Energy Consumption

Primary Energy Demand of India

PrimaryPrimary
Energy Energy
Demand Demand Primary Energy Demand of India
of Indiaof2030(Estimated)
India 2010
2010 2030(Estimated)
Coal CAGR % Coal
2%
Oil 2%
5 4%
11%
23% 11% Oil
4% 4.1 1%
23%
41% 1%
Gas 3.9 Gas
1% 7%
2% 3.8
Hydro Hydro 50%
1% 8 41%
8% 7%
1% Renewables 8.4 Renewables
2% 50% 25%
Nuclear Nuclear
 Ample Opportunity
24% to increase1%India’s Coal Production - estimated coal reserves of 293 billion tonnes
8% Source: IEA ,McKinsey Analysis
 Source: IEA ,McKinsey Analysis
Substantial Shale gas potential, even though reserve estimates vary widely


The likely Energy-scape in 2030
25%
Conventional oil and gas still holds great potential in India, especially via the redevelopment and intensive exploitatio
 of existing
India’s energymature
demandbasins, provided
to reach viable pricing
1500 million and
tones of oiltaxation
24% mechanisms
equivalent by 2030 are in place
 Nuclear and other Renewable energies is expected to grow fastest at a CAGR
Source:of
IEAmore
,McKinseythan
Analysis8%
 Momentum in increasing wind and solar capacities and set global cost benchmarks
Source: IEA ,McKinsey Analysis

 Coal
The bulk of primary energy OilOil come
Coal would Gas Hydro
Gasfrom Coal, OilRenewables
Hydro and Gas
Renewables Nuclear
Nuclear Non-Commercial
Non-Commercial
 Unique opportunity to create stronger and more secure supply partnerships with oil and gas supplying countries in th
Middle
 Energy East and
import Africa, who
dependence willincrease
would be seeking largeby
to 51% and stable
2030 frommarkets
around to30%
absorb imports displaced by the US
presently
 Unlock
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Enable globalisation
power consumption
of gas
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Indian
production
energy
Energycompanies
like Shale, CBM
 US is expected Develop to reduce
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
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Oil
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nuclear accident which has been a deterrent towards investment.
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athas
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of
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and
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develop
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have been
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itspenalties
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such as the revamped Decentralized Distribution Generation scheme
 India
energy
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remove
Encourage
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inNepal,
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Australia(38%
Indian
investments
corporate
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refining
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petrochemicals
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wind
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modal
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onefficiency
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domestic
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make the

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necessary
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arehigh required
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publicto
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to Japan
remove
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to India
renewable
important
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by
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step hydro East
considering andof
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bureaucratic
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ships nuclear
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and
India’s
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Russia–EU,
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atLand
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Continue
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private
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to
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makeresponsibility Innovative
to
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America
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coal
upstreamto Capacity
improve
gasThoriumand
and the
 corporate
India
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development
the
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on the
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budgets
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unexplored
administration – by
Energy
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reserves
enforcing working
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bound deemed
midstream positions
freedomtechnology
to marketin gas the US and Canada
breeder
approvals with management committee accountability,
 Expand
Planning intofor LACIntegrated
for collaboration River inBasin E&P of oil and gas with
development to better
improve tiesriver
with
countries
management like Mexico
and address,Venezuela interetc state disputes
 Develop
Increasing
Reducing
Securing
Alternate
Oil
Demand
Supply
Supply
Sources
Increasing Unlock unconventional gas production like Shale, CBM
Supply
Increase Coal Production to 1200mtpa by 2030
 Enforce Renewable
Expand scope of ShalePurchase
gas policyObligations unilaterally
to include private by mandating
and public sector
 states
Accelerate
Ensure thedevelopment
viability of of 180-odd
redeveloping Coal
its India
existingprojects
mature which
to meet RPO targets and enforcing penalties for noncompliancebasinsare
andat
various
removestages
 Ensure of approval
the remaining
sufficient and
anddevelopment
bottlenecks
fiscal to resource development
infrastructural incentives to attract
 Invest in and
investment
Support oil low wind speed technology
conventional with focus on building domestic
 Fast-track
Allow 220 pricing
market captive coal
of crude oilgas
blocks
R&D and manufacturing capabilities
production
which
from are eitherblocks,
nomination waitingtofor approval
make the
ornecessary
landfull
 Allow acquisition
high cost
exploration andinvestments
exploitation of and the related
all resources technology
in NELP blocks
development
 Introduce a peaking power policy to allow developers to invest in
 storage
 Allow market
Allow private
to makeplayers to explore,
solar viable
determined develop
forpricing
evening peaks
for and market coalgas
unconventional to and
improve
the
Progressing
 freedom
the
Streamline on
utilization the
if
contractrenewable
country’s
to market gas unexplored
administrationSources
reserves
by enforcing time bound deemed
approvals with management committee accountability,
Reducing Reduce power consumption
Demand
Lighting
 up a50,000
Incentivise villages through
shift in long-distance cargo fromoffroad
gridtosolar
rail
 Target energy reduction in power intensive industrial segments through
 Fine-tune, scaletargets,
year on year up and time
roll out
of models thatand
day tariffs have been successfully
incentivising piloted,
production of
 such
Implement
as the policy to promote
revamped higherDistribution
Decentralized tonnage commercial
Generation vehicles
scheme
energy efficient industrial equipment

