India in but old, years 20 than less is fleet plant power thermal world’s the of half over Just to keep upwithlarge-scale retirements. to ensure that capacity additions keep pace with consumption, rather than also having or replaced be one: a simple re-powered to essentially beforeinvestment is the India 2040, in equation have will capacity PV and wind installed currently the all almost lifetimes (the assumed lifetime of wind and solar PV is around 25 years). Thus, although 40 remaining The rapidly. plants and replacing them with larger supercritical stations in order to expand capacity Indian authorities are actively discussing the idea of prematurely retiring old, inefficient sites. on existing stations power efficient and large installing by processes acquisition figure the capacity than suggests. larger This provides an opportunity is in many cases retiring to bypass lengthy plants and costly land of number the size, unit smaller a 60 around 2040, to a is 100 therefore the Of India. in OECD countries) challenge smaller in issue (amajor stations power retiring Replacing

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© OECD/IEA, 2015 Chapter 2 ultra-supercritical and supercritical of installation modern technology the requires plants to be designed according to the properties of a specific impede coal type. not does coal technology Indian but it inevitably results in an efficiency of loss compared to what would content be achievable with low ash coal. ash Use of high 11. The renewables, Variable load. high of times in operate to tend plants hydroreservoir-based while baseload, as serving essentially plant run-of-river with heterogeneous, is capacity 45 from growing over the dams, large for especially a challenge, remain acceptance public and permitting Although Figure in system operations. supply,power keyforload-following used typicallyrolesoperationbalancing, being and 120 over reaching given shift notable a – India’s endowment 2040 of low quality (high ash) coal. in 38% to today 34% from efficiency plant coal average period projection the of half towardsshift The supercritical(Figure2.21). effectivelytechnology country’s lattertheboosts the in built (IGCCs) combined-cycle gasification around half of the total and there are also some ultra-supercritical plants and integrated coal fleet. By 2040 the share of supercritical plants in the expanded fleet has increased to capability for such boiler types has been boosted, accounting for the remaining 15% of the Several supercritical plants have come online in recent years, as domestic manufacturing efficiency.conversion their of terms in poorly technology,performing boiler subcritical markedly.onchanges based also arefleet plants coalTodaycoal the the of of 85% over composition technological The early-2020s. the in States United the overtaken having China), (after world the in fleet coal second-largest the has India time which by 440 2040, almost reaching two-and-a-half-times, around by increases fleet coal the ten last the ( years during service into entered have which of half – plants power Coal-fired GW 100 200 300 400 500 2010

– remain the backbone of the Indian power system. In our projections, our In system. power Indian the of backbone the remain – Box

Outlook 2.21

| 2.7)

Outlook forIndia’s 2015

⊳  period India increasingly taps its large hydropower potential, with capacity

G Coal-fired efficiency

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Policies

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Scenario

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11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 be complemented by additionalpeaking capacity. PVcontributenot does to meeting a demand, peak key whyreason its needs expansion to W in 2014 to over 180 solar India, system, peaking in like evening that an in but relatively high, is load when day 3.5 that underpins the rise in renewable energy development, with capacity boosted from just Wind power reaches around 140 like wind power and especially solar PV, are set to grow rapidly over the period (Table 2.4). 90 in 2014, the target would require annual additions averaging 12 averaging additions annual require would target the 2014, 20 in of target previous the over five-fold increase a targetis This 2022. in W 3.7 From ambition. solar India’s in step-change a representing 100 to capacity solar country’s the bring to plans announced has government Indian The potentially transformativeand technologyinIndia’s energy mix. new a be shall power solar that intent of statement powerful a making purpose, risktoour downside vital one India’s that served targets have already solar is unarguable well as is what projection: as potential is upside There chains. supply overheating installation without industry an of manufacturersbuild-up fromlocalfor allowsthe and panels the of bulk the sources that deployment rateof today’sa capacity, at increasing 40 reaches capacity PV solar that project we mind, in constraints these With 4). Chapter (see risk currency foreign as such challenges, new introduces attractingcapital international but sector; financial domestic the of capacity estimated the problematic, $170 as is ample PV manufacturing capacity in other countries. The financing issue is particularly 2.8 (around capability manufacturing panel solar current India’s beyond be also would years, early the Arapid in least at installations, solar in are overcome. increase and financing expansion network remuneration, acquisition, land to related issues of set challenging a that require will ambitions these Achieving and availability offinancing(see alsoChapter 3). cost the improving and policies net-metering on focus primarily They advanced. less PV are rooftop out roll to Initiatives schemes. support and targets own their with up with up to states, 500 various across facilities solar large-scale parks, solar of series a for proposal 15 more than add to plans (which Mission Solar National the being centrepieces the with advanced, most the are installations utility-scale the for Plans installations. off-grid and small-scale other and installations PV rooftop being 60 around 11 the exceedednever date, to have, country single a by PV solar of installations annual The years. eight next the

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G SPOTLIGHT

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G G W, W, © OECD/IEA, 2015 Chapter 2 Table oe ep gsfrd oe gnrto t ices mr ta sxfl overthe period, thanreaching 430 six-fold more to increase generation power gas-fired helps role they flexibly follow the daily load pattern and meet power. demand Instead, peaks. baseload This essential produce balancing not do plants gas-fired – India in fuel the of cost high continued relativelythe to due – although term, longer the over mix power the in ground further gains Gas price. competitive more a at available becomes LNG imported as term, operating only at verylow load-factors. This situation is partially reversed over the medium (CCGTs)areturbines gas combined-cycle many loss, large a at plants the run than Rather domesticallyof produced gas, higher which for cost imported substitute. no been has LNG 7% in 2040. Gas-fired power plants are currently suffering from lower than expected supply coal in baseload power generation, increasing its share in the mix from around 3% today to with renewables, nuclear and gas all increasing at high rates. Nuclear power complements only China (and produces more electricity by two-and-a-half-times from coal than India), coal’s share in expands the power mix generation drops to 57%, power coal-fired though ( plants power coal-fired by generated are electricity of units four every the of out three has diverse. nearly Today, increasingly India becomes The power also mix 2040, generation States. the United by and output, China after of world, terms the in In system power third-largest later). years few a only levels overtakes demand European power Indian losses, of rate higher a of because (although, 2035 by meaning that power output in India is larger than power generation in the European Union 1 from increases production Electricity Power generation * Compound average annual growth rate. to 10%in2040.

Total Renewables Nuclear Fossil fuels Other Solar PV Wind Hydro Oil Gas Coal

2.4

|

⊳

Outlook forIndia’s

2000 New PoliciesScenario Power generationcapacitybytypeinIndiathe 113 25 27 11 84 66 0 0 1 3 7

TWh 2014 289 204 174 by 2040. The share of gas in the Indian power mix nearly doubles 23 45 79 23 7 3 6 7 energy consumption 2020 436 147 280 230 11 28 50 58 10 41 9

193 (GW) 2030 746 100 102 304 419 329 18 83 24 13 76 W i 21 t oe 4 over to 2013 in TWh 1 076 2040 182 142 108 462 122 438 576 30 39 15 100% 2014 15% 27% 60% 71% Figure 3% 1% 8% 2% 3% 8% Shares

2.22). 100% 2040

17% 13% 10% 43% 11% 41% 53% 100 3% 4% 1%

By 2040, even 2040, By W i 2040, in TWh 2014-2040 CAAGR* 16.4% 5.2% 5.5% 7.2% 3.5% 7.0% 7.6% 2.9% 6.6% 3.6% 4.1% Outlook 91

11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 dioxide per kilowatt-hour(g technologies bring the CO coal-fired efficient more of use the and deployment energy Renewable 2040. in 45% to today half from decreases emissions totalcountry’s the in sector power the of share The CO important role inproviding accessto electricity inremote villages. playhydroIndia, Small annorthern 2040. mountainous of in parts those plants,especially in in fluctuations electricity renewables-based the of meet third a provides hydropowerstill Overall, to demand. flexibly more operate others while power, baseload providing installations some with group, varied a form plantshydropower although respect, this in helps hydropower of growth The sources. power flexible of expansion an triggering and integrate these sources, affecting the operational characteristics of the other power plants powerwind PVand generation requires complimentary system arrangements optimallyto modestlylatterup the picking in projection the of half The period. variable nature solar of 2030. Wind energy deployment is primarily at onshore sites, with offshore wind power only United the first overtaking 2040, by installations solar resources, makes the country the second-largest good producer of the electricity from solar with PV combination in deployment, PV solar on focus government’s The output. power renewable in growth the of 65% for accounting together PV solar and wind with The share of all renewables in power generation increases from 17% today to 26%in 2040, Outlook role today in the power system in India. However, this is set to change substantially over the a minor – plays of hydro exception the with – energies Powergeneration from renewable Figure 92 Outlook TWh 2 1 000 2 000 3 000 4 000 5 000 emissions from power generation in India grow nearly two-and-a-half-times over the two-and-a-half-times over nearly grow India in generation power from emissions 2000

period, reaching 2.3 reaching period, period, with non-hydro renewable power output growing twelve-fold, to 720

2.22

⊳

historical New PoliciesScenario Power generationbysourceinIndiathe 2010

2 emissions-intensity down by 30%, from 790

CO projected

gig 2 /kWh) to 560 atonnes (Gt) in 2040 (up from just under 1 under just from (up 2040 in (Gt) atonnes 2020

g

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© OECD/IEA, 2015 Chapter 2 intensive technologies, asupward pressures onthese costs are contained by the marked overthe Outlook decrease costs generation power Coal-fired system. the to provide they value additional output upand by the therefore justified is generation costs in share disproportionately high Their down. ramp quickly to able being i.e. operation, flexible favour characteristics play akey role inthe reliability ofpower supply, asboththeir technical andeconomic shareaveragein generation costs amounts ( 17% to its while at 10% stands mix generation India’s in generation gas-fired of share the 2040 in costs: to than generation to less contribute also they – renewablesnon-hydro of case in the so than more – even though different, slightly is situation the plants, gas-fired For Figure avoids over-compensation. be designed inaway that captures thebenefit offalling technology costs over time and cost increases from non-hydro renewables deployment, their supportmechanisms must power generation, slightly above itscontribution to thecountry’s output.To contain the a result, in2040, non-hydro renewable energy accounts for 19%ofthe average cost of observations are truefor windpower, althoughitscapacity credit isslightly higher. As the amount ofdispatchable capacity needed to serve theevening peak. Some similar conventional generation duringthedaytime –saving fuel costs –butreduces onlyslightly PV doesnothave asignificant capacity credit. Consequently, solarPV primarilydisplaces costs. Indiaisanevening peaking system andtherefore, despite abundant sunshine, solar chiefly solarPV andwindpower –they putupward pressure onIndia’s power generation Despite themultiplebenefits that come withthedeployment ofnon-hydro renewables – around $65permegawatt-hour (MWh)today to just over $70/MWhin2040( transmission anddistribution. The average cost ofpower generation increases from essential to keep incheckthe underlyingcosts ofpower generation andthecosts of The affordability ofelectricityisanunderstandably sensitive issue inIndia, making it Power prices andgeneration costs 2040 2030 2020 2014 2010

2.23

|

Outlook for India’s energy Outlook forIndia’s 20

⊳

period,despite increasing coal pricesanddeployment ofmore capital- in IndiatheNewPoliciesScenario Components ofthedelivered costofanaverageunitpower 40

60

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11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 key to countering risingpower generation cost and keeping power affordable forall. transmission. brings Improving the efficiency of the networks and bringing their losses costs down is the and commercial power of volume growing the and of technical expansion grid despite time, over down costs network reduction Continued 2040. in $105/MWh $115/MWh today, system costs stay flat over the medium term and then decline to around system.costsnetworkprovidethe reliefaroundtoat Standingdeclining as term, long the over slightly decrease costs system average the costs, generation average rising Despite costs can be interpreted as a proxy for average end-user prices (excluding taxes and levies). electricity. of distribution transmissionand per-MWh-basis, a the average On total system the for costs network includes cost system total the costs, generation the to addition In are lessexposed to thevolatility offuelprices. generation costs as stable, more slightly tariffs power makes power, it affordability of but the impact directly not does structure cost the in shift fixed,This 2014. are in 53% costs with compared generation power total the of 55% 2040, In expenditure. fuel reducing efficiency, byhigher justified is supercritical cost technology. capital the focus to higher shifting The with more capital-intensive becomes also generation power Coal-fired costs. variable minimal have and capital-intensive very are technologies these rapidly; grow PV solar and However,wind nuclear,hydro,costs. fuel (variable) of composed primarily are costs generation power coal, on reliance large transformation. with Today, considerable a undergoes also components, fixed and variable their of terms in costs, of structure The Figure tariffs (although thefalling technology costs ofsolar andwindreduce thiseffect over time). to keepelectricity power of sources costly more adding helping is India when period costs, a in consumers to overall for affordable than to output more substantially power contributes Coal-fired time. over realised efficiency conversion in improvements 94 2040 2014 Gen Gen era era

Costs Costs 2.24 tion tion

⊳  Coal generation inIndiatheNewPoliciesScenario Share oftotalpowergenerationcostsversusshare

20% Gas a

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© OECD/IEA, 2015 Chapter 2 infrastructure. metering the of modernisation opportunity,largethe a is also but challenge, Anadditional generation thereby reducing costs. fleet, plant power the of dispatch efficient more permits grid expanded This 2040. to period the in 70% over by increases network the of length the projections, electricity.our to In access have not do currentlythat households and settlements those reach to also power systems, and neighbouring interconnection with improve to projects, solar and wind utility-scale of share growing integratethe to demand, of consumption, the network still needs to be expanded both to accommodate growing power distributed renewables, notably rooftop solar the PV, over allows challenges capacity to additional be of built nearer number to thea faces point network distribution and transmission India’s losses, the down bringing from Apart Figure network much needed out investments. carry to funds the them giving companies, distribution and transmission the of viability financial the re-establish helps losses commercial Reducing 2040. in 16% than less to today 20% of average national a from dropping share the with losses. In our projections, India takesto network large steps in add bringing down collection network revenue losses inadequate over time, and consumption unmetered theft, side, commercialOn the installations. efficient and modern than losses technical high to prone generation sources and demand centres. Ageing and poorly maintained networks are more between distance and temperatures ambient with increase typically losses technical The ( world the generation) electricity in (of loss of shares highest India’s the of suffersnetwork one from consumers. the to kilometres few last the over power deliver which lines, distribution of power the restconsistsThe length. network the of 5% fromforonly account – hubs demand the to plants distances large over power transport which – lines Transmission grid. India hasfive regional network zones that are connected to each other, forming anational Transmission anddistribution 12% 16% 20% 4% 8%

I

ndia 2.25

| Figure

Outlook forIndia’s

⊳ 

2.25). international contextintheNewPoliciesScenario Network lossesandreductionofinIndiaan Brazil

Network losses are driven by technical and commercial factors. commercial and technical by driven are losses Network R ussia energy consumption

Eu Un ropean ion Outlook

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tion 95

11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 growth; almost two-thirds of the estimated releases of PM 3 h aayi o te mat o ftr lcl i pluin rns a be dvlpd n olbrto wt the with collaboration in developed been has trends pollution air local International Institute for Applied futureSystems Analysis, Austria. of impacts the of analysis 13. The and is considered the most harmful to health. (PM industrial facilities (Figure 2.26). The strong increase in demand for mobility and increasing extent, lesser a to and, plants power in combustion coal from primarily stemming levels, 12. Particulate matter is categorised by the size of the particles, PM Figure NO in rise large similarly a to lead wnership car SO of emissions 2040, to period the Over relevant pollutants, sulphur oxides (SO main the of evolution the examinedhave we analysis, this For 1). Chapter (see health on toll heavy a takes already that India in problem growing and large a is pollution air Local Implications for airquality establish theground for demand-sidemanagement andtheintroduction ofsmartgrids. to solutions information technology-based other and metering smart out roll to India allow also could but losses, commercial reduced to contribute only not would this successful, If 96 increase intotal emissions, whichdoubleintheperiodto 2040. to the contribution largest the makes transformation and production Energy significant. remains use industry,biomass fromwhere emissions in increase robust a by degree, a to for cooking, emissions are reduced by 30% in the residential sector. The benefits are offset, substituted biomass with industry and, and combustion households by biomass LPG of for three-fold increase), compounded by emissions from industrial combustion and the and combustion industrial from broader energy sector, which emissions also grow robustly. PM by compounded increase), three-fold in theenergy system to manage these issues. the amount of each pollutant emitted, to help identify the improvements that can be made Million tonnes

10 15 20 25 o 2.5 5

), assessing how the different energy scenarios presented in this presented in different scenarios energy the how assessing ),

2.26 2010 SO

⊳ Emissions ofNO x 2040

2010 NO

2040 x

x , SO x ), nitrogen oxides (NO

x andPM x rise to more than two-times their current their two-times than more to rise 13 2010 World Energy Outlook | PM 2.5 x

2.5 2.5 ra tasot msin rgse a register emissions transport (road represents the size of the particles in micrometres 2.5 2040 bysector,2010and2040 emissionsshow muchmore modest

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© OECD/IEA, 2015 air quality set a target annual average limit for PM for limit average annual target a set quality air govern only particulate matter and set a target ranging from 150 milligrams percubic 150 milligrams from (mg/m metre ranging a target set and matter particulate only govern the 1980sand in low by international standards. Current set standards for coal-fired power plants,were for example, comparatively now are force standards the in that mean then since improvements the standards technological of many stand, things As realities. to introduce improvements and updates to bring it into line with India’s changing economic Policy-makers 1987). planning in are amendments (with 1981 to back dates Act, Pollution daily giving cities, and Control of Air Prevention the legislation, status.existing The pollution the ten updateson in index quality air an implement to plans announced have who policy-makers, Indian to known well is pollution air in increase unbridled an of threat The impacts additionallyonsoybean, rice andmaize crops.adverse have will and yield wheat in decrease 13% a to leads gases ozone ground-level in increase the 2040, By losses. crop to leads ozone ground-level in rise the addition, In number.this to considerably add to expected be could cooking, for biomass solid of use which reach 1.7 million in 2040. Indoor air pollution, from the continued though diminished Chapter 2 in outdoor PM current of result rise a is that expectancy The life reduced in months 16.8 the to addition in is (this months considerable. seven are pollution increasing PM of impacts health The recommended by the World HealthOrganization. 2.5 alone is calculated to lead to a reduction in life expectancy of more than more of expectancy life in reduction a to lead to calculated is alone emissions

|

Outlook forIndia’s 3 ) to 350 mg/m 350 to ) 2.5 levels). This corresponds to a 140% increase in premature deaths,premature in increase 140% a to corresponds This levels). 3 , compared with 30 with compared , energy consumption

mg 2.5 /m that is four-times higher than that than higher four-times is that 3 in China. Standards for ambient for Standards China. in 97 11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 © OECD/IEA, 2015 Chapter 3 • • • • • have though easedconstraints onnuclearco-operation. acceptance could continue to hold back investment: recent international agreements plants have power fallen well short of planned levels andnuclear in recent years, and issues of permitting of and public hydropower Additions projections. our in coal to only second is 2040 to capacity generation solar of expansion the but installationfinancing, and grids use, and land with issues manufacturing by practice, in projects, slowed, is Deployment capabilities. new galvanising intent, of statement 175 reach to target The effective. cost increasingly and abundant are power solar and Wind 90 to by 2040, rises and high production reliance on the Gas Middle East for imported crude oil. India’s refinery outputgrows, butisincreasingly dedicated to thedomestic market. 9.3 to imports, oil net in rise rapid a is result The projects. oil new constraincosts high India’s oil production tails off to around 700 largest importer ofcoal before 2020andimportsriseto over 400 world’s the becomes India India. coastal of parts in imports priced competitively of the of structure an expansion concentrated including to consumers, the of coal allocation efficient by an investmentand constrained is 2020, by tonnes mining llion new underpin contracting and procurement coal of system the to Reforms bottlenecks. infrastructure and permitting, and use land over issues industry, coal 1.5 to output raise to target volumetric ambitious the as such growth, of rate faster a of Accomplishmentproducers. global among China to only second India making 2040, 930 to increases production Coal supply isimported, upfrom 32%in2013. energy primary of 40% than more 2040 by and needs, consumption India’s below is far production energy domestic in increase the terms. Yet energy in contribution largest the far by year, makes per 4% almost at rising coal, of production domestic low-carbon 2040, to projections energy – led by solar and wind power – our grows rapidly, from In a relatively low base, but fronts. all on resources supply energy its The sheer size of theincrease energyin means that India demand in itmobilises to theMiddleEast andto Central Asiaoffers scope for new pipelinelinks. India’s although LNG, relative of proximity imports rising by filled is balance gas The producers, or investment risks falling short – especially for complex offshore projects. (or premium on top of) the current formula that determines the price paid to domestic

mb/d

|

bi

Outlook forIndia’s

G o rnwbe aaiy ecuig ag hdo b 22 i a strong a is 2022 by hydro) large (excluding capacity renewable of W

Outlook forIndia’senergysupply energy supply bcm in 2040, but this would require an adjustment to adjustment an require would this but 2040, in Highlights

Mt Unlimited needs,limitedresources ce (roughly 1 (roughly ce

kb/d, as limited resources and relatively

750

Mt in volumetric terms) in terms) volumetric in

Mtce by 2040. Chapter 3 99

© OECD/IEA, 2015 the fact that typically not all in-situ reserves are extractable) and deducts cumulative past production volumes. resources and 132 und Rohstoffe (BGR) on reserves and resources are used for all countries in the countriesin forall Rohstoffe resourcesused are und and reserves on (BGR) orderto1. In provide consistent a data for basis fromBundesanstaltmodelling, underlying the Geowissenschaften für and Chhattisgarh ( of the country, with two-thirds of Indian reserves located in the states of Jharkand, Odisha tonnes (BGR, 2014). Coal is not evenly dispersed across India. Most can be found in the 213 larger,easttwo-and-a-half-times at almost are proven, be to yet95%, up are makes coal)that coking deposits and (steam coal hard which of – output current of ears and theremainder islignite. 140 87 to amount India in reserves coal provenTotal Coal quality, resources andreserves Coal Note: Mtoe = million tonnes of oil equivalent. Figur least at imports coal for need the keep production coal domestic in Increases dependence ofgreater than90%. partly in check. But net oil imports rise dramatically, to reach 9.3 Table ( fuels imported by filled be to needs that gapgrowing a leaving demand, with up to keep in aggregate sufficient not is production energy play.Yetdomestic into come higher in 2040 than in 2013, with the sole exception of oil, where India’s resource limitations power increases at the fastest pace, but the production of all domestic sources of energy is solar and wind of Deployment Scenario. Policies New the in frontsavailable all on supply mobilises India that means expand to expected is consumption energy which at pace The Energy supplyinIndia 100 section are different from the Indian coal ministry’s coal Indian the fromdifferent are section -

1 Mtoe - - - -

800 600 400 200 000 200

y

2000 0 3.1). e

3.1

2005 ⊳

billion

Fossil-fuel tradebalanceinIndiatheNewPoliciesScenario Figure historical tonnes of reserves) as the BGR applies a recovery factor to the in-situ reserves (accounting for 2010

3.2 andmapat

2015 projected 1 oa ca rsucs ifre ad niae) including indicated), and (inferred resources coal Total

2020 Figure

Coal Inventory ofIndia 2025

3.7).

World Energy Outlook |

2030 billion

report (which states 307 states (which report tonnes – roughly equivalent to equivalent roughly – tonnes 2035 World Energy Outlook

mb/d 2040 Total Cr Coal products Petroleum Natu

by 2040, an import ude oil

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Special Report

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Figure tonnes of tonnes

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3.1,

© OECD/IEA, 2015 Chapter 3 such asChina, United States orRussia. countries,producinglarge other in found typically coals averagecontentof heatthe than a range of 3 content high-ash The coal. currently coal the India in produced Most of in falls coal. the calorific reduces of the value the from removed be easily cannot ash inherent – process part of the coal. Contrary to free ash – mineral impurities that are related to the extraction combustible the in embedded are that matter mineral of particles small i.e. ash, inherent so-called is coal Indian in ash the of majority content.The marketash rarelyexceeds15% internationalcomparison,coaltradedcoalsapproachingthe In highestash on 50%. the of some greater, with or 30% of content ash has production coal current of Three-quarters content. high-ash but moisture low relatively with bituminous, mostly is coal hard Indian of itsminingindustry. full potential of India’s coal endowment will require significant technological improvement been successful in economically and safely haveextracting companies coalmining Worldwide, at in-roads. greatlimited depths,made buthas unlocking– the mines some already in applied though even – mining underground state-of-the-art far, so but mining, in surface experience extensive have India in companies Coal techniques. mining underground Coal clearing. forest and resettlement avoids 300 greaterthan depths at it occurring as tapped, be to are deposits these if solution feasible only the prove ultimately might underground going obtain), to difficult is approval mining surface which for (areas forests dense or settlements below located are reserves coal these of some However,as methods. mining surface using exploitable typically are and metres, 300 to up of depth shallow,a mostly at are reserves coal Indian compoundaverage= GR growthannual rate. metres;cubic barrelsday;billion thousand per = = Notes: bcm kb/d Mtce = million tonnes of coal equivalent. * Tabl

Coal Natural gas Share ofimports Total production Total demand Renewables Nuclear Oil CAA Other renewables Bioenergy Hydropower e

3.1

|

⊳

500 Outlook forIndia’s

Energy productioninIndiatheNewPoliciesScenario kilocalories per kilogram (kcal/kg) to 5 Mtoe Mtoe Mtoe Mtoe Mtoe Mtoe Mtoe Mtoe Mtoe Mtoe Mtce kb/d bcm Unit % energy supply 2000 441 351 149 155 187 131 771 20% 28 23 37 0 6 4

me tres is usually economically extractableeconomicallywith usually only is tres 2013 775 523 188 204 340 238 917 32% 35 29 43 12 4 9 1 018 2020 619 209 237 425 298 734 39% 38 32 35 13 15 17

000 1 440 2030

836 217 274 632 443 678 42% k 55 46 31 35 22 43 cal/kg. This is markedly lower 1 908 1 121 2040 209 297 926 648 725 41% 89 75 31 60 29 70 Change 1 133 -192 n.a. 586 410 598 2013-2040 -12 55 46 20 93 56 16 61 CAAGR* 11.0% -1.2% -0.9% 3.6% 3.6% 0.4% 1.4% 3.8% 3.8% 3.4% 3.2% 7.9% 2.9% n.a. 101 11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 h mns xii a ihr aoritniy hn lehr. hl oe-at ie, in mines, open-cast While elsewhere. than labour-intensity higher a exhibit mines the Ma prevalent in countries with low wage levels. have a highly mechanised and hence capital-intensivetypically costcoal mining labour industry while high substitution with of capitalcountries capital:for labour and is less labour of cost relative the of function a is productivity 2. Miner 13 to up mines 5 than more produces China in miner a productive, thousand tonnes (kt) of coal per year, while two-and-a-halfan Indonesian than counterpart is less at producesleast 50% miner more coal Indian average An pace. slower much a at grown has productivity labour their and poorly perform still contrast,mines underground early-2000s ( the productivity since labour in doubling havingexperienceda mines to surface due is partly This mines. in underground than higher fifteen-times was In 2013, labour productivity (expressed as output per miner shift in tonnes) in surface mines of open-cast mines are usedto cross-subsidise costlyrents production from deepmines. the Consequently, returns. financial optimising andto than power rather stations to industry coal to provide output of maximisation is India in companies state-ownedcoal of goal primary the demand, coal surging by Driven structure). industry and market coal on section (see unprofitable outright are India in mines underground of 6 to adjusted (both coal imported for tonne per $80 and coal domestic foraverage on tonne per $40 of prices coal current At mines). underground in coal from surface mines, even when adjusted for energy content (which tends to be higher than produce to costly more much is India in mines underground from productivity, coal low to due primarily underground speaking, Generally high-costtonne. per small $150 of excess other in costs while have mines tonne, per $15 than less for coal mines producing open-cast large some with range, wide a in fall India in coal for costs Production Costs Sources: BGR; Inventory of Coal Resources of India; IEA analysis. Figure 102 West Bengal dhya Pradesh A

ndhra Pradesh C 3.2 hhatti

⊳

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11% k Hard coalreservesbystate 8% pr er n average. on year per t

13% 8% 82 billion tonnes

Other 6%

22%

Odi 33% 2 In India wages are still low and consequently and low still are wages India In sha

Jharkand

in India World Energy Outlook |

k t per year and an Australian workerAustralian an and year per t

Depth of hard coal reser

000 82% 16% 2%

k

cal/kg), the majority the cal/kg), 600 - 1 200m600 - 300 - 600m300 - 0 - 300m0 - Special Report In Figure

3.3). ves © OECD/IEA, 2015 Chapter 3 35 coal, steam were ce third-largest) the is India terms volume in terms; energy (in coal of producer fifth-largest 291 340 produced India Production prospects the over production coal in growth strong India’s (with productivity improving and costs capital up pushing by i.e. machinery, and equipment efficient more countercaneffectcompanies using this mining and increasing mechanisation although by upward pressure, experience to are expected wages growth, real (GDP) product domestic the over costs in increase moderate a to lead which factors price, oil the and wages are drivers cost fundamental two the mines, of open-cast high share the and methods production labour-intensive generally to Due Sources: IEA analysis; Coal Directory of India. Figure part ofthe coal remains inplaceas“pillars” to supporttheroof). ina coal the deposit to be of extracted fraction (with this method, a tunnels of coal only are carved allow out of the which seam, while methods, room-and-pillar on rely primarily mines Underground rare. still are methods longwall efficient mines, undergroundIndia’s particular, in larger scale, equipment, of of economies have use gaining increasingly made by electricity. underground mining in the latter half of the projection period, which tends to be powered is also likely to see some diversification away from oil use because of the rise in mechanised degree, be offset by more efficient equipment or additional use of electric draglines). India Scenario, put upward pressureNew Policies on costs at surfacethe mines (although this effectin can, to someenvisaged but as prices, equipment oil Rising earth-moving explosives. certain forto input fuel an as also a as primarily mining, open-cast in used are products widely oil oil: is driver cost second The miner). per output increase to rather but workforce the to reduce be not would gains efficiency and mechanisation of goal primary Index (2000=100) 100 150 200 250

50 Mt 2000

3.3

|

Outlook forIndia’s ⊳

Productivity evolutioninthecoalminingsectorIndia 2003

million

ons f ol qiaet Mc) f ol n 03 o which of 2013, in coal of (Mtce) equivalent coal of tonnes energy supply Mt 2006 ce coking coal and 14 and coal coking ce

Outlook 2009 period. With continued strong gross strong continued With period.

