India's energy demand set to surpass US and China
What's the story
India's energy demand is expected to outpace that of the US in the 2040s and China in the 2060s, a new report by Shell India has said. The study, titled 'India's energy transition in a security-focused age,' predicts three possible futures shaped by geopolitics, digitalization and climate imperatives: Archipelagos, Surge, and Horizon. It highlights India's growing role in global energy due to rapid economic growth and population increase.
Energy transition
Transition from imported fossil fuels to renewable energy
The report emphasizes a major shift from imported fossil fuels to domestically produced renewable energy, enhancing energy security and promoting decarbonization. Solar and wind energy's contribution to final electricity consumption has grown from around 3% in 2015 to over 20% today. The study projects these sources will account for at least 59% of electricity generation by 2050 across various scenarios.
Fuel dynamics
Low-carbon fuels' role in future energy mix
The report also highlights low-carbon fuels' crucial role in India's future energy mix, especially for hard-to-electrify sectors. It notes strong domestic bioenergy potential and supportive policies driving future growth. Despite a declining share, absolute volumes of fossil fuels continue to rise across all scenarios as India's energy demand doubles over the next two to three decades.
Transition fuels
Natural gas and LNG's role in transition
Natural gas and liquefied natural gas (LNG) are expected to play a key role in the transition, with demand rising by 50% or more over the next decade. This is to ensure grid reliability, industrial growth, and AI-driven power consumption. The report stresses industrial transformation, transport electrification, scaling up low-carbon fuels such as bioenergy and renewable hydrogen, enabling carbon removals through geological storage/natural sinks.
Strategic choices
Five key action areas for next decade
Mallika Ishwaran, Chief Economist at Shell, emphasized the need for strategic and secure measures to meet India's accelerating energy demand. She said their new Shell Scenarios Sketch provides a structured view of these choices through three scenarios Archipelagos, Surge and Horizon. The report identifies five key action areas for the next decade: accelerating low-carbon electrification, driving road transport electrification, enhancing industrial competitiveness, maintaining transition fuels where necessary and making carbon removals investible.