India will have highest energy demand globally over the next decade: IEA report

World Energy Outlook 2024 outlined that the world is set for temperature rise of 2.4°C in global average temperatures by the end of the century

India’s total energy demand is set to increase by around 35% by 2035, while electricity generation should ideally triple to 1400 GW. This is according to the Stated Energy Policy Scenarios (STEPS) segment of World Energy Outlook 2024, the annual flagship report on the global energy scenario by the International Energy Agency.

Essentially, it means that India will have the highest energy demand over the next decade than any other nation, thanks to it being the most populous country in the world and growing demand for power from different sectors, said the report.

Owing to severe heat waves during the summer, a major chunk of that energy demand will come for the purpose of cooling – the number of air conditioners is  expected to grow 4-5 times, found the report. The resultant electricity demand from air conditioners in 2035 will actually be higher than Mexico’s entire electricity consumption the same year.

Most of this power generation surge will come from coal. In 2023, coal met 40% of India’s power needs, while it will grow to more than 50% by 2035, according to the report. 

Parallely, the country will also add a staggering 12,000 cars every day till 2035, and increase built space by over 1 billion square metres annually, said the report. Naturally, such an expansion in construction will drive the iron, steel and cement industries. Iron and steel is supposed to grow by 70%, while cement will grow by 55%, found the report.

Heavy reliance on coal

India’s renewable story is growing. But fossil fuels still dominate the sector. In the STEPS segment, the report points out that by 2030, nearly 60 GW of coal capacity will be added after factoring in the plants which will be retired by then. Resultantly, electricity generation from coal will increase by 15%, and coal consumption will peak in the 2030s as well.

Oddly enough, even though solar will account for twice as much capacity as coal, power generation from the latter will be 30% higher, according to the report. This is because of the lower capacity factor of solar. 

But when looked through the lens of the Announced Policy Scenario (APS), power generation from renewable energy will be about 20% higher by 2035 than in the STEPS scenario. And by 2030, India is projected to have the third-largest installed battery storage capacity.

According to the report, by 2035, India’s carbon dioxide emissions will amount to 2.5 billion tonnes in 2035. 

But China dominates the energy market more than any other country. It accounts for 80% of the CO2 emissions over the last decade, and is the highest emitter currently, said the report. It’s racing ahead again in renewables – accounting for more than  40% of global installed capacity for wind and solar PV, and more than half of the electric cars in the world today.

In 2023, about 50 GW of new coal plants were added in China, as opposed to 260 GW of solar PV and over 75 GW of wind, according to the report.

Global worry

According to the report, the world is on course for a rise of 2.4°C in global average temperatures by the end of the century, well above the Paris Agreement goal of limiting global warming to 1.5°C.

Global carbon dioxide emissions, and demand for the primary fossil fuels – coal, oil and gas – are also set to peak by the end of this decade, found the report. It also said that low-emissions sources are set to generate more than half of the world’s electricity before 2030. While renewables are being ramped up at a fast pace, deployment across nations isn’t uniform. 

“In the second half of this decade, the prospect of more ample – or even surplus – supplies of oil and natural gas, depending on how geopolitical tensions evolve, would move us into a very different energy world from the one we have experienced in recent years during the global energy crisis,” said IEA Executive Director Fatih Birol. 

“It implies downward pressure on prices, providing some relief for consumers that have been hit hard by price spikes. The breathing space from fuel price pressures can provide policymakers with room to focus on stepping up investments in clean energy transitions and removing inefficient fossil fuel subsidies. This means government policies and consumer choices will have huge consequences for the future of the energy sector and for tackling climate change,” he said.

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