THE CONTEXT: As of 2023, India is the third-largest energy consumer globally, behind only China and the United States. However, it’s crucial to note that India’s per capita energy use remains relatively low despite this high overall consumption. In 2023, India’s per-person energy consumption was 27.3 gigajoules (GJ), which is significantly lower than China (120 GJ) and the United States (277.3 GJ). This disparity highlights the potential for further growth in India’s energy consumption as its economy develops.
INDIA’S ENERGY CONSUMPTION BY SECTOR (2023):
| Industrial | 42% |
| Residential | 26% |
| Transport | 17% |
| Agriculture and Forestry | 5% |
| Commercial and Public Services | 3% |
| Others | 9% |
| Total Energy Consumption | 39.02 EJ |
INDIA’S PRIMARY ENERGY SOURCES (2023):
| Coal | 56.3% |
| Oil | 27.1% |
| Biomass | 21% |
| Renewables | 6.1% |
| Natural Gas | 5.7% |
| Hydropower | 3.56% |
| Nuclear | 1.1% |
THE ENERGY INTENSITY:
Energy intensity measures a nation’s economy’s energy efficiency. It is calculated as units of energy consumed per unit of GDP. A lower energy intensity indicates a more energy-efficient economy, as it requires less energy to produce the same economic output.
GLOBAL ENERGY INTENSITY TRENDS:
Global energy intensity has been on a declining trend, albeit at a slower pace than required to meet climate goals. Key points include:
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- In 2023, global energy intensity declined by only 1%, below the 2010-2019 average decline of 1.8% per year.
- This decline is insufficient to meet the 2°C climate target pathway, which requires an annual reduction of about 4%.
- The International Energy Agency (IEA) reports that to achieve net-zero emissions by 2050, the global rate of energy intensity improvement needs to double to about 4% per year between 2020 and 2030.
- Energy efficiency is the ‘first fuel’ of a sustainable global energy system. Strong efficiency gains are vital to achieving climate goals, reducing air pollution, and improving energy security.
INDIA’S ENERGY INTENSITY TRAJECTORY:
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- Energy intensity declined by 1.58% per year in 2010-20, compared to 1.32% per year in 2000-10 and 0.61% per year in 1990-2000.
- Overall, India’s energy intensity fell by 57% in the last three decades.
- The Bureau of Energy Efficiency (BEE) reports that India’s energy intensity decreased from 0.273 kg (kilogram of oil equivalent) per dollar of GDP in 2005 to 0.183 kg in 2020, a 33% reduction.
COMPARISON WITH OTHER COUNTRIES AND REGIONS:
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- OECD countries: Achieved a sharp reduction in energy intensity with a decline of 3.1% in 2023, compared to their 2010-2019 trend of 2.1% decline per year.
- European Union: Energy intensity dropped by 4.7% in 2023, with energy consumption decreasing by 4% while GDP grew by 0.5%. The EU’s energy intensity is now 42% lower than the global average.
- United States and Canada: Both experienced a 2% contraction in energy intensity.
- Japan: Recorded a significant drop of 5.3% in energy intensity.
- China: Energy intensity increased by 1.3% in 2023, reaching 32% above the global average. This contrasts with China’s rapid fall of 3.9% per year over 2010-2020.
- Russia: Achieved an energy intensity decline of 3.2% per year.
- Middle East: Experienced an annual increase in energy intensity by 2.3%.
RELATIONSHIP BETWEEN ENERGY CONSUMPTION AND CARBON EMISSIONS:
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- The relationship between energy consumption and carbon emissions is intrinsically linked, as the combustion of fossil fuels for energy production is a primary source of carbon dioxide (CO2) emissions.
- In India, energy consumption has grown to meet the demands of its expanding economy and population, carbon emissions have also increased. However, the rate of increase in emissions has been lower than the rate of economic growth, indicating some level of decoupling.
INDIA’S CARBON INTENSITY TRENDS:
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- India’s carbon intensity, measured as CO2 emissions per unit of GDP, has shown a declining trend over the past few decades:
| DECADE | FALL PER YEAR |
| 1990 TO 2000 | 0.36% |
| 2000 TO 2010 | 0.23% |
| 2010 T0 2020 | 1.3% |
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- India’s carbon intensity fell 36% in the last three decades, while energy intensity fell 57%. This indicates that India has been making progress in decoupling economic growth from carbon emissions.