Mt ce lignite, making India the India making lignite, ce Outlook 2013 Surface mines Surface mines U

ndergro period, the period,

und

103 11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 production of less than 10%, indicating their tiny size. coal national to contribution small disproportionately their contrasttostark in is mines underground of number largeThe operations. underground are half than more which of India in mines coal active 530 over currently are 3. There mining does rise steadily from the mid-2020s and reaches 12% by 2040. undergroundof share the although decade,last the over supply in growth of source main Most of the production in our projections comes from surface mines, which have been the Sources: IEA analysis; Coal Directory of India. Figure two-and-a-half-times grows (from alow base) over the Nadu, Tamil and Rajasthan Gujarat, in place taking mostly the volume increasing from 35 subdued, is production coal coking in growth thus and small comparatively is coal coking behind only terms), Steamproductioncoal growth. China. accounts the India’s volume of almost all for endowment of and energy in (both producers coal global among position 925 to grows production coal Indian Scenario, Policies New the In Australia. and Indonesia States, United China, after 104 result of focussing on shallower, easier-to-mine deposits of low-energy coal, is projected the is coal, low-energy production, of shallower,deposits easier-to-mine coal on focussing of of result tonne per content energy decreasing of trend established The extent to whichthe sector isopened to competition. period; the speed at which new technologies are adopted in practice will be related to the Australia or United States) is gradually adopted by the coal China, industry in instance in for found India (as over technology underground mechanised the highly and efficient that assumes Scenario Policies New The approval. mine accelerating deposits, the many cases over in mining, surface for allow underground mining theoretically may be preferred as it avoids maydisturbance of the land and settlements reserves the of depth the where Even growth. production sustain to necessary increasingly is mining underground Mtce 1

000 200 400 600 800 2000

3.4

2005 ⊳

India intheNewPoliciesScenario Coal productionbytypeofmineandsharesurfaceminesin 2010 Exis

ti ng ng mines 2015 Outlook

Mt Mt 2020

ce in 2040 ( 2040 in ce ce in 2013 to nearly 50 period, andreaches around 35

2025 Brown and

Figure 2030 projects World Energy Outlook |

greenfi

2035 3.4),

eld

Mt moving the country into second into country the moving

2040 ce in 2040. Lignite production, 75% 80% 85% 90% 95%

Mtce. 3 ( s p Sha The shift towards right axis) urface mines roduc re of Special Report ti

o n f ro Outlook m m

© OECD/IEA, 2015 Chapter 3 Figure back improvements intheefficiency of power plants. strain on the transportation system, as increasing volumes need to be shipped, and holding of produced coal remains aproblem throughout the by tapping deeper deposits, some of which have higher calorific values. But the low quality and equipment mining in advancestechnological contained by somewhat be projectedto is content energy of deterioration the than term, (less low-energy coal of production while stayedlongerflat broadlykcal/kg)has ( doubled the than moreIn has coal. cal/kg) Australian of tonne one 1.5 aroundextract 4 4 than (more coal mid-energy and high- energy of production early-2000s,the the Since on output. of contentalso but tonnage, increasing on only not be to focus policy the for need the highlights This values. calorific in deterioration the to contributing and content ash carefulresultless couldalso in it term, as waste rock removal, essentially increasing (free) tocontinue. push A for output rapid expansion could exacerbate trend this medium the in the total yield. Policies are proposed to require fly ash use in the construction industry within 500 km from coal plants. 4. Ash disposal is also a problem as fly ash utilisation (e.g. ( in the 2020 cement or by brick industries)coal absorbs of only aroundtonnes 60% of frequently 2009, short since falling sluggish been growth has why output projections (and 1.5 the over increase production coal The Sources: IEA analysis; Coal Directory of India. coal with has values between 4 5 than more of valuescalorific categoryhas coalhigh-energy The Note: levels targeted by the Indian government, which has announced the objective of mining of objective the announced has which government, the Indian of the by targeted short levels falls nonetheless, This, producers. emerging smaller some world, by the only in topped production coal for rates growth highest the of one 3.8%, of rate growth

Million tonnes 200 100 200 300 400 500 600

billion

k

2000 200

3.5

|

Outlook forIndia’s ⊳

Evolution ofsteamcoalproductionbygradeinIndia

t onnes of coal to get the same amount of energy as that contained in contained that as energy of amount same the get to coal of onnes 2003

200

- 5

600 energy supply

k cal/kg (GAD); and low-energy coal contains less than 4 2006 The reasons why this target is missed in our in missed is target this why reasons The Box

Outlook 3.1). Figure

3.5), 2009 period corresponds to an average annual average an to corresponds period

meaning that miners in India have to have India in miners that meaning 4

600 Outlook

k cal/kg, gross air-dried (GAD); mid-energyair-driedgross(GAD); cal/kg, period, putting additional putting period, 2013

200 Uncla High Mid Low

k cal/kg (GAD). - - - energy energy energy ssi fi ed 105

11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 Box 106 India’s state-owned mining company CIL is pivotal to this process, slated to contribute development. line railway and mine coal by affected people the of consent the require also would target the Reaching transported. be can coal additional and schedule on developed are speedily,mines issued are licences and –approvals that so companies seamlessly co-ordinate railway and mining governments, state and and all federal – delay actors without involved fulfilled are plans expansion all that imply though, would, It Reaching 1.5 4.6% per year. 800 over to rising production coal have projections Our approvals speed up mine developments – but India falls short of the targeted volume. to up pick 2020 – based on the assumptiondoes that policies regardinggrowth licensing, land acquisition and of rate the Scenario, Policies New the In average). on year per 4% by (or third a the around by in increased production comparison, coal Indian of 2006-2013 way period By average). on year per 14% by (or period seven-year require that domestic coal production increases by almost two-and-a-half-times over a 603 produced country the country’s the 1.5 increase to to production plans coal announced government Indian the 2015, early In If coal production in India reached 1.5 reached India in production coal If production. in increase marked a despite 2020, by importer coal largestworld’s the becomes India Scenario, Policies New the In imports. coal Chinese in slowdown the absorbing India on betting are world exportersthe markets,aroundas coal global for implications dramatic have would this reached, be to were target production the If (20%), another92 while projects future from and (62%) implementation under projects from (18%), 908 identified have They from. come to are tonnes of output to the government’s target, with the remainder coming from tonnes additional the where showing detailed roadmap a released has CIL auctioned. smaller state-owned mining companies and the captive mines that are currently being 1 would remain depressed for alongtime to come. region is far too small to absorb all the additional production and, consequently, prices growth centresignificant demand internationallyonly for the The as coal. traded Asia for imported coal diminishing, India disappearing as an importer would leave Southeast appetite Chinese With market. international the on projects overcapacity in Australia, of situation current Coal entirely. imports cutting Indonesia and South Africa that target the Indian market would lie idle and extend the coal, in steam self-sufficient

billion

3.1

⊳

A 1.5billiontonnequestionforthecoaloutlook

billion

Mt are yet to beidentified. tonnes of coal production by 2020 is difficult, but not inconceivable.

billion

million

t onnes by 2020, a highly ambitious goal, given that given goal, ambitious highly a 2020, by onnes ons M) n 03 Rahn te agt would target the Reaching 2013. in (Mt) tonnes

billion

Mt tonnes in 2020, the country would be would country the 2020, in tonnes World Energy Outlook | of capacity, from existing projects existing from capacity, of

Mt in 2020, a growth rate ofrate growth a 2020, in Special Report

© OECD/IEA, 2015 Chapter 3 delivered the than price attractive more a at obtained be market international the from coal can fields, coal domestic the from far locations, coastal few a in only that meaning for coal linkages in that year. Coal from domestic mines is sold below market value in India, price quoted average the than higher 50% almost price sales a e-auction, the in sold coal linkagesthe of regime:forprices received instance,averageCIL 2013, on in $42/tonnefor like platform, called “e-auction”. Prices realised in the e-auction markedly exceed the fixed CIL and SCCL is not sold under the linkage regime but instead is marketed on a spot market- at the mine mouth, with freight cost borne by the buyer. Around 12% of the annual generatorsoutput oftypically receiving coal at more favourable rates than industrial users. Coal is sold supply.coal generally powerdifferentTheydiscriminatebetween with coal, of consumers toquotedtypicallyso-calledapply “coalprices long-termlinkages”of contract kind a – for The coal. of type and quality the on depend and SCCL) (and CIL by set are coal for Prices industry andincreased competition. coal the in ownership greater diversity of to leading gradually Act, this implementation of door to private sector commercial mining in the future. The New Policies Scenario assumes grantedcanbe licenses mining toprivate players restriction,end-use without the opening theory, in that, is Act the of feature key However, a 1). Chapter (see blocks coal captive cancelled the of auctioning and re-allocation the with concerned primarily is which Act, Provisions Special Mines Coal the passed has parliament Indian the Recently production. cement or making steel generation, power in examplethe buyers for use, which own their for extract can coal reserves arespecified which if block”, they only mining “captive a production acquired coal in participate could players private Hitherto, output. coal country’s the to 10% than less contributing India, in company coal public second-largest CIL’s coal yield. Singareni Collieries Company Limited of (SCCL), not half under CIL’saround Eastern for account South umbrella, together is Limited, the Coalfields two, Mahanadi the largest and Limited Coalfields of which sizes, coalvia different India’s of 80% of companies subsidiary roughly eight producing position, adominant has CIL coal. of domestic marketing over control full and production of 90% than more over control exercises The government. currentlystate the by influenced are pricing and allocation coal India, In Coal market andindustry structure coal, with competition between them determining the optimal domestic production level. unable toship infrastructure additional volumes. Insomepartsofthe country,they are importsbecome cheaperthandomestic cases transport as some production their in increasing from mines impede bottlenecks begun, have operations Once unproductive. resettled, be to be rendered arable people to land clearedforest or requiringeither be to densely populated, and surface mine development, in particular, affects large areas of land, permitting – especially for land acquisition and permission for forest clearing. India isvery nextsection). (see with very difficulties limited to due on-stream capacity mining new bringing are in delays often are There players new for opportunities highly and is concentrated, (CIL), Limited India Coal state-owned The by India. dominated industry, in the industry of coal structure the facing challenges of series a to related are demand) of

|

Outlook forIndia’s energy supply 107

11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 plant would have cost at least $75-85/tonne in 2013. This means an implicit (domestic) implicit an means This 2013. in $75-85/tonne least at cost have would plant of $60-70/tonne. Imported coal with the same energy content delivered to a coastal power $20-30/tonne for railway transport to a coastal location would imply a delivered coal price to aconvergence over timebetween domestic and international prices. determine prices – for example, the more widespread use of auctions for linkages – leading market-basedof use increasinginstrumentsto the from also costs,but mining rising from $40/tonne in 2013 to $60/tonne in 2040 the (adjusted over to increase 6 to set are prices coal mine-mouth Indian average Scenario, Policies New system the In sustainable. financially the less and less imports, become would of share increasing an With coal. imported expensive buy leads to to plants that have power This for hardship sector. tofinancial and power companies the power between in has inequalities prices particularly coal sectors, domestic end-use and the prices in coal repercussions imported between spread the stands, it As Note: Adjusted to 6 Figure close to paritywithinternational coal prices. be should linkages coal the of price auction the theory, In 2015. April late in committee be many inter-ministerial an will by proposed was mechanism This auction). foravailable linkages there new market, coal growing a rapidly (in participate to able being players all with linkages, new for auctions of system a to moving considering is government the response, allocated.In arelinkages coal which non-transparentwayin re-enforcedthe by system of pricing has raised concerns about possible abuse of dominant position, which are The inoutput. shortfall growing to the contributing insufficient, been has projects mining new to allocation capital why reasons the of one are and signals market distort linkages $5-25 to rise would subsidy the persist, to $2-10 or $5-25/tonne of subsidy consumption coal ( mouth mine the at 2013 in average on $40/tonne around at sold 6 of value heating a Converted to supplies. domestic of price 108 Dollars per tonne 120 150 30 60 90

0 D Import

omes

3.6 mine tic p

⊳ rice 50

000

Indicative domesticminingcostcurve,2013 -

mouth k cal/kg. 100 p rice

150 M

n tonnes illion 200

billion 250 World Energy Outlook |

n 00. h qoe pie fr coal for prices quoted The 2040). in billion

000 300 kcal/kg). Upward pressure comes

per year (if the situation were situation the (if year per

Outlook 000 350

k cal/kg, Indian coal wascoal Indian cal/kg,

periodfrom around Figure Special Report

3.6). Open Underg Mixed Adding - cast

round

© OECD/IEA, 2015 Chapter 3 directly from seaborne vessels. coal receive also can coast the on works industrial or plants power Some belt. conveyor or systems)railway coal closed-loop, (exclusive,systems merry-go-round by coal receive often leads to congestion and additional air pollution. Consumers 200 locatedthan closeless of to distances minesthe for only economic is transport truck Typically truck. by out carried is movements, coal country’s the of 500 quarter a than roughly transport, distance more travels rail by moved coal of tonne every and transportation long-distance for economic are Railways movements. coal of 55% around various railway, by transportation is accounting for the of mode primary The to India. over all end-users mines the from hauled be to need coal of amounts large Consequently, Moreover, reliability. system power enhance state-level energy policy tofavours a balanced distribution of and power stations across the country. expansion network cost the electricity on save of to order in hubs demand power to closer located country, the across scattered are plants other fields, coal the near stations power of clustersare there While ( consumers and producers of location the between mismatch geographical a is there country, the of half eastern the in concentrated primarily production coal With Transport andhandlinginfrastructure power sector investment risks and contributes directly to the reliability of electricity supply. in Chapter 2), improving the conditions for investment in coal mining also serves to mitigate (discussed sector power the in measures other alongside India: in plants coal-fired power of reliability investorsby borne risks primary the areincoalamong supply, of quality the and price the The deposits. difficult geologically more tapping and mining underground of share the increasing gains, productivity through escalation cost mining countering in technology new of role the given step important an innovation, and transfer facilitate technology to helps investment, direct foreign including sector, the to comes investment the idling of too costly operations. The envisaged increase of competition, as more private or mines uneconomic currently in gains productivity trigger also signals price Adequate helps to overcome and the market Scenario distortions in the Policies power sector New and to increasein our mine output. reflected is intentions policy these of developments.Implementation as desirable private sector policy in Indian for identified been respectto all have with development process mine byallowing the bureaucratic and streamlining competition mining in coal increasing participation linkages, coal of Auctioning to marked production losses. lead can that strikes with reform, at attempts oppose they,often too,Consequently cuts. and pay job losses to lead would participation private and competition introducing that 400 around with sector, mining labour-intensive the representing unions The market. the to players new introduce would that changes structural countenance to reluctant been have companies state-ownedmain slow.The be to likely is industry coal Indian the in reform of pace The

|

Outlook forIndia’s

000 people directly employed in public sector mining companies, fear companies, mining sector public in employed directly people energy supply

km n vrg. Shorter average. on Figure

km and it and

3.7). 109

11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 and willneed to beexpanded to allow for increasing imports. growth capacity port with up kept not has inland) further coal distribute (to connectivity handling capacity. Thus, port infrastructure to handle imports is currently sufficient, but rail growth in imports, India currently has at least 250 accommodate growth in coal demand and must be financed. In relation to the prospective freight tariffs. Investments in access links, additional tracks and rolling stock are needed to for lower passenger fares, has the effect of slowing down coal movements and pushing up paying transport freight involve that cross-subsidies with together transport, passenger accorded to understandable priority The social shipments. coal up holding corridorsoften and delaying mining growth investments. Railwaysoutput are operatinghampering at fullis capacity onthat some critical transportfreight of forms other to access inadequate or mining investment generally lagging behind, in some cases it is the lack Despite of access to shortages. railway coal past to contributed have infrastructure transport in Bottlenecks Figure 110 This 0 a swtotprejudice without is map

3.7 Gujarat 250

⊳ to

Rajasthan the Main coal-miningareasandcoalinfrastructureinIndia u for of status Haryana 500 km Goa Nagea Haveli Mumbai Dadra and sover Maharashtra eignty Ka Kerala rnataka Madhya Pradesh over Delhi New an Delhi yt erritor Ut y, Hyderabad ta to Telangana h eiiaino nentoa rnir n onaisand boundaries and frontiers international of delimitation the rakhand Nadu Ta Ut mil ta Chennai Pradesh Andhra r Pradesh Chhattisgarh Puducherry

World Energy Outlook | million tonnes per annum (Mtpa) of port Jharkhand Odisha Major coalmines Lignite basins Hard coalfield Hard coalbasin Coal import/export terminal Major cementplants Major steelplants Major coal-fired power Bihar to h nameo the Sikkim Special Report fa Bengal ny We territor Kolk Meghalaya st sta y, ata Assam iyo area. or city tions © OECD/IEA, 2015 Chapter 3 of only 45% 2040, In ground. gains Australia from coal steam as share market loses but market,Indian the key in playera remains It coast. east the on advantage,especially cost transport a from benefits thus and exporter coal major closest the also is Indonesia coal. imported of 60% around accounting for currently India, toexporter main the is Indonesia Figu within reasonable distance for economic seaborne transport. sector. electricity India has a favourable the geography, for with a long coastline and several powerlow-cost coal exporters growth in baseload of providing the plants power from themajority comes demand industry, steel growing rapidly the for essential remain importscoal cokingbefore importerlargest coalAlthough the global becomes2020. India the over increase to continue to projected are Imports coal. coking remainder the and coal surging coal demand. Indian imports reached 144 with up production todomestic failed keep as came imports in rise The coal. importersof largest world’s the among country the putting works, industrial and plants power its for Over the last decade India has increasingly tapped the international market to procure fuel Coal imports 750 than more for transported coal that mandates that regulation by supported is Washing on depending removed,profitablebeing becomes is transportash distancesfor much 700 howover and, $3-4/tonne to amount costs Washing distances. transport long the to due India, in profitable mostly is washing coal as washeries, independent up set have ash. India has around 130 the of part a removing which by this of alleviate to part help can washing only Coal energy.more product, provides of volumes ever-higher handle to has it as infrastructure, The growth in low-energy coal production puts particular additional stress on the transport Mtce 100 200 300 400 500

Outlook km (500 re

3.8 2000

| period, to reach 410 reach to period,

Outlook forIndia’s km from 2016)must have ashcontent oflessthan34%. ⊳

Coal importsbyorigininIndiatheNewPoliciesScenario 2005

Mtpa 2013 of washing capacity installed. Private players, in particular, energy supply

Mt ce in 2040 in ce 2020

(Figure 2030

Mt

ce in 2013, of which 70% were steam

3.8). 2040 In the New Policies Scenario,Policies New the In

10% 20% 30% 40% 50%

( Imp Other I Austra Sout ndonesia right axis) ort share h

Af lia rica

km. 111

11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 offsetting gains in termsofenergy security. to aim for complete self-sufficiency in coal would be to adopt an expensive policy, without coal production can be justified (or challenged) on a number of grounds, but to go so far as own projects, for instance in Australia or in Mozambique. India’s their drive from to increase needs domestic coal their procuring companies Indian integrated vertically from stems imports of share increasing an addition, In producers. of variety a from needs its sources India event, any in and, gas) and oil (unlike market coal international the in between far and few been have supply do to disruptions risks: security imports energy significant to rise Coal give not country. the across down costs supply coal keep to helping economy, Indian the to beneficial is imports of share continued a circumstances, these Under too. coal traded internationally of pricing the in role important an playing point, keyarbitrage would be competitive ( supply imports coal domestic some that with we estimate India, northwest in Particularly coals. domestic certain than cheaper becomes coal imported regions coastal some in pricing), coal market-based of share a larger and cost mining domestic increasing from (resulting coal imported and domestic differentials between price of narrowing envisaged the With for imported coal go down. inland distances and transport medium term the situationprojections, eases over this our users, as the transport distances add markedly to already higher prices of imported coal. In the tocost major a at comes this but shortages, fuel alleviateto order in inland distances long transported currently is coal imported Some demand. incremental of share higher takes a production domestic Indian as today’slevelsto returns it however,2040 2020, by projectedis imports sharetoof increase further, energyterms)(in aroundat 38% peaking Indian coal import dependency has trebled over the last decade, reaching 30% in 2013. The environmental concerns andthe financingofthemines andinfrastructure remain. regarding challenges but term, longer the in coal export additional provide investors, will Australia’sGalilee in Projects 2040. in 40% over for accounting importance, in gain exports coal steam mid-2020s, the from but, India to coal Australiacoking moment, ships chiefly the For cost basis. exportersa on total coking coal exports from 3 face substantially States, United and longer the transport distances, creating a cost disadvantage.Canada Only Mozambique, ramping up its coal trade, coking the in competitors almost exclusively, Australia is the primary supplier of coking coal to India. Australia’s main 53 over to today 18 from triple volumes but flat stays essentially market import Indian the in share Its dwindles. market European the of size the as buyers Indian target to continues Africa South rates. market to discount a at available typically are and well Indianboilers plant suit power Africa South from coals ash higher the of some Moreover,shipments. its of share largest the for accounting now India with east, the to shifted have Africa’sexports Africa is the natural Southexporter toperspective, India’scost west transport coast. Once a the main From supplier to Indonesia. Europe, South from come imports coal Indian the 112

Mt ce in 2040. With Indonesia and South Africa producing steam coal steam producing Africa South and Indonesia With 2040. in ce

Mt Figure ce in 2013 to 20

Basin,

3.9). some of which are being developed by Indian by developed being are which of some In the long run, the region thus becomes a becomes thus region the run, long the In World Energy Outlook |

Mt ce in 2040, can challenge Australian Special Report

Mt ce © OECD/IEA, 2015 Chapter 3 demand that isalready at 1.4 the total remaining recoverable resources of 24 5.7 of reserves proven oil: of case the in stark particularly is needs and resources domestic between mismatch The imports. on dependent likewise is sector India is heavily reliant on imports for the bulk of its crude oil supply. Its smaller natural gas Resources andreserves Oil andnatural gas delivered price. lower a in results imports”) with competitive supply (“Domestic coal domestic and cost-competitivebetweenimports exceeding imports”) anticipatedthe with levelprice that can achievedbe lowerThe demand. the of servepart imports if uncompetitivegraph shows how mixa supply “Domestic labelled part (the cost supply domestic the of much with Note: The upper graph shows a case in which India’s entire north-western coastal demand is served with domestic coal, Figure $/t (adjusted to 6 000 kcal/kg) $/t (adjusted to 6 000 kcal/kg) 100 120 100 120 20 40 60 80 20 40 60 80

0 0 Coastal delivere Coastal

3.9 c D

ompe | omes

Outlook forIndia’s imports ⊳ titi

supply tic ve withve 10 10 in theNewPoliciesScenario,2030 Indicative costofcoaldeliveredtonorthwestcoastalIndia d p

compe rice

D

omes titi ve with imports with ve supply tic 20 20

billion barrelsbillion every andrising year (Table 3.2). energy supply

M M 30 30 n illio n illio

tonnes tonnes

billion

40 40

Imports barrels) compare with annual crude uncompe D

omes titi 50 50 ve with imports with ve supply tic

India demand India No

billion rthwest coastal coastal rthwest

60 60

barrels (out of (out barrels

113 11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 Petroleum and Natural Gas. of Ministry India AS; RystadEnergy (2015); BP (2013); OGJ 2012b); (2012a, USGS (2014); BGR databases; IEA Sources: Notes: Data include crude, condensate and natural gas liquids. URR = ultimately recoverable resources. adds another 1.3 million km million 1.3 another adds and shallow water sedimentary basins. India’s deepwater territory, also largely unexplored, an average density of one well per 14 per well one of averagedensity an 146 per well one of density average 3 Roughly record. drilling (km kilometres square 1.1 some over extend of exploration, of resource levels significant awaiting prospective”, i.e. better assessment for or as either exploration “prospective” “potentially authorities Indian potential.by the Areas identified geo-scientific scanty data no additional or require have either and of amount basins a considerable ofsedimentary has A number still India potential. hydrocarbons,unexplored of short is that country a For the offshore KG-D6 find. 330 than more adding while gas of (bcm) metres cubic but positive in the case of gas: in the past seven years, India has produced some 280 resources into proven reserves) has been slightly negative in the case of oil in recent years, reserves have been replenished (through exploration and development activities that turn unconventional, in the form of shale gas and coalbed methane. The rate at which produced conventionalis half offshore)is and all (almost this gas of metresAroundhalf (tcm).cubic natural gas, for which remaining recoverable resources stand at a much healthier 7.9 India’sIf forsaid reallycannotbe same resources the oil needs,meagre next toits appear Table 114 impact ondomestic gas supply. significant more much a have could but balance, oil India’s on effect limited a only have exploratory activity, through sufficiently attractive licensing andpricing arrangements, may fsoe ais ad etil wt te S uf f eio wih a be drilled with hasbeen which Mexico, Gulf of US the with certainly (and basins offshore

Total India Deep offshore Shallow offshore Tight oil Conventional onshore

3.2

⊳

(billion barrels) Oil resourcesbycategoryinIndia,end-2014 2 o te lot 1.8 almost the of ) recoverable Ultimately resources

000 34.4 12.5 15.3 2 2.8 3.8 . The sense of under-explored potential is reinforced by the by reinforced is potential under-explored of sense The . wells have been drilled in India’s offshore basins, at an basins, offshore India’s in drilled been have wells

km

km Cumulative production 2 10.2 2 , which is a low intensity compared with other with compared intensity low a is which , 0.0 5.7 0.0 4.4 ). Getting the incentives right for an increase in an increase for right incentives the Getting ).

million World Energy Outlook | km recoverable Remaining resources 24.3 10.9

2 2.8 6.8 3.8 bcm ht ae p ni’ 2 onshore 26 India’s up make that to proven reserves, excludingprovenreserves,to Remaining %

100% of URR 71% 99% 54% 71% Special Report reserves Proven 5.7 1.0 1.2 0.0 3.6

million

trillion billion

© OECD/IEA, 2015 Petroleum and Natural Gas. of Ministry India AS; RystadEnergy (2015); BP (2013); OGJ 2012b); (2012a, USGS (2014); BGR databases; IEA Sources: Note: URR = ultimately recoverable resources. Chapter 3 of indicator important an New be the will 2016) under for round scheduled tenth now Policy, Licensing (the Exploration round licensing X NELP long-planned the in Interest opportunities abroad ( investment seeking also are companies Indian main the why explain to help demand, oil increasing of continuously abackdrop against prospects, domestic Limited fields. existing the in sufficient are basins excluded, neither these nor the envisaged development of new reserves from the offshore not are Rajasthan in seen magnitude the of discoveries onshore additional although and, 2020 by subsides Rajasthan in discoveries the to due output to boost The 3.10). (Figure and then term 700 around at medium remains the in falls production oil India’s Scenario, Policies New the In in been has (ONGC), production since the mid-1970s andindeclinesincethelate 1980s Corporation Gas Natural and Oil state-owned majority India’s by operated field, This waters. shallow in state, Gujarat of south field, High Mumbai the in concentrated is production Offshore resource). crude waxy the of recovery with assist to India (despite the relative youth of the field, Cairn is alreadyby Cairn contemplating developed EOR being techniques field Mangala the of a result as mainly production, national of fromtozeroclose recentlyas to 170 2008 as most of existing reservoirs. Production in Rajasthan has grown substantially in recent years, recoverymaketooil (EOR)techniques the enhanced of deployment the maintenanceand field extensive with years, few last the for stable relatively the been has in Assam from of oilproduction and Gujarat and centres output) the mature from onshore Output of offshore. field 95% High Mumbai than aged more for account which Rajasthan, and Assam (Gujarat, states onshore three from primarily comes today India in production Oil Oil supply Table

Total India Shale gas Coalbed Methane Deep offshore Shallow offshore Conventional onshore

