India will need to invest $1.4 trillion in clean energy technology over the next 20 years, according to a new report from the International Energy Agency (IEA). In India Energy Outlook 2021, the agency also predicts that India, underpinned by ‘a rate of GDP growth that adds the equivalent of another Japan to the world economy by 2040’, will overtake the EU as the world’s third-largest energy consumer by the end of the current decade, and that its energy needs will grow at three times the global average.
The predictions are both a warning and an acknowledgement of India’s expected rapid rate of economic growth and the speed of urbanization that will accompany it. In 2019, the international construction consultancy Mace Group forecast that India’s urban population will have doubled from 449 million to 814 million by 2050. Following last week’s recommendation from the country’s Finance Commission that the government set aside around $1bn for eight new cities in as many states and the percentage of its growing population now defined as urban dwellers rising at around 0.5% a year, that forecast remains realistic.
The scale of the trend towards urbanisation will dramatically boost industrial energy consumption in its own right and is also expected to trigger a boom in consumer demand for energy-guzzling white goods and air-conditioning appliances and systems. Demand for private motorised transport is also forecast to remain on a steep upward trajectory.
With 660 million of its inhabitants still relying on solid biomass such as firewood for cooking fuel, the IEA argues that India is not just heading for an energy crisis but, unless it acts fast, an environmental one as well. The report is not all doom and gloom, however. It also predicts that the country’s solar energy output could match coal-fired power within 20 years, and that falling renewable energy costs and India’s ambitious targets could see the country host 450GW of renewable capacity by the end of the decade.
Further grounds for optimism come in the form of the growing number of energy multinationals waking up to India’s green potential. Last month, Italy’s Eni confirmed plans to reach 55GW of installed capacity in India by 2050, and both Total (France) and Petronas (Malaysia) have already made significant investments in the country’s clean-energy sector.