The International Energy Agency (IEA) predicts that by 2030, India will be the world's third-largest energy consumer, accounting for 25% of global energy growth and inflation. According to the IEA's India Energy Outlook 2021, which was released on Tuesday, India's energy consumption will nearly double as GDP grows to an estimated $8.6 trillion by 2040 under the country's current national policy scenario. An energy agency and policy adviser to members of the Organization for Economic Cooperation and Development said that by 2040, global GDP growth would add the equivalent of another Japan to the global economy. While domestic oil and gas production has remained stagnant for years despite government policies to promote petroleum exploration and production as well as renewable energy, India's growing energy demands will increase its reliance on fossil fuel imports.
A report by the International Energy Agency (IEA) estimates that India's oil demand will rise to 8.7 million barrels per day (bpd) by 2040 from about 5 million bpd in 2019. At the same time, the country's refining capacity will increase from 5 million barrels per day (bpd) to 6.4 million and 7.7 million barrels per day (bpd) by 2040. It currently imports about 76% of its crude oil requirements, making it the world's second-largest net oil importer after China. By 2040, the IEA predicts that our reliance on foreign oil will rise to 90 percent. Demand for crude could double India's import bill to about $181 billion in 2030 and nearly triple it to $255 in 2040 from 2019, according to the International Energy Agency (IEA). In order to increase the use of LNG, the world's fourth-largest LNG importer, which currently imports about half of its natural gas needs by tanker, is investing billions of dollars in infrastructure. According to the International Energy Agency (IEA), LNG imports will quadruple to 124 billion cubic meters (bcm) by 2040, or about 61% of global gas demand. By 2030, imports would account for 58 percent of global gas consumption, up from the current level of 76 billion cubic meters. India's oil demand, according to OPEC's report, is expected to rise from 3.9 million barrels of oil equivalent per day in 2015 to 9.9 million mboe/d in 2040.
Demand in India is expected to grow at a 3.7% average annual rate, with a net increase in demand of 5.8 mb/d. When demand grows at this rate for the remainder of the forecast period, India will likely surpass the 10 mb/d mark (2015-2040). According to the report, oil will remain the country's second-largest source of energy, growing from 23.2% in 2016 to 25.2% in 2040. Coal will continue to be India's primary energy source until 2040 when its share will rise to 46.4% from 44.9% in 2015. As predicted by WOO 2040, India will import more crude oil in 2040 than it produced in 2017, falling to 0.4 million barrels per day. This shows a rise in India's crude oil imports through 2040.
When road mobility measures collapsed, the demand for gasoline fell by around 13% (3,1 Mb/d). Product demand for personal protective equipment (PPE) and other medical and hygiene-related goods has increased, while those most directly associated with the petrochemicals industry (naphtha, ethane, and LPG) have remained unchanged. Natural gas, on the other hand, showed much more resiliency. In 2020, gas consumption is expected to be down 2.3% (81 bcm), which is comparable to the drop experienced in 2009 after the financial crisis. Gas consumption increased by almost 7% in China but dropped by nearly 2% in the rest of the world. Because of the significant decline in gas costs, natural gas has been able to gain a share in the US power market and compete in the EU despite the threat of climate change. In 2020, it is expected that electricity consumption would have fallen by the least amount of all the major components of final energy demand, by only 0.9%. With decreasing power consumption in industrial and commercial buildings partly offset by increasing household use by home-based employees and locked-down families, the relative robustness of electricity use was helped.
First, let's talk about oil. Global oil output is projected to have decreased by 6.6 Mb/d in the last year, which is the biggest decline since World War II. A year is divided into three parts to better understand the timing and content of the supply response. Phase 1 spans the months of December 2019 to April 2020, when the worldwide epidemic begins. When demand fell by more than 20 Mb/d before COVID-19 in April, the world's oil consumption practically crashed. Out of this world compared to anything that has ever happened before. The first reaction from the supply side was mediocre at best. In actuality, it worked against us. OPEC was the apparent supply source that could respond fast. The crucial OPEC+ meeting in early March ended in dispute, however, as a short price war broke out, with supply actually rising for a period of time. Over the last four months, oil stocks have grown at an unprecedented rate, adding almost 750 million barrels to the global total. This level of imbalance has never been seen before, and it created major logistical problems in terms of storage availability as well as surplus goods' ability to reach storage fast enough. Phase two, which lasted from April through August, witnessed a substantial increase in supplies. OPEC+ agreed to reduce oil output by 9.7 Mb/d from May to June, which was subsequently extended to July as a major supply response.
It's easy to overlook the substantial change in the generating mix when looking at total electricity production since it's resilient. While total power consumption fell, renewable energy production (wind, solar, biofuels, and geothermal energy, excluding hydroelectricity) had its largest-ever rise despite this (358 TWh). Both wind (173 TWh) and solar (148 TWh) generated more electricity, which fueled the expansion. Positively, renewables' proportion of worldwide power grew at its quickest rate ever. This is a continuation of the rapid expansion observed over the last several years. Wind and solar power have more than doubled in the last five years, making up around 60% of the increase in worldwide power production. One of the biggest losers in renewable energy last year was coal-fired power, which saw one of the steepest drops on record (405 TWh, 4.4 percent ). Beyond decreasing electricity demand and increased renewable energy installations, coal also suffered from a decline in competitiveness with natural gas.
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