Background

• India is home to 18% of the world’s population but uses only 6% of the world’s primary energy. India’s energy consumption has almost doubled since 2000 and the potential for further rapid growth is enormous.
• Per capita final energy consumption in India is very low and there is wide disparity between urban and rural areas. In 2015-16, India’s per capita energy and electricity consumption stood at 1075 KWh/year, which was just one third of the world average.
• Nearly 25% of the population does not have access to electricity and a large proportion of the population especially in rural areas rely on non-commercial biomass like firewood for their cooking needs, exacerbating health concerns due to poor air quality (GOI, Draft National Energy Policy, 2017).

Future scenario as per NITI Aayog

• In future, India is set to be at the center of the world’s energy stage. It is set to contribute more than any other country to the projected rise in global energy demand, around one-quarter of the total.
• Urbanization will be a key diver of this trend as an additional 315 million people, almost the population of the United States today, are expected to live in India’s cities by 2040. This will push up the demand from energy intensive sectors.
• In addition, climate change will be a major challenge. Few countries in the world are as vulnerable to the effects of climate change as India is with its vast population that is dependent on the growth of its agrarian economy, its expansive coastal areas and the Himalayan region and islands (UNFCCC, 2015).
• The Government of India is taking significant steps towards adopting clean energy. As a part of its international commitment, India put forward eight Nationally Determined Contributions (NDCs) under the Paris Agreement of UNFCCC (UNFCCC, 2011).
• Three of the eight NDCs set quantifiable targets to be met by 2030: Goal 3, aims to reduce the emissions intensity of its GDP by 33%-35% from 2005 level, Goal 4, is to have 40% of cumulative electric power installed capacity from non-fossil, and Goal 5, aims to create an additional carbon sink of 2.5 to 3 billion tonnes of CO2 equivalent.

Total Primary Energy Supply

• Total primary energy will increase almost 3 times between 2017 and 2042 as can be seen in Figure, equivalent to an annual growth rate of approximately 4%.

• With increased access to modern energy, the share of biomass particularly, non-commercial biomass is expected to decline fast in the coming decades and will get replaced by other sources of modern and commercial energy. Coal will continue to remain predominant among all other commercial sources of energy in India until the foreseeable future because of its cost advantage relative to other energy sources. Moreover, as compared to other fuels like oil and natural gas which are mainly imported due to limited domestic resource availability, coal is available domestically in abundance. Efforts in the direction of reducing oil imports and improving energy security are already underway.

NDC Scenario Assessment

• Installed Capacity and Generation: By achieving its targets for increasing renewable capacity as per the NDC commitments, India can increase the share of renewables in power generation to 22% in 2032 as compared to almost 16% in the baseline. In this scenario, the share of non-fossil sources in installed capacity is 45% in 2030, as compared to 35% in the baseline scenario.
• Emissions: As a result of this transition to clean energy, cumulative CO2 emissions from the power sector will reduce by 375Mt CO2 under the NDC scenario in 2032, an 11% decrease compared to the baseline. This can be seen from blue and dotted blue line in Figure 8. The impact of NDC is lesser on the total emissions, which decrease by only 5% in the NDC scenario compared to the baseline.
• Cost sensitivity of Renewable Energy: Renewable technology penetration is found to be highly cost elastic. Lower the cost of installing and maintaining the services, higher the chances of newer capacity addition in the system. A decrease in solar cost by 50% can increase solar penetration by more than eight times as compared to the baseline scenario. A decrease in solar cost in the range of 10% and 20% will help in meeting the generation level met by the NDC scenario.

Overall, the government policy for this scenario needs to be in line with SDG 7 objectives so as to "Ensure access to affordable, reliable, sustainable and modern energy for all"