 Implement
Devise
Change bio-ethanol
interventions/
transport policy for and
incentives
modal mix blending bio-ethanol
for moving
rural in petrol &
micro-enterprises
introduce efficiency diesel
and other
norms
 Drive energy efficiency in agriculture, towards electric pump
anchor loads (e.g. telecom towers) to shift to renewable solutions
 Incentivise faster adoption of electric vehicles to shift demand from
 Reducing AT&C losses: India’s AT&C losses at about 23–24 per cent
 Channelize
liquids to power, especially
and attract fundsduring
fromoff-peak
central hours
and state budgetary allocations,
corporate social responsibility budgets
Securing
Oil Supply
Enable globalisation of Indian energy companies
 US is expected to reduce its oil import, hence Middle East and Africa nations
will seek new stable large markets in the East
 obtain Diversify
Ensurea financial
foothold in International
strength
major of energy
energy Oilinvolving
companies
projects & Gas Sources
to enable
Centralthem
Asianto invest in
countries
newensure
and capacity, make
access toacquisitions, take risks,
the hydrocarbons and develop
in Central Asia technology
 Encourage joint companies
Enable energy investmentto with
make Middle
crossEast investing
border in Indian
corporate refining and
acquisitions
petrochemicals and Indian upstream investments in the Middle East
 Create
Strengthen
shared processes of public between
energy infrastructure sector India
companies
and theby reduction
Middle East andof
bureaucratic
dedicated mega layers
shipsoflike
decision for efficient
Russia–EU, capital Myanmar–China
Russia–China, infusion etc
 Continue to expand its presence in North America through upstream and
midstream positions in the US and Canada
 Expand into LAC for collaboration in E&P of oil and gas with better ties with
countries like Mexico ,Venezuela etc
Develop
Nuclear Energy
Alternate
 Over 93% of river basin in the NE region, primarily along the Brahmaputra
Sources  India’s
river, is Civil Nuclear Liability law holds suppliers responsible for a
untapped
nuclear accident which has been a deterrent towards investment.
 Extended
Government tax holidays
incentives in addition
with
Solarpreferential
to the existing
Energy tariffs
10 year
and periods
Renewable
and
Review
 loans
Nepalathasof the same
huge Hydro is needed
power reserves
Purchase concessional
Obligation would
rates as
support
per thisofsegment
JNNSM about 83000 MW capacity using
only about 600 MW. Power buying agreements to build hydro-power
 India
plantshasandlimited
buy Uranium
a lesserreserves – Uranium deal with Australia(38%
 State
Generation
level solarat Incentive
Based policies price
are can
schemes
neededtobeoffset
done
to with
push
the Nepal,
policy Bhutan
investments and and
uncertainties
global deposits)
Bangladesh was an important step to secure steady Uranium supply
and
Renewable
lack of initiatives
Purchase Obligation
Wind Energy

 Civil Nuclearare
Initiatives cooperation
required with
to Japan
remove– Next
the important
barriers step considering
to hydro power
Japan’s expertise in nuclear technology
development which includes Streamlining Land acquisition, Facilitating
market development, Innovative Fiscal incentives and Technical Capacity
 India has huge Thorium Hydro
development ReservesEnergy
– Expedite working on Thorium
breeder technology
 Planning for Integrated River Basin development to improve river
management and address inter state disputes
The Consumption Pie
Energy Fuel Mix Projection
Primary Energy Demand of India Primary Energy Demand of India
2010 2030(Estimated)
Coal
Coal CAGR % 2% 11%
5 Oil 4%
23% Oil 1%
4.1 Gas
41%
Gas 3.9 7%
1%
3.8 Hydro 50%
2% Hydro
1% 8 Renewables
8%
Renewables 8.4
25%
Nuclear
Nuclear
24%
Source: IEA ,McKinsey Analysis
Source: IEA ,McKinsey Analysis

The likely Energy-scape in 2030

 India’s energy demand to reach 1500 million tones of oil equivalent by 2030
 Nuclear and other Renewable energies is expected to grow fastest at a CAGR of more than 8%

 The bulk of primary energy would come from Coal, Oil and Gas

 Energy import dependence would increase to 51% by 2030 from around 30% presently
 Ample Opportunity to increase India’s Coal Production - estimated coal reserves of 293 billion tonnes

 Substantial Shale gas potential, even though reserve estimates vary widely

 Conventional oil and gas still holds great potential in India, especially via the redevelopment and intensive exploitation
of existing mature basins, provided viable pricing and taxation mechanisms are in place

 Momentum in increasing wind and solar capacities and set global cost benchmarks

 Unique opportunity to create stronger and more secure supply partnerships with oil and gas supplying countries in the
Middle East and Africa, who will be seeking large and stable markets to absorb imports displaced by the US