3.3

|

⊳

Outlook forIndia’s

end-2014 Natural gasresourcesbycategoryinIndia, Box

thousand recoverable Ultimately

resources 3.2). (bcm) Outlook 8 810 2 720 1 230 1 480 1 810 1 570 energy supply barrels per day (kb/d) throughout the period to 2040 to period the throughout (kb/d) day per barrels to outweigh the effects of declining production from production declining of effects the outweigh to Cumulative production 850 500 280 70 0 0

kb/d in 2013, amounting 2013, almost quarterin to a recoverable Remaining resources 7 930 2 720 1 230 1 400 1 300 1 280

Remaining %

of URR 100% 100% 90% 95% 72% 82% reserves Proven 1 420 770 340 290 20 0 115 11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 due to be introduced in NELP X, are to be tested in a pending auction, announced in announced auction, pending a in tested be to are X, NELP in introduced be to due acreage, more than 80% of which will be in offshore regions. Someimportant innovations, upstream, especiallyfor acreage that requires exploration. in the investors new attract to sufficient be will be seen reward and to risk of balance the it remains whether But projects. previous burdened have that accounting cost over disputes the of some prevent could introduction their and administer straightforward to morepotentially principle, in contractsare,Revenue start.sharing the from sales gas and oil from revenue operator gross of share a the with to entitled be production would government of the government,from subsequent the instead revenues that, sharing is then and approach costs sharing recovering initially revenue the of feature main The arrangements. sharing production of instead contracts, sharing therevenue of is introduction change second A granted). was license a which for stream hydrocarbon the only to produce possible it was (previously field the in unconventional, found or conventional gas, and oil anyproduce to holder license a allow will terms new The costs.development but notdeveloped because oftheir location, thesize or complexity ofthe reserves orhigh September 2015, of 69 166 than more include round X NELP the for Plans Figure main international operators that remain. Santos,Petrobras were– BHP and subsequently Energyrelinquished.Cairn and areBP the 40 of the 254 market, have entered winning production. into the Foreign companies put and developed since NELP, awarded 128 the of blocks inception the 254 the within date, To environment. base resource business the complex of the quality and and size limited the by constrained been has success but toencourage private companiestooil participate development the in India’s of resources, India’sarrangementsprospects.Licensing upstream time forover the havemodified been 116 mb/d 0.2 0.4 0.6 0.8 1.0

2000 3.10

N

⊳ ELP blocks, but many of these blocks – including those held by Eni, Gazprom, 2005

Oil productionbysourceinIndiatheNewPoliciesScenario

mar 2013 ginal fields previously held by ONGC and Oil India Limited (OIL),

2020 disc

overies have been made but only 11 fields have been have fields 11 only but made been have overies 2025

2030 World Energy Outlook |

2035 000

km 2040 2 f rvosy unavailable previously of

Special Report Onsh water O deepwater O ff ff shore s shore ore

ha

llow

© OECD/IEA, 2015 Chapter 3 Corporation’sOil Indian 300 3.1 by higher runs refinery push rates utilisation high very and East) Middle the and China after (third Over the period to 2040, a further 3.4 with naphtha from domestic refineries. cooking fuel. India’s petrochemicals sector is projected to consume imported ethane along East and China, most of Indian LPG demand comes from the residential sector, for use as a Middle States, United the as such consumers LPG major other to contrast in but, market (LPG)-consuming petroleum gas world’sliquefied largestthe become to set is India 2040, By cooking. from demand kerosene of elimination total almost the by offset than more is Total demand aviation fuel annually,in keroseneunusually,growth1% byuse, as declines increase especially quickly, (Table reflecting sector demand from both refining personal mobility and Indian road freight. the for challenge 6 by grows that demand product oil domestic of ahead However, products. refined staying of exporter net a into country the turned and growth demand domestic outpaced have decade last the over additions capacity refining Indian Oil market andrefining Box whose estimated overseas oil entitlement is already around the 2.2 India’s companies have been noticeably less acquisitive abroad than those from China, United States andCanada. the in of assets unconventional one and discoveries in gas offshore sharenew Mozambique’smajor a as well as Sudan, South and Sudan Azerbaijan, Myanmar, Brazil, VankorVenezuela,field), Siberian East large the recently,in more and, Sakhalin-1 (in significant stakesare Russia companies in Indian by abroad held assetsproducing the $3.5 some invested companies 140 abroad around to operating risen had companies ofIndian entitlement production overseas the 2014, as of the that, estimate Videsh, Corporation. We Gas Natural and ONGC India’s Oil of of arm international formation the for 1965 in already spur the was this security: India has long been conscious of the value of overseas investment to domestic energy applied inthe homemarket. be can that gas) shale or plays deepwater in example (for technical expertise to and access knowledge secure and gas) natural of case the in (especially chains supply integrated develop to risks, and portfolios diversifyto companies allow they broader: are typically and benefits motivations market). The domestic the course for of matter there is no reason to think that their respective overseas production is earmarked as a cover more than a fraction of their future import needs (and in the case of oil, at least, could assets overseas acquired that prospect realistic a has country neither case, any

3.2

⊳

|

Outlook forIndia’s

Looking abroad:Indianoverseasoilandgasinvestment mb/d to reach 7.6 reach to

kb/d

kb/d energy supply of oil and 6.1 and oil of

Paradip refinery comes online at the end of 2015, there 2015, of end the at online Paradip refinery comes mb/d billion

mb/d by 2040 (Table 3.5). Once majority state-owned majority Once 3.5). (Table 2040 by usd ter oe onr i 21. Among 2014. in country home their outside of refinery capacity expansion in India to 2040

bcm

3.4). of gas, and that Indian oil and gas and oil Indian that and gas, of aoie n dee consumption diesel and Gasoline

mb/d to 2040 represents a stern a represents 2040 to

mb/d mark. But, in

117 11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 gas fractionation. * Fractionation products are LPG and ethane, as well as the portion of naphtha/natural gasoline that is produced during States. At the same time, India has the highest import dependency among the regions among dependency import the highest has India time, same the United At the States. and Union European the both of ahead but China, behind importer, largest 5. Data from the Ministry of Petroleum and Natural Gas show a figure of 3.8 mb/d for crude imports in fiscal year fiscal in imports crude for mb/d 3.8 2014/2015. of The number provided here is figurefor calendar year 2014. a show Gas Natural and Petroleum of Ministry the from 5. Data from up 2040, by oil crude of projectionsOur New inthe leave Scenario Policies need the with India import7.2 to Crude oilimportsandproducttrade Table Table eventually falls behinddomestic demand. Indian refinery output is increasingly drawn into the domestic market, that and mean output refinery capacity oil crude domestic lower and growth demand India’s of size sheer the Scenario, Policies New Indian In the markets. export product competitive to increasingly refiners in challenge major a provide which supplier, crude biggest and neighbour close India’s East, Middle in the refineries new by projections our in back held ultimately is but thereafter, continues Refinery expansion 2020s. beforecompletedthe be toexpected are other, two only as anticipated large-scale additions smaller,in capacity pause a is projects 118 Refinery products demand Fractionation products balance (LPG) Refined products balance Crude balance Domestic crude availability Refining crude intake (refinery runs) Oil demand

Total oilproduct demand Other products Fuel oil Diesel Kerosene Motor gasoline Naphtha LPG Ethane of which fractionation products*

3.4 3.5

⊳ ⊳

Oil balanceinIndiatheNewPoliciesScenario Oil productdemandinIndiatheNewPoliciesScenario

3.7

mb/d 3% -0.3 -3.7 2014 2014 in 2014 in

1.3 0.5 0.8 3.8 4.5 3.2 3.8 0.8 0.1 1.4 0.2 0.4 0.3 0.5 - 5 , which makes India the world’ssecond- the India makes which , World Energy Outlook | -0.5 -4.3 2020 2020 0.6 0.8 0.6 4.8 4.9 4.1 4.8 1.0 0.2 1.8 0.1 0.6 0.4 0.7 0.1 -0.9 -0.2 -5.4 2030 2030 1.2 0.4 7.0 5.8 5.8 7.0 1.4 0.2 2.6 0.1 1.0 0.5 1.1 0.1 (mb/d) Special Report (mb/d) -1.1 -0.9 -7.2 2040 2040 1.6 0.4 9.8 7.6 8.2 9.8 1.9 0.3 3.5 0.0 1.9 0.5 1.4 0.2

mb/d

© OECD/IEA, 2015 Chapter 3 operator, ONGC, which has long experience in optimising performance from mature fields. Vasai India’s on field to continuewestern field this coastalattract shelf: by investment the to be met by imported gas. Conventional gas production isdominated today bythe ageing 90 nearly to In the New Policies Scenario, India’s natural gas production increases from 35 Natural gas North 21st century. or European from – away further American refiners, reversing from the east-to-west product trade products flows that dominated the early some source will consumers Indian that possible is it but imports, product India’s of bulk the provide to likely is East Middle The result. a as market import LPG largestworld’s the becoming India with LPG, almost 1 consists of half other The and diesel gasoline. refinery as products, such I Figure remain thepreferred markets for Russiancrude exports. private (for 0.2 with refiner Essar provide a significant share of India’s imports, beyond a recently announced long-term deal increase their exports to India, but their market share decreases. Russia is not expected to bitumen, once the export infrastructure is put in place in Canada. Africa and Latin America Canadian for market potential a also is India crudes, heavy very on running of capable is capacity refining new With 3.11). (Figure 2040 by 63% to projections our in rise to set is that share a East, Middle the from imports crude its of 57% some sources currently India a sizeable share ofIndia’s overall GDP–5.3%in2014and4.6%2040. in 2030 and $480 of India’s net oil and gas imports grows from $110 in 2014. India’s growing reliance on oil and gas imports carries with it a large bill. The value 70% from up 2040, in imports covered demand by oil of 90% over with above, mentioned ndia imports a total of around 2.3 around of total a imports ndia

3.11 18% 18%

| 3%

bcm Outlook forIndia’s 3.7

⊳ 4% 2014

mb/d

in 2040, but this still leaves a sizeable gap of around 80 around of sizeable gap a leaves still this but 2040, in billion Crude oilimp

57% in 2040 (of which gas accounts for some 10-15%). This represents energy supply

orts byorigininIndiatheNew Policies Scenario mb/d), Other N La Af Mi

mb/d ort rica ti ddle East n h Ame

as logistics imply that Europe and northeast Asia northeast Europe and that imply logistics as Am in oil products by 2040, but only half of this is this of half only but 2040, by products oil in erica rica

billion 11% 11%

10% in 2014 to more than $300

7.2 6% 2040

mb/d

bcm

63% bcm that needs that

mb/d in 2013

billion 119 of

11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 around $5.6 per million British thermal units (MBtu), but subsequent six-monthly revisions of producers domestic for price a established initially 2014 in place in put formula pricing gas new the 2015: of second-half the in prevailingenvironment price the in marginal are developmentsgascommercial new most that suggests costsIndia’s supply gasof analysis Our required. the investment to incentivise sufficient be will producers gas domestic to available price the whether of question key the is projections these of all over Looming communities. could run into significant problems over land use, water availability and acceptance by local large-scaleproductionstageand early very a at is appraisal but large, be understoodto is have gottenCBM projects off to a reasonable start, development. but development costs offshore are still for high. The shale expectations gas resource tempered has block KG-D6 gasface substantial uncertainties: disappointing the production performance of Reliance’s onshore coalbed of sources these of large, all are resources Although period. projection the laterin output by followed basins, offshore in the methane (CBM), which we assume to increase in the 2020s, and the possibility of shale gas first are growth substantial for opportunitiesto the stagnate, set from conventionalcontribution fields onshore the With Figure entry, resulting inhighdecline rates. sand and expectedwaterproduction than higher including issues, performancewell from giving rise to a relatively high development costs. The KG-D6 project itself has also suffered water1 betweenand of depths700 in arediscoveries The ONGC). and Reliance by blocks neighbouring in discoverieslargeby followed (since block KG-D6 the at corporation, sector privateIndia’slargest Reliance, by with the deepwater Krishna-Godavari basin the centre of activity since the initial discovery onshore, considering the extent of unexplored acreage, but the larger potential lies offshore, contribute more than 5% of total onshore supply. There is potential for new gas discoveries Onshoreconventional which production of a handful many consists of small only projects, 120 bcm 120 150 180 30 60 90

2000 3.12

⊳ 2005

Natural gasproductioninIndiatheNewPoliciesScenario

2013

2020

700 2025 metres,wellsarethe technicallyand challenging,

2030

World Energy Outlook | 2035

2040

Gas producGas ti Conven Coalbed Tight gas Sha Total gas demand le gas Special Report tional

methane

on by type:

© OECD/IEA, 2015 Chapter 3 the Russian domestic gas price. of set a of average ReferenceweightedandAlberta Point,Price the Balancing National a UK Hub, Henry US to the including linkedprices, internationalenergy is gas, produced domestically of bulk the to applies which formula, 6. The Box is linked ( it referencewhich tothe prices in falls of because $4/MBtu,around to down broughtthis Figure risk ofbeingoutstep withtheactualdynamicsofIndiangas market (OIES, 2015). the runs choice such any although price, reference a generate to prices international of basket a pick to was solution long-debated the so India, in gas of value market the thatis price determine to hub, agas trading domestic a as such place, in yetstructure no supply.is There produces which mechanism acceptabletogas-consuming sectors,a pricing sufficient also tois attractbut new investments in find to how import-dependent economies: gas by many faced difficulty a of illustration vivid a provides India investment to meet our production outlook: we estimate that India needs to develop to needs India estimate that we sufficient outlook: production our investmentmeet to generate not would levels these at prices However, 2040. by $9 MBtu to close and 2025 in $7/MBtu around reach to $4/MBtu around of levels today’s from recoverIndia’s producers should toavailable domestic price gas the referenceprices, different the for trajectories price international our and formula new the on Based Sources: IEA analysis based on IEA databases and Rystad Energy AS. to come online through 2040. Costs vary significantly for each resource type: the cost figures shown here are representative of projects projected output in the New Policies Scenario (many of the fields developed would also continue to produce beyond 2040). Notes: A cumulative 2 substituted an estimate for shale gas costs outside North America, based on cost.We supply estimatehavesufficienttoa quantitiesIndia’s in developed* gasresources been haveshale not bcm

1 2 2 1 3.3

200 600 000 400 400 800

Box

⊳

3.13 |

Outlook forIndia’s

2020 3.3). Finding anaturalgaspricethatisrightforIndia

⊳

6

050 Gas resourcesdevelopedinIndiathe New PoliciesScenario

bcm 2025 of new resource development is needed to deliver the 1 energy supply 2030

2035

2040

WEO-2013 (IEA, 2013).

($4 O ($7 Onsh ($7 Coalbed methane ($7 Sha ($9 O

400 ff ff shore sha shore - - - - - le gas 8/M 10/M 12/M 9/M 14/M

bcm ore conven Btu) Btu*) d

of domestic gas Btu) Btu) Btu) eepwater

w llow water

tional

121

11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 rm cmlx emtig rcs ad netite oe te a price environment. gas CBM in rise anticipate a do weIndia’sgas, the for resourceand need the of size the on Based over uncertainties and process permitting complex a from tooperators delaysbut 2001, since developmentthe in havephase common,been arising development, although this has yet to result in a significant volume of gas output: gas of volume significant a in result to yet has this although development, India haslarge coalbed methane resources andpolicies inplace to supporttheir .Te oenet a evsgd ht e gs icvre i dewtr r ih hlegn rsror (high- reservoirs reformed in order to provide additional stimulus for upstream challenging investment. with or deepwater have yet to be in approved. In the New Policies Scenario, discoveries we assume that the current gaspricing arrangements are detailssuccessfully the although approvedprice, the newabove and overpremium a given be will temperaturehigh-pressure fields) or that envisaged has government 7. The projections, starting after 2025and reachingabout15bcmper year by2040. agriculture use for a scarce resource. A limited volume of shale gas supply is included in our India, given the likelihood of water stress and the sensitivity of being seen to compete with production exists today. In the longer term, water use is a key issue for the shale outlook in several drilledshale research wells has in the Gondwana and ONGC Cambay basins, but date, no commercial shale unconventional. To and conventional both block, given a within resourceshydrocarbon all develop to rights confer would which round, licensing X NELP the under up open to likely is approach this but companies, oil national the to gas shale supplycost the likely – making exploit to rights the assigned 2013 October in issued policy A shale determine. started to difficult barely has activity but large(although widely), be to vary estimates is understood size resource the and plain Indo-Gangetic the Cauvery and Krishna-Godavari, been Gondwana, has Assam-Arakan, potential Cambay, gas six basins: Shale in future. gas identified India’s in variable important an is gas Shale production starting inthe2020s,withoutput reaching 28 26 the of two-thirds almost covering blocks, Thirty-three investment. larger requiring environments complex more anddo in however,lies resource, shallow the of typically Much fracturing. hydraulic are large-scale require not wells The profitable term. near the in production start to production started in 2007 and stood at 0.2 122 down costs to these levels. aresignificant, givenintensity that the especially drilling be of would required bringto challenges the But less. or $7/MBtu of cost average an at on brought be could shale or methane coalbed if curve, cost India’ssupply change fundamentally also could gas reduction in the perception of risk associated with investment in India. Unconventional situation could also be altered by a change in the fiscal terms for upstream activity, or a A higher gas price is not the only variable that affects the prospects for investment. The existing orapremiumformula, attached toit. gas needed as early as the 2020s would require a higher price than that implied by the the of some judgement, our in and, production actual of advance in well made be to ( Scenario 2 some

000 Figure

bcm

3.13). of new gas resources over the period to 2040 in the New Policies New the in 2040 to period the over resources gas new of

000

The related investment in exploration and development needs development exploration and investmentin related The km 2 areas available for coalbed exploitation, have been awardedexploitation,available havecoalbed been forareas

bcm 7 in 2013, with seven more blocks expected World Energy Outlook |

bcm by 2040. 7 Special Report © OECD/IEA, 2015 Chapter 3 India’s that different Given storage and planning. natural is network stages pipeline of gas 28 of capacity totalimport a it giving terminals, will also require adequate infrastructure: as of March 2015, India had four LNG operational LNG on reliance Increased Spotlight.) the in examined are generation power in foothold substantial more a gain could gas which in circumstances (The demand. power in peaks to ( expensive too is $6/MBtu) demand electricity mid-merit most at or baseload for fuel (evena as coal imported with compete LNG example, for sector, power the In users. Eastrelativelynonetheless,a is, this Africa;but costly source energy of manyfor domestic from exports prospective to and placedfor East Middle well the to proximity its isreasonably of supply,because India LNG market. domestic the Indian in a niche find can gas this where and how and price to relates gas natural imported for uncertainty main The Figure met by LNG andtheremainder by pipeline (Figure Inour uncertainties. bypolitical 80 over to clouded rise imports gas projections, are timing and prospects the cases, both although, in suppliers, pipeline prospective main the are Iran and Turkmenistan pipeline. potentially, viaalso, but term) (LNG) medium the over gas prices LNG natural lower of period liquefied a by (helped of set toimport form the is in primarily India gas, natural needs, of volumes country’s the increasing of short falling production domestic With LNG imports andpipeline over commerciality preclude any inclusionofgas hydrate production inourprojections. uncertainties and costs high vast, be could resource the Although shore. eastern India’s sites off prospective sample and to map expeditions several run has which institutions, Gas Hydrate Programme is a consortium of the national upstream companies and research India’s territorial within India’s future. Natural the in energy supplying quantities in potential role a least athave waters and in large identified been have hydrates gas Sub-sea Figure bcm 20 40 60 80

3.15),

3.14 Pipe

| 0%

line Outlook forIndia’s leaving gas with only a limited role as a way to balance the system and meet

2013 ⊳

LNG

Natural gasimportsinIndiatheNewPoliciesScenario

Pipe 16% energy supply line 2030

LNG

bcm

in 2040, with around 85% of the total being total the of 85% around with 2040, in

bcm,

3.14). Pipe although other LNG terminals are inareterminals LNG other although 17% line 2040

LNG

% gas gas imp s Pipe a Mi N R Austra Af La ha nd Ca ussia ort rica ti dd re n line h le East Ame of tota

Am lia spian orts

erica rica 123

l

11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 Imp their share ofcapacity inthepower mixfrom 28%to more than40%( renewables accountnewforcapacitythe brought all of half overtoincreasing online period 2040, the where sector, power the in particularly strongly, grows sources renewable drag down the share of non-fossil fuels in the overall energy mix, but energy from all other fuel. Looking forward, the gradual retreat from this form of consumption actually serves to picture is skewed by the continued large-scale use of solid biomass as a traditional cooking overall The expansion. their for environment fertile a created has goals, security energy and development country’s the with synergies clear and cases some in exploitation their costsfordeclining with renewableallied resourcesenergyof India, across abundance The Renewable energy and freeing upIranian gas inthe south,where most ofIran’s gas isproduced, for export). demand Iranian northern of part a meeting Iran Turkmenistanto exportsincreased (with IPI of case the in indirectly or TAPI of case the in supplier as directly play,either to role important an have may Turkmenistan’sresources case,large either In 2020s. the of part these of both projects or to be viable one in the long termfor and projectpotential that gas see imports to India we start in the Nonetheless, latter gas. pipeline receiving India of the availability of relatively inexpensive LNG in the medium term rule out an early prospect and uncertainties view, political our these In second. the into financing and pricing questionsabout open category; first the into fall Pakistan and India between relationship the and in Afghanistan situation security the obstacles; commercial and political substantial Iran-Pakistan-India still are there but years, many for the the on going been have both pipelines, on Discussions (IPI). pipeline major and proposed (TAPI) two on centre pipeline pipeline Turkmenistan-Afghanistan-Pakistan-India by supply gas boost to Plans a forgas-fired plant. 53% and generation coal-fired new for 39% of efficiencies megawatt-hour.assumes Calculation= MWh Notes: Figure that are currently notserved by majorgas pipelines. regions southern the be will terminals LNG new for focus the that anticipate we limited, 124 orte d

LNG coal 3.15

⊳

Levelised 20

costs

of

gas-fired 40

versus World Energy Outlook |

$60 60 -

85/to coal-fired

nne

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India, 3.16). 100

2020

© OECD/IEA, 2015 Chapter 3 Indian system the ( in generation power of cost average the with convergence full to close coming and to 2040, by which time the levelised cost of electricity will be similar to that of wind power 45% over by falling period, projection the throughout decline continue expectedto toare costs pace, a slowing at Albeit cells. solar for costs investment the in a decline reflecting half, around by largelyfallen has India generated in utility-scaleelectricity solar by of cost direction. For solar, recent trends bode well for the opposite future: the since in 2010, the moving is average trajectory levelisedcost the investment, incentivise still to subsidies they require although power, solar and wind of case the In cost. average the up pushing is installedcapacityof unit per decreasingoutput trendof a although powermix, Indian the Hydropower,where canestablishedit is built, be relativelya as competitive contributor to Costs depreciation schemesanda range ofinterventions that lower the cost offinancing. feed-in tariffs, purchase obligations, bundling renewable with thermal output, accelerated encompasses that initiatives state-level and rather national in India, different of patchwork forintricate renewables an support official of system single no is There approvals. necessary the expedite to readiness a and financing long-term concessional on strongly relies hydropower of expansion The subsidy. of form some without investment justify to power, solar and costs wind technologyfall,particularly for yet not strong are enough but statewellas technology-by-technology.as economicThe drivers are becoming stronger as state-by- vary which economics, and policies of doses different to subject also is India in hydropower. But, alongside questions of resources, the pace at which renewables develop across the country, although there are still some strong regional variations – particularly for India’s renewable energy resources, unlike those of fossil fuels, are spread much more evenly Note: GW = gigawatts. Figure GW 100 200 300 400 500

3.16 2014

|

Outlook for India’s energy Outlook forIndia’s

⊳ Figure

2020 New PoliciesScenario Renewables-based powergenerationcapacityinIndiathe

3.17).

2025

2030 supply 2035

2040

20% 30% 40% 50% 10%

in total ( Sha Hydro S CSP Wind B olar PV ioenergy re of

right axis) renewables

125 11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 can be used for solar power projects, plus an assessment of the potential for rooftop solar). at around 750 gigawatts (GW) (based on the assumption that 3% of wasteland in each state India has substantial solar potential, estimated by India’s National Institute ofSolar Energy Solar power arewhich inherently variable, isanexercise withconsiderable limitations. means that comparing their levelised cost of electricity with those of solar and renewables, capacity baseload nuclear or fuel fossil of economics) therefore (and profiles generation generation mix and thelocal availability of resources. In addition, the significantly different environmentalplethoraconcerns,wella as as factors,other of diversitythe as such theof revenues, expected include these generation; power for technologies on deciding when These sorts of generic cost calculations do not capture the range of considerations that apply closer to par. averagethe than higher aroundmuchfrom60% goesbeing being toonshore cost wind of the that means nonetheless whole a as system the across generation of averagecost the in increase The exploited. improvements already efficiency for potential the of much and and local learning to bring down costs, as wind turbine technology is standardised globally improvementstechnological forexists which scope limited more the as well as occupied, are sites wind best the after factors efficiency maintain to deployed increasingly are that 18% to 2040. This reflects are higher capital costs costs for the these taller only towers by While falling decline, with material larger a trajectory. see turbine not today, do different blades PV they solar than lower significantly a follows power wind onshore of cost The Average power generation costs = average power generation costs for all technologies. megawatt-hour.= MWh deployed.Notes:averagecapacity indicate the of costPV utility-scale solar and wind Onshore Figure 126 See Chapter 8 of the 8. Dollars per MWh (2014) 120 150 30 60 90 2015

3.17

⊳

2020 W cost ofpoweroutputinIndiatheNewPoliciesScenario Levelised costofelectricityfromwind,solarPVandtheaverage orld Energy Outlook

2025

2015 (IEA, 2015) for a full description of power generation costs. 2030

World Energy Outlook | 2035

2040 gene Ave O so U 8

tility hore wind nshore Special Report l ar PV ge power rage ti ra - sca

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© OECD/IEA, 2015 Chapter 3 Box of individualstates to solarpower iscritical to the prospects for growth ( commitment political the statefederalbetweenresponsibilityauthorities, and shared a is and of national state-level initiatives have been announced in supportA of these range objectives. Since electricity capacity. off-grid and schemes small-scale some with together 40 further a and 500 above generally capacity with parks, solar large of series a including CSP), starting point. This total between split is 60 100 reach to is target national powerSolar atis India’s of heart the towardspush low-carbon energy sources. overallThe 200 around with ground, gain to started just only has (CSP) power solar Concentrating 2014. taketoslowerhave been off, W around 450 with of capacity in place as of mid-2015 (up from 3 quickly.4 growing about with been in-roads, fastest the has made have projects capacity (PV) photovoltaic solar InstalledUtility-scale Pradesh. Andhra and Pradesh, Madhya Maharashtra, including states, other of number a in considerable also is it but Kashmir), and Jammu (Rajasthan, country the of northwest and north the in strongest is resource solar today. The capacity power installed India’s total three-times almost represents This

G gemn wt Aai oe (n nin rvt cmay t ivs $ blin n a in billion 10 $9 invest to company) private Indian (an Power Adani with agreement venture joint a signed Rajasthan of government state the 2015, June In change. use land- a register to needing first without land agricultural use to projects allowing by including acquisition, land ease further subsequentlytoupdated has it approach,and Guajaratthe of elements the of containing Policy2011,number Solar in a adoptedits Rajasthan Gujarat. in achieved success the from lessons on drawn havestates Other is anotable outcome. 25 years. The 500 cross-subsidy charges were levied for access within the state and guaranteed tariffs for evacuation of power by the Gujarat Energy Transmission Corporation, ensured that no exemptions for electricityintroduced duties, streamlined It the land acquisitioninvestment. process, guaranteedstifling were that impediments of number a removing the by capital when attract to 2009, aiming power in solar on came policy new point a announced turning government state A itself. state the by determined policies 26 but All total. India’s of quarter a 1 has Gujarat of state The

MW inoperation.

GW solarpark. 3.4

⊳

|

Outlook forIndia’s Gujarat’s shiningexample

G W of rooftop solar applications for commercial users and households, and users commercial for applications solar rooftop of W

MW Charanka solar park in Patan – one of the largest in the world –

G

W of installed solar capacity, accounting for more than more for accounting capacity, solar installed of W G energy supply W of installed capacity by 2022, a huge task given the given task huge a 2022, by capacity installed of W

MW

G f hs aaiy a bit n h bss of basis the on built was capacity this of W of utility-scaleof W projects and solar PV (both

meg

G awatts (MW) of capacity installed as of installed as capacity of awatts (MW) W in 2014). Rooftop solar installations Box

3.4).

