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Energy Data of India Important
Energy Data of India Important
Overview
India is the third largest energy-consuming country in the world. Peak
demand reached 207 gigawatts (GW) for the first time in April 2022, and
consumption is projected to rise. Supported by industrial growth,
urbanization, government policies, and favorable geopolitics over the past
decade, India has installed capacity exceeding 400 GW. The Indian power
sector uses diverse fuel sources, including conventional resources, such as
coal, oil, and gas, and environmentally sustainable sources, such as solar,
wind, biomass, industrial waste, as well as both large and small hydro plants.
Fossil fuels dominate India’s power sector, with coal comprising over 70
percent, but the country aims to significantly increase the share of renewable
and nuclear energy. Efforts are being made to reduce greenhouse gas
emissions and dependence on energy imports, while at the same time
enhancing India’s energy security. The transition from coal to renewables will
take decades, and in the interim India requires the flexibility of fossil-fired
power generation to balance the grid during intermittent operation of
renewables. India will continue to rely on natural gas and cleaner forms of
fossil energy during this transition.
India has set ambitious renewable energy targets for the medium and long
term. The country aims to have installed renewable electricity capacity of 175
GW this year, and 500 GW by 2030. As of January 2021, data from India’s
Ministry of New and Renewable Energy shows that India’s installed renewable
energy capacity reached 113 GW, of which solar and wind comprised 56.95
GW and 40.70 GW, respectively. The remainder is composed of small hydro,
biomass, and other sources.
India is the fourth largest liquefied natural gas (LNG) market in the world.
While natural gas constituted six percent of India’s energy mix in 2019, the
Indian government has stated its intent to raise the share of natural gas in the
national energy mix to 15 percent by 2030 as part of its effort to support the
transition to renewable energy. However, rising gas prices throughout spring
and summer 2022 may impact this goal. India is the third-largest consumer of
crude oil and petroleum products in the world. It is also the world’s third-
largest net importer of crude oil and petroleum products, importing over 80
percent of the crude consumed.
The global COVID-19 pandemic negatively affected the Indian power sector.
Constrained economic activity and unemployment aggravated payment delays
from residential, commercial, and industrial consumers to Indian distribution
companies (discoms). Timelines for capacity additions and developmental
plans were delayed across the sector. While the energy sector is already
approaching pre-pandemic levels of operation and growth, the weak financial
health of many of India’s discoms due to lack of competition, politically
motivated subsidies, and expensive legacy power purchase agreements
persist.
Smart Grid 60 52 38
Leading Subsectors
Transmission, Distribution, and Smart Grid
In India, the electric power transmission and distribution sector is dominated
by public utilities, with the overall private sector role limited to one percent in
transmission and five percent in distribution. Prominent challenges in these
sectors include aggregate technical and commercial losses, primarily due to
theft or grid inefficiencies, and the growing financial distress of discoms.
India’s aggregate technical and commercial losses were 22 percent in fiscal
years 2018-2019 and 21.2 percent in 2020. In contrast, the world average
was 8 percent in 2019. As of March 2019, Indian discoms were looking at a
total outstanding debt of approximately $14 billion.
Addressing the financial stress of indebted discoms, starting in April 2021, the
Indian government approved a reform-based, results-linked power distribution
sector program with a budget outlay of $41 billion. The program aims to
improve the operational efficiencies and financial sustainability of discoms
through fiscal years 2024-2025. India also plans to privatize discoms in all
eight union territories and will explore public-private partnerships for power
distribution in some Indian states. However, as of summer 2022, discoms
continue to face crippling financial stress.
India has also begun its ambitious roll out of smart meters, with the aim of
installing 250 million by 2024. The initiative is expected to reduce power loss,
improve revenue collection for local electric utilities and discoms, and
incentivize energy conservation.
India is a major hub for wind energy manufacturing and is one of only five
countries that can produce all six major wind turbine components (nacelles,
blades, towers, generators, gearboxes, and bearings). India’s leading wind
companies include Vestas India, Suzlon Energy, ReGen Powertech, Wind
World India, Orient Green Power, Indowind Energy, GE Energy India, Inox
Wind, Leitwind Shriram Manufacturing, and RRB Energy.
