The Economic Survey 2018-19, tabled before the Parliament by Finance Minister Nirmala Sitharaman, emphasised on the need to increase the energy consumption across India to better the economic status of the nation."A comparison can be made between India and China, both of which started from low levels of per capita primary energy consumption as well as per capita GDP. However, we can see that China was able to quickly increase its energy consumption and grew rapidly," the Survey stated.
"India cannot become an upper-middle-income country without (i) rapidly raising its share of the global energy consumption commensurate with its share of the global population, and (ii) ensuring universal access to adequate modern commercial energy at affordable prices," the Economic Survey further added.
The survey said that India needs to increase its per capita energy consumption by 2.5 times to increase its real per capita GDP by $5000 at 2010 prices and enter the upper-middle-class income group. "This will require huge energy resources that would also need to increase with time," the document further added.
The Survey also said that India will have to quadruple its per capita energy consumption to reach the Human Development Index (HDI) score of 0.8, which indicates high human development. As per the last HDI report, India had a score of 0.64 which showed medium human development. The Survey pointed out that a large gap exists between the rural and urban areas in terms of energy access.
Additionally, the Economic Survey added that India is undertaking the world's largest renewable energy expansion programmes. The share of renewable in total generation was around 10 per cent in the year 2018-19 compared to around 6 per cent in 2014-15. This however does not include hydro power above 25 MW.
"Now, globally, India stands fourth in wind power, fifth in solar power and fifth in overall renewable power installed capacity. The cumulative renewable power installed capacity (excluding hydro above 25 MW) has more than doubled from 35 GW on 31st March, 2014 to 78 GW on 31st March, 2019. The target is to achieve an installed capacity of renewable based power of 175 GW by the year 2022," the Survey stated.
The Economic Survey estimated that additional investments in renewable plants up to year 2022 (without transmission lines) would be about $80 billion at today's prices. An investment of around $250 billion would be required for the period 2023-2030. Thus, on an annualized basis, investment opportunity for over $30 billion is expected to come up for the next decade and beyond.
While renewable energy capacity has been expanded manifold, fossil fuel based energy is likely to continue to be an important source of power, the Survey adds.
"Almost 60 per cent of India's installed capacity is in thermal power out of which the main component is the coal based thermal power plants. India's Nationally Determined Contribution (NDC) under the Paris Agreement states that India will achieve 40 per cent installed capacity of power from non-fossil fuels by 2030. While there has been tremendous increase in the renewable energy capacity, fossil fuels, especially coal, would continue to remain an important source of energy," the Survey stated.
The Survey also cautioned against abandoning coal-based power plants without utilising their full potential as it would adversely impact the banking sector.
(Edited by Vivek Punj)