MW each, 127

11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 adopt rooftop solar PV systems. (to overcome the high upfront cost), so more and more customers could be encouraged to options financing and models business innovative to access easier as well as grid) the to or sold generated which offset under bills, be conditions power utility against thecan (i.e. generation costs decline and there is greater regulatory clarity over issues like net solar metering rise, tariffs conventional As generators. diesel-fired on reliance daytime displace to industrial consumers, with one attraction being to hedge against interruptions to supply and the early adopters of rooftop solar (around two-thirds thus far) have been commercial and of improve). Most not does supply grid-based of reliability the if (particularly deployment 83 projected our over upside considerable with growth, rapid very potentially of area an is far, it so off take to slow been has this solar. Although rooftop for instead, go, is to development solar utility-scale for acquisition land of problem the to solution One Figure proving difficultinmany cases toidentify andacquire suitable land). (evenwhere it is issues states in practice parks, haveexpressedinitiativecreate solar strong to interest the in acquisition land and of financing availability production, additional of enforcing difficulty the to absorb the grid of the ability utilities, distribution the local the obligationspurchase on including deployment, solar confront challenges of number CSP. A of share smaller much a with PV, solar mostly utility-scale, is capacity new Most ( 2040 in generation of (7%) share smaller a for accounts it today,although 1% around from 2040 in 17% to capacity power totalIndia’s in power solar of share the boosts This China. after world, the in market solar second-largest the India making 2040, 29 to rises capacity Installed generation. of source other any (see Chapter 2, Spotlight), but the solar sector does witness dramatic growth – faster than India’s solar targets are not met within the envisaged timescale in the New Policies Scenario 128 Bi oenergy Wind

Hydro

Sol

13% 3.18 ar PV 2%

10%

17% ⊳

Share ofrenewableenergycapacityandgenerationin India, 2040 Sol Share of capacity ar CSP

57%

Bi Hydro oenergy

World Energy Outlook | Wind

8% 3%

Sol

7% ar PV

7% genera Non

Share of G Sol

W in 2020 and 188 and 2020 in W - ar CSP renewable ti on

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G G

3.18). W by W W of W

© OECD/IEA, 2015 Chapter 3 mid-merit plants, was superior, leaving gas withonlyasmallpeakingrole. forcaseevencoal,for expensivebusiness the rangean $10-14/MBtu – from2012-2014 in issues only available typically LNG imported had with – supply,havedomestic but of availability with fuels both theme: this on variant coal-heavy very a has India peaks. demand meet to helping curve, load daily the follows flexibly more gas while factors, and gas is that coal takes care of baseload operation, operating at deployment relatively high capacity of renewables from country-to-country, but a typical division of labour in a power system effectiveness between coal cost and nonetheless have implications for India’s scale choice of thermal power plants. The split varies increasing the generation capacity, power conventional build to need the eliminate to unlikely is India While have their own regulatory all orcost challenges. storage) electricity in investment and management demand-side grid, the (strengthening capacity thermal for need the limit so and flexibility system improve monsoon. the with comes that options various the but that problem,insuperable an fromfar is variability Managing output wind and solar in seasonality measurable the and demand power in peak evening the network, transmission the of weakness wind and solar output, an especially pertinent consideration in India, given the relative in variability of issue well-known the of smaller.because much is is This capacity gas) (or coal actual for need the on impact potential the use, coal of growth the slowing generate,therebytorequired are plants thermal electricity of amount the on impact significant have a will deployment solar and power large-scale wind practice, while In and windturbines. years at least – from disinclination in India to rely too heavily on imported solar panels demand could also run into significant supply-side challenges, stemming – in the early rising largerof sharemuch a meetto deployment solar and wind of rapidpace very a on Relying table. the on options generation all with even India, for challenge stern a already is year per 4.9% at growth consumption power with pace keeping 2, Chapter in underlined As challenge. demand electricity the of scale sheer the is which among for case the which in situation a investment in reach new coal-fired capacity to disappears. There are unlikely a number of reasons, is chief India that is assessment Our coal-fired capacity. How feasible issuchapathway for India? electrification need the bypasses also only that but not path for new use reduces coal low-carbon a for opt now could India that past: the with India could break dramatic that more a see some quarters in idea the nurtured also have reductions cost and play a major role in expanding electricity supply in India. But these technological gains to set sources are these that suggest projections our and years recent dramatically in The cost competitiveness and investment outlook for wind and solar PV have improved Can Indiabypasscoalforsolar-andwind-basedelectrification?

|

Outlook forIndia’s SPOTLIGHT energy supply 129 11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 130  plays out, butitisfeasible, ifthere isaconfluence of four factors: baseload generation. Such a switch to gas is not the way that our New Policies Scenario of provider a coal’sas challengepredominance could solar-plus-wind-plus-gas,which is opening up the possibility for India of a large-scale electrification pathway based on renewables and gas both of efficiency cost the in improvement parallel The India. in buyers environment for price LNG term medium favourable more much a suggesting The fall in the oil price and the increasing availability of new LNG supplies is, though, now    framework to channel low-cost financing to low-carbon investment inIndia. a requires it policy, climate global of failure or success the of barometer critical a is generation power India’s of intensity carbon the that conscious community, long-term finance, for example via domestic capital markets. From the international of sources new unlock efforts to and capital, of cost their lower to lenders enable requiresit regulatorya regime that creates sufficient and security predictability to government direct require India From 4). in Chapter sector would power the financing on section (see intervention but possible, is This renewables. favouring of capital, the option cost in a substantial difference “renewables-plus-gas” is there if attractive more becomes the example, For support. government without to beat difficult remain coal baseload of costs total the estimate that we met, are renewables. for capital of costs Preferential marketsservice have amajorimpactoninvestment costs. local operationcontentconnection and the local equipmentgrid and and of rules, environment, solar, but licensing and regulatory the and that wind suggests experience international for ofthe potential high competitiveness has of the India option. “renewables-plus-gas” component a key is portfolio renewable the of renewables. in investment cost-efficient Achieving in thepower generation mix. gasfor path the ease considerablywould digits single in prices LNG sustained But Africa). East in notably abroad, projects are LNG Indian companies in investors prominent and increasingly at home, market gas traded competitive more a for greatswaypolicy-makershas create(although topolicy conditionsmuch do could Avoidinga strong rebound in LNGprices. elimination ofsubsidies would be afirst step. help the investment case for gas. Carbon pricing would reinforce this effect. But the swing the choice in favour of higher efficiency coal-fired generation technology and the administered price (collecting the associated rents via taxation), would help to coalthe Bringing toup price parity,import Thisthrougheither deregulation in rise a or prices. import below well are that artificially increases the attractiveness of coal, prices making veryit hard to out-compete. at generators power to sold is India. in pricing coal domestic to reform A This is not an area in which Indian energy As things stand, domestic production domestic stand, things As World Energy Outlook | Even if these first three conditions three first these if Even The average investment cost investmentaverage The Special Report © OECD/IEA, 2015 Chapter 3 slope of more than 20 degrees. 1 over elevation an with areas land and airports railways,roads, areas, protectedexcludes 9. This can bemanufactured. turbines where in Pune aplant up setting Electric General with incentives, tax of number International India. firms market,and enteredhave also Indian the size its a and drawn by deliver services that can China States, United in the supplier, factories operating turbine wind world’sfifth-largest industry and an expertise internationally. There is already evidence of this, with Suzlon, an Indian company, to develop now the potential the offers power wind of development large-scale the generation, power for energy renewable of conditions of the wind resources at the available sites). Beyond the well-known advantages from 18% to 24% (though this remains significantly below the worldfactors, average, capacity averagereflecting the the in increase an in results however This costs. capital the up built away from the prime areas, and have to use larger towers and longer turbines, driving conditions and proximity to the large demand centres, means that turbines are increasingly Over the projection period, gradual exploitation of the best sites, both in terms of thewind the land. farmto ability operators, their prejudicing the without charges from to income additional with land purchases is to build wind towers on existing farmland, allowing farmers to raise higher investment requirements and costs. Another way to overcome problems associated dampened by is outlook their Offshore but circumvent wind issues, farms acquisition land makesforpossible largeit centres. demand utility-scale closer to projects built solar be to resourcesthat solar of naturewidespread the and 2020s), lateconvergence the full by its (and wind with compared solar of cost the in gap narrowing the to due part PV,in solar of pace the half than less at grows capacity wind proliferating strongly, installed despite wind power: in growth further limiting factor isanother solar with Competition utilities. processes, to agreements on an appropriate framework for power purchases by distribution wind resources, but by a number of challenges, ranging from land acquisition and approval 23 from rising capacity installed strongly, with increase to projected is generation power Wind Gujarat. Karnataka,Maharashtraand Pradesh,Madhya Pradesh, Andhra TamilNadu, of states the in potential the of 90% around with south, and west the in are sites promising most The 302 at metres 100 of height hub a with installations turbine wind for suitable deemed estimates by the National Institute of Wind Energy,which take into consideration only land of efficiency, hub heights, turbine size and land-use considerations. The most recent official Estimates of India’s wind power potential vary greatly, depending on different assumptions Wind power

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Outlook forIndia’s

G W to 142 to W

G W in 2040. Further development is not constrained by lack of lack constrainedby not is development Further 2040. in W energy supply

G W (National Institute for Wind Energy, 2015). Energy, Wind for Institute (National W 9 , put total onshore wind power potential power wind onshore total put ,

500 metres and a and metres 131 11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 10. in 2014. in place with Nepal, including the approval of projects with a combined capacity of 1.8 to strengthen transmission lines to export surplus power to India. Similar arrangements are assistance, a further ten projects in various stages of construction or preparation and plans with 1.5 around of projectsthree with Bhutan, with co-operation is through relationship the in pillar important hydropower an becoming is from Hydropower countries. neighbouring benefit to India for avenue Another of the generation mix continues its steady decline, falling from 12% in 2013 to 8% in 2040. around 330 2.8 from increases capacity potential is concentrated. Small hydropower, projects 10 up to hydro remaining India’s where regions, northeast and northern the in period projection 100 under 42 hydropowerfrom large for capacity installed in rise a is result The 2014). (CEA, period projection the in later operation into come that projects new as well helpsto expedite 14 This the both river systems). thevarious along by projects affected states different the between to disputes water-sharing avoid co-ordination better (including consultation and planning in project as improvements aswell procedures, authorisation and permitting simplify to effortsgovernment of result a as improve,graduallyinfrastructurelarge projects such for Our projections in the New Policies Scenario are based on the assumption that the prospects uncertainty over theimpactsonwater flows ofachangingclimate. the is there least, not but Last plant. hydropower a in structures steel other and blades can reduce reservoir storage capacity and, if not removed, cause heavy damage to turbine the high levels of sediment in the rivers coming down from the Himalaya Mountains, which to hydropower, specific notably issues are there addition, In finance. long-term obtaining and opposition public power), the evacuate to lines transmission new for and plant (boththe for land acquisition with difficulties permits, large environmental especially many approvals, to necessary common the all procure challenges to timelines extended of notably India, in set projects infrastructure a overcome to need projects hydropower system which has an increasing share of wind and solar capacity. To tap into this potential, power a balancing in hydropower of advantages operational the on as well as – resource hydropower feasible economically its of a quarter over little a used has India – potential remaining sizeable the on rest reversed be might trend this that Hopes 2013. in 12% 1980 to in 40% to close from decades, recent in trend declining a on been has generation steadilycapacityhas contributionAlthough increased, the of hydropower power Indian to Hydropower 132 those with capacity under 10 role, meeting in the powerparticularly requirements of remote, mountainous Theirareas. India’s Ministry of New and Renewable Energy defines small hydro as plants with capacity of up to 25

G

t erawatt-hours (TWh) in 2040 (up from 142 W in 2040, with most of the increase taking place in the latter part of the of part latter the in place taking increase the of most with 2040, in W

MW are included in the definition used in the

G

G W to over 10 GW by 2040. Although total output rises to rises output total Although 2040. by GW 10 over to W W of projectsof W that are at various stages construction,of as

G W in total already developed with Indian with developedtotalalready in W World Energy Outlook |

TWh World Energy Outlook in 2013), hydropower’s share

MW 10 , also playsalso growing, a

G W in 2014 to just to 2014 in W . Special Report

MW , while only

G W © OECD/IEA, 2015 Chapter 3 ethanol 5% of minimum A 2017. of end the by blending has been made mandatory in 20% 20 states and 4 union territories.of target indicative an has Biofuels on Policy National 12. The 11. This analysis was developed in collaboration with the Center of Applied Mathematics, Mines ParisTech. Box such asLPGwhere itisavailable, orto invest inmore efficient biomass cookstoves. fuel. This can limit the economic incentive for rural households to switch to alternative fuels, there– overallno is scarcity fuelwoodof for byuse rural traditionala as households cooking that – despite evidence of localised shortages in parts of the country, including the northeast suggesting years, recent in increased actually has India in forests by covered area total the Data from the United Nations Food and Agriculture Organization (UNFAO, 2015) indicate that reasonAvailabilitythe fornot is trend, this supply except of (Boxbiofuels caseof the in mix. energy Indian the in shrinking steadily bioenergy of a moderate share the in to 2040, results that increase period projection the over 11% around by rises demand Bioenergy Bioenergy power outputisoften subject to significant seasonal variations. hours’ worth of generation), limiting their ability to be dispatched on a flexible basis. Their But these projects have little or no water storage (rarely more than the equivalent of a few acceptance. public secure to help so and resettlement for need the ease thereby can and we ourprojections, reservoirs expansive In avoid these projects; run-of-river on impacts. focus increasing environment an anticipate and social cumulative the and projects linkagesthe betweenassessing basins, developmentriver the of on broaderview a taking episode This of also but depth, flooding. in projects individual evaluating of only the not importance the underlined of severity the for blame to was region the in development stateof Himalayan in the floods Uttarakhand in 2013, which prompted a major debate over theby whether intensive hydropowerby affected adversely been also have attitudes but public new projects, by most affected of people The resettlement ahead. the been moving has projects issue difficult to obstacle of hydropower major a public acceptance been of already lack has and development India in sensitive very are issues Water water security orprotection of forest areas. point, compromise other critically important Indian policy objectives, notably food and acertain at could, cultivation expanded their security, but energy India’s buttressing for mountains, built-upproductive deserts, (e.g. play areas). use Biofuels can in a role 8% of woodlands and the remainder being either forests or other areas hardly suitable pasture, of 3% additional an availableIndia’sforwith is agriculture,of mass 57% land some Overall, land. of availability the is supply future projecting in uncertaintykey A facingconstraintssupply.both on but biodiesel than groundmore making bioethanol ni hs e isl hg bedn tres o boul: o nrae h sae of share (2017). the Plan Fifth the increase of to biofuels: for end the by respectively) targetsdiesel, and gasoline (for 20% to up biodiesel blending and bioethanol high itself set has India

3.5

⊳

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Outlook forIndia’s How muchlandcanIndiaspareforbiofuels? 12 In 2013, the actual level of blending was below 1%, with 1%, below was blending of level actual the 2013, In energy supply 11 12

3.5). 133 11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 constrained by relatively high costs and by poor access to financing. policy Butdespite supply. electricity of support rural for modern biomass technologies in India, the uptake of bioenergy-based reliability supply is the to contribution valuable a 120 around reach to five-times than more by rises biomass on 134 for collection, transportation and storage. In our projections, power generation based power generation our projections, In and storage. transportation collection, for from (mainly agricultural available and forestry biomass residues), although supply in surplus practice depends on ample reliable systems principle, in is, there biogas, produce to plants as power gasifiers biomass or mills) sugar such cogeneration at bagasse-based (e.g. bioenergy with fired applications, energy modern but rural predominantly other For or 105 or sugar)toconversionby-product juice the sugara cane of producedfrommolasses,of 75 around (plus bioethanol of (kboe/d) day per equivalent oil 225 produce either could land this Mission), and the Bio-Diesel National Policy Blending Ethanol in the identified crops preferred (the biodiesel for the assumption that sugarcane and rice are the crops used for bioethanol crops and to on jatropha Based cultivation. for their for suitability of degrees different available with biofuels, hectares produce million seven around leave would calculation Our there is still not enough land left for biofuelsthat cultivation toestimate meet both the 20% –targets. we irrigation with land agricultural of share the of and productivity in adoubling – to 2030 variables two on these assumptions of set optimistic an with is irrigated). Even total of the effective irrigation(currently,has 35% that around only agriculture for available land of share the about and productivity agricultural about assumptions on depends future the in cultivation biofuels foravailable area land The advanced biofuelsaccounting for around one-fifth of the biofuels produced. with 2040, in mix roadtransportfuel overallthe 3% modestin share a only occupy to forbiofuels. Although biofuels production is projected outlook to increase in our the on constraints significant impose security water and food of importance vital the and India in issues land-use of sensitivity the stand, things As development. researchand of effortterms in major still that a arearequires an is this feedstock, as available agricultural residues ample with large, is India in potential the Although deployment. their in increase a rapid or costs their in reduction significant a anticipating before pause to reason us gives world the around biofuels advanced these commercialising in progress of a lack security. But food with conflicts potential The development of advanced biofuels could change this picture, not least by avoiding diesel for demand as wheat andrice, provide lower energy yields. projected of 5% only represent would biodiesel of exacerbating India’s/d problems with water scarcity; but less water-intensive crops, such yields of sugarcane). The choice of sugarcane, a water-intensive crop, carries the risk of morea (bioethanolis productive energy the higher avenue because the biodiesel, of than while transport, road for gasoline for105 demand projected the of 30% around

kboe

kboe/d of biodiesel in 2030. The 300 The 2030. in biodiesel of

kboe/d World Energy Outlook | of bioethanol would represent would bioethanol of Outlook

TWh kboe/d

thousand , biofuels continue in 2040, providing 2040, in of bioethanol of Special Report barrels of barrels © OECD/IEA, 2015 Chapter 3 become has India uranium, import to permitted not was it as and base,resource rich this of advantage reactors. take nuclear To in fuel uranium to alternative potential a is which than 50% in 2007 to over 80% in 2013. India also has the world’s largest reserves of thorium, less from India’s plants, average power the at factor load substantial nuclear in increase a expensive option. By alleviating shortages of reactor fuel, the 2008 agreement has enabled low less and are necessary a represent resourcesimports that meaning areas, uraniumremote in located and grade these However, 2014). (IAEA/OECD, total world the of 2% 29 further a and resources 129 include to estimated are These aspirations. future and needs current its with compared limited are uranium of resources domestic India’s stages ofconstruction. variousGW, in 4 around of capacity total a with reactors, six further a has It sites. seven 5.8 of generation, installed capacity nuclear with of terms in country largest world’s 13th the as ranks India 2050. by nation’s electricity the of 25% to capacity of 17.3 current Its basis. low-carbontarget powertonuclear is triple capacity over decadethe from would(which equate2014 a on security energy its enhance and needs energy rising its meet to way a as power nuclear additional develop to commitmentstrong a has India the doorfor Indiato trade withforeign suppliers ofnuclear fuel andtechnology. opening thereby 1974, since Nuclear place in been the had that 2008, sanctions the lifted in Group Suppliers Agreement Nuclear Civil India-US the following However, India). to materials nuclear of export the on restrictions to led (which Non-Proliferation Treaty heavily on indigenous its first technologies, as with a result of its relyingstatus technology, by developedas a has power industrynon-signatory nuclear to Its the nuclear 1969. Nuclear in online adopt coming reactor commercial to countries first the of one was India Nuclear power Ghazipur andDelhi. Pune, Hyderabad, in underway already are which projects, encourage to incentives and subsidies place in put and source energy renewable a as waste-to-energy classified has avoid toxic emissions from waste incineration). The to Ministry of needed New and be Renewable Energy would care (although health public improving and cities, in sprawling India’s consideration a major landfill, for required area the reducing by co-benefits bring to potential the has also which but biogas, and generate electricity only not would which of use the resource, unexploited largely a is This 2014). Commission, (Planning sites open atuntreated dumped be to rest the leavingtreated, is waste urban total the of 20% only that estimated is it hazard: environmental and health cities major India’sa becoming in is rise that one the but of product natural a – waste municipal is supply energy urban for option under-utilised One forests. and woods nearby on pressure relieving townscities, and Indian in used hardly is which charcoal, to also applies This low. is biomass solid of consumption that means fuel cooking a as LPG of availabilityready the areas, urban In

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Outlook forIndia’s

G W in 2024). It also has a longer term target for nuclear power to supply

000 energy supply tonnes in the inferred category; or, in aggregate, around aggregate, or,in category;inferred the in tonnes

000

G W in 2014 with 21 reactors21 atwith 2014 in W tonnes of reasonably assured reasonably of tonnes 135 11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 ( 5.8 from seven, In the New Policies Scenario, India’s nuclear power capacity increases by a factor of nearly power inIndia. therefore,will, expandnuclearcapacitytokey support be factorsbroadpublic securing in huge Indian Ocean tsunami in 2004. Confidence in regulatory frameworks and institutional the affected by badly was that region a TamilNadu, stateof southern the in coast the on located project, Power Nuclear Kudankulam the on focussedtechnology. Protestershave nuclear of risks the and safety plant about concerns widespread more by supplemented plants were been have if these Japan, in Daiichi Fukushima at of compensation accident the since But, them. adequacy near built the and communities on focussed of for nuclear plants displacement power nuclear the prospects about country the the on in debate influence Earlier India. powerful in power a exert also could concerns Public the nuclearliabilitylaw isapositive development inthis respect. framework in place. The recent progress that has regulatorybeen made and to address legal attractive issues surrounding an is there ensure to necessary be will it forthcoming, be to capital foreign For investments. such means for capital foreign deficit on reliant account very be current will it that and undertaking, fiscal capital-intensive India’s very investment: upfront a large is a plant involving power nuclear a building Nonetheless, distant from coal reserves (not surprisingly, this is where the current fleet is concentrated). to be an economically attractivefor – world option the in India, of particularly parts inparts other many of in the country than that lower are is This megawatt-hour (MWh). estimates, these appearspower on nuclear Based constructioncosts India. areof lower in overnight the because primarily – Union European the in $110/MWh are they example around$69 average 2030 in India in online coming plants power nuclear for costs levelised Scenario, Policies New the In 2014). (IEA, basis cost levelised a on compiled generation, assessing the lifetime economics of new power plants is to consider the costs of electricity of means imperfect,technology. though useful,the pursuingcountriesA all in as India, in power nuclear of future the of determinant major a be also will considerations Economic a seriousobstacle to future development ofnuclearcapacity inthe country. overcome adequate provides reassurance to setupan solution this whether tell will Time accident. India 2015, In June owned). insurance pool that provides cover –to is government both operators and suppliers in the case of a nuclear Limited India of Corporation Power – Nuclear operator sole the since government, the mean effectively would in India (which operator plant the with rests liability that is internationally practice standard accident: an of case in liable directly them held law liability India’snuclear that concerns to due investments, make to unwilling were suppliers However,many do India. can in business plants power nuclear of suppliers foreign that meant also agreement 2008 The although many economic, technical andregulatory challenges first need to be overcome. 2030, around by deployed reactors commercial and 2022 by service in reactor pilot first a have to plans power.It nuclear thorium-based developing and researching in leader a 136 Figure

per

3.19). On a worldwide basis, India sees the second most significant increase in increase significant most second the sees India basis, worldwide a On

G W in 2014 to almost 39 almost to 2014 in W

G W in 2040, having reached 9.7 reached having 2040, in W World Energy Outlook | Special Report

G W in 2020 in W © OECD/IEA, 2015 Chapter 3 Figure 7% over the period. to 3% from doubling than more generation total of share nuclear the in resulting whole), a as supply electricity in growth than (faster year per 7.9% of growth of rateaverage an 34 from increases generation electricity nuclear India’speriod. sustainedratelong be tooverrecenta need would the past and realisedin 1.3 of a rate implies construction 2040 in capacity of level this Reaching China. after capacity, nuclear installed GW 12 16 - 0 4 8 4

3.19 2014

|

Outlook forIndia’s

⊳

New PoliciesScenario Nuclear capacityadditionsbytimeperiodinIndiathe 2015

G - 20 W per year on average, which is significantly faster than the than faster significantly is which average, on year per W energy supply 2021 - 30

2031

TWh - 40

in 2013 to nearly 270 nearly to 2013 in 8% 0% 2% 4% 6%

Capacity insta electricity (right axis) Av Re Capacity a er age share of tire

TWh ments ddi

in 2040, in

ti dlle ons

137

11 10 11 13 12 16 14 13 17 18 1 3 2 5 4 7 6 9 8 © OECD/IEA, 2015 © OECD/IEA, 2015 Chapter 4 • • • • and an expanded range of investors and sources of finance. Opening up new, efficiency and low-carbon technologies. Opening finance. of sources and long-term and low-cost financing options is investors critical to direct investment towards of high range expanded an and frameworkregulatory predictable and open an requiring atthese challenge, huge a is levels investment Securing spending. efficiency in increase 80% an of because Investment in energy supply is held at similar levels in the Indian Vision Case, largely $0.8 additional an sector,and power the in is which of 75% Scenario, New Policies the in projections year,supply per the meet to $2.8 cumulative a requires India to reduce local airpollutionandthedamage that it causes to health. other renewables, and the deployment ofadvancedcontrol emissions technologies powersector,the in and end-uses in both accelerated investment and solar wind, in environmentaland security strains requires tireless energya on emphasis efficiency, sector. services the growthby with led To exacerbatesavoidfurther thatthis energy to needed energy the fuel development, at least in ten-times more energy per unit of value added comparedrise large a means model growth India’s of heart the at industry promote Putting supply. to electricity campaign round-the-clock India” universal, in and “Makemanufacturing, the notably targets, policy Indian key of realisation accelerated an of implications the examine we Case, Vision Indian an In energy-relatedCO India’s in rise a large to leads coal on reliance Heavy attention. need which security energyinvestment tradeand forespecially – and implications– oil India’sfor energy the in marketworld. India’s increasing solar reliance on imported energy second-largest has a profound effect the on global with energy, renewable in player major a becomes India consumption. oil and coal both in growth absolute largest the and forenergyglobal 25% of therisein use to 2040, (more anythan other country), projectionsOur moving show India centre the to energy global of affairs, accounting improved of welfare andqualityoflife for India’sterms population isenormous. in prize the But levels. state and national at policy for challenge major a is impacts, environmental mitigating while operation reliable its in ensuring acost-efficient way, and system an integrated such Developing capital. of inflows larger much requiring and manage; to complex more far technologies; and fuels players, of terms in diverse more scale; different a on operating today: from respect every The energy systemthe Newin India in Policiestransformed2040 is in Scenario in remain some20%below theworld average in2040.

| What woulditmeantorealiseIndia’senergyvision?

