As per International Energy Agency (IEA), India is expected to have the largest share of energy demand growth at 25 per cent, in the next two decades, overtaking the European Union as the world’s third-largest energy consumer by 2030. India’s energy consumption will be driven by the gross domestic product expansion to a projected USD 8.6 trillion by 2040. As a result, the country is projected to lead the oil demand growth in the world due to a five-fold increase in per capita car ownership. The net dependence on oil imports is projected to increase more than 90 per cent by 2040 from the existing level of 75 per cent. The increased dependence on imports will be attributed to domestic consumption surpassing domestic production. Urbanisation will also drive energy use from solid biomass towards electricity owing to share of energy demand in the buildings sector rising from a quarter to around half by 2040.
IEA’s ‘India Energy Outlook 2021’ report ponders over the opportunities and challenges ahead for India to ensure reliable, affordable and sustainable energy to a growing population. It also examines pathways out of the crisis that emerged from the Covid-19 pandemic and how India’s energy sector might evolve by 2040 under a range of scenarios.