Energy Policy Challenges

While acknowledging the steps taken towards a coherent energy policy (see above), this section recapitulates the main challenges which face India in the energy sector, in order to highlight the key areas for action. To meet India's large energy infrastructure investment needs will require the mobilisation of public and private funds. To attract private investment, a transparent and predictable investment framework must be established. Reducing the number of people who do not have access to...

Final Energy Consumption

Total final energy consumption increases at a similar rate to primary energy demand, more than doubling between 2005 and 2030. At 3.0 , the annual rate of growth is lower than that from 1990 to 2005, when it averaged 3.5 . Total final consumption of coal grows by 4.4 per year on average between 2005 and 2015, before easing off after 2015. Most of the increase in coal use to meet final energy demand comes from industry. Final gas consumption increases nearly four-fold by 2030. Final oil demand...

Box Household Use of Biomass and Coal

The proportion of the population using coal and biomass (everything from firewood to manure) for cooking is one of the indicators used to assess progress towards the Millennium Development Goals. The World Health Organization (WHO) estimates this share at 80 in China (WHO, 2007). For biomass alone, we estimate the figure to be 37 , or 483 million people. Most of them - an estimated 428 million - live in rural areas. We project the total number of people relying on biomass for cooking to fall to...

Demographic Assumptions

Population growth affects the size and composition of energy demand, directly and through its impact on economic growth. Our population assumptions are drawn from the most recent United Nations projections (UNPD, 2007). World population is projected to grow by 1 per year on average, from 6.4 billion in 2005 to almost 8.2 billion in 2030. Population growth slows over the projection period, in line with trends of the last three decades from 1.1 per year in 2005-2015 to 0.9 in 2015-2030 (Table 1)....

Defining Energy Security

Energy security, broadly defined, means adequate, affordable and reliable supplies of energy. It matters because energy is essential to economic growth 1. The term consuming countries is used to describe countries that rely on imports to meet at least part of their energy needs net of exports. Producing countries refers to net exporters. and human development. Yet no energy system can be entirely secure in the short term, because disruptions or shortages can arise unexpectedly, whether through...

Health and Energy Poverty

There is a strong correlation between disease, such as chronic bronchitis, tuberculosis, cataracts and acute respiratory infection (ARI), and exposure to indoor air pollution (IAP) from burning biomass fuels on unventilated, inefficient stoves. According to the World Health Organization, the use of biomass for cooking and heating causes over 400 000 premature deaths per year in India (Figure 20.2). The number of such deaths in India each year is equivalent to the population of Luxembourg. Most...

International Energy Agency

The International Energy Agency (IEA) is an autonomous body which was established in November 1974 within the framework of the Organisation for Economic Co-operation and Development (OECD) to implement an international energy programme. It carries out a comprehensive programme of energy co-operation among twenty-six of the OECD thirty member countries. The basic aims of the IEA are I To maintain and improve systems for coping with oil supply disruptions. I To promote rational energy policies in...

Energy Policy Challenges and Uncertainties

The energy-related issues that China faces are familiar the world over, although the magnitude and the speed of change the country is experiencing are unprecedented. As in any country, China's energy-policy challenges are largely framed by national socio-economic policy goals. Paramount among them is the need to sustain rapid economic development and growth in output, but in a 1. The policies mentioned in this section are not meant to be exhaustive. More detailed sectoral policies can be found...

Box Feedstock for Indias Fertilizer Industry

The government has in the past heavily subsidised fertilizer use in India, because of its importance in maintaining food self-sufficiency. The recent surge in oil prices, however, has increased the financial burden on the government, prompting it to reduce provision for payments to fertilizer producers in the 2007 08 budget. But fertilizer prices have not been allowed to increase and now the producers are facing large losses. The share of energy in the total cost of ammonia production in India...

Measuring Energy Security

There is no single universally recognised way of measuring a country's level of energy security. Such assessments are normally a matter of expert judgment, as the perceived risk of a serious disruption or shortfall in investment for any given country or at any given time depends on a large array of different factors. Some of these factors, such as political stability, are inherently difficult to measure. Nonetheless, most discussions centre on the following variables, or indicators Diversity of...