Implications ofIndia’s energy Implications ofIndia’senergydevelopment 2 emissions, although, expressed on a per-capita basis, emissions basis, per-capita a on expressed although, emissions,

Highlights trillion development in investment, an average of $110 of average an investment, in

trillion to improve energy efficiency.energy improve to Chapter 4

billion 139

© OECD/IEA, 2015 The New Policies Scenario anticipates the resolution of some major energy challenges of all energy to electricity to access bringing of long-standingobjective the including major facingIndia, ofsome resolution the anticipates Scenario Policies New The Note: Shares are calculated only for those countries and regions where consumption is growing. Figure policies. technology, investment andalsointeractions inrelation to emissionsandenvironmental transfersfuels, fossilof in trade via world: the of rest the India’sto sectorbind energy more relatedalso is it (FigureBut rangetoChina 4.1). the than connectionsslightlythatscaleof and 2040, to use energy global in rise the of quarter a almost for accounts PoliciesScenario,IndiaNew the keyin of consumptionfuels: growthof the in share its markets. This is, in part, a function of the expanding size of the internationalIndian energy sector and the transform India energy system, in and India in turn developmentswill be increasingly exposed to Energychanges in international affairs. energy global in An unmistakable inference from our analysis is that India is heading for a central position and faster -what we have dubbedtheIndianVisionCase. thatgoes India assumption furtheryet also,the then, PoliciesNewon and the Scenario of implications of the prospective Indian energy transition, first on the basis of the projections wider the of some out draws chapter This capital. of inflows sustained forrequirement a and interms ofgovernance, withagreater range ofplayers, andtechnologies, fuels and the complexity and diversity of the energy system that emerges, both in operational terms special focus onIndiaare notable notjust because oftheir sheer scale, butalsobecause of be a spur and not a hindrance to India’s development ambitions. The changes visible in this nexttwenty-fiveoverchangethe years promises moreeven dramatic, be energy is to if to of pace the But 1991. in reformseconomic widespread of start the to prior ago, decades Today’s energy sector in India is already unrecognisable from the one that existed over two What route to centre stage? 140 100% 20% 40% 60% 80%

Total 4 .1

⊳

New PoliciesScenario,2013-2040 Share ofIndiainworldenergyconsumptiongrowthbyfuelthe Coal

Oil

Nuclear

World Energy Outlook | Gas

Renewables

Special Report India China Other Asia Middle East OECD Rest of world

© OECD/IEA, 2015 Chapter 4 in arapidly expanding economy hasamajorimpact onglobaltrends. of the global average even in 2040, the cumulative weight of rising individual energy needs consumption per capita remains relatively low in India in the New Policies Scenario, at 60% buy. to population average though the energyEven of share bigger a allow incomes rising in whichanincreasing numberofthem live, aswell astheappliances and vehicles that to quality of life in India, powering the offices and factories in which people work, the cities Scenario. Over the next two-and-a-half decades, energy is set to make a huge contribution Policies New the of path the following India of implications broad the consider,first, We Implications oftheNew Policies Scenario realise this can help that investment andtherisks that might lead itto fall short. the measures both for energy and examine supply, for energy requirements, and these investment efficiency wequantify chapter, this of section capital. This, in turn, will require thorough-going energy regulatory reform. In a concluding sustained require will Case, foreign private and of large-scaleflows upon necessitatecalling that levelsinvestment, Vision at Indian the of tempo accelerated the at or Scenario Policies New the in anticipated pace the at whether objectives, energy India’s Realising India’s airquality. deteriorationinthe arrest and pollutants local of emissions tackleeffort dedicatedto a and sectors end-use India’s coal-firedacross efficiency greater the for push in concerted a efficiencyfleet, power high to transition faster a includes that sector coal the in even more rapid deployment ofrenewable energy, led by windandsolarpower, reformby Case, Vision Indian the in accompanied, is areas these in Accomplishments supply. power round-the-clock and universal of realisation rapid with together model, growth announced the is analysis intention this to put of accelerated expansion heart of the the manufacturing sector At at the full. heart of India’sin met were key vision if that evolve of targets would system energy India’s how examine we Case, Vision Indian an In view that isnotconsistent withallaspects ofIndia’s own visionfor itsenergy sector. a provides approach this Inevitably, realised. successfully and fully be will implemented intentionsbe to are which yet policy that chances which the of assessment cautious mandatesa – Model Energy World our in regions and countries all to discrimination without –applied Scenario Policies New of the methodology the reflects This envisaged. officially objectives in a number of important areas, or see the achievement of these goals later than The projections of the New Policies Scenario also fall short of India’s policy and development implications ofclimate change. of crude oil – and a range of environmental issues including air quality, water stress and the The unfinished. imports on reliance of extent the notably – security energy of aspects thatvulnerabilities span remains ofbusiness as well as vulnerabilities, exacerbated) (even of this chapter, there is a sense not only of India’s achievements but also of some continued, country’s firstthe the part projected in But population. the reviewing do outcomes, we as

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Implications ofIndia’s energy development 141 10 11 11 13 12 14 14 17 16 18 1 7 6 5 4 3 2 9 8 © OECD/IEA, 2015 s lo xetd o ie Tbe 4.1). (Table rise to expected also is ownership increased such from stemming consumption electricity average and increases household each in equipment energy-using large of items of number average The 2040. by 80% almost to rises percentage this but 2014, in households total of 25% around up vehicles, with forthe shift from playtwo-and three-wheelers toin cars offsettingis improvementslogic in fuel efficiency.same The consumption. electricity average their in increase net a to substantially,leading grow to expected is stock the to added appliances new of size the India, in households by used appliances common most the energyperformanceminimum standards 2. Although consumptionareforofexpectedappliancesannual lowertothe (Beinhocker, 2007). 000-65 $13 1. Defined as households with an average income of household income INR 200 energy Middle-income groups up use. urbanisation pushes and incomehouseholds middle- of growth the as today, 2040 in of that in from different very is Scenario household Policies New Indian the an average of profile consumption energy projected The Sources: Government of India, 2012; IEA analysis. eaning equipment refers to washing machines, dryers and dishwashers. **** and two- and three-wheelers. demand.*** sector transport in three-wheelers and two- and cars by consumption fuel of share the and biomass) solid (excludingsector residential the of consumption total the in appliances of category each of share the is consumption ** motorbikes. or cars new for kilometres 100 per litres in 2013 consumption fuel in and 2040; India and in sold appliances new forkilowatt-hours, in appliances, household of consumption annual Average * Table 142 lo y sic fo to ad he-hees wih con fr rud 0 o the of 80% around for account (which three-wheelers and two- from switch a by also unreliable electricity supply. Similar trends are expected in personal mobility, accompanied actually higher because they start in 2013 from a much lower base, due to low incomes and ownership astheir urbancounterparts, their growth rate inaverage ownership levels is average of levels same the reach not do households rural though Even computers). and televisions (e.g. items electronic two than more and coolers) air or conditioners air (fans, systems cooling different two as well as 2040, by freezer or refrigerator one average, on Cooling appliances Refrigeration Cleaning *** computers Televisions and Vehicles**** (million) Number ofhouseholds

Cl

4

.1 000

⊳ per year in purchasing power parity terms or $4 or terms parity power purchasing in year per

areas intheNewPoliciesScenario Breakdown ofaveragehouseholdenergyuseinruralandurban 2013 175 0.7 0.1 0.0 0.6 0.3 Rural Average ownership rate 2040 208 1.2 0.5 0.1 1.6 1.0 2 e siae ht ra hueod i 2040 own, in households urban that estimate We 2013 1.3 0.5 0.2 1.0 0.7 90 Urban 2040

World Energy Outlook | 000-20 190 1.9 1.0 0.6 2.1 1.9

000 2013 consumption* per year in market exchange rate terms)rateexchangemarket in year per 290 361 171 102 4.2 household

000-1 Average

V

ehicles ehicles include both passenger cars

000 2040 761 405 193 112 4.3

000

The per year share in sector total sector in share Special Report consumption** 2013 10% 26% 4% 1% 4% sector total

Share in (appr

oximately 1 2040 made 27% 11% 36% 1% 5%

© OECD/IEA, 2015 becomes significantly more complex, not least because of the integration of variable the integration of renewable energy sources for power generation. because not least complex, more significantly becomes system the balance to dispatched are plants different that way the and sector power the of Governance network. the in losses distribution and transmission of reduction the and powerrenewable and fuels procurement of the also investment but relating to those just not including sector, power the in policies cost-efficient of importance the of reminder a powerful is this consumers, to Indian tariffs power of sensitivity political and social the of our half first the concentratedin is increase capacity.This power new of cost capitalaverage theincreases solar,fuels) capital-intensivemoreand other for technologiesalso wind but In the case of electricity, the addition of more expensive sources to the power mix (notably bank accounts rather thaninterventions onend-userpricesor tariffs. targeted protection for vulnerable consumers, increasingly throughindividual payments to towards shift prudent and a strategic by mitigated are goals reduction India’spoverty for main fuels (transport fuels are already deregulated) and for electricity. Yet the implications gradually more exposed to market prices for energy due to the removal of subsidies for the developed and solid insufficiently biomass remains readily available in are most areas. Consumers networks across India become distribution LPG as not, is all to facilities cooking of clean provision the Scenario, Policies New in the achieved ultimately is electrification rural universal Although cities. and towns in those behind consistently lag areas rural in facilities cooking clean and electricity to rates access density, and population higher with easier to bring electricity and modern fuels, such as liquefied petroleum gas (LPG), to areas much is It Well-managed services. energy urbanisation modern facilitates provision of the the production ofa range of energy-intensive materials inIndia. blocks, andmulti-story houses urban implications striking for has household, average per the area in floor doubling a alongside and concrete-built to steel shift anticipated the construction; residential rural for used materials main the constitute bricks clay moment, the For prospects. energy India’s for implications pivotal have will realised and planned is urbanisation how 2, Chapter in underlined As transport. in growth demand energy of in buildings (excluding solid biomass) and could also be expected to represent a large share Model, urban areas account for three-quarters of the projected energy consumption growth Chapter 4 classification of urban areas. 3. Densely populated but often partly informal settlements on the edge of major cities may not be included in the official economic life and energy consumption. dominate to come areas urban which to extent full the capture not do statistics probably 315 some by grows population urban India’s India’s cumulative production of steel. of 3% around equivalent of the absorb and consumption energyboost 2040 to 2014 from 320 The cars. to currently) owned vehicles after which declining capital costs for renewables flatten this trend. Given trend. this flatten renewables costs capital for declining which after Outlook,

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Implications ofIndia’s energy 3 Even with the data that we use in the World Energy development million

million new cars projected to be sold in India in sold be to projected cars new over our projection period and the and period projection our over 143 10 11 11 13 12 14 14 17 16 18 1 7 6 5 4 3 2 9 8 © OECD/IEA, 2015 increased globalsupportfor CCStechnology). [CCS] to on reliant remains India and storage in routes production low-carbon into capture processes coal-based carbon turn using (and task difficult more much a is industry in steam and heat process for coal for substitutes finding deployment, their increase to seeking actively is India in alternatives policy and power are sector the coal to available in Box hleg ta Ida ae i crig abndoie (CO carbon-dioxide curbing in faces India that challenge theindustry, latter underlining and sectorthe power of the sharebetween the split is use coal in growth The consumption. global in increase net total the than greater is demand into account, including those where coal consumption declines, the increase in India’s coal coal worldwidecountries all aretakenIf 2040). in China that in of half whose than less totalis (although use coal consumption coal countries in growth the those of 60% Among around represents India. increasingly India grows, in is use Scenario made Policies choices New energy the with in industryintertwined coal global the for outlook The important initself(Box 4.1). India’sof general strategy for creation;job sector’s the own requirement also is labour for pillar a is sector energy well-functioning A chapter). this in later Case Vision Indian the in each month as well as for those who shift from the agricultural sector (a theme developed market job the enter that million one the for opportunities employment provide to way As other materials. recognised in and the “Make in India” campaign, aluminium a healthy manufacturing glass, sector is steel, an important – cement, hub for a production energy-intensive becomes industrial performance. India urbanisation, India’s growing for and needs infrastructure large is essential its With supply energy reliable and Affordable 144 rapid than the increase in energy use as a whole, reflecting the rise in energy imports in rise reflecting the whole, a as energyuse increasein the rapidthan manufacturedtobe growthassumed employment lessbut equipmentis in India; is in energy sector employment rises, not least because a greater share ofthe necessary but including large hydropower) is also just shy of 500 biomass, solid of marketing commercial(excluding energy renewable in employment aspects of the construction and operation of coal-fired power plants. Our estimate for one than more transportation and and extraction coal in million a The majority of India’s energy jobs today are in the coal sector, including just under half such asaccounting, legal orfinance. services, providing those or equipment or components intermediate of providers as those whose employment depends indirectly ontheenergy sector are included, such if double almost could total The terminals. (LNG) gas natural liquefied and refineries lines, transmission plants, and power including infrastructure,energy-supply maintaining andbuilding equipment energy-supply manufacturing extracting it, employed; transporting currently energy, people million three approximately are there that estimatewe but sparse,areIndia’s sector in energy jobs of number total the on Data

4 .1

⊳

Employment graduallyturninggreeninIndia’senergysector World Energy Outlook |

000. 2 eisos Wie low-carbon While emissions. ) In the New

million

P olicies Special Report in differentin

Scenario ,

© OECD/IEA, 2015 Chapter 4 through measures to ensure emergency preparedness and co-operation with other oil other stockholding countries. with co-operation and preparedness emergency ensure to measures through interruptions, supply unexpected against provision prudent make to need the highlights trade in oil can consolidate around international relationships, from experience over 2040, the lastinternational by half-centuryThough East. Middle 90% the on reliance over strong very today,three-quarters towith rises imports oil on Dependence oil. imported for India’s requirement in rise the vulnerability: potential of area one to points also analysis (Table 2040) more However,to generation added power 4.2). newcapacity the of for the50% than account sources (low-carbon renewables of rise the to due mix, power the in Despite the continued predominance of coal, there is a clear trend towards greater diversity Figure total energy supplyjobs in2040, upfrom 2014. 15%in a marked shift towards jobs in renewable energy, which account for more than 30% of and a projected increase in labour and technological productivity (Figure 4.2). There is technologies. energyrenewable other and panels solar for maintenance teams installation and and operators equipment staff, technical managers, project engineers, as skilled such and workers, semi-skilled for requirement estimated the in 35%) to 25% (from rise a and extraction) coal in example, for (as, labour unskilled on future the in is less emphasis There education. and vocational training with effort intensified an requiring decades, coming the over change sector energy Indian the run to required skills The Natural and Water and Environment Energy, on Council (2015); Resources Defense REN21 Council (2014); Rutovitz (2012). (2013); Labour of Ministry Sources: Note: Mtoe = million tonnes of oil equivalent; GW = gigawatts. Jobs (million) 1 2 3 4 5

2014 4 |

.2 Implications ofIndia’s energy

⊳

sector intheNewPoliciesScenario Estimated numberofdirectjobsinIndia’senergysupply 2020

2030 development 2040

1 1 300 600 900

200 500

Mtoe or GW (Mtoe, right axis) e Total primary Other energy sectors Renewables (GW, (GW, right axis) c Total electrical power apacity installed nergy produc

ti

o

n

145

10 11 11 13 12 14 14 17 16 18 1 7 6 5 4 3 2 9 8 © OECD/IEA, 2015 base year of 2010. based on emission limit values and fuel quality standards as adopted by mid-2015, normalised to a value of 100 for the year,per tonnes in calculatedare matter particulate and oxidesnitrogen and sulphur Totalof *** emissions pollutant ** Energy intensity is measured as tonnes of oil equivalent per $1 generation is measured as per grammes of CO equivalent oil of tonnes as measured is intensity Energy ** Middle East, Russia, Caspian, Africa, Southeast Asia and Australasia. solar,wind, America,South America,between:gasareNorth divided and renewables.imports otheroil sources of The nuclear,hydropower,gas, bioenergy,oil, coal, are: mix power the for variables The renewables). and (nuclear energy low-carbon biomass, of use traditional gas, oil, coal, are: mix energy the in categories The calculation. the of element single a on dependence growing or high indicate time over increase that values or values High share). 100% a having where 0 = complete diversity (i.e. each element having an equal share) and 1, 1 and = complete0 betweenconcentration values for (i.e. one normalised element and Index Herfindahl–Hirschman a as calculated are diversity forIndicators * Table 146 Emissions ofNO Carbon intensity ofpower (2013=100)** Energy intensity ofGDP(2013=100)** Sustainability Import diversity* Natural gas importdependence (%) Crude oilimportdiversity* Total crudeimportsasashare ofglobaltrade Net oilimportdependence (%) Coal importdependence (%) Imports Household energy spendingasshare ofincome Net fossil-fuel importbillas share ofGDP(MER) Average cost ofpower capacity (2013=100) Total investment inenergy supply(2013=100) Investment andexpenditure Access to cleancooking (%) Access to electricity(%) Access to energy Share ofnon-hydro renewables ingeneration Diversity ofthegeneration mix* Power generation capacity (2013=100) Power sector Share ofIndiainglobalfossil-fuel consumption Diversity energy oftheprimary mix* Energy use percapita relative to global average Energy mix CO CO 2 2 emissions percapita relative to global average emissions asashare ofglobalemissions

4 .2

⊳

x , SO Selected energyindicators x andPM 2.5 (2010=100)*** 2 per kWh. Both are normalised to a value of 100 for the base year of 2013. for IndiaintheNewPoliciesScenario World Energy Outlook | 2013 0.76 0.29 0.49 0.14 34% 10% 74% 29% 33% 81% 33% 30% 100 100 100 100 100 100 2% 7% 5% 5% 6%

000 of GDP ($2014). Carbon intensity of power of intensity Carbon ($2014). GDP of 2025 0.35 0.31 0.35 0.14 53% 12% 83% 37% 45% 92% 13% 44% 58% 159 148 222 155 3% 6% 8% 9% 81 66 Special Report 100% 2040 0.05 0.33 0.27 0.15 49% 16% 91% 31% 70% 17% 60% 12% 79% 14% 158 209 409 227 4% 5% 71 45 © OECD/IEA, 2015 Chapter 4 efforts (Dubash et al., 2015). 4. A wide range of future demand and emissions trajectories emerge from different national scenario-based modelling average(3.2 global in 2030andaround 5 improves substantially, but India’s emissions rise from 1.9 CO energy-related 2 average global temperatureto increase long-term the limiting CO energy-relatedhistoricalCO of 3% only thus far: atmosphere the into released emissions cumulative GHG the of share small a for accounted has India size, and population its despite though, even emissions, fleet). India therefore has a strong interest in concerted and effective global action on GHG which could be exacerbated by climate change – on the operation of India’s coal-fired power climate (we highlight below just one aspect of this, the potential effects of water scarcity – India isamongthe most vulnerable countries whenitcomes to ofachanging theimpacts Energy-related CO a whole. economyasIndia’s its forsustainable in growthor basis sector energy the be cannot risks environmentalunder-pricing or Under-playing trivial. not are sector energy the of needs natural the where relation other land, in waterto resources, including and visible also are Stresses envisaged. scale the on use and production energy from spillovers negative the of the New Policies Scenario for India’s air quality, described in Chapter 2, already indicate water.for implicationsneed potential its The as well as (GHG), emissions greenhouse-gas the issue ofsustainabilityto because ofitsrole source astheprimary oflocal airpollutants and central is sector energy growth The development. economic to approach inclusive more its and of cornerstone the as sustainable of faster, a target setting in been has explicit India impacts. environmental of question the is there least, from far but Last htvr h seai, ni wl ne icesn vlms f nry o civ its achieve by theWorld Energy Outlook to energy prepared of scenario other every in and volumes – Scenario Policies New increasing the In goals. development need will India scenario, the Whatever the level in2005. against measured 2030, by 33-35% by economy the of intensity emissions the reduce to Nationally Determined Contribution (INDC) submitted in October 2015, it has also pledged below the level ofthose ofindustrialised countries inthefuture and,aspart ofitsIntended emissions per-capita its keep to committed has governmenteconomy. The the in growth headroomto allow sufficient preserving still future,for while the growin emissions which challenge for Indiaisto demonstrate seriousintent to limitemissions, reducing therate at h lvl f nry s ad lo n h etn t wih ni lcs no high-carbon a into locks India which path.development to extent the on also and use energy of level the on both depending trajectories, emissions future these of level projected the in variation 2 in 2013, are around one-third of the global average. The domestic and international and domestic The average. global the of one-third around are 2013, in

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Implications ofIndia’s energy 2

4 emissions are higher in 2040 than in 2013. There is, though, a huge a though, is, There 2013. in than 2040 in higher are emissions t In the New Policies Scenario, the carbon intensity of India’seconomyof intensity carbon the Scenario,Policies New the In onnes of CO of onnes

2 Gt in2040, meaningthat emissionspercapita converge towards the emissionsandclimate change 2 emissions since 1890. Per-capita emissions, at 1.5 at Per-capitaemissions, 1890. since emissions (WEO) including the 450 Scenario (that is consistent with consistent is (that Scenario 450 the including (WEO) 2 per capita in India in 2040, versus a global average that development

gig atonnes (Gt) in 2013 to 3.7 Gt

de grees Celsius) – India’s– Celsius) grees

t onnes of onnes 147 10 11 11 13 12 14 14 17 16 18 1 7 6 5 4 3 2 9 8 © OECD/IEA, 2015 sector, notonlyfor hydropower andbioenergy, butalsofor many other areas, suchas the impact of climate change, could also become an increasing underavailability, constraintWater on India’s 2). tariffs and energy Chapter in discussed onelectricity (as sector policy agricultural the via in metering security, water on future livestock impact and significant a irrigation have India, in could decisions policy energy sector withdrawals, water total of water-using 90% than more largest for accounting the far by is agriculture Although is an world. the around generation power temporally) and supply and energy for spatially concern increasing (both balances water on change climate of impact The risks to thepopulation andthedemand for cooling appliances(Hijoka et al., 2014). experienced in India in May 2015, are expected to become more frequent, increasing both the temperaturesextreme the like waves, security. Heat water and affecting hydropower as well bioenergy, as and crops food of yields the on repercussions strong have can pattern their in changes that means monsoons on agriculture Indian of dependency high weather.The dry accompanied by an increased possibility of both prolonged periods of heavy precipitation and make India’s monsoons more unpredictable, with a likelihood of higher seasonal mean rainfall, to is expected change climate but difficult, inherently is impacts climate of timing and nature the of assessment precise A livelihood. its for forestry and fisheries agriculture, like sectors populated coastlines. Similarly, a large share of the population is dependent oncountry’s densely the along threatening climate-sensitivedisplacement also levels sea rising with drought, and A significant share of India’s large population lives in areas already vulnerable to floods, cyclones Focus: water andclimate change Notes: PPP = purchasing power parity. Bubble area represents total energy-related CO Figure 4.1 downwardsto edges 148 the New Policies Scenariofalls well shortofexhausting the scope for furtheraction. projection period. Although it includes steps towards a more sustainable pathway for India, means that Indiaisthe largest single contributor to theriseinglobalemissions over the Tonnes per thousand dollars of GDP ($2014, PPP) 0.1 0.2 0.3 0.4 0.5 0.6

0 4 European Union European

.3

⊳

India nryrltd CO Energy-related the NewPoliciesScenario 3

t onnes of CO of onnes China 6

Japan 2 2 percapita) ( emissionsbyselectedcountryandregionin 9 United States United

Russia 12

World Energy Outlook |

Figure Tonnes per capita

4.3 15

). This increase in emissions in increase This ). 2 emissions. 18

Special Report Key Bubble Bubble area 4 Gt 2 Gt 2040 2013

© OECD/IEA, 2015 requires operators to re-use water.re-use to operators requires that policy zerodischarge a introducedsystems and cooling once-through use that plants power thermal of construction the banned Forests and Environment of Ministry India’s In1999, well asthe plants. retrofitting existing for as and plants new for technologies cooling of choice power plants, of location the influence availability water on Constraints most Indianplants use wet-tower cooling ( of 2014, As (WWAP, them 2014). retrofit cost-effective to not is it as systems, open-loop ■ ■ ■ Chapter 4 5. An exception was made for power plants located in coastal areas, which can use seawater as a coolant. dry-cooling systems by 2040. 31 total, (water consumption) (IEA, 2012).Theoptions are: withdrawals) andtheamount that iswithdrawn butnotreturned to thelocal water basin plants –determines theamount offresh water that iswithdrawn from local sources (water power of the efficiency overall the with together – used technology cooling The stations. power nuclear gas-fired and between split being rest withdrawals,waterthe total of 95% around for responsible are plants power coal-fired India, in sector power the of cooling within and, form some require nuclear) and fossil-fired (including plants power Thermal might evolve istaken upinmore detail below. including the Chandrapur constrained and the Parli plants faced in recent years. How these already water-energy links has stations, power coal-fired of shutdowns caused sector have shortages water – availabilitywater power coal-fired India’s plants. power thermal northern India, including Uttar Pradesh and Rajasthan, and in the south in Karnataka. In Karnataka. in south the in and Rajasthan, and Pradesh Uttar including India, northern in areas arid in dry-cooling of use the in projected is increase significant A India. in costs) increasingly an have to likely is stress watermaterial impactonthechoiceanddeployment ofcooling technologies (andthe related that show Scenario, Policies New the in today. However, the results of a detailedsystem electricity spatialIndian the modellingin role exercise,minor a only basedplays technology dry-cooling on of use the The projections ■ ■ ■ usually require highercapital investment thanother cooling systems. Dry-cooling plant. systems the of electricity, output of power effectively the lowering substantial amountssystemsDry-cooling use consumed. and withdrawnwaterare of Dry-cooling: large volumes of air are passed over a heat exchanger and limited amounts lost through is water evaporation. Some The capital cost istypically tower. higherthanonce-through systems. the of bottom the at collected then and tower cycle, withwater passingthrough the condenser beingpumped to thetop ofacooling Wet-tower (or closed-loop) cooling: withdrawn water is managed in an internal re-use wet-tower systems, butthelevel ofwater consumption ismuchlower. the through passed has it after temperature,condenser. Once-throughsystems more times water thanwithdraw60 totypically up higher a at source the to returned and sources surface from withdrawn is water cooling: open-loop) (or Once-through

gig

| awatts (GW) of installed coal-fired capacity is projected to be equipped with equipped be to projected is capacity coal-fired installed of (GW) awatts

Implications ofIndia’s energy 5 Older plants, built prior to this decision still run on run still decision this to prior built plants, Older Figure development

4.4 ). ). 149 10 11 11 13 12 14 14 17 16 18 1 7 6 5 4 3 2 9 8 © OECD/IEA, 2015 Note:sizeThe correspondscharts pie the of to coolingthe technology capacity the installed.of smallestThe charts pie map This Figure Figure 150 represent 200 MW and the largest 46 GW.

0 GW 120 160 200 240 40 80 is ihu prejudice without

4 4 Once .4 .5 250

(fresh) ⊳ ⊳ - to through

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so or of us 500 km

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capacity

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capacity Wa Po Withd n onaisandt boundaries and wer plant coolingtechnologies

Ve High (40% Low (20% Ve Dry-cooling To Once-through non-fresh Once-through fresh te Dry-cooling by r- wer fresh water ry high(>80%) ry low(<20%) ra st

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a. © OECD/IEA, 2015 ■ ■ Chapter 4 the olicies Scenario, leading to a higher in rate of overall GDP as growth. The implications for sectoragriculture are discussed later services the of in this section. expansion same the includes Case Vision New Indian the in assumption GDP 6. The Scenario are: growth. The essential points infulland that differentiate the Indian Vision Case from theobjectives New Policies key these of economic attains a path different on India itself putting thus timetable, accelerated an which to according in Case Vision an Indian in effort, its energy system. We explore these implications, through an additional detailed modelling domestic product (GDP) gross under the “Make in in India” campaign – manufacturingwould have profound of implications for share expanded an and supply electricity the-clock The vision India has defined for its development – two pillars of which are universal round- An IndianVisionCase systems cooling andnetwork expansion. transport, fuel to related costs generation of share the in increase 6% a to lead water-relatedtotal, factorsIn limited. is plants power fordry-cooling for need the so and ultimately due to the fact that coal mines are, typically, not located in water-stressed areas $30 around is stress, water no faces that system a with compared period, projection the over systems cooling investment for additional The today to more than165 20 than less from increases systems cooling once-through saline with capacity fired ( Jharkhand), which does not experience water stress today nor is it expected to do so in 2040 Coal mines in India are located mainly in the east (in the states of Odisha, Chhattisgarh and transport and limiting their exposure to water stress. This is one of the reasons why coal- why reasons the of one is This water stress. to exposure their limiting and transport forcost-advantage a them giving medium, cooling a as seawater use and coal imported on rely primarily plants power coal-fired new coast, the system.Along wet-towercooling predominantlya use they case which in relative mines, in proximitycoal the built to be to generation projected coal-fired power are capacity of distant, amounts significant too not Figure ■ ■

P achievement universal offull access to electricity withinten years. Policies New Scenario, soasto ensure afaster the improvement inthe reliability ofpower supplyand in than quickly more accelerates sector power the in Investment the New Policies Scenario. averageyear,annual per an to6.8% rises of GDP (Figure4.6). Scenario versusin 6.5% 2040 in the Indian Vision Case, compared with a more modest rise in the New The share of manufacturing in India’s GDP rises to 25% by the mid-2020s and to 30% by

4.5

). In order to reduce coal transportation costs, and where demand centres are centres demand where and transportation costs, coal reduce to order In ). |

Implications ofIndia’s energy

GW in2040theNew Policies Scenario. 6 development

billion. That this sum is not larger is larger not is sum this That

P olicies

G 151 W 10 11 11 13 12 14 14 17 16 18 1 7 6 5 4 3 2 9 8 © OECD/IEA, 2015 energy demand higher, as – to a lesser extent – does the more rapid achievement of universalachievement accessto electricity (Spotlight). rapid more the does – extent lesser a to – as higher, demand energy residential push incomes higher and urbanisation Increasing wages.average increasing less in opportunities the urban employment and peri-urban areas; triggering from increasing additional migration from rural society: someto added urban areas Indian and implies value across also changes of manufacturing far-reaching on $1 emphasis than An sector. energy services more energy-intensive ten-times least at requires a means years)Over the Outlook recent in development.India’s growthfuel to required GDP energy of amount of the in acceleration driver significant prime the been has (which sector services the India’sthan rathergrowth,of engine the sector manufacturing the Making ■ ■ ■ ■ These achievements are complemented by more rapid movement in four additional areas: Note: NPS=New Policies Scenario; IVC=Indian Vision Case; PPP = purchasing power parity. Figure 152

■ ■ ■ ■ Billion dollars (2014, PPP) 10 12 2 4 6 8 matter that cause thelow inIndia’s airquality majorcities. A suite of measures to control the emissions of sulphur, nitrogen oxides and particulate with further expansion after thisdate. 2022, by GW 175 reach hydropower) large (excluding sector power the in capacity Accelerated deploymentrenewable of energy, basedgoal onthe tosee total renewable more efficient coal-fired technologies in the power sector. transition to sector,faster India’s a coal of including modernisation thorough more A transport, industry andagriculture. strongA topush promote energy India’s of efficiency all in sectors: end-use buildings,

000 000 000 000 000 000

4 .6 NPS

⊳ 2013

IVC compared withtheNewPoliciesScenario Value addedinmanufacturingtheIndianVisionCase

period, generating $1 of value added through expansion of industry of expansion through added value of $1 generating period,

