Difficult target. Share of gas in India’s primary energy mix at 7-11% by 2050: bp Energy Outlook

The bp Energy Outlook 2023 projects that the share of natural gas in India’s primary energy mix, which currently stands at around 6.5-6.7 per cent, is expected to grow to just 7-11 per cent by 2050.

This means that the world’s third largest energy consumer may fail to achieve its target to raise the share of natural gas in the total energy mix to 15 per cent by the end of the current decade.

“The share of natural gas in total primary energy grows in all scenarios, increasing from 5 per cent in 2019 to 7-11 per cent in 2050, supported by industry and heavy road transport demand,” the bp Energy Outlook – 2023 report said.

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Natural gas is the only fossil fuel that grows (in absolute terms) throughout to 2050 in all scenarios, it added.

Three scenarios

The outlook’s three main scenarios are designed to explore a range of possible outcomes for the global energy system over the next 30 years. The ‘Accelerated’ and ‘Net Zero’ scenarios explore how different elements of the energy system might change in pathways that achieve substantial reductions in carbon emissions by 2050 by around 75 per cent in Accelerated and over 95 per cent in Net Zero. While the ‘New Momentum’ scenario is designed to reflect the current broad trajectory of the world’s energy system, it explained.

The outlook projects India’s natural gas consumption at 235 billion cubic meters (BCM) under ‘Accelerated’ scenario as well as 177 BCM and 286 BCM under ‘Net Zero’ and ‘New Momentum’ scenarios, respectively. Besides, gas production grows under all scenarios, up to 59-132 BCM in2050 (from 27 BCM in 2019).

India consumed 55.54 BCM of gas during April-February in FY23, a decline of 5.4 per cent on an annual basis.

Challenging endeavour

Last month, in a podcast with businessline, former Planning Commission Member Kirit Parikh had also said that the target to reach 15 per cent share of natural gas is challenging. Last month, the government accepted recommendations of the Parikh committee on fair pricing of natural gas.

“As far as gas is concerned, it constitutes around 6.5 per cent of our energy basket. Out of which nearly 45-50 per cent of gas is imported. So, domestic production constitutes less than 4 per cent. Now to increase the share of natural gas to 15 per cent by 2030 is a very very ambitious goal,” he pointed out.

Similarly, Fitch Ratings in a January report said that price volatility and infrastructure constraints will challenge India’s target of increasing natural gas’ (NG) share of energy to 15 per cent by 2030 despite resilient demand from city gas distribution (CGD) and rising domestic production.

“Fitch Ratings believes that India’s target to increase the share of natural gas in energy mix to 15 per cent by 2030, from 6 per cent in 2017, remains exposed to risks of lower demand from price volatilities, and infrastructure constraints on importing and distributing NG. Progress on the target has been minimal – 6 per cent share in 2021 – as NG growth has not managed to outpace total energy growth,” it added.