But Threats to the Worlds Energy Security Must be Tackled

Rising global energy demand poses a real and growing threat to the world's energy security. Oil and gas demand and the reliance of all consuming countries on oil and gas imports increase in all three scenarios presented in this Outlook. In the Reference Scenario, China's and India's combined oil imports surge, from 5.4 mb d in 2006 to 19.1 mb d in 2030 - more than the combined imports of Japan and the United States today. Ensuring reliable and affordable supply will be a formidable challenge....

Box Coal Based Alternative Fuels

China is becoming increasingly dependent on oil imports, so the attraction of technologies that can convert coal into various liquid fuels is clear. The technology is available and the economics have become more favourable in recent years, due to surging oil prices. Some such fuels can be used directly as transport fuel, while others ease oil demand by substituting for petrochemical feedstock. For example, coal gasification can replace oil gasification to produce syngas for fertilizer...

Unchecked Growth in Fossil Fuel Use will Hasten Climate Change

Rising CO2 and other greenhouse-gas concentrations in the atmosphere, resulting largely from fossil-energy combustion, are contributing to higher global temperatures and to changes in climate. Growing fossil-fuel use will continue to drive up global energy-related CO2 emissions over the projection period. In the Reference Scenario, emissions jump by 57 between 2005 and 2030. The United States, China, Russia and India contribute two-thirds of this increase. China is by far the biggest...

Renewable Energy

Renewable energy supplied nearly a third of India's energy needs in 2005. Most of this was traditional biomass. Hydropower was the second-largest source, while wind power is emerging as a relatively important source of electricity.15 Total renewable energy demand is projected to rise to 225 Mtoe in 2030. India consumed a total of 158 Mtoe of biomass in 2005, most of it by rural households. At least three-quarters of rural households (668 million people) use traditional biomass fuels, fuelwood,...

Chapter Overview of the Energy Sector

8.1 Key Energy Indicators for China 263 8.2 Selected Targets for Improvements in Energy Efficiency in the 11th Five-Year Plan for Energy 276 Chapter 9. Reference Scenario Demand Projections 9.1 Key Assumptions for China's Energy Projections in the Reference Scenario 285 9.2 Energy Intensity in Selected Power-Generation Technologies and End-Use Sectors in the Reference Scenario 286 9.3 China's Primary Energy Demand in the Reference Scenario 287 9.4 Industrial Energy Demand in the Reference...

Chapter Energy Trends in China and India

2.1 Shares of China and India in the Increase in World Primary Energy Demand by Fuel in the Reference Scenario, 2005-2030 118 2.2 Primary Oil Demand in China and India by Sector 2.3 Fuel Mix in Power Generation in China and India 2.4 Road Transport Fuel Consumption in China and India 2.5 Net Oil Imports in China and India in the Reference Scenario 125 2.6 Coal Balance in China and India in the Reference Scenario 127 2.7 Cumulative Investment in Energy Supply in China and India by Fuel in the...

Chinas Energy Sector

In less than a generation, China has moved from being a minor and largely self-sufficient energy consumer to become the world's fastest-growing energy consumer and a major player on the global energy market. Soaring energy use is both a driver and a consequence of the remarkable growth in the country's economy especially in heavy industry. For many years, China was able to meet its rapidly growing energy needs entirely from domestic resources, so its impact on global markets was minimal. That...

Residential Sector

Energy consumption in the residential sector grew on average by 1.6 per year in 1990-2005 and is projected to maintain this growth rate from 2005 to 2030.12 Its share of total final consumption will decrease from 44 in 2005 to 29 in 2030. Higher incomes and urbanisation progressively reduce reliance on traditional biomass, including fuel wood, dung and agricultural waste. These resources dominate residential energy consumption today, accounting for 79 of residential energy demand. That share...