NPS 2020

IVC

NPS 2030

IVC

World Energy Outlook | NPS 2040

IVC

5% 10% 15% 20% 25% 30%

in GDP (right axis) m Share of Manufacturing anufacturing Special Report

© OECD/IEA, 2015 Chapter 4 of Energy Systems Analysis (KTH dESA). 8. The geographic analysis was developed in collaboration with the KTH Royal Institute ground-of Technologylarge-scale (Sweden), been division has India in deployment mounted projects that, fromsolar a system perspective, of are power plants feeding the majority centralised grid. the far so but electrification, decentralised and of diesel generators, which are decentralised but not low-carbon. Solar PV is theoretically more suitable for low-carbon not decentralised, as wind farms rely on a centralised grid to deliver electricity to consumers. India also has a large fleet Note7. that a decentralised grid and a low-carbon electricity system are not synonymous: wind power is low carbon but next ten years, a detailed spatial analysis has been undertaken the to over illustrate India the optimal in lines transmission main the of expansion anticipated the on Based rising energy needs ashouseholds buynew appliances. provide access vital initial accommodatefor able remote to less but are communities, the capacity of electricity systems needs to be scaled up over time. Off-grid systems can that mean and demand per-capitaelectricity on strongimpact havea these incomes: household to rising relates consideration dynamic A further tariffs. off-grid and mini- grid systems, the cost of diesel and the comparison between grid-electricity tariffs and is one of the main variables, but others include the technology costs for mini- and off- density population factors: of variety a on depends choice technology final the areas In urban areas, the most economic option is always on-grid electrification; but in rural 2025 inthe IndianVisionCase, viaagridconnection either ordecentralised systems. 390 around growth, of population different generation of account technologies. additional Taking a range of help the with population, rural the of entirety the to electricity brings also involves not only a swift pace of electrification in and around India’s urbanThis centres,Scenario. but Policies New the in projected than earlier years, ten within electricity to access gain areas rural and urban both in households all Case, Vision Indian the In technology split to achieve universal access (Figure access universal achieve to split technology two states andadditionaltransmission linesare already plannedorunder construction. access today, a higher share gain access via the grid: population density is higher in these accounting Pradesh, Uttar and collectively for Bihar one-third of the total of rural population and states 60% of the population without the In Rajasthan. west or of country part the north-eastern the in Assam of state the as such density, population low with regions cost-effective in most aresystems decentralised map, the from seen be can As dominant overall typeofelectricityconnection in2025. role in bringing power to the rural population of India, on-grid connections remain the an important play solutions off-grid and mini- off-grid Although systems. via 40% and systems mini-grid via 35% grid, the via today,access gainaccess 25% without around

|

Implications ofIndia’s energy

million What mixoftechnologiescanachieve universal electricityaccessinIndia? people become new consumers of electricity over the period to period the over electricity of consumers new become people SPOTLIGHT development

4.7). 8 For the 240 million people million 240 the For

153 7 10 11 11 13 12 14 14 17 16 18 1 7 6 5 4 3 2 9 8 © OECD/IEA, 2015 all thestrains described earlier inrelation to the New Policies Scenario, increasing energy exacerbatewould outcome an Such Scenario. Policies New the in seen levels the above 170 (or 15% by up 2040 in consumptionenergy 154 faster attainment ofuniversal andreliable electricity supply) would beto pushtotal final The net result ofjust these two changes (theincreased share ofmanufacturing andthe Figure on-grid capacity andextension oftransmission anddistribution lines. off-grid power generationand capacity,mini- new to goes investments by followed in this drive for universal access is around $60 with associated investment The generation. in share their limits this and conditions, local suitable of existence the on depends deployment their but mixes, off-grid and to improve reliability). hydropower Small andwind power alsocontribute to the mini- compared with diesel generators (with which they may, in practice, be used in tandem competitive, more and more become to anticipated is technology the and time over falls PV solar of cost share The systems. (PV) photovoltaic largest solar by the followed generation, of provide generators diesel systems, off-grid and mini- the Within those with the highest deficit in terms of population without access. darkerlinkedthe colour,is density: the populationto density.population the higher the regionsselectedareThe colour the of density The lines. transmission main the of expansion planned incorporatedanalysisthe The Note: hsmpi ihu prejudice without is map This 0

250 4 .7 Rajasthan

⊳  to the 500 km u for of status selected regionsintheIndianVisionCaseby2025 Optimal splitbygridtypetoachieveuniversalaccessin sover eignty over an yt erritor Uttar Pradesh y, to h eiiaino nentoa rnir n onaisand boundaries and frontiers international of delimitation the

billion

million World Energy Outlook | in total. Three-quarters of this sum Bihar tonnes of oil equivalent[Mtoe])oil of tonnes Tr ans Pl Existi mission aH nned ng HV Assam to V h aeo an of name the lin lines es Special Report Arunachal Access type yt Pradesh erritor Mi Of driOn-g y, f- ni iyo area. or city g rid rid-g © OECD/IEA, 2015 Chapter 4 by global standards. low relatively are levels efficiency averagecurrent which in but 2040, by demand energy needs tobe paid to theIndiansteel industry, whichisprojected to account attention for almost 20%ofindustrial Particular by 2040. levels practice best global to close industries in these standards efficiency bring to significantly tightened requirements the and 2016, from period the for second-cycle the in envisaged already as extended,Achieve and is Trade”scheme the “Perform, of the coverage sectors, energy-intensive the For food potential. textiles, as savings energy (such significant have which campaign equipment), industrial India” and machinery in processing, “Make the by targeted are that energy-intensive industries less the also but 4.2) Box role, vital a play can materials of re-use and energy-intensive use efficient only (wheresectorssector. industrialnot encompasses This (Figure 48 (or 7% “only” adding while achieved be can Scenario) Policies New the with one-quarter (compared 2040 byby sector industrial the to added value increasing that shows analysis Our Figure CO higher pace development, infrastructure required of the and resources water on pressure additional putting needs, import Pushing in the same direction, rapid deployment of renewables reduces the carbon reduces of renewables deployment intensity of growth while alsolessening the call onimported energy. rapid direction, same the in Pushing growth. industrial generating “Make inIndia” while environment the of safeguardthe to aims which vision campaign, the underlying with environmental consistent adrive – and essential energy be will adverse the keep sectors all across to policies, efficiency energy of enforcement Strong Scenario, check. in implications Policies New the in than That is why the other components of the Indian Vision Case assume even more importance quality.

- - - Mtoe 20 40 60 80 60 40 20 0

4.8). Buildings

4.8

Mt |

Implications ofIndia’s energy However, this requires a heavy commitment to energy efficiency across the across efficiency energy to commitment heavy a requires However,this ⊳ oe) to industrial energy demand, 35 demand, energy industrial to oe)

Vision Case compared with the New Policies Scenario, 2040 Vision CasecomparedwiththeNewPoliciesScenario,2040 Change infossil-fueldemandtheend-usesectorsIndian Industry

Agriculture

Transport 2 development emissionsandafurther deterioration inair

Mt Total net change oe of which comes from fossil fuels fossil from comes which of oe

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155

10 11 11 13 12 14 14 17 16 18 1 7 6 5 4 3 2 9 8 © OECD/IEA, 2015 oe) in 2040 above the level in the New Policies Scenario, with the difference the with Scenario, Box Policies New the in level the above 2040 in oe) explained mostly by higher consumption ofdiesel for trucks. 12 (or per es other developing Asiancountries) can contain growth intransport energy demandto 4% from pollution 33 air the from trucks heavy limit new of to efficiency the and improve which imports measures, These gases. oil exhaust constrain to order in need pressing a becomes vehicles commercial light and trucks medium and heavy efficiency standards for Introducing transportation. for demand oil to jolt upward significant potentially a and – in manufacturing output in the Indian Vision Case also implies a 30% rise in freight activity The need to focus on energy efficiency does not stop with the industrial sector. The increase 156 Implementing material efficiency strategies, inadditionto energy efficiency, in reducing waste ofnatural resources. while quality product on focus to companies encouraging of direction the in step The government’s Zero Effect, Zero intensely. Defect more concept, launched materials in energy-intensive2015, is using an important and yields fabrication increasing measures, suchasincreasing recycling, reducing theweight ofconsumer products, and reducing greenhouse-gas emissions. Material efficiency includes a set of diverse energy demand, increasing energy security, enhancing economic competitiveness with less overall material input–can complement energy efficiency inreducing the outside lies potential savingsservice material same the delivering energy – efficiency energy-intensiveMaterialsectors. the of most Case, exploited Vision is Indian potential the efficiency in energy viable economically the of share large a totalquarterconsumptionalmostof a and energy While final consumption2040. in intensive industries still account for more than40%oftotal industrial energy energy- five these Case, Vision Indian the In India’sindustrialisation. of pillar a are paper,and aluminium plastics, cement, steel,Energy-intensive including industries, f h wrds oet ad hs elc eeg-nesv piay te wt less with steel energy-intensive secondary steel. primary energy-intensive replace thus and lowest, world’s the of one currently are which rates,recycling increase to help would framework, legal a of absence the in fragmented highly currently is modernising which industry, Additionally, recycling India’s process. manufacturing the during losses reducing by and buildings steelin particularly longer,products, for using light-weightingsteel components by reduced be can steel for demand The industry. energy-consuming 7-8 by oil savings would arisefrom thesteel sector, whichisalsoby far for the most important and electricity 50 for almost by demand reduced be would demand efficiency-related Coal industries. than these in more savings significantly is which industries), energy-intensive 65 almost save can Case Vision Indian the

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Implications ofIndia’s energy

t erawatt-hours (TWh) lower in the Indian Vision Case compared with the Case compared Vision Indian in the lower (TWh) erawatt-hours

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million by 2025 and 221 development

TWh.

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10 11 11 13 12 14 14 17 16 18 1 7 6 5 4 3 2 9 8 © OECD/IEA, 2015 and low-carbon investment. improvements efficiency low-costfor financing channel to mechanisms as well as likeCCS technologiesproving and developing in examplefortoo, leadership, external on depends Case Vision Indian the in deployment renewables and measures efficiency the beyondfar push to ability and readiness India’s but growth, of model low-carbon a deliver to India 9. India’s energy-related CO energy-related9. India’s 2020. by emissions energy-related global in peak a deliver to designed is that 2015) (IEA, Report Scenario, presented inthe Bridge the called scenario, a of pillars the with coincide – technologies energyrenewable in investment and increased plants, power coal-fired least-efficient the of construction further efficiency, no energy end-use on accent strong the – case this in elements policy eventual outcomes, in terms of energy demand and emissions, are similar. Some of the key development strategy for India, compared withtheNew Policies Scenario, even thoughthe a low-carbon of direction the in steps additional important takes Case Vision Indian The in 2040by efficiency savings . Note: Theincrease ofelectricity demand dueto earlier achievement ofuniversal electricity accessisoffset Figure result ofthereduced risk that comes withapredictable businessframework. a as or guarantees explicit through either secured capital low-cost and available readily latter, The renewables. to flows thatcapital particular, of in amount needthe would in up a step as well as investment, necessary the attracting of capable framework investment sector as a whole, discussed in Chapter 2, this would require the creation of a business and power the of functioning the improve to measures the Alongside 2040. in 50% almost to of non-fossil fuel capacity in power generation – mostly non-hydro renewables – increases efficiency of coal-fired generation improves quickly, more The in2040. share 39% to reach 158 because the policy measures are stronger and assumed GDP growth is lower.

- - - TWh 300 200 100 100 200 300 0

4.9 9 The Indian Vision Case does not illustrate, by any means, the full potential for potential full the means, any by illustrate, not does Case Vision Indian The Buildings

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2 emissions in the Bridge Scenario are considerably lower than in the Indian Vision Case Vision Indian the in than lower considerably are Scenario Bridge the in emissions Industry Energy andClimate Change: World Energy OutlookSpecial

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Change related to: E produc Agricultural “Make in India” Urbanisa ffi ciency ciency policies Special Report ti vity ti on

© OECD/IEA, 2015 SO phased in over ten years to 2025, would allow for an 80% reduction in sulphur-dioxide in (SO reduction 80% an for allow would 2025, to years ten measures,over bestin practice ofphased a suite of enforcement that estimate We health. human on emissions these of effects adverse the reduce and quality air improveto as so pollutants, local of emissions reduce to measures for need the – model India’sgrowth to dimension Another element of the Indian Vision Case reinforces the importance of the environmental of traditional biomass cookstoves. Some of these measures are already under discussion in because of tighter controls over industrial emissions as well as a decrease in household use Chapter 4 wide and Euro 4/IV in selected cities. 11. Standards that are currently in force in India for road sources are Euro 3/III for light-duty/heavy-duty vehicles India- 10. The emission standards and measures included are based on legislation in force in the European Union. nitrogen oxides (NO Box reduction in the road transport sector. Emissions of particulate matter (PM ■ ■ ■ ■ ■ increasing combustion of fossil fuelsand foreconomy powergrowing generationa andfrom in the arising end-usepressures sectors. the with even India, in quality air of Proven control emissions technologies are available to maintain acceptable levels advanced control measures intheIndianVisionCase involves: of the package generation, of power efficiency the improve to efforts with parallel In 2 2 emission limits in the power generation sector and in industry (Box industry in and generationpower sector the in limits emission ■ ■ ■ ■ ■ ) levels in 2040, compared with the baseline of no additional action, mainly due to tight

4.3 continued efforts to encourage switching from solid biomass to LPG and electricity. cookstoves, by accompanied biomass improvedefficiency Acceleratedof roll-out efficient covers andseals. from compounds organic liquid fuels production, volatile storage and distribution, such as leak detection and more of emissions control to measures Low-cost and other agricultural/construction vehicles, trains, ships etc.). for motorcycles and mopeds, along with measures for non-road vehicles (tractors 3 Euro and trucks heavy-duty for 6 Euro trucks, and carslight-duty for 6 Euro of equivalent the to up vehicles, road from emissions exhaust forstandards Higher fuels sulphur-free and oil (a fuel light for 0.1% oil, fuel heavy for 1% of level the at fuels, liquids for requirements content sulphur maximum of introduction The plants existing of NO desulphurisation, retrofit gas flue like the equipment appropriate with require also but plants new be for would stringent These more plants. combustion large from emissions on controls Tighter industries suchasiron andsteel, cement, chemicals andothers. to usebest availabletechnologiesfor certainindustrial processes,energy-intensive including a requirement alsoinclude would Measures de-dusters. efficiency

maximum of10partspermillion)for transport.

⊳

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Implications ofIndia’s energy Five stepstoimproveIndia’sairquality x ) would also fall by around 65% over the same period, with the largest development 11 x controls orhigh

4.3). 2.5 ) would decline Emissions of Emissions 10 159

10 11 11 13 12 14 14 17 16 18 1 7 6 5 4 3 2 9 8 © OECD/IEA, 2015 between energy security and environmental policy objectives is not complete. including the idea of affordability; the price that India pays for unabated combustion of fossil fuels, although the overlap single energy type, supplier or route to market) and affordability. To this one could add the environmental dimension, by to shocks, disruptions and sudden changes in the supply-demand balance); its diversity (avoiding too great a reliance on a energy supply of (ability of the systemquality to the deliver uninterruptedinsecurity); energy); resilienceenergy and flexibility of (the ability of formthe systemextreme tomost react the being energy modern of (lack alleviation poverty and access differentdimensions: sector.are energyThere Indian the facing challenges key the of one encompasses – uninterruptedIEAdefinesas the which – energyavailabilitysecurity of notion energyaffordable13. The atof an price made in 2015 by the 12. The emission limits from combustion in large boilers in the Indian Vision Case are similar to the values in a proposal made mandatory inseveral states), whilemore andmore minimumenergy performance India hasintroduced avoluntary energy code for commercial buildings(that hasbeen standardsand for heavy-duty vehicles are expected to introducedbe buildings,In 2016. in India introduced its first fuel-economy standard in 2014 (for passenger light-duty vehicles) support to improve energy efficiency in small and medium enterprises (SMEs). In transport, financialprovide awarenessraise and to measures of suite a place in put governmenthas Achieve andTrade (PAT) schemecovers large industrial energy consumers, whilethe Indian Perform, In industry, the growth. consumption energy of prospects the of mitigation the to contributing importance, and scope in growing are India in policies efficiency Energy Investment inenergyefficiency and implications for Indiaifinvestment falls short. riskssome as well foras – met be to efficiency,these energy enable canand that actions policy supply energy for both Case, Vision Indian the and Scenario Policies New the of needs investmentoverall the describes section This needs. its meet to sufficient be resourcescapitalof to expandenergy mayIndian funds) the sectorpublic (including not currentobstacle,government.potentiallymajor toois a giventraditionalthatFinancing the of focus the much very are which climate, business Indian the overallof complexity within the energy sector itselfbutalsoahost ofmore general issuesrelated to the largestepabovea are – Case Vision Indian the in thisso moreeven investment – Scenario olicies comes inatimely waythat depends notonlyonproviding appropriate conditions Ensuring sector. power the in particularly far, so India by achieved anything investment. New of issues to back comes – Over the longterm, safeguarding Indianenergy security –inallitsmultiple dimensions Investing inIndia’s energy future with local pollution. significanta reduction, more by per million one than year, in premature deaths associated But the benefits include a reduction in crop losses caused by ground level ozone, as well as amountmoretheto that– double 2040 wouldthan required be currentunder legislation. These measures come at a significant financial cost, almost $90 the Indian government; others would go beyond anything currently under consideration. 160

P Indian Ministry of Environment for the power generation sector 13 h lvl o ivsmn rqie i the in required investment of levels The World Energy Outlook |

billion . per year on average Special Report 12

© OECD/IEA, 2015 Chapter 4 for proposal formal no but discussion, under currently is regulation has yet been announced, so this is not transportincluded in the New Policies Scenario. freight for regulation efficiency noted, 14. As Scenario). Policies New the in not (but case that in Case($161 included are standards Vision fuel-economy tighter Indian as in the is substantial vehicles freight in road efficiency more increase than ten-fold sales to a level of 29 PLDV annual as spending, efficiency energy in increase the of bulk and Figure 4.10).However, future,light-dutypassenger 4.3 the in vehicles(PLDVs) accountfor the Table in transport road” “other of (part spending efficiency of share large a for target the are and transport road in consumption energy of half about for today account buses transport, by mass dominated traditionally been has system transport India’s As of efficiency levels in different end-use sectors in 2014. sectorpublic the toand firms improvehouseholds, performancethe energy-usingtheir of equipment above baselinea by made expenditure additional the from investmentderives efficiency energy measuring for methodology The Note: Table by buildingsandindustry. the Indian Vision Case, is dominated by energy efficiency investment in transport, followed cumulativeThe investment4.3). need(Table of $0.8 Case Vision Indian the in in so, more rapidly even and, rises Scenario Policies efficiency New the energy in investment annual energy, for demand expanding the rapidly and efficiency to energy attention growing of combination this of result a As 21 the of out 4 only albeit appliances, electric for introduced been have (MEPS) standards Heating and cooling Buildings Non energy-intensive Energy-intensive Industry Lighting Appliancesandcooking Transport Total energy efficiency Aviation andnavigation Other road Road freight Passenger vehicles

current MEPSare mandatory.

4.3 14

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⊳

Implications ofIndia’s energy

the IndianVisionCase,2015-2040 Investment

million in Cumulative

energy 181 139 512 832 128 220 New Policies Scenario 32 85 54 65 84 87 77

trillion in in 2040. The additional investment to increase energy

efficiency in the New Policies Scenario, and $1.5 Annual average development 20 32 1 3 2 7 5 2 3 3 3 5 8

in

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10 11 11 13 12 14 14 17 16 18 1 7 6 5 4 3 2 9 8 © OECD/IEA, 2015 with the New Policies Scenario. the Indian non-energy-intensive industries, In where the cumulative investment needs double compared lighting. to more even shifts improvements efficiency and industrial of terms refrigeration in focus the Case, in Vision also but mainly systems, consumption, motor-driven electricity electric reduce steam in to in those as energy, and is thermal furnaces, for industrial Investment need and systems the machinery. reduce and to measures food between equally textiles, split brick-making, the including fertilisers), industries, (including chemicals energy-intensive less from though comes particularly spending future of bulk The industries,cement. and steel energy-intensive the is carried by projects out efficiency energy industrial in investment the of majority the Today investmentrequired level ininsulation in2040increases by four-times. the buildings, all in mandatory become standards building where Case, Vision Indian the In buildings. public and commercial in primarily Scenario, Policies New the in $0.4 of level a reaches – cooling space for use energy reducing at aimed mandatory standards in place for air conditioners. Annual investment in insulation – mainly are becoming more and more efficient (Box 4.4). For heating and cooling, India already has that LEDs to CFL and bulbs light incandescent from switch a incentivise that programmes of lighting a consequence as role, an important plays also lighting for spending Efficiency growth. demand energy slow and potential this exploit would Case, Vision Indian the in $240 cumulative additional an standardsmobilising and Tightening further Scenario. Policies New the in unexploited remains appliances for televisions, refrigerators and washing machines. Yet, significant energy efficiency potential projected to become more stringent andmandatory for awiderrange ofappliances, including arestandards Appliance rise. levels ownership appliance and incomes as important more becomes which on spending investment), the of 40% around (representing appliances by Energy efficiency spending in the buildings sector in the New Policies Scenario is dominated investment in transport is indicated on the right axis. Note: The volume of efficiency investment in the industry and buildings sectors is on the left axis: the higher volume of Figure 162 Billion dollars (2014) 10 2 4 6 8

2015

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4.4

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Implications ofIndia’s energy

efficiency

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10 11 11 13 12 14 14 17 16 18 1 7 6 5 4 3 2 9 8 © OECD/IEA, 2015 PV isuponly14%inthe Indian VisionCase. greaterresult,cumulativepredominatesa investment technologylearning as and, solar in of effect The installation. their as well as equipment and panels solar of manufacturing domestic the for those both check, in costs investment unit keep to helps that learning strain supply chains and so couldpush up costs,deployment but it wouldof also trigger additionalpace technological the in rise rapid a Such Case. Vision Indian the in higher 22% to that in the New Policies Scenario. Cumulative installations of solar PV capacity are some generation is up by almost 10%, or a cumulative $73 power of sources renewable in Case Vision Indian the in investmentpower: wind and PV Another difference comes in the investment requiredin renewable energy, notably in solar equipment). plant power of manufacturing domestic to spread campaign India” in “Make the increased costs of higher-efficiency plants are somewhat contained as the effects of the Indian Vision Case, compared with the New Policies Scenario, as fewer plants are built (and coal-fired plants, there is a slight decrease in capital investment in coal-fired capacity in the terms of fuels and technologies. Despite the accelerated push for more costly supercritical quarterstotalof investment energyin supply, therearebut variations between two in the three- around with cases, both in needs investmentoverall dominates sector power The Note: NPS = New Policies Scenario; IVC = Indian Vision Case; T&D = transmission and distribution. Figure much larger increase inenergy-supply investment inthis case. olicies Scenario and $2.9 But the in particular. sector power the The additional energy to efficiency investment flowing in the Indian Vision Case is essential started to avoid a capital private as New related to energy supply – a cumulative total of $2.8 flows investment in increase sustained further a require here examined scenarios main Chapter Investment inenergy supplyinIndiahasrisen steadily over the period since2005(see Investment inenergysupply 164 2015 2015 2005 NPS IVC

P - - - 2040 2040 2014

4.11 1),

Power plants

⊳

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trillion Power T&D 40

in the Indian Vision Case (Figure 4.11 and Table

60 Oil

World Energy Outlook |

billion

trillion over the Gas over the period to 2040 in the 80

Outlook Coal Billion dollars (2014) 100

period, relative Special Report

Biofuels 120

4.4).

© OECD/IEA, 2015 Chapter 4 Table power sector also come with some specific risks: whether risks: whether coal-firedspecific some plantspower with come can relypower to sector also unlikely are companies, distribution the of condition financial to the is notably India the of part if each Investments in required. levels the essential at sector energy the to attract capital be will sector) distribution the to on sold electricity the for paid in described be not generators will that possibility the (i.e. quickly.off-takerresolvedReducing risk be weaknesses structural the that awareness Chapter also is there but investors, from interest to generate continues it capital: in shortfall a to vulnerable particularly is (Box projections our to risk downside a presenting environment, India’sbusiness complexgrantedin taken for be cannot certainly scale this Investmentat 1%. Theremainder covers investment intransmission anddistribution. than less for biofuels and 3% over just nuclear 27%, aroundrenewables total; the of 40% around for accounts plants) power fuel-fired fossil and transportation, refining upstream, particularly into offshore basins. In both cases, investment related to fossil fuels (including sector, upstream the to capital more attract imports) for demand in rise the slow to push as the assumed improvement in conditions and incentives (resulting from a stronger policy around 8-10%, by Case, Vision Indian the in higher gasproduction is and Investment oil in

Biofuels Total energy supply and distribution Power transmission ofwhichsolar Hydro Other renewables Nuclear Gas Coal Power generation Coal Mining Transport Refining Gas Upstream Transport Transport Upstream Oil

4.4

2,

|

⊳

Implications ofIndia’s energy

Indian VisionCase,2015-2040 Investment inenergysupplytheNewPoliciesScenarioand

Cumulative 2 829 1 277 New Policies Scenario 845 364 141 611 354 199 127 192 212 127 285 11 96 66 72 84 31 62 Annual average development 109 0.4 33 14 23 14 49 11 5 4 3 8 3 5 7 8 3 5 1 2 ($2014 billion) Cumulative 2 919 1 322 838 412 687 137 330 206 135 192 234 158 308 11 96 64 71 76 34 82

Indian VisionCase 4.5). The power sector power The Annual average 112 0.4 32 16 26 13 51 12 4 5 2 3 3 8 5 1 7 9 6 3 165

10 11 11 13 12 14 14 17 16 18 1 7 6 5 4 3 2 9 8 © OECD/IEA, 2015 Box advanced technology, especiallyinunderground mining. more deploy and standards safety improve operations, their mechanise further to seek companies mining as up, go to set is projects new of intensity capital the – low relatively greenfield mines and – although the unit costs of current investments in coal extraction are casecoal,risks.boostthe of the In to production will require brownfield and newprojects gas), the policy framework needs to offer potential returns that are commensurate with the to theprovisions inupstream contracts, orto the priceofthe produced product (for natural and involve relatively high-cost projects. Whether through adjustments to the fiscal system, exploit to complex technically are offshore, largely are resourceshydrocarbon remaining Investments in upstream oil and gas likewise face challenges: the most promising of India’s the degree oflocal publicconsent that allows itto go ahead. has – networks in including investmentany– whether capital-intensiveand technologies; into money to put framework regulatory in the confident sufficiently feel can renewables investors whether ahead; move non-hydro authorisations to in and permits necessary the secure can hydropowerplants large or nuclear remunerated;whether adequately be will order merit the in up high plants whether and costs fuel higher their given competitive remain can plants gas-fired whether standards; environmental of tightening future a of coalsupply,their of quality volumesand the on towhatextentor facetheypossibility the 166 them, they are far from optimal from a power system perspective. They are typically are They perspective. system power a from optimal from far are they them, While such solutions can deliver reliable power supply for those who can afford to install on inverters andbatteries that store power fromis thegridwhen it available. alternatives that are typically more costly, either generating their own power or relying reliable grid-based power, companies and households would be forced to rely more on of absence In the competitiveness. their for supply secure affordable and on rely and would bedealtaheavy blow, asthe manufacturing sectors are more energy intensive the economy away from agriculture towards andservices, manufacturing industry, re-orientate to ambition general the and campaign India” in “Make the for Prospects in India(World BankEnterprise Survey, 2014). owners and managers as the second-most important obstacle to business development by business identified been already has supply electricity unreliable productivity: and output on toll its took shedding load continued example, for as, outlook, India’seconomic to risks important to rise give would Scenario Policies New the levels in the projected of short falls investment business energy and which market in energy environment An the environment. of reforms planned out carrying in delays were there major if or wane, to were momentum this if projections our to risk downside significant be would There markets. functioning better for push the by accompanied encompassing cleaner andmore reliable energy supplyanduniversal access, and There isclearmomentum inIndiabehind thedrive to modernise theenergy system,

4.5

⊳

The riskofashortfallinpowersectorinvestment World Energy Outlook | Special Report © OECD/IEA, 2015 Chapter 4 involved disproportionately companies in the six states mentioned. was not allocated by region as it concerned the acquisition of shares by non-residents, operations which may also have 15. In practice the concentration of foreign direct investment may be even higher than this: around a quarter of the total 2000-2015 (India Department of Industrial Policy and Promotion, 2015). Andhra Pradesh – accounted for over 70% of foreign direct investment flows to India during as an example, the top six states stand, – Maharashtra, Delhi, Tamil Asthings Nadu, Karnataka, Gujarat and investment states. foreign Taking India. individual across distributed evenly of from far actions are flows investment the on also and but decisions level, on federal just at not policies depends investment of adequacy the context, Indian the In needed inmore capital-intensive andlonger lead-time portprojects. private firms or independent be investmentwill coal coal, of largestimporter the becoming India With investtoo.players might or whether Railways, Indian monopoly, national the by exclusivelyout carried be should and can railwaycoal whether of investmentscarriage the for Mand the of connection Ib the of connection the (improving Odisha are three lines in Jharkhand (improving the connection of the North Karanpura coal fields), fields), coal Karanpura North the of connection the (improving Jharkhand in lines three are supply. energy of most pressing railway adequacy The projects the to critical particularly railis Coal-related infrastructure.railway coal-related and pipelines, gas and terminals import LNG refineries, are components largest the which of investment,energy-supply in element major Infrastructure for transportation (not including electricity transmission) and oil refining is another responsibilities are shared between the federal and state levels. of model The competitive practice is diverging outcomes between states – particularly in the power sector, for which of variable renewables. integrate amounts large to difficult more become would it so purposes, balancing for Captive suffer. would generation – plants do not deployment contribute to renewablessystem security, for i.e. they cannot targets readily be used its reach to aims India which by route main the – projects power wind and PV utility-scale solar but boost, a necessarily be positive for renewable energy technologies. Rooftop solar PV would get The emergence by default of a more decentralised power generation system would not $30 to up prices) current on (based costs it gas, natural with fuelled turbine open-cycle generatorsfordiesel example,200 500 when of used, being are fuels costlier because also rise, to tends spending Fuel produce). can plants their than electricity less companiesoftenfrequently need casesince is the (as are also typically less efficient than larger plants, especially if they operate at part load units Smaller issues. permitting other and acquisition land including unit, the of size power plants for large industrial consumers duplicates costs that are notrelated to the of scale. Replacing a 1 more costly than grid-based technologies, in part because they miss out on economies

million more peryear just for fuel to generate the same amount ofelectricity.

