Electricity demand in India, which consumed more than 1,600 billion units in FY24, is expected to grow at 4 per cent annually through 2050, the International Energy Agency (IEA) said on Wednesday.
The IEA in its world energy outlook 2024 has projected that increasing electrification, especially of new end-uses, is set to change the magnitude and patterns of power demand.
India is set to become the third-largest electricity consumer in the world by 2050 on the back of growth in demand of over 4 per cent a year in all scenarios — Stated Energy Policies Scenario (STEPS), Announced Pledges Scenario (APS) and the Net Zero Emissions (NZE), the report noted.
India’s peak electricity demand rose 13 per cent year-on-year (y-o-y) to 243 gigawatts (GW) in FY24. Its energy requirement grew 7.5 per cent y-o-y to 1,626 BU in the same period.
The report also pointed out that emerging markets and developing economies account for about 70 per cent of the additional electricity demand through to 2050 across all scenarios. China alone contributes about 45 per cent of the increase to 2030 and around 25 per cent between 2030 and 2050.
Demand patterns
Electricity load patterns will look very different in 2050 from today’s limited variations across the day, but action can be taken to manage them, the report further stated adding that, heat pumps and air conditioners will increase winter and summer demand, while EV charging will drive a surge in the evening.
In India, the daily variability of electricity demand averaged 15 per cent in 2023 and is set to almost triple by 2050. Cooling will become the most important driver of daily variability in demand, though higher levels of appliance ownership and EVs are set to affect it as well.
“The population size and the scale of rising demand from all sectors mean that India is poised to experience more energy demand growth than any other country over the next decade,” the report said.
In the STEPS, India is on track to add over 12,000 cars every day to its roads over the period to 2035. Built space is set to increase by over 1 billion square metres annually, which is larger than the total built space in South Africa today.
By 2035, iron and steel production are on track to grow by 70 per cent; cement output is set to rise by nearly 55 per cent; and the stock of air conditioners is projected to grow by over 4.5 times, resulting in electricity demand from air conditioners in 2035 that is more than Mexico’s total expected electricity consumption that year.
Total energy demand in India increases by nearly 35 per cent by 2035 in the STEPS, and its electricity generation capacity nearly triples to 1,400 GW by 2035.
Coal use
Coal is set to retain a strong position in the energy mix in India over the next decades. In the STEPS, nearly 60 GW of coal-fired capacity is added net of retirements by 2030, and electricity generation from coal rises by over 15 per cent, the IEA said.
Generation from coal remains over 30 per cent higher than that from solar PV even in a decade in which solar PV accounts for twice as much capacity, owing to the lower capacity factor of solar installations.
Coal has been playing a prominent role to meet energy demand in industry, providing 40 per cent of its energy needs in 2023. By 2035, the consumption of coal in industry would have grown by 50 per cent, with its share in total industry demand remaining at similar levels as today.