Natural Gas
India is the world’s fourth largest buyer of LNG, after Japan, South Korea, and
China, with international purchases expected to rise to support increasing
demand for natural gas and the Indian government’s promotion of a cleaner
environment.
Half of India’s supply of natural gas comes from domestic production while the
other half comes from imported LNG. Industry experts expect that rising
demand will prompt a mix of 30 percent domestic and 70 percent imported
LNG by 2025. Anticipating future demand, Indian companies broadened their
international supplier base and negotiated long-term contracts. However,
longstanding infrastructure challenges at LNG receiving terminals and the lack
of gas distribution pipelines create bottlenecks, impacting efficient distribution
and importation, and resulting in large quantities of contracted LNG to be sold
on the spot market while in transit.
India is moving toward its goal of “One Nation, One Gas Grid” as it expands
its gas pipeline infrastructure. Over 18,820 km of product pipelines, 10,419
km of crude oil pipelines, and 32,718 km of natural gas pipelines are now
operational, with additional pipelines under construction. Upcoming city gas
distribution projects will cover 86 percent of India’s land and reach 96 percent
of the total population. This creates near term opportunities for U.S.
companies to partner with Indian entities bidding to implement these projects.
India has six LNG receiving terminals in operation, five of which are on the
west coast including Petronet’s 15 million tons per annum (MTPA) terminal in
Dahej and 5 MTPA terminal in Kochi; Shell’s 5 MTPA terminal in Hazira;
Ratnagiri Gas and Power’s (NTPC subsidiary) 5 MTPA terminal at Dabhol,
and its 5 MTPA terminal in Mundra. One terminal is on India’s east coast – a
5 MTPA terminal operated by State-owned Indian Oil Corporation. India’s
plan to double the share of natural gas in its energy mix to 15 percent by 2030
necessitates a huge increase in imports and the construction of more LNG
terminals. A terminal in Karaikal is expected to come online in 2022 and four
additional terminals (Jaigarh, Dhamra, Jaffrabad, and Chhara) are expected to
come online by 2023.
Opportunities
The U.S. market share of India’s energy-related equipment and commodities
imports remains low. China was the top foreign competitor for low-cost
equipment, but since 2020 India has sought to reduce its supply chain
dependence on China, signaling increased opportunities for U.S. companies.
The PLI scheme for solar and energy storage led several large Indian
renewable energy companies and public sector entities to scout for
partnerships with foreign technology providers. Increased manufacturing in
India may lead to U.S. export opportunities for components in the solar value
chain (e.g., U.S. polysilicon). For example, India’s Reliance Industries, the
world’s second largest energy company, has announced plans to invest $10
billion in clean energy between 2021 and 2024, creating U.S. export
opportunities for products such as polysilicon, solar trackers, energy storage,
and electrolyzers for hydrogen production.
Large Indian energy companies like Adani, Renew Power, and Avaada, and
public sector entities like Coal India Ltd. and NTPC Ltd. indicate interest in
investing and diversifying into the clean energy space, including solar, energy
storage, hydrogen, and smart grid technologies. The PLI scheme has
prompted several U.S. solar companies to rethink their India strategy, and
some have now established offices in India.
India plans to replace all traditional electricity and gas meters with smart
meters to increase the operational efficiency and revenue generation capacity
of distribution utilities. Energy Efficiency Services Limited is the nodal agency
for implementing the roll-out of smart meters for electricity and it is the leading
smart metering service provider in the country. Energy Efficiency Services
Limited plans to replace 250 million conventional meters with smart meters
over the next three years and has signed agreements with various state
distribution utilities to undertake smart metering projects.
Several new refinery and petrochemical projects are planned for the next five
years, as well as expansion projects for existing refineries. India plans to
double its refining capacity from 5 million barrels per day to 10 million barrels
per day by 2030.
Natural gas infrastructure will present opportunities over the next several
years, particularly as India constructs new LNG terminals, expands pipelines
across the nation, and builds city gas distribution infrastructure to include
piped city gas for buildings and compressed natural gas dispensers for
transportation. LNG dispensing units and virtual pipelines in the form of
cryogenic containers present additional opportunities for U.S. companies.
The requirement for new entrants in the fuel retailing business to invest in
new-fuel dispensation will be an opportunity for LNG, biofuels, and possibly
hydrogen technology.