|

Implications ofIndia’s energy

G Raig W coal-fired power plant with five 200 arh and Korba coal fields). There are ongoing discussions about about discussions ongoing are There fields). coal Korba and arh development V alley coal fields) and Chhattisgarh (improving Chhattisgarh and fields) coal alley

kilo watt size each, replace a 100 watt a size each, replace

meg awatt (MW) captive 15 A risk for India in

MW 167

10 11 11 13 12 14 14 17 16 18 1 7 6 5 4 3 2 9 8 © OECD/IEA, 2015 Figure lines betweenand some ambiguousboundary national, state andlocal competences. clarity and certainty around of the alack rules of the game, including severe, the complexity are challenges of administrative the procedures But inflation. and finance public on pressures eases that price oil lower a with reformingadministration coincides a which environment,in investors and others are attracted by India’s size, its growth These Gujarat). potential in andprojects ansolar auspiciousin currentinvolved heavily been already have SunEdison, and Essar 175 the achieving of support greater role –andindeed have been invited to lead investments intherenewables sector in a Internationalrequired. investors, play likely be are to likelytotoo, infrastructure is projects in energy private participation greater 1), Chapter (see priorities competing to due assumed, energy caseIndian past.the the beenavailability in has the than As cannot funds public be of in investors of range broader a upon call to need also will required scale the on Investment Financing with relevant stakeholders engagement at numerous levels –federal, regional, state timely andlocal. alongside issues, areas protected and biodiversity water, use, provisiontransport).forwith Integratedpublic involvespolicy-makinglandatalso looking appropriateconnections,grid with supply coal infrastructure, port and rail planning urban atcross-purposes with plants power new (e.g. system the of different parts of operating delivery the synchronise and avoid policy of energy with aspects institutions various different for that responsibilities ensure to essential is policy-making co-ordinated Well approaches can beeasily andquicklystudied andemulated across thecountry. stimulate innovative policy experiments at the state level and ensure can that successful policy role) apositive play can Aayog] [NITI India Transforming for Institution National the and co-operative federalism, involving a strong dialogue between the states (an area where 168 Russia China Brazil India

4.12 23%

Power ⊳ 27%



in selectedcountriestheNewPoliciesScenario,2015-2040 Breakdown ofcumulativeenergysupplyinvestment by sector

20%

63% G W capacity target by 2022 (some private investors, including including investors,private (some 2022 by target capacity W Oil

75% 40% 36%

Gas

61% World Energy Outlook | 60%

Coal 16%

38% 80% 10%

12% Biofuels

7% Special Report

7%

8% 7% 5%

100% 3%

© OECD/IEA, 2015 capital needed of new projects, suggests that these sources willbe stretched too thinto provide allthe bankability the affect that aspects financial and technological, regulatory, political, with including low-carbon generation projects, and this, coupled with the host of risks associated looks set to come under increasing strain. Large outlays are foreseen for the energy sector, has manufacturers, equipment generally Chinese proven sufficient for the capital needs of the Indian power sector. from But this model funding and finance development some sector, with banking together the from finance and money now, public until domestic Up markets; andinternational capital flows, including development finance. sector: public funds; domestic savings, channelled via the banking system or Indian capital power the financing for capital of sources external main three on spotlight the puts This Chapter 4 financed through retained earnings in OECD markets, but that more debt and equity is needed in non-OECD countries. 16. The an istypically funding avenue followed onlyby thevery largest Indiancompanies for (Didier andSchmukler, 2013). these markets andtapping traded actively are companies, few listedrelatively many have markets capital Indian the While 2013). Thirty, of (Group financing external of 90% over markets) well accounts capital for the via loans securitised options financing ofdomestic system, rather than capital markets: corporate lending from range banks (as opposed to bonds or narrow relatively the available. is There is strong reliance in India on – problem and preference for – loans from the the banking of part A Figur manytoborrowcompaniesneed togrow; retained areunlikelyearnings sufficient.tobe world), the throughout countries in indeed, and, expansion economic rapid experiencing investment and of financing will be tested ( other emerging economies – and this will be the key arena in which the adequacy of future The share offuture investment going to thepower sector ishigher inIndiathanmost 2036 2031 2026 2021 2015 Coal - - - - - 2040 2035 2030 2025 2020

e IA 21b dmntae ta a ihr hr o eeg ivsmn is investment energy of share higher a that demonstrated 2014b) (IEA, World Energy Investment Outlook

4.13

Gas and oil

|

Implications ofIndia’s energy

⊳ (Figure

New PoliciesScenario Average annualinvestmentinthepowersectorIndia Nuclear

4.13). 20

Hydro

40 Solar PV

Figure development

4.12). Wind 60 In India (as in many other countries

Other renewables Billion dollars (2014) 80

Networks 100

169

16

10 11 11 13 12 14 14 17 16 18 1 7 6 5 4 3 2 9 8 © OECD/IEA, 2015 from themultilateral development banks. capital at scale to the renewables sector, alongside an enhanced role for low-carbon finance cheaper strategicbring tothe address wouldneed kind this facilityof well-designed a but – currency the in devaluation sharp of event the in expensive very become could facility a Such 2015). Initiative, Policy (Climate facility hedging currency government-sponsored a providing in interest shown has government Indian the response, In market). domestic based currency hedging in Indiapushes up the cost of debt towards that available on the market- (and devaluation source of of risk the againstprotect cheaper to hedge currency a requires capital, a theoretically financing, International technologies. efficiency high and projects for low-carbon finance at attracting aimed specifically initiatives other are there infrastructure into and debt – long-term projects vehicles of flow accelerate tothe designed investment – Funds Debt Infrastructure India’s of example, for purpose, the is the range of financing options available and bring down the cost of long-term finance. This broaden to seeking is government Indian the vulnerabilities, potential these Recognising risk of sectoral clauses that limittheexposure oflenders to individualsectors. because difficulties to lead might technologies energy capital-intensive moregenerally other or renewablesinvestmentinto for demand the in surge a banks: by lending that direct for conditions other the India interest and rates influence and sectors of various to credit Bank the Reserve from guidelines and regulations banking also are There 2014). (OECD, financing long-term supply to ability its GDP,limiting of 5% capitalisation only a of has and India in under-developed relatively is – maturity longer a have typically which – bonds corporate market for The years. five than less of maturity a have sector banking Indian the fromoutstanding loans of 80% than Moreinvestment projects. energy of needs long-term the for match good a generally not are loans However,bank 170 World Energy Outlook | Special Report

© OECD/IEA, 2015 Countries value exceeds 200%. Nil values are marked “-”. a compound average annual basis and are marked “n.a.” when the base year is zero or the differences minor betweento totals and lead the sum mayof their individual rounding components. Growthtables, rates the are calculatedin on and book this of text the in Both PRIS Agency database (www.iaea.org/pris Energy Atomic International the and version) 2015 (April Database Plants Historicaldata for gross electricalcapacityare drawn fromPlatts the World PowerElectric aa o fsi-ul rdcin eeg dmn, rs eetiiy eeain and generation electricity gross demand, energy CO production, fossil-fuel for Data www.iea.org/statistics/topics/ fuel combustionfuel compared previous with Annex A Total capacity is the sum of existing capacity and additions, less retirements. and services non-specified other) and other (agriculture and (residential,non-energy use). Projected gross electrical buildings transport, industry, include TFC comprising Sectors and heat. TPEDdoes notinclude ambient heat from heat pumps orelectricity trade. sector excluding electricity and heat, plus total final consumption (TFC) excluding electricity energy other generationplus power toequivalent is Total(TPED) demand energy primary Definitional note tothe tables ■ ■ ■ and the Indian Vision Case (IVC). These tables are in three categories, including: The tables in this Annex detail India projections to 2040 in the New Policies Scenario (NPS) guidelines, guidelines, has led to a change in the definition and absolute levels of and non-renewable municipal waste. Using the 2006 IPCC guidelines, instead of the older 1996 General note to thetables TFC sectors shown thetables. in statistics ■ ■ ■ 2 fromcombustionfuel toareIEAup 2013 on statistics, based ( emissions Annex Annex Annex CO 2 includes emissions from other energy sector inadditionto the power generation and ) publishedin

, |

CO A3: A2: A1: Tables for scenarioprojections 2

Emissions fromFuel Combustion emissions. Ener Primar F generation, electrical capacity, and energy-related carbon-dioxide (CO carbon-dioxide and energy-related capacity, electrical generation, ossil-fuel production andinvestments in fossil-fuel supplyandpower. gy access to electricity and clean cooking facilities, gross electricity gross facilities, cooking clean and electricity to access gy Energy Balances ofOECD Countries y energy demandandfinal consumption. ). ). CO2 CO emissions 2 emissions do not include emissions from emissions emissionsdonotinclude industrial waste Tables forscenarioprojections WEO . editions. For more information please visit: please information more For editions. and theIEA Monthly Oil Data Service , Energy Balances ofnon-OECD CO 2 emissions from fossil- www.iea.org/ Annex A 171 2 ) .

© OECD/IEA, 2015 Gas sector sector Oil Coal sec Coal Power sector Power Total Total coal Total coal gas Total natural gas Total natural gas Total natural Total Total coal Total Total oil Total oil Total oil 172 Re Upstream Transport Upstream Transport Transport Power plants Mining Lignite Lignite Lignite T&D Coking Coking coal Steam coal Coking coal Steam coal Coking Coking coal Steam coal Unconven Unconven Unconven Conven Conven Conven Crude oil Crude oil Crude oil Unconven Unconven Unconven Natural gas liquids Natural gas liquids Natural gas liquids fi Renewables Fo ning ssil-fuelled 13.2 13.7 16.7 19.5 20.2 147.7 282.1 282.1 147.7 20.2 19.5 16.7 13.7 13.2 ssil-fuelled tor onal onal gas onal gas onal gas onal onal oil onal oil onal oil onal onal gas onal gas onal gas 052 012 063 013 064 052 2026-40 2015-25 2036-40 2031-35 2026-30 2021-25 2015-20 59.6 74.4 88.0 96.7 93.7 729.8 1 392.1 392.1 1 729.8 93.7 96.7 88.0 74.4 59.6 35.0 43.8 51.9 57.3 60.5 428.8 847.8 847.8 428.8 60.5 57.3 51.9 43.8 35.0 19.8 26.7 30.6 33.3 36.0 36.0 33.3 30.6 26.7 19.8 24.6 30.6 36.2 39.4 33.3 301.0 544.3 544.3 301.0 33.3 39.4 36.2 30.6 24.6 00 03 00 05 00 05 00 032040 2013 2040 2013 2040 2040 2013 2035 2040 2040 2030 2035 2040 2035 2025 2030 2013 2030 2020 2025 2040 2040 2025 2013 2020 2013 2035 2020 2000 2013 2040 2030 2013 2000 2035 2025 2000 2030 2020 2025 2013 2020 2000 2013 2000 00 03 00 05 00 05 00 032040 2013 2040 2035 2030 2040 2025 2013 2040 2020 2013 2040 2040 2013 2013 2035 2040 2000 2040 2030 2035 2035 2025 2030 2030 2020 2025 2025 2013 2020 2020 2000 2013 2013 2000 2000 8 30 2 54 3 75 2 10 0 3.8 3.8 100 100 100 100 926 926 775 775 632 632 514 514 425 425 340 340 187 187 8 30 2 54 3 75 2 10 0 3.8 100 100 926 775 632 514 425 340 187 6 21 6 40 6 67 4 8 9 4.0 4.0 91 91 85 85 842 842 697 697 562 562 450 450 368 368 291 291 163 163 6 21 6 40 6 67 4 8 9 4.0 91 85 842 697 562 450 368 291 163 2.9 6.6 8.2 10.0 14.1 50.1 161.5 161.5 50.1 203.2 14.1 81.9 10.0 17.4 8.2 13.5 6.6 9.8 2.9 7.9 7.1 6.0 5.9 7.3 9.3 10.1 65.6 133.4 133.4 65.6 10.1 9.3 7.3 5.9 6.0 4 0 2 0 1.9 2.0 2.6 2.8 2.8 21.6 40.7 40.7 21.6 2.8 2.8 2.6 2.0 1.9 2.9 2.3 2.7 3.1 2.9 28.9 43.4 43.4 90.0 28.9 36.7 2.9 7.2 3.1 6.2 2.7 4.6 2.3 3.6 2.9 3.1 . 09 . 07 . 07 . 10 0 -0.9 -0.9 100 -0.9 100 100 100 100 0.7 100 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.9 0.7 0.9 0.8 0.9 0.8 0.8 . 02 . 02 . 03 . 1 4 2.4 2.4 43 2.4 43 18 43 18 0.3 18 0.3 0.3 0.3 0.3 0.2 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 . 00 . 01 . 01 . 4 0 4.9 4.9 20 4.9 20 4 20 4 4 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 . 07 . 04 . 03 . 7 3 -3.5 -3.5 37 -3.5 37 78 37 78 0.3 78 0.3 0.3 0.3 0.3 0.4 0.3 0.4 0.4 0.4 0.4 0.5 0.4 0.5 0.7 0.5 0.7 0.6 0.7 0.6 0.6 6 5 7 0 2 5 7 0 1.1 1.1 5 5 10 10 47 47 45 45 42 42 40 40 37 37 35 35 16 16 6 5 7 0 2 5 7 0 1.1 5 10 47 45 42 40 37 35 16 8 5 8 5 5 9 9 0 10 3.6 3.6 100 3.6 100 100 100 100 89 100 89 69 89 69 55 69 55 45 55 45 38 45 38 35 38 35 28 35 28 28 8 4 7 8 0 2 5 9 0 1.0 1.0 50 1.0 50 99 50 99 45 99 45 42 45 42 40 42 40 38 40 38 37 38 37 34 37 34 28 34 28 28 6 5 .6 .0 3.0 3.4 3.8 4.3 26.8 57.4 57.4 26.8 4.3 3.8 3.4 3.0 .0 .6 .7 1.0 1.6 2.1 2.1 1.6 1.0 .7 .6 .9 3.6 4.8 6.1 9.9 23.2 104.1 104.1 23.2 9.9 6.1 4.8 3.6 .9 1 2 2 2 3 3 4 3.5 3.5 4 4 4 4 37 37 33 33 28 28 24 24 21 21 14 14 8 8 1 2 2 2 3 3 4 3.5 4 4 37 33 28 24 21 14 8 0 7 5 8 4 5 19.7 19.7 50 19.7 50 1 50 1 1 44 44 28 44 28 15 28 15 7 15 7 2 7 2 0 2 0 - 0 - - 0 New PoliciesScenario .1 6.2 9.1 12.5 53.1 138.8 138.8 53.1 12.5 9.1 6.2 .1 (billion, year-2014 US (billion, dollars) Average annual investments annual Average Natural gas Natural produc Natural gas Natural produc gas Natural produc Coal produc Coal produc Coal Coal produc Coal Oil produc Oil produc Oil Oil produc Oil on on on on on on on on (mb/d) (mb/d) (mb/d) (Mtce) (Mtce) (Mtce) on on on on World Energy Outlook | (bcm) (bcm) (bcm) 252.1 499.3 499.3 252.1 Shares Shares Shares Shares Shares Shares Shares Shares Shares (%) (%) (%) Special Report 7.1 23.6 23.6 7.1 investments Cumula ve ve 2013-40 2013-40 2013-40 2013-40 2013-40 2013-40 2013-40 2013-40 2013-40 CAAGR CAAGR CAAGR CAAGR CAAGR CAAGR CAAGR CAAGR CAAGR (%) (%) (%) © OECD/IEA, 2015 Annex A Coal sector Coal Gas sector Pow Oil sector Oil Total Total coal Total coal Total coal gas Total natural gas Total natural gas Total natural Total Total oil Total oil Total oil Transport Transport Re Upstream Mining Transport Upstream Power plants T&D Steam coal Steam coal Steam coal Conven Conven Conven Crude oil Crude oil Crude oil Coking Coking coal Coking coal Coking coal Unconven Natural gas liquids Unconven Natural gas liquids Unconven Natural gas liquids Lignite Lignite Lignite Unconven Unconven Unconven er sector er fi eeals 59 45 18 1735.7 31.7 31.8 34.5 25.9 Renewables oslfeld 36 35 56 7018.1 17.0 15.6 13.5 13.6 Fossil-fuelled ning onal onal gas onal gas onal gas

| onal onal oil onal oil onal oil onal onal gas onal gas onal gas

Tables for scenarioprojections 2015-20 6. 8. 8. 9. 8. 89.8 90.5 87.6 83.4 67.2 4. 5. 5. 5. 58.0 53.1 52.0 51.5 41.4 2. 3. 3. 3. 31.8 37.4 35.7 31.9 25.8 25 . 85 1117.6 11.1 8.5 6.5 2.5 65 . 78 . 9.6 9.3 7.8 6.6 6.5 71 . 1. 1. 19.1 14.9 10.7 8.4 7.1 29 . 2.2 2.9 16 . 31 . 4.0 3.5 12.5 9.1 3.1 6.2 2.7 5.1 1.6 4.6 36 . 50 . 7.0 6.2 5.0 4.4 3.6 09 . 54 . 13.6 2.4 7.6 1.8 5.4 1.1 3.8 0.8 0.9 0.6 19 . 35 . 4.1 4.0 3.5 2.5 1.9 20 20 20 20 20 20 20 20 20 20 20 1 2 3 4 6 8 1 1 4.1 4.1 3.9 91 4.1 3.9 91 100 19 3.9 91 100 22 19 68 100 22 19 70 68 22 70 68 861 70 947 861 748 947 861 829 748 947 630 829 748 703 630 829 523 703 630 588 523 703 416 588 523 474 416 588 474 416 474 . 07 . 08 . 01 02 10 -0.0 -0.0 100 -0.0 100 0.2 100 0.2 0.1 0.2 0.1 0.1 0.9 0.9 0.9 0.8 0.8 0.8 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 . 02 . 03 . 00 01 4 3.3 3.3 -2.3 42 3.3 -2.3 42 42 -2.3 0.1 42 42 0.1 0.1 0.0 42 0.1 0.1 0.1 0.0 0.1 0.1 0.0 0.4 0.1 0.4 0.4 0.4 0.4 0.3 0.4 0.4 0.3 0.4 0.3 0.2 0.4 0.4 0.2 0.4 0.2 0.2 0.4 0.4 0.2 0.4 0.2 0.2 0.4 0.5 0.2 0.5 0.2 0.5 . 01 . 01 . -. 00 1 4.9 4.9 16 4.9 16 -0.0 16 -0.0 -0.0 -0.0 -0.0 -0.0 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.0 9 6 9 2 1 5 2 0 4.6 4.6 100 4.6 100 27 100 27 5 27 5 5 116 116 82 116 82 59 82 59 46 59 46 39 46 39 39 7 9 2 6 1 4 1.5 1.5 44 1.5 44 6 44 6 2 6 2 2 51 51 46 51 46 42 46 42 39 42 39 37 39 37 37 7 4 3 4 7 0 - 5 1.1 1.1 5 1.1 5 - 5 - 0 - 0 0 47 47 47 46 46 46 43 43 43 41 41 41 37 37 37 1 2 0 3 9 2 2 4 3.7 3.7 4 3.7 4 2 4 2 2 2 2 2 39 39 39 35 35 35 30 30 30 25 25 25 21 21 21 7 7 6 5 1 5 21.4 21.4 56 21.4 56 21 56 21 2 21 2 2 65 65 36 65 36 17 36 17 7 17 7 7 2 2 2 Natural gas Natural produc Natural gas Natural produc gas Natural produc 25 2025 2025 2025 25 2025 2025 2025 2025 2025 2025 2021-25 Coal produc Coal produc Coal produc Coal Oil produc Oil Oil produc Oil produc Oil (b Average a Average Indian VisionCase ion, year-illion, 30 2030 2030 2030 30 2030 2030 2030 2030 2030 2030 on on on on nn on on on on 2026-30 (mb/d) (mb/d) (mb/d) ual investments ual 4 2014 US dollars) . 312.7 3.1 2.8 (Mtce) (Mtce) (Mtce) on on on on 35 2035 2035 2035 35 2035 2035 2035 2035 2035 2035 (bcm) (bcm) (bcm) 2031-35 40 2040 2040 2040 40 2040 2040 2040 2040 2040 2040 (IVC minus NPS) minus (IVC NPS) minus (IVC NPS) minus (IVC 2036-40 30 2030 2030 2030 30 2030 2030 2030 2030 2030 2030 Di Di Di Di Di Di Di Di Di ff ff ff ff ff ff ff ff ff erence erence erence erence erence erence erence erence erence 40 2040 2040 2040 0 2040 2040 2040 2040 2040 2040 2040 2040 2040 2040 2040 2040 2015-25 0.3 1 1 820.3 506.0 327.8 314.4 149.1 4. 47.9 7. 71.8 8. 84.6 2. 52.8 23.3 53.1 2. 43.1 28.0 4. 90.9 43.9 2. 24.6 2. 58.1 24.2 7326.5 7.3 hrsCAAGR CAAGR Shares CAAGR Shares Shares Shares Shares Shares hrsCAAGR CAAGR Shares CAAGR Shares Shares investments 40 2040 2040 2040 Cumula (%) (%) (%) 2026-40 ve ve 2013-40 2013-40 2013-40 2013-40 2013-40 2013-40 2013-40 2013-40 2013-40 185.9 133.9 223.4 340.0 138.8 133.1 815.9 496.1 524.1 253.2 CAAGR CAAGR CAAGR (%) (%) (%) 173 A1 © OECD/IEA, 2015 174 TPED Buildings Hydro Coal Indus Bioenergy Oil Coal Coal Other renewables Oil Oil Gas Gas Gas Other energy Other Nuclear Electricity Electricity Electricity Hydro TFC Bioenergy Bio Bioenergy Other renewables Coal Other renewables Oil Other renewables Other Gas Transport Pow Oil Coal Electricity Oil Electricity Bio Bioenergy Gas Ot Other fuels Nuclear her renewables ener fuels er sector er try gy sector 23 70 91 112 137 161 183 100 100 3.6 3.6 100 100 183 161 137 112 91 70 23 sector 90 03 00 05 00 05 00 03 2040 2013 2040 2035 2030 2025 2020 2013 1990 308 775 1 018 1 207 1 440 1 676 1 908 100 100 3.4 3.4 100 100 1 908 1 676 1 440 1 207 1 018 775 308 134 214 242 257 274 287 299 100 100 1.2 1.2 100 100 299 287 274 257 242 214 134 108 141 146 140 130 112 94 66 31 -1.5 -1.5 31 66 94 112 130 140 146 141 108 245 527 686 815 968 1 122 1 275 100 100 3.3 3.3 100 100 1 275 1 122 968 815 686 527 245 133 188 209 215 217 213 209 24 11 0.4 0.4 11 24 209 213 217 215 209 188 133 130 171 182 183 180 171 161 33 13 -0.2 -0.2 13 33 161 171 180 183 182 171 130 94 341 476 568 690 814 934 44 49 3.8 3.8 49 44 934 814 690 568 476 341 94 69 185 263 336 417 497 572 100 100 4.3 4.3 100 100 572 497 417 336 263 185 69 27 91 137 180 228 277 322 49 56 4.8 4.8 56 49 322 277 228 180 137 91 27 10 13 14 14 14 13 11 6 4 -0.5 -0.5 4 6 11 13 14 14 14 13 10 63 176 229 273 329 393 458 23 24 3.6 3.6 24 23 458 393 329 273 229 176 63 10 19 24 29 34 40 45 10 8 3.3 3.3 8 10 45 40 34 29 24 19 10 11 27 31 33 38 43 47 13 16 2.1 2.1 16 13 47 43 38 33 31 27 11 11 45 58 81 103 126 149 6 8 4.6 4.6 8 6 149 126 103 81 58 45 11 23 30 36 42 48 54 59 16 10 2.5 2.5 10 16 59 54 48 42 36 30 23 39 103 151 194 242 289 333 20 26 4.4 4.4 26 20 333 289 242 194 151 103 39 52 150 202 243 298 360 423 28 33 3.9 3.9 33 28 423 360 298 243 202 150 52 22 53 71 86 101 113 123 100 100 3.2 3.2 100 100 123 113 101 86 71 53 22 2 5 18 16 16 224 176 136 108 75 21 65 282 393 474 581 693 806 100 100 4.0 4.0 100 100 806 693 581 474 393 282 65 18 72 104 130 166 210 258 96 92 4.9 4.9 92 96 258 210 166 130 104 72 18 49 223 300 337 397 462 529 79 66 3.3 3.3 66 79 529 462 397 337 300 223 49 18 77 115 150 192 236 281 15 22 4.9 4.9 22 15 281 236 192 150 115 77 18 7 27 37 44 54 64 74 38 40 3.9 3.9 40 38 74 64 54 44 37 27 7 6 12 15 19 22 25 29 4 4 3.2 3.2 4 4 29 25 22 19 15 12 6 0 3 12 21 32 44 55 1 7 11.2 11.2 7 1 55 44 32 21 12 3 0 1 13 18 23 28 32 35 7 6 3.9 3.9 6 7 35 32 28 23 18 13 1 0 4 5 5 6 8 9 2 3 3.2 3.2 3 2 9 8 6 5 5 4 0 2 9 17 28 43 57 70 1 4 7.9 7.9 4 1 70 57 43 28 17 9 2 9 32 49 62 78 94 110 17 19 4.6 4.6 19 17 110 94 78 62 49 32 9 5 2 6 6 4 19 15 4 5 5. 45 14 135 109 84 62 46 29 5 6 12 15 19 22 25 29 2 1 3.2 3.2 1 2 29 25 22 19 15 12 6 0 0 1 1 2 2 3 0 1 7.7 7.7 1 0 3 2 2 1 1 0 0 0 0 0 0 1 1 2 0 0 16.2 16.2 0 0 2 1 1 0 0 0 0 0 4 13 23 35 47 60 0 3 11.0 11.0 3 0 60 47 35 23 13 4 0 6 25 35 43 53 62 71 5 6 4.0 4.0 6 5 71 62 53 43 35 25 6 0 1 2 2 2 2 3 2 1 2.5 2.5 1 2 3 2 2 2 2 1 0 5 8 9 10 10 11 11 3 1 1.3 1.3 1 3 11 11 10 10 9 8 5 3 14 18 33 44 57 69 5 9 6.1 6.1 9 5 69 57 44 33 18 14 3 2 1 2 3 5 3 2 1 2 2 0 0 1 0 0 - 13 22 27 32 37 43 5 5 4.5 4.5 5 5 43 37 32 27 22 13 - - 0 1 1 3 5 8 0 3 16.0 16.0 3 0 8 5 3 1 1 0 - 9 17 28 43 57 70 3 9 7.9 7.9 9 3 70 57 43 28 17 9 New PoliciesScenario Energy demand demand Energy New Policies Scenario New Policies 2 2 4 5 0 0 9.1 9.1 0 0 5 4 2 2 (Mtoe) World Energy Outlook | 7 10 2 4 7.5 7.5 4 2 10 7 280 100 100 5.0 5.0 100 100 280 Shares Shares Special Report (%) CAAGR 2013-40 8 8 (%) © OECD/IEA, 2015 Annex A Coal Hydro Pow Other renewables Oil Coal Industry Bioenergy Gas Nuclear Other renewables Gas Hydro Oil Coal Bio Oil Buildings TFC Bio Coal Other fuels Bio Electricity Electricity Nuclear Gas Electricity Gas Electricity Gas Oil te nrysco 9 1 4 6 8 0 3.7 100 2 3 185 163 140 113 92 sector energy Other Other renewables Oil Oil Transport Other renewables Other Other renewables Bio Coal Bioenergy Electricity TPED energy energy fuels energy er sector er

