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BP Report: India's energy demand will likely exceed China's by 2035

17th January 2014

The report also revealed that India's energy consumption will increase over the next 20 years

BP's Canadian head office in Calgary, Alberta

The latest BP Energy Outlook 2035 report reveals that India is likely to surpass China as the largest source of energy demand growth in the world by 2035.

Furthermore, the growth in demand for energy in India will overtake each of the other BRIC countries, which are considered to be the upcoming engines of economic growth in the world.

India’s energy demand is projected to grow by 132 per cent, while China and Brazil’s energy demand will increase by just 71 percent and Russia’s by only 20 percent. In addition, growth in India’s energy demand will be double that of non-OECD countries.

In 2012, India had consumed around 46.5 billion cubic metres of natural gas, and 755,847 gigawatt-hours, detailed a report titled Energy Statistics 2013.

The report also reveals India and China will together account for half of the energy demand growth in the world till 2035, which is estimated to be 41 per cent.

India’s energy consumption is also projected to increase at a rate of 11 percent over the next 20 years, albeit at a lower clip than energy demand growth. This will compel India to be dependent on imports of fossil fuels such as coal well into in the future, the report states.

The BP Energy Outlook’s prediction differs from Indian oil minister M. Veerappa Moily’s objective to achieve energy independence by 2030, which will involve a series of government policy initiatives to ease investment in the sector.

As far as fossil fuels, natural gas will see the largest demand, reaching approximately 183 per cent. However, it is a commodity whose scarcity has led to concerns in the Indian economy.

The country was expected to have significant production of domestic natural gas supply, specifically from the Krishna-Godavari basin where companies like Reliance Industries Ltd and Oil and Natural Gas Corp. Ltd are active. Unfortunately, geological challenges have prevented this from happening leading to increased imports of expensive gas.

According to Rahool Panandiker, principal at Boston Consulting Group, India’s energy import bill may reach USD 300bn by 2030.

He commented that “This has serious implications for policymakers who need to come up with ways to ensure that domestic energy production is boosted as much as possible, else factors like the current account deficit and geopolitical tension in oil and gas producing regions of the world may pose a threat for India.”

 

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