India will overtake China as the biggest driver of growth in energy consumption by 2040, the World Energy Outlook report by the International Energy Agency (IEA) has said.
The report says China’s use of coal will have reached a plateau approximately at levels it uses today, and overall energy demand growth will ease before it falls. India, on the other hand, with its high economic growth, a large, growing population and rising per capita energy consumption, will push energy demand to “two-and-a-half-times current levels”. The report says Asia, including India, will be the leading demand centre for every major element of the world’s energy mix in 2040—oil, gas coal, renewables and nuclear energy.
This year, India is the special focus of the WEO 2015 report. It predicts that government initiatives such as the emphasis on programmes such as “Make in India” will boost energy demand rapidly. The head of the IEA, Fatih Birol said the agency expected coal and oil consumption to grow significantly in India, but India was also focusing on renewable energy, with a pledge to have 40 percent of the power sector capacity based on non-fossil fuels by 2030.
The report also said the extended period of low oil prices would benefit consumers, but would trigger energy-security concerns by increasing reliance on a small number of low-cost producers or risk a sharp rebound in prices if investment fell short.
WEO 2015 expects world demand for energy to grown by a third between 2013 and 2040, with net growth driven entirely by developing countries. WEO-2015 highlighted that the links between global economic growth, energy demand and energy-related emissions will weaken, with some markets (such as China) undergoing structural change in their economies and others reaching saturation in demand for energy services.
All will adopt more energy-efficient technologies, though a prolonged period of lower oil prices could undercut this crucial pillar of the energy transition; diminished incentives and longer payback periods mean 15% of the energy savings would be lost in a low oil-price scenario, the report said.
Lower prices alone would not have a large impact on the deployment of renewables, but only if policymakers remain steadfast in providing the necessary market rules, policies and subsidies, according to the report.