|

Tables for scenarioprojections 2 128 8 172 3 3 2 0 3 100 22 43 1 930 1 712 1 482 1 238 1 029 00 05 00 05 00 00 00 2040 2040 2030 2040 2035 2030 2025 2020 27 37 32 45 48 5 1 6 2.9 63 - 41 - 15 488 435 382 327 297 33 42 53 60 78 -3 0 3.8 100 - 38 - 7 768 670 573 472 393 14 18 25 37 30 2 28 27 350 307 255 198 144 29 22 323 262 209 25 205 25 35 47 52 64 4 1 10 4.5 100 41 40 614 542 457 365 275 18 22 29 39 31 2 8 2 4.7 27 28 27 361 319 269 212 158 19 17 15 17 15 -6 1 -0.4 12 - 6 - 5 155 167 175 177 179 69 80 1 116 2 9 5 0 3.5 100 51 49 1 326 1 176 1 017 850 699 17 13 14 25 27 2 1 4.9 21 - 5 2 277 235 194 153 117 27 25 20 20 29 4 0 10 1.0 100 - 20 - 14 279 270 260 245 237 27 22 35 49 43 2 5 2 3.8 25 25 26 483 419 355 292 237 18 11 19 22 28 1 2 5.0 92 9 13 268 222 179 141 108 13 17 19 27 22 1 2 10 5.2 100 12 13 292 237 189 147 113 41 58 74 89 92 1 -1 8 3.7 48 - 11 13 922 819 704 578 481 10 19 1 129 140 3 4 5 3 7 -2 3 3.8 39 - 2 0 72 63 54 44 37 1 9 22 19 15 1 9 4 6 7 3 4 11.8 4 13 7 73 56 42 29 16 1 8 4 7 7 - 7.9 9 - - 70 57 43 28 17 1 4 4 6 6 -2 9 6.0 9 - 2 1 66 56 45 34 18 1 9 2 5 2 -0 1 3.1 1 - 0 0 28 25 22 19 15 3 4 4 6 5 8 2.4 18 4 2 51 46 40 34 32 1 4 1 2 1 -0 -0.6 4 - 0 - 0 11 12 14 14 15 3 7 5 1 6 1 2.8 11 6 7 64 61 55 47 39 1 8 4 7 7 - 7.9 4 - - 70 57 43 28 17 5 6 8 9 14 5 5 1 4.8 19 5 5 114 99 82 66 50 3 3 5 3 7 4.2 6 4 0 75 63 53 43 34 5 2 14 17 11 1 3 8 4.6 8 3 1 151 127 104 82 58 1 3 2 1 3 -1 3.6 5 - 2 - 1 33 31 27 23 18 2 1 3 43 37 31 25 7 3 11 18 11 1 8 10 3.7 100 18 11 141 128 111 93 74 1 7 3 1 6 11.8 8 9 6 64 51 39 27 14 4 0 7 8 19 -1 3 5.3 43 - 15 - 5 119 98 79 60 46 2 7 3 7 4 -0 6 4.5 6 - 0 0 42 37 32 27 22 5 1 2 3 5 9 1 4 1 11.6 1 4 1 9 5 3 2 1 9 1 2 1 -2 1 0.6 1 - 2 1 9 10 12 11 9 2 3 5 8 1 -0 4 5 8.8 5 4 - 0 15 8 5 3 2 1 1 2 4 6 -2 2 14.9 2 - 2 - 0 6 4 2 1 1 2 2 2 2 3 0 0 0 3 2 2 2 2 0 0 1 2 5 0 3 1 21.1 1 3 0 5 2 1 0 0 1 2 2 3 4 0 1 1 8.6 1 1 0 4 3 2 2 1 Energy demand demand Energy 0 1 0 0 -5 0 0.3 10 - 6 - 5 203 209 212 209 6 7 9 1 3.5 4 1 1 10 9 7 6 Indian VisionCase Indian Vision Case Vision Indian 8 12 8 -1 -1 0 -1.9 30 - 10 - 12 84 102 18 (Mtoe) 37 40 2 7 3 4.1 34 27 25 450 387 2 8 0 3.1 4 - 0 0 28 25 4 3.5 8 2 3 47 (IVC minus NPS) minus (IVC Di ff erence 1 2.5 1 Shares Shares (%) 5 5.1 57 2013-40 CAAGR (%) . 4 175 A2 © OECD/IEA, 2015 176 Total Total capacity Total capacity Total Total capacity Total Total CO Coal Coal Coal T TFC TFC P sector Power sector Power Total CO Total CO Total Total genera Total genera Total genera Coal Coal Coal Coal Coal Coal Oil Oil Oil Coal Coal Coal Oil Oil Oil Coal Coal Coal Oil Oil Oil Oil Oil Oil Gas Gas Gas Oil Oil Oil Gas Transport Gas Gas Transport Transport Gas Gas Gas Gas Gas Gas Nuclear Nuclear Nuclear Gas Gas Gas Hydro Hydro Hydro Nuclear Nuclear Nuclear Bioenergy Bioenergy Bioenergy Hydro Hydro Hydro Solar PV Solar PV Solar PV Bioenergy Bioenergy Bioenergy Other renewables Other renewables Other renewables Solar PV Solar PV Solar PV Other renewables Other renewables Other renewables Clean cooking facil cooking Clean Electricity to: access Without FC ower sector ower 2 2 2 n on on on ities 0 1990 1990 1990 0 1990 0 1990 1990

170 170 170 300 300 300 218 218 218 1 1 1 534 534 534 0 1 1 1 1 370 370 370 3 1 1 1 1 293 293 293 194 194 194 192 192 192 128 128 128 151 151 151 5 56 5 56 56 1 5 2 0 3 5 3 3 1.3 2 3 36 35 33 30 27 25 16 1 5 2 0 3 5 3 3 1.3 1.3 2 2 3 3 36 36 35 35 33 33 30 30 27 27 25 25 16 16 1 3 2 9 3 6 3 2 1.7 1.7 1.7 1 1 1 2 2 2 37 37 37 36 36 36 32 32 32 29 29 29 26 26 26 23 23 23 13 13 13 1 5 85 85 85 13 13 13 1 5 9 96 96 96 65 65 65 10 10 10 7 72 72 72 2 4 9 7 4 94 75 59 43 2 2 4 9 7 4 94 94 75 75 59 59 43 43 2 2 8 3 3 7 77 43 32 8 8 3 3 7 77 77 43 43 32 32 8 8 6 3 6 66 66 66 34 34 34 6 6 6 0 3 3 93 93 93 34 34 34 0 0 0 3 4 4 8 9 99 99 99 80 80 80 64 64 64 48 48 48 23 23 23 - - - 0 9 90 90 90 40 40 40 3 3 3 - - - 3 2013

237 841 3 2013 2013 2013 201 3 2013 2013 3 2013 3 2013 2013

219 219 219 460 460 460 0 2 2 2 2 880 880 880 4 1 1 894 4 1 1 1 894 894 3 1 1 943 3 1 1 1 943 943 8 1 1 1 1 348 348 348 154 154 154 3 1 1 1 1 193 193 193 6 1 1 886 6 1 1 1 886 886 263 263 263 9 1 1 1 1 869 869 869 391 391 391 447 447 447 142 142 142 2 1 5 6 76 76 57 57 41 41 22 22 2 1 5 6 76 57 41 22 4 8 7 3 9 95 95 83 83 71 71 58 58 43 43 4 8 7 3 9 95 83 71 58 43 2 1 7 78 78 51 51 21 21 2 1 7 78 51 21 7 9 1 3 1 5 1 2.8 2.8 1 1 3 3 15 15 15 15 13 13 11 11 9 9 7 7 7 9 1 3 1 5 1 2.8 1 3 15 15 13 11 9 7 6 1 6 2 1 3 2 7.3 7.3 4 4 2 2 39 39 31 31 24 24 16 16 10 10 6 6 6 1 6 2 1 3 2 7.3 4 2 39 31 24 16 10 6 7 1 3 1 0 2 3 4.6 4.6 2 2 3 3 24 24 20 20 16 16 13 13 10 10 7 7 7 1 3 1 0 2 3 4.6 2 3 24 20 16 13 10 7 3 2 1 61 61 28 28 3 3 3 2 1 61 28 3 3 3 0 2020 New PoliciesScenario 157 832 Electricity genera Electricity Electricity genera Electricity genera Electricity Electrical capacity capacity Electrical Electrical capacity capacity Electrical capacity Electrical 0 2020 2020 2020 202 0 2020 2020 0 2020 0 2020 2020 316 316 316 673 7 1 1 257 673 673 7 1 1 1 257 257 9 3 3 3 3 569 569 569 2 1 1 262 2 1 1 1 262 262 0 2 2 2 2 870 870 870 230 230 230 6 2 2 2 2 766 766 766 2 1 1 192 2 1 1 1 192 192 436 436 436 4 1 1 1 1 224 224 224 525 525 525 585 585 585 115 115 115 174 174 174 CO CO CO Energy access (million) Energy 0 0 2 2 2 emissions emissions emissions emissions emissions 5 2025 3 63 33 - 19 - - 19 - 33 63 113 785 5 2025 2025 2025 5 2025 5 2025 2025 5 2025 5 2025 2025 395 395 395 3 1 1 873 1 1 1 581 3 1 1 1 873 873 1 1 1 1 581 581 1 3 3 3 3 081 081 081 5 1 1 445 5 1 1 1 445 445 8 2 2 2 2 218 218 218 276 276 276 1 2 2 2 2 251 251 251 9 1 1 339 9 1 1 1 339 339 583 583 583 2 1 1 1 1 412 412 412 633 633 633 697 697 697 166 166 166 185 185 185 109 109 109 215 215 215 148 148 148 on on on on (Mt) (Mt) (Mt) (GW) (GW) (GW) (TWh) (TWh) (TWh) 0 2030 0 2030 2030 2030 707 0 2030 0 2030 2030 203 203 203 World Energy Outlook | 506 506 506 5 1 1 095 9 2 2 969 5 1 1 1 095 095 9 2 2 2 969 969 4 4 4 4 4 744 744 744 746 746 746 5 2 2 715 5 2 2 2 715 715 2 3 3 3 3 682 682 682 329 329 329 8 3 3 3 3 848 848 848 9 1 1 579 9 1 1 1 579 579 8 2 2 2 2 698 698 698 780 780 780 0 1 1 1 1 850 850 850 104 104 104 212 212 212 262 262 262 165 165 165 253 253 253 100 100 100 152 152 152 104 104 104 207 207 207 0 0 0 0 0 5 2035 2035 2035 5 2035 5 2035 2035 5 2035 2035 203 5 2035 640 640 640 0 1 1 310 2 2 2 372 0 1 1 1 310 310 2 2 2 2 372 372 5 5 5 5 5 445 445 445 6 1 1 1 916 916 6 1 1 916 6 2 2 006 6 2 2 2 006 006 6 3 3 3 3 156 156 156 385 385 385 5 4 4 4 4 485 485 485 7 2 2 837 7 2 2 2 837 837 9 2 2 2 2 009 009 009 0 1 1 950 0 1 1 1 950 950 7 1 1 1 1 027 027 027 100 100 100 112 112 112 134 134 134 263 263 263 348 348 348 218 218 218 293 293 293 142 142 142 218 218 218 128 128 128 264 264 264 595 5 5 0 2040 2040 2040 0 2040 0 2040 2040 0 2040 2040 0 2040 2 2 4.9 28 24 787 2 2 4.9 4.9 28 28 24 24 787 787 5 5 4.5 55 51 511 0 770 5 5 4.5 4.5 55 55 51 51 511 511 0 770 770 7 147 147 147 6 076 076 6 076 0 300 0 300 300 7 7 3.7 3.7 3.7 70 70 70 72 72 72 623 623 623 5 4 3.9 3.9 41 41 59 59 438 438 5 4 3.9 41 59 438 4 124 124 124 9 9 3.3 91 94 103 9 9 3.3 3.3 91 91 94 94 103 103 7 5 3.7 3.7 3.7 57 57 57 73 73 73 333 333 333 4 4 4.0 41 44 130 4 4 4.0 4.0 41 41 44 44 130 130 2 2 3.8 3.8 3.8 24 24 24 24 24 24 213 213 213 8 1 6.6 6.6 11 11 8 8 122 122 8 1 6.6 11 8 122 5 4.2 5 5 130 5 4.2 4.2 5 5 5 5 130 130 3 6.1 7 3 162 3 6.1 6.1 7 7 3 3 162 162 5 4.9 4.9 4.9 6 6 6 5 5 5 311 311 311 5 0 7.3 7.3 7.3 10 10 10 5 5 5 431 431 431 1 1 3.5 3.5 10 10 16 16 108 108 1 1 3.5 10 16 108 3 7.9 7.9 7.9 7 7 7 3 3 3 269 269 269 1 8 3.2 3.2 3.2 8 8 8 12 12 12 333 333 333 2 6.3 6.3 6.3 3 3 3 2 2 2 121 121 121 1 7 16.8 16.8 17 17 1 1 182 182 1 7 16.8 17 1 182 0 17.8 17.8 17.8 7 7 7 0 0 0 285 285 285 8 4 7.5 7.5 14 14 8 8 148 148 8 4 7.5 14 8 148 3 8.7 8.7 8.7 8 8 8 3 3 3 316 316 316 0 2040 1 67 30 30 67 481 2013 2013 2013 2013 2013 2013 2013 2013 2013 0 100 100 0 100 0 100 0 100 100 0 100 0 100 100 0 100 100 100 0 100 100 100 Shares Shares Shares Shares Shares Shares Shares Shares Shares 3 2013 (%) (%) (%) (%) (%) (%) (%) (%) (%) Special Report popula 2040 2040 2040 2040 2040 2040 2040 2040 2040 4.3 100 4.3 4.3 100 100 3.8 3.8 3.8 100 100 100 5.4 5.4 100 100 5.4 100 3.4 100 3.4 3.4 100 100 4.7 4.7 4.7 100 100 100 Share of Share on on 2013-40 2013-40 2013-40 2013-40 2013-40 2013-40 2013-40 2013-40 2013-40 CAAGR CAAGR CAAGR CAAGR CAAGR CAAGR CAAGR CAAGR CAAGR 0 2040 (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) © OECD/IEA, 2015 Annex A Other renewables Other renewables Other renewables Solar PV Solar PV Solar PV Other renewables Other renewables Other renewables Solar PV Solar PV Solar PV Bioenergy Bioenergy Bioenergy Bioenergy Bioenergy Bioenergy Hydro Hydro Hydro Hydro Hydro Hydro Gas Gas Gas Nuclear Nuclear Nuclear Nuclear Nuclear Nuclear Gas Gas Gas Gas Gas Gas Gas Gas Gas Transport Transport Transport Oil Oil Oil Gas Gas Gas Oil Oil Oil Oil Oil Oil Oil Oil Oil Oil Oil Oil Coal Coal Coal Coal Coal Coal Total Total genera Total genera Total genera Coal Total Total capacity Coal Coal Total Total capacity Total capacity Coal Coal Coal Coal Coal Coal TFC TFC TFC sector Power sector Power sector Power Total CO Total CO Total CO Without access to: access Without Electricity Clean cooking facil cooking Clean 2 2 2

| on 1 1 1 1 on on on

Tables for scenarioprojections ities 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 0 2020 0 2020 2020 0 2020 0 2020 2020 0 2020 2020 2020

330 330 330 174 174 174 114 114 114 3 1 1 1 1 213 213 213 9 1 1 1 1 179 179 179 608 608 608 546 546 546 232 232 232 9 2 2 2 2 889 889 889 1 1 705 1 705 705 310 310 310 0 1 1 1 1 250 250 250 3 3 3 610 610 610 8 2 2 2 2 788 788 788 460 460 460 5 0 80 51 5 0 80 80 51 51 1 4 1 0 2 0 23 20 17 14 48 10 1 4 1 0 2 0 0 23 23 20 20 17 17 14 14 48 48 10 10 9 94 94 94 4 4 8 9 99 99 99 81 81 81 64 64 64 69 69 69 48 48 48 5 1 8 5 95 83 71 58 5 1 8 5 95 95 83 83 71 71 58 58 5 4 9 93 93 93 74 74 74 58 58 58 6 66 66 66 1 6 2 1 3 - 39 31 24 16 10 1 6 2 1 3 - - 39 39 31 31 24 24 16 16 10 10 9 96 96 96 4 9 79 79 79 43 43 43 2 3 3 2 3 4 4 4 30 30 30 32 32 32 36 36 36 33 33 33 27 27 27 4 0 8 80 60 40 4 0 8 80 80 60 60 40 40 2 4 3 2 2 3 3 3 29 29 29 32 32 32 36 36 36 34 34 34 28 28 28 1 3 1 3 1 1 13 13 14 13 10 1 3 1 3 1 1 1 13 13 13 13 14 14 13 13 10 10 2020 2025 2030 2035 2040 2030 2040 2040 2040 2040 2030 2040 2035 2030 2025 2020 16 - - 6 - -63 - - - - 106 795 714 632 526 410 -75 -71 26 26 -71 -75 410 526 632 714 795 Electricity genera Electricity Electricity genera Electricity genera Electricity Electrical capacity capacity Electrical Electrical capacity capacity Electrical capacity Electrical 5 2025 5 2025 2025 5 2025 5 2025 2025 5 2025 2025 2025 428 428 428 103 103 103 153 153 153 152 152 152 216 216 216 109 109 109 190 190 190 167 167 167 7 1 1 1 1 377 377 377 0 1 1 1 1 300 300 300 749 749 749 680 680 680 277 277 277 9 2 2 2 2 259 259 259 3 1 1 1 1 2 2 953 2 953 953 708 708 708 3 1 1 1 1 413 413 413 3 3 3 175 175 175 4 2 2 2 2 294 294 294 633 633 633 CO CO CO 2 2 2 emissions emissions emissions emissions Indian VisionCase Energy access Energy 0 2030 0 2030 2030 0 2030 0 2030 2030 0 2030 2030 2030 546 546 546 108 10 10 145 145 145 216 216 216 218 218 218 254 254 254 165 165 165 262 262 262 105 105 105 213 213 213 5 1 1 1 1 645 645 645 7 1 1 1 1 517 517 517 1 1 1 914 914 914 0 1 1 1 1 840 840 840 328 328 328 8 3 3 3 3 738 738 738 3 1 1 1 1 213 213 213 9 1 1 1 1 659 659 659 6 2 2 2 2 146 146 146 7 3 3 3 3 877 877 877 5 4 4 4 4 865 865 865 799 799 799 8 8 on on on on (Mt) (Mt) (Mt) (GW) (GW) (GW) (TWh) (TWh) (TWh) 5 2035 5 2035 2035 5 2035 5 2035 2035 5 2035 2035 2035 677 677 677 134 134 134 185 185 185 284 284 284 284 284 284 291 291 291 113 113 113 218 218 218 337 337 337 131 131 131 261 261 261 100 100 100 2 2 2 2 2 912 912 912 7 1 1 1 1 727 727 727 1 1 1 085 085 085 2 1 1 1 1 012 012 012 379 379 379 9 3 3 3 3 179 179 179 3 1 1 1 1 443 443 443 0 2 2 2 2 890 890 890 7 2 2 2 2 567 567 567 6 4 4 4 4 456 456 456 5 5 5 5 5 525 525 525 8 1 1 958 8 1 1 1 958 958 0 2040 0 2040 2040 0 2040 0 2040 2040 0 2040 2040 2040 40 40 40 816 816 816 3 160 3 3 160 160 45 221 45 45 221 221 9 9 9 360 360 360 67 67 67 345 345 345 0 0 0 118 118 118 1 1 1 328 328 328 0 107 0 0 107 107 -1 -1 -1 137 137 137 - - - 269 269 269 1 1 1 414 414 414 1 1 1 156 156 156 1 1 1 315 315 315 4 121 4 4 121 121 -53 -53 -53 185 185 185 -61 -61 -61 938 938 938 64 64 64 261 261 261 61 61 61 184 184 184 -1 428 -1 -1 428 428 56 56 56 581 581 581 2 632 632 632 -57 -57 -57 124 124 124 28 28 28 049 049 049 3 953 953 953 53 111 53 53 111 111 7 157 157 157 (IVC minus NPS) minus (IVC NPS) minus (IVC NPS) minus (IVC (IVC minus NPS) minus (IVC (IVC minus NPS) minus (IVC NPS) minus (IVC (IVC minus NPS) minus (IVC NPS) minus (IVC NPS) minus (IVC 0 2030 0 2030 2030 0 2030 0 2030 2030 0 2030 2030 2030 117 117 117 177 177 177 121 121 121 Di Di Di Di Di Di Di Di Di (IVC minus NPS) minus (IVC 29 29 29 12 12 12 39 -1 39 39 -1 -1 44 44 44 60 60 60 -2 -2 -2 7 7 7 -5 -5 -5 -1 -1 -1 ------17 -17 -17 -6 -6 -6 4 4 4 -6 -6 -6 - - - -1 -1 -1 -6 -6 -6 - - - -10 -3 -3 -3 -10 -10 48 48 48 54 54 54 - - - -42 -42 -42

-74 -74 -74

35 35 35 10 10 10 ff ff ff ff ff ff ff ff ff Di erence erence erence erence erence erence erence erence erence ff erence 0 2040 0 2040 2040 0 2040 0 2040 2040 0 2040 2040 2040 148 148 148 165 165 165 177 177 177 122 122 122 183 183 183 28 28 28 14 14 14 20 2 20 20 2 2 3 3 3

9 9 9 8 8 8 10 10 10 5 5 5 7 7 7 3 3 3 10 10 10 7 7 7 1 1 1 11 11 11 6 6 6 1 1 1 54 54 54 1 1 1 91 91 91 39 39 39 24 24 24 69 69 69 40 40 40

55 55 55

9 9 9 Shares Shares Shares Shares Shares Shares Shares Shares Shares 0 2040 2040 2040 2040 2040 2040 2040 2040 2040 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 (%) (%) (%) (%) (%) (%) (%) (%) (%) popula 5.0 5.0 5.0 7.8 7.8 7.8

1 1

4.5 4.5 4.5 18.6 18.6 18.6 6.2 6.2 6.2 3.4 3.4 3.4 4.4 4.4 4.4 3.2 3.2 3.2 7.9 7.9 7.9 7.3 7.3 7.3 5.0 5.0 5.0 7.1 7.1 7.1 6.6 6.6 6.6 6.0 6.0 6.0 1.0 1.0 1.0 0.6 0.6 0.6 3.9 3.9 3.9 4.2 4.2 4.2 3.5 3.5 3.5 2.1 2.1 2.1 2.9 2.9 2.9 3.8 3.8 3.8 3.7 3.7 3.7 4.8 4.8 4.8 4.6 4.6 4.6 3.1 3.1 3.1 4.5 4.5 4.5 5.5 5.5 5.5 3.8 3.8 3.8 17.6 9.2 9.2 9.2 Share of Share 2013-40 2013-40 2013-40 2013-40 2013-40 2013-40 2013-40 2013-40 2013-40 CAAGR CAAGR CAAGR CAAGR CAAGR CAAGR CAAGR CAAGR CAAGR - - on on (%) (%) (%) (%) (%) (%) (%) (%) (%) 7.6 7.6

(%) 177 A3 © OECD/IEA, 2015 © OECD/IEA, 2015 Annex B Oil Coal Units report the throughout used units;generalincluding: conversion terminology factors; anddefinitions. on information general provides annex This Monetary Power Energy Gas Mass

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Definitions Mt TW $ trillion $ trillion $ billion Gt kt GW MW mb/d kb/d b/d Mtce $ million $ million kW W TWh GWh MWh kWh MBtu Mtoe tcm bcm mcm kg million tonnes (1tonne x10 kilogramme (1000 terawatt (1 Watt x10 1 USdollarx10 1 USdollarx10 gigatonnes (1tonne x10 kilotonnes (1tonne x10 gigawatt (1 Watt x10 megawatt (1 Watt x10 million barrels perday thousand barrels per day barrels per day million tonnes ofcoal equivalent 1 USdollarx10 kilowatt (1 Watt x10 watt (1joule per second) terawatt-hour gigawatt-hour megawatt-hour kilowatt-hour million Britishthermalunits million tonnes ofoilequivalent trillion cubicmetres billion cubicmetres million cubicmetres 12 9 6

kg =1tonne) 3 12 9 ) ) 6 ) ) 3 9 ) ) 6 ) Definitions Annex B 179 © OECD/IEA, 2015 matter andusedasafuel. organic of degradation bacterial by produced dioxide carbon and methane of mixture A Biogas technologies usedto produce themandtheirrespective maturity. the to according biofuels advanced and conventional as classified be can They biodiesel. Biofuels are liquid fuels derived from biomass or waste feedstocks and include ethanol and Biofuels feedstocks andbiogas. solidbiomass, biofuelsandbiogas. Itincludes biomass from derived products gaseous and liquid solid, in content energy the toRefers Bioenergy that are notconnected to themain power grid. be from as little as a few kilowatts. Such capacity is distinct from mini- and off-grid provide systems of disruption, the event in electricity. Back-up generators can, are typically fuelled with diesel or gasoline that and capacity can capacity generation power “back-up” of form some have also may grid power main the to connected businesses and Households Back-up generation capacity Definitions Currency conversions Energy conversions 180 Japanese Yen Indian Rupee Euro Chinese Yuan British Pound Exchange rates (2014annualaverage) GWh Mtoe TJ From: Convert to: MBtu Gcal multiply by: 1.0551 x10 4.1868 x10 4.1868 x10 3.6 TJ 1 -3 -3 4 0.252 238.8 Gcal 860 10 1 7 1 USDollarequals: 2.388 x10 2.52 x10 8.6 x10 Mtoe World Energy Outlook | 10 105.69 1 61.74 -7 0.75 6.14 0.61 -5 -8 -5 3.968 x10 MBtu 3.968 947.8 3

412 1 7 Special Report 1.163 x10 2.931 x10 0.2778 11 630 GWh 1 -4 -3 © OECD/IEA, 2015 Annex B modern technologies usingprocessed biomasssuchas pellets. Modern use of solid biomass refers to the use of solid biomass in improved cookstoves and Modern useofsolidbiomass of stoves; accessthat enablesproductive economic activity;andaccess forpublic services. level minimum a to access and fuels heating and sustainablecookingmore safer and to access household household electricity; includes services energy modern to Access Modern energyaccess Small gridsystems linkinganumber ofhouseholds andother consumers. Mini-grids real terms inyear-2014 USdollars. in presented are data Investment distribution. and transmission in investment as well as generation,off-grid and mini-grid on-grid, for technologies and fuels all for replacements transportation; those for the power sector include refurbishments, uprates, new builds and it actually incurs. Investments for oil, gas, and coal include production, transformation and when year the than started, rather is trade) (or production year the to assigned generally investmentAll data projectionsand reflect “overnight investment”, the capital i.e. spent is Investment onthesupply-side in buildings. end-uses across and transport industry,in in modes sub-sectorsacrossacross made been the average efficiency level of that equipment in 2014. Estimates of investment needs have sector public the improve and to firms performance the energy-using of equipment above Investment in energy efficiency is defined as the additional expenditure made byhouseholds, Investment for energy-efficiency demand. electricity access-related meet to needed grid main the to connected additions capacity share off-gridof the and as generationpower mini- newsystems, well in as lines, capacity distribution transmission new and Investmentfinance for includes electricity tofor access Investment for access to electricity solar stoves. and biogas gas, petroleum liquefied as such fuels cleaner using stoves in and cookstoves biomass improved for financing includes facilities cooking clean to access forInvestment Investment for access to cleancooking facilities liquefied petroleum gas stoves, ethanol andsolar stoves. systems, biogas cookstoves, biomass solid improved to primarily refers This fire). stone more environmentally and a three- as (such biomass solid of use make that traditional facilities the efficient than sustainable more safer, considered are that facilities Cooking Clean cooking facilities

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Definitions 181 B © OECD/IEA, 2015 such asathree-stone fire, often withnoorpoorlyoperating chimneys. The traditional use of solid biomass refers to the use of solid biomass withTraditional basic useofsolidbiomass technologies, other solidwastes. and waste wood residues, agricultural dung, fuelwood, charcoal, includes biomass Solid Solid biomass Stand-alone systems for individualhouseholds orgroups ofconsumers. Off-grid systems 182 World Energy Outlook | Special Report © OECD/IEA, 2015 Services in India 2011-2012, Government in India Services ofIndia,New Delhi. (2014a), Office Survey Sample National India, New Delhi. inIndia Services and Goods ofVarious Consumption Household Office, (2012), Implementation Programme and Statistics of Ministry schemes/grid-connected/small-hydro/ Distribution (2014), Banerjee Ghosh S. Pargal,and S. of India OECD (Organisation for Economic Co-operation and Development) (2014), Policies, PlayersandIssues (2012), Agency) Energy (International IEA & QualityPower: ShacklingIndia’s Growth Story (2012), Industry) & Commerce of Chambers (Federation Indian FICCI of DAE (Department ofAtomic Energy) (2015), CSO (Central Statistics Office) (2015), New Delhi. Timelines andDelaysacrossSectors andStates (2014), al. et V., Chaturvedi, actual/dec14/actual-dec14.html Annex C – – – CEA (Central ElectricityAuthority)(2014a), International Monetary Fund, Washington, DC. (2013), Anand, R. Chapter 1:Energy inIndiatoday MNRE (Ministry of New and Renewable Energy) (2015), Energy) Renewable and New of (Ministry MNRE Council onEnergy, Environment andWater, New Dehli. (2015), al. et A., Jain, Washington, DC. IMF (International Monetary Fund) (2015),

(2014b), (2015), (2014b), , OECD, Paris.

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