IEA cautions against India's coal-dominated energy supply growth ahead of Paris climate summit

Warns global temperatures could jump as much as 4.3 degrees Celsius by the end of the century, urges countries to reduce emissions

The International Energy Agency (IEA), the Paris-based energy think-tank for the Organization of Economic Cooperation and Development (OECD) countries, has said coal and other fossil fuels will continue to dominate India’s energy mix even as it lauded the government’s efforts to expand green energy sources through 2022.

“India’s large (and growing) population, its low (but increasing) levels of energy consumption per capita and the high level of projected economic growth are powerful trends that, in the absence of concerted action, will commit India to a high-carbon development path,” the 29-member organisation said in its annual World Energy Outlook (WEO) report.

According to the IEA, India’s energy sector emissions through 2022 will be guided by the targeted 175 Giga Watt (Gw) of renewable energy capacity addition, target to reduce carbon intensity by 20% to 25% below 2005 levels by 2020, fossil fuel subsidy reforms and increased taxation on domestic and imported coal.

“At a time of high demand growth, this by no means eliminates fossil fuels from the energy mix. Coal still accounts for 40% of energy mix in 2022 (44% in 2013) and all fossil fuels together provide three-fourth of total energy demand. India’s energy-related CO2 emissions are around 30% higher than 2013 by 2022, reaching 2.4 Giga Tonne and go on to exceed 3 GT in 2030,” The WEO 2015 report said.

The country will invest $85 billion annually by 2022 in building energy supply infrastructure which will increase to $120 billion in 2030. The power sector alone will account for around 70% of this investment even as the spending on creation of solar and wind capacities will double to $28 billion in 2022. 

“Overall, India’s future power sector investment moves towards a less carbon-intensive path than in the past but investment in coal does not cease and could grow if strong policy signals for low-carbon energy supply were to fade after 2022,” it said.

The IEA also projected that India’s oil consumption in end-use sectors will grow by 1.4 million barrel per day (mbpd) by 2022 and a further 1.6 mbpd to 2030. Net oil imports will more than double by 2030 (to 6.2 mbpd) and the related import bill will rise to around $270 billion. The projected growth in vehicle ownership will drive oil demand growth, with average incomes in India reaching a level at which rapid increases are expected in car ownership.

India imported 189 million tonne of crude oil at a cost of $112 billion last financial year (2014-15). Prime Minister Narendra Modi has set a target of reducing the country’s energy import dependence by 10% from the existing 75% by 2022.

In the WEO 2015 report, coming ahead of the United Nations climate change conference later this year and the Paris climate change summit, the IEA has laid out a number of policies that would lead to a peak in energy-related emissions by 2020. It has warned global temperatures could jump by as much as 4.3 degrees Celsius by the end of the century and urged countries to improve their pledges on reducing emissions.