According to the International Energy Agency's (IEA) World Energy Outlook 2015, India's economy is expected to grow more than five times its current size by 2040, creating a huge surge in energy demand over the coming decades. Also, by the end of this period, India's population is expected to exceed 1.6 billion, overtaking China in the early 2020s, contributing significantly to a rise in its share of global energy consumption.
THE NATION'S POPULATION WILL OVERTAKE THAT OF CHINA BY EARLY 2020S
India's current share of global energy consumption, according to the BP Statistical Review of World Energy 2016 is 5.3%, compared to 22.9% to that of China. Coal and oil will form the largest chunk of India's energy basket, contributing heavily towards emissions. Therefore, it makes sense for Indian policy makers to increase the share of natural gas to keep a check on growing emissions.
According to the BP Energy Outlook 2035, the usage of coal and oil in India's primary energy consumption continues to be on the higher side, despite marginal drop in their respective shares from 58% and 28% in 2015 to 52% and 27% in 2035. Natural gas, on the other hand, remains at around 7% throughout the projected period. However, demand for gas is expected to expand by 162%, against 120% and 105% for oil and coal respectively, during the projected period.
Thus, while these trends signify increased usage of natural gas compared to oil and coal, it also poses challenges to the government's ambitious target to more than double the share of natural gas to 15%. Interestingly, in the past, the share of natural gas declined from 9% in 2007 (BP Statistics 2008) to 6.5% in 2015 (BP Statistics 2016), compared with global average of 24%. India's projected gas demand, according to IEA's "Gas Medium-Term Market Report 2016" (GMTR 2016), is 6% on average until 2021.
However, given the need for India to curb its emissions, as pledged during the Paris Summit, supported by the current liquefied natural gas glut, India's push towards natural gas to fuel its economy, is rightly timed.