India’s rapid economic development over recent years provides outstanding opportunities for our country.
Millions of people are benefitting from the economic boom and now live their lives in a similar way to people in developed countries. With per capita purchasing power parity increasing rapidly, this aspiration is becoming a reality.
But the economic growth poses challenges as well and energy security is one of our biggest challenges today.
The global average power consumption per person per year is 2,600 units (units are kWh per person). India’s per person average consumption is 650 to 700 units. The global average is four times greater and is a clear indication that a game of catch-up is needed. India has an installed power generation capacity of 181,000 MW and is planning to add 100,000 MW between 2012 and 2017.
Urban population is growing
Indian cities are continuing to see an increase in population due to the migration of people from rural areas. Cities will account for 70 percent of the GDP by 2030 (230 million more people will live in cities by then – the fastest addition to the urban population outside China).
Roughly speaking that means we need 8 to 9 million new homes each year. Buildings already account for 30% of the total energy consumption. However, two-thirds of India is yet to be built!
Indian cities need a capital funding of USD $1.2 trillion and total funding of USD $2.2 trillion dollar over the next 20 years. To continue in the fast lane and keep pace with the current GDP rate, India needs to increase power generation infrastructure to the tune of 500 MW per week to meet demand.
We are a long way from reaching that goal.
Energy deficit is spinning out of control
Right now, the gap between demand and supply is close to 18,000 MW and India’s current main energy resources (coal and hydropower) cannot meet the challenge alone.
In fact, Indian power plants are already facing a shortage of coal, a problem which is compounded by the fact that climate change is affecting hydropower, and nuclear options face strong opposition from public.
Overall, India has an ambitious plan to grow the economy but when the major challenge is our carbon footprint, we must look at the ‘brighter’ options left at the table. The key focus is to save energy with energy-efficient technologies that can be implemented in existing buildings and the industry sector.
Policy initiatives to speed up the energy saving process
The realities of the energy deficit have already forced initiatives by the government (Bureau of Energy Efficiency, BEE) to deploy stringent measures on energy consumption. However, policy initiatives are only being introduced now and it is extremely important to focus on their execution.
The speed of execution will help us raise the energy-efficiency potential and thereby mitigate the overall energy demand. Global companies should adapt their products and services to suit the needs of Indian customers and offer solutions based on energy efficiency.
The opportunity is huge. It is estimated that investment of around USD $15 billion will be required for energy-efficient initiatives in India.
Today, India’s energy deficit is spinning out of control and this will subject consumers to very tough reduction norms in the very near future. Is this going to change? Most likely not, unless we change the path we are currently following.
I believe we can manage the energy deficit by implementing energy-efficient solutions to our existing buildings and the industry sector. Better today than tomorrow!
What is your take on this?