Context: According to the International Energy Agency’s (IEA) latest World Energy Outlook (WEO), India will see the largest energy demand growth of any country or region in the world over the next three decades. 

About the Report

Source and Objective

• This report provides a comprehensive view of how the global energy system could develop in the coming decades.

• It is designed to inform policymakers, industry stakeholders, and the general public about the challenges and opportunities in the future of energy.

Methodology

• The report encompasses a wide range of parameters, including energy consumption, sources, policy frameworks, and global challenges.

Key Findings of the Report

India's Energy Outlook

• India is projected to experience the highest growth in energy demand among countries or regions in the next three decades.

• Power consumption for household air conditioners in India is expected to increase nine-fold by 2050.

• It will surpass current consumption levels in Africa.

• By 2030, India's industry will emit 30% less CO2, and each kilometre driven by a passenger car will release 25% less CO2.

• These projections highlight the success of India's multi-faceted policy approach towards meeting climate commitments without compromising growth.

Global Energy Landscape

• The energy sector remains fragile but has effective strategies to enhance energy security and address emissions.

• Immediate pressures from the global energy crisis have subsided, but energy markets, geopolitics, and the global economy remain unsettled.

• Global Geopolitics: Energy markets, geopolitics, and the global economy are unsettled and the risk of further disruption is present. 

• The risk of protracted conflict in the Middle East now accompanies continued fighting in Ukraine. 

• The emergence of a new clean energy economy, led by solar PV and electric vehicles, offers hope for the future.

• Clean energy investments have surged by 40% since 2020, emphasizing the economic case for mature clean energy technologies and the significance of energy security.

• Global Average Surface Temperature: It is already around 1.2 °C above pre-industrial levels, prompting heatwaves and other extreme weather events, and greenhouse gas emissions have not yet peaked.

• The Energy Sector: It is also the primary cause of the polluted air linked to more than 6 million premature deaths yearly. 

• Positive trends in improving access to electricity and clean cooking have slowed or even reversed in some countries.

Bioenergy Prospects

• Modern bioenergy, available in solid, liquid, and gaseous forms, constitutes over half of the global renewables supply.

• Solid bioenergy (biomass) is primarily derived from organic waste sources and is often pelletized for power generation or industrial use.

• Biogas and biomethane are gaining traction, especially in Europe, as low-emission domestic gas sources.

• The total modern bioenergy supply is projected to reach around 65 EJ in the APS by 2030 and over 70 EJ in the NZE Scenario.

Renewable Energy Growth:

• Renewables are set to constitute 50% of the global electricity mix by 2030.

• It will be up from the current 30%.

• Solar, wind, electric cars, and heat pumps are among the clean energy technologies expected to redefine global power generation and usage.

• Global demand for coal, oil, and natural gas is anticipated to decline within this decade.

• Fossil fuel's share in the global energy supply is projected to drop from 80% to 73% by 2030.

Challenges for India and the World

• Changing Demography: There are aging populations in the European Union, Russia, Japan, and China whereas there is an increasing population in India and Africa. 

• India’s urban population will increase by 74% and per capita income will triple by 2050, increasing demand for oil and natural gas and leading to a rise in India’s annual CO2 emissions by nearly 30% by 2050, one of the world’s largest increases.

• High Technology Costs: Higher input prices for critical minerals, semiconductors and bulk materials such as steel and cement have negatively affected the financial performance of some major clean technology suppliers and project developers in the short term. 

• For example, Hydrogen and carbon capture, utilization and storage (CCUS) projects show that more than 400 GW of electrolysis for hydrogen and over 400 million tonnes of CO2 capture capacity are vying to be operational by 2030.

• Increasing Investment in Fossil Fuel Dependence: The share of coal, oil and natural gas in global energy supply starts to go downwards and reaches 73% in the STEPS by 2030 whereas investment in oil and gas today is almost double the level required in the NZE Scenario in 2030.

• Energy Poverty: The importance of ensuring cost-effective and clean technologies are deployed, especially in poorer households and communities and affordability is a concern in India’s transition to cleaner energy sources.

• Impact of Air Conditioners (ACs) on Electricity Demand: India’s demand for electricity for running household ACs is estimated to expand nine-fold by 2050 and will exceed total power consumption in Africa today. 

• Although solar PV matches well with daytime cooling needs, cooling demand is also significant in India during the late evening and at night.

• Import Dependence: India is an importer of modern clean energy technologies as it scales up solar and wind power generation capacity. For example, its imports of solar PV modules in 2021-2022 were valued at USD 3.4 billion. 

Key Suggestions

• Meeting National Energy and Climate Targets: Clean electrification, improvements in energy efficiency and switching to lower- and zero-carbon fuels are key levers available to emerging and developing economies to reach their national energy and climate targets. 

• In India, it means every dollar of value added by India’s industry results in 30% less carbon dioxide (CO2) by 2030, and each kilometer driven by a passenger car, on average, emits 25% less CO2.

• Diversification and Innovation: These are the best strategies to manage supply chain dependencies for clean energy technologies and critical minerals and to strengthen the resilience of clean energy supply chains and reduce high levels of concentration.

• Ensuring Affordability: India, Africa and other low-income countries need to work on policies to ensure the affordability of clean energy technologies, especially for low-income households.

• Meeting Energy Demand of Increasing Population: Finding and financing low-emissions ways to meet rising energy demand in these economies is a vital determinant of the speed at which global fossil fuel use eventually falls.

• Reducing Peak Electricity Demand: By implementing building codes, using more efficient appliances and adopting demand response measures that enable the same cooling needs to be met with less energy. 

• Lowering Cooling Demand: Energy efficiency policies reduce the need for investment in batteries or expensive standby generation capacity, and thus help to integrate renewables more cost-effectively.

About International Energy Agency (IEA)

• It is a Paris-based autonomous intergovernmental organization to make a collective response during major disruptions in the supply of oil.

• It was established in 1974 during the 1973 Oil Crisis [in the framework of the Organization for Economic Co-operation and Development (OECD)]

• Members: 30 member countries and 8 Association countries

• India is an associate member of the IEA and not a member state.

• Unlike the World Bank or the International Monetary Fund (IMF), it does not dispense grants or make loans.

• Main decision-making body: Governing Board composed of energy ministers or their senior representatives from each member country.

Focuses on the “3Es”

1. Energy security,

2. Economic development, and

3. Environmental protection.

• It advises governments on effective policies on oil.

Reports

• Global Energy & CO2 Status Report

• World Energy Outlook; World Energy Statistics

• World Energy Balances and Energy Technology Perspectives