- In 2023, India’s economy grew by 6.7%, while emissions rose by more than 7%.
- Despite this growth, India’s per capita emissions remain very low at around 2 tonnes, less than half the world average of 4.6 tonnes.
- The Economic Survey 2023-24 highlighted that India’s GDP grew at a CAGR of about 7% between 2005 and 2019, while emissions grew at a CAGR of about 4%, further demonstrating the decoupling of economic growth from greenhouse gas emissions.
COMPARISON WITH GLOBAL AVERAGES AND DEVELOPED NATIONS:
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- Per capita emissions: In 2023, India’s per capita CO2 emissions reached 2.07 metric tons, a 6.7% increase from 20224. However, this is still far below the global average of 6.6 tons CO2 equivalent (tCO2e).
- Historical contribution: Despite being the third-largest emitter, India’s historical contribution to global CO2 emissions is only 3%, compared to 20% for the United States.
- Emissions growth: India’s emissions grew by 6.1% in 2023, contributing to 8% of the global total3. This growth rate is higher than many developed nations, reflecting India’s stage of economic development.
- Carbon intensity: India’s carbon intensity, measured as energy consumed per unit of GDP in purchasing power parity (PPP) terms, is below the world average but still above that of the EU and Japan.
ECONOMIC GROWTH AND ENERGY CONSUMPTION NEXUS:
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- GDP growth and energy demand: From 2019 to 2023, India’s GDP growth averaged 4.1%, with a robust 6.7% growth in 2023. In 2023, India’s energy demand increased by 6.1%, outpacing GDP growth by about one percentage point. The International Energy Agency (IEA) forecasts an 8% rise in India’s electricity consumption in 2024.
- Causality of energy consumption and economic output: As India’s economy expands, particularly in energy-intensive sectors like industry and infrastructure, energy consumption increases. The share of investment in GDP growth increased from around 35% in 2015-19 to nearly 50% in 2019-23, driving up energy intensity.
- Decoupling economic growth from energy consumption: India is projected to add over 12,000 cars daily to its roads and increase built-up space by over 1 billion square meters annually up to 2035. India has reduced its emissions intensity by 40% compared to 2005, showing substantial progress toward its NDC target of a 45% reduction by 2030.
POLICY CONSIDERATIONS FOR SUSTAINABLE ECONOMIC DEVELOPMENT:
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- Renewable energy expansion: India has set a target of 500 GW of non-fossil fuel-based power generation capacity by 2030.
- Green hydrogen promotion: The National Green Hydrogen Mission, with a total outlay of INR19,744 crore (US$2.4 billion) up to 2029-30, aims to position green hydrogen as a competitive energy source.
- Energy efficiency measures: Initiatives like the Energy Conservation Building Code (ECBC), Standards and Labelling (S&L) program, and Perform, Achieve, and Trade (PAT) scheme have resulted in annual cost savings of approximately ₹1,94,320 Crore and a reduction in annual CO2 emissions of around 306 million tonnes.
- Green finance: The government has issued sovereign green bonds amounting to ₹36,000 Crore to raise proceeds for public sector projects that contribute to reducing the economy’s emissions intensity.
- Electric vehicle promotion: Policies supporting charging infrastructure for electric vehicles are being implemented to reduce emissions in the transport sector.
- Green Credit Programme (GCP): This initiative incentivizes individuals, communities, and private sector entities to participate in environment-positive activities.
THE CONCLUSION:
India’s challenge is to continue its economic growth while transitioning to cleaner energy sources. This requires a delicate balance between immediate energy needs and long-term sustainability goals.
UPSC PAST YEAR QUESTION:
Q. Describe the benefits of deriving electric energy from sunlight compared to conventional energy generation. What are the initiatives offered by our government for this purpose? 2020
MAINS PRACTICE QUESTION:
Q. Analyze the relationship between India’s economic growth and energy intensity. How has this relationship evolved?
SOURCE:
https://www.orfonline.org/expert-speak/india-trends-in-energy-intensity
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