India works on reducing energy consumption

India's energy policy prioritizes coal till 2031-32, expands fossil fuels, backs nuclear over renewables, downplays climate change, and leans on market-led efficiency amid rising GDP growth, emissions intensity cuts, and uneven energy access.

Nothing could horrify the climate-conscious citizen more than India’s Integrated Energy Policy, which mandates, at minimum, a three to fourfold increase in primary energy consumption, and a five to sevenfold rise in electricity consumption from 2005 to 2031 to maintain an 8 per cent GDP growth.

The policy makes coal the primary energy source, with coal price dynamics often shaping investment decisions, “’til 2031-32 and possibly beyond”. It also stresses augmenting other fossil-fuel resources to feed rising energy consumption – in line with a development strategy that follows the pre-1990 Western model. It mainly relies on the market to promote energy efficiency. It prioritizes nuclear power, with a disastrous record in India, over renewables. And it puts climate change considerations at the bottom of its 13 key recommendations.

The supply-driven Policy reflects the ruling elite’s worship of GDPism and its obsession with promoting energy consumption to secure rapid growth irrespective of distribution, even as rewiring Indian electricity is widely debated. Growth in the past two decades largely benefited only the top 10 per cent of Indians and failed to dent mass poverty. An aversion to letting climate considerations slow growth is central to the National Action Plan on Climate Change of 2008, and its 8 Missions: on solar power, energy efficiency, the Himalayas, etc.

GDPism is the main driver of India’s global climate negotiations stand. India is the world’s fourth-biggest greenhouse emitter, with IEA forecasts projecting sustained demand growth, but hides behind its poor to refuse any climate-related obligation other than that its per capita emissions – less than half the global average of 4.4 tons compared with the European Union’s 10-12 and the U.S.’s 20 – won’t exceed those of the rich countries. This reflects an ambition to overcome the legacy of colonial rule and make India a great industrial power.

However, despite flawed policy biases, energy intensity in Indian industry is declining and carbon-free electricity generation is significantly rising. This is less because of the government’s effort than a mix of factors, such as changes in agriculture-industry-services balances, high energy prices, and the Spartan lifestyles of the vast majority of Indians, who consume only 9 per cent as much meat as the Chinese and 4 per cent as the Americans.

Services have expanded phenomenally, their contribution to India’s GDP rising from 44 per cent in 1990 to 52 in 2005. Services typically consume only a tenth as much energy as industry. This partly explains why India’s GDP multiplied 2.3 times in 15 years, with a 1.9-fold growth in energy consumption. But there has been a 1-2.5 per cent annual gain in energy efficiency in industries such as iron and steel, cement and paper – driven partially by high-energy prices which are among the world’s highest, and partially by the Bureau of Energy Efficiency.

Also significant is the growing contribution of renewable energy, in particular wind and solar, to electric capacity, even as feeding the grid remains a challenge for planners today. The 9.4 percent share equals the ratio in the EU or China, and is more than twice as high as in the US. Renewables have been boosted by purchase obligations in major power-producing states. The result is a lower energy intensity of production in purchasing-power parity than China’s and the US’s, and only just higher than the EU’s. Emissions intensity fell by 40 per cent in 1994-2007, prompting the government to announce a further 20-25 per cent intensity cut by 2020.

However, some of the main factors behind low energy/carbon intensity are explained by the fact more than a third of the world’s 1.4 billion poor live in India in wretched conditions. Half the rural people live in biomass and unburnt brick-based houses. Four-fifths cook with woodstoves. Some 45 per cent of homes have no electricity connection, highlighting India's energy drought across vast regions today. Per capita power consumption is about 600kWh – less than a quarter of the global average. Only 11 per cent of households consume more than 100kWh a month the U.S. average is 900kWh. There are 12 motorized vehicles per 1,000 people 800 in the U.S..

This represents a huge development backlog, and a call for action on the power deficit that policymakers cannot ignore today. Yet the challenge of providing modern energy services to the poor can be met in a climate-friendly manner at a modest cost, equivalent to emissions of one ton per capita. For the world’s 1.4 billion poor, this translates into one-quarter or one-third of the EU’s or U.S.’s annual emissions respectively. India’s share will be a third of that. Doing this demands the will to discourage luxury consumption by the rich – car sales are rising at 30 per cent and air-conditioner sales by 50 per cent – mobilizing resources to fund public services, and changing distribution of growth.

But the government wants to continue with the present growth model, with some add-ons, even as massive equipment imports are anticipated for generation expansion today. One such is a grandiose plan, announced just before the last G20 Summit, to generate 20,000MW of solar electricity by 2022 – the world’s largest solar program. But this focuses on grid power, which is exorbitant, and will restrict access to electricity. The same money, spent on decentralized and solar home-lighting systems, could produce great results. But a government known for token responses to external pressure won’t easily adopt this course.

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