Share of Natural Gas in Total Primary Energy Demand in China and India

2005 2030 2030 2030 Reference Alternative High 2005 2030 2030 2030 Reference Alternative High 2005 2030 2030 2030 Reference Alternative High 2005 2030 2030 2030 Reference Alternative High Although their current import needs are small in volume terms, the importance of China and India in global gas trade will increase particularly towards the end of the Outlook period. In the High Growth Scenario, their combined share of world inter-regional trade reaches 29 in 2030 11 percentage points more...

Power Generation Economics

Signal Bars

The costs of alternative generation options have been assessed, on the basis of key parameters related to fuel prices, capital costs, capacity factors and discount rates. The analysis reveals that, in the current Chinese context and without a price on CO2 emissions, coal is likely to be the most competitive electricity supply source, followed by nuclear and advanced coal. Gas turns out to be the most expensive option, with costs ranging from 4.7 to 7.7 US cents per kWh Figure 10.17 . Coal can...

Box Regional Air Quality

Rising energy consumption and the continuing heavy reliance on coal is contributing not just to higher CO2 emissions but also to worsening air pollution in China and India. Fossil-energy use gives rise to various toxic and noxious emissions, notably SOx, NOx, carbon monoxide and particulate matter soot . These emissions contribute directly to health problems, ground-level and atmospheric ozone and acid rain. Many of these problems are of a local nature. Despite some improvements in recent...

Gun Fuel Shares in Household Energy Consumption for Cooking in India by Area in the Reference Scenario

World Energy Consumption Urban Rural

2000 2005 2015 2030 2000 2005 2015 2030 Fuelwood BCoke and coal BDung I Kerosene BLPG I Electricity 2000 2005 2015 2030 2000 2005 2015 2030 Fuelwood BCoke and coal BDung I Kerosene BLPG I Electricity Sources NSSO 2007 and IEA analysis. Electricity use by Indian households is growing rapidly, even in rural areas, though most of the increase in demand in absolute terms is in towns and cities. Lighting accounts for about 70 of electricity use in the residential sector. Refrigeration and air...

Methodology and Assumptions

As in previous Outlooks, a scenario approach has been adopted to examine future energy developments. The projection period runs to 2030. The core projections are derived from a Reference Scenario, which assumes that there are no new energy-policy interventions by governments. This scenario is intended to provide a baseline vision of how global energy markets are likely to evolve if governments do nothing more to affect underlying trends in energy demand and supply, thereby allowing us to test...

Electricity Pricing

Historically, until at least 2002, coal was sold to generators at prices below market values. Prices were determined annually at an Annual Coal Procurement Conference run by central government authorities. In 2004, the NDRC adopted a new scheme linking coal prices for electricity generation to on-grid wholesale power prices. The scheme allows generators to pass through to consumers approximately 70 of any increase in coal prices. An increase of 5 or more triggers an automatic adjustment to...

On Energy Poverty

Part A Global Energy Prospects Impact of Developments in India Energy Trends in China and India 117 Alternative Policy Scenario 130 International Trade and the World Economy 135 China and India in the Global Economy 136 Explaining China's and India's Economic Growth 136 International Trade and Financial Flows 140 Global Economic and Energy Market Linkages 145 Simulating the Impact of Faster Growth in China and India 149 Energy and Other Commodity Prices and Expenditures 151 Economic Growth and...

Iron and Steel

The iron and steel sector is the largest industrial consumer of energy in China, accounting for 28 of total industrial energy use in 2005. It grew by 14.5 per year between 2000 and 2005, while steel production grew by more than 20 per year in the period. China is currently the world's largest producer of steel, accounting for 34 of world steel production in 2006 World Coal Institute, 2007 . The average efficiency of medium and large plants in China is lower than that of plants in other...

Acknowledgements

This study was prepared by the Economic Analysis Division of the International Energy Agency in co-operation with other divisions of the IEA. The Director of the Long-Term Office, No van Hulst, provided guidance and encouragement during the project. The study was designed and managed by Fatih Birol, Head of the Economic Analysis Division EAD . Other members of EAD who were responsible for bringing the study to completion include Maria Argiri, Raffaella Centurelli, Michael-Xiaobao Chen, Laura...