3. ENERGY AND SUSTAINABLE DEVELOPMENT

Renewables: SDG 7.2 progress and outlook

The official SDG 7.2 tracking methodology accounts for all renewables, including the use of traditional biomass. On this basis, the share of all renewables in India’s total final consumption (TFC) in 2018 stood at 28.8%, as traditional biomass still plays an important role, notably for cooking. However, the use of traditional biomass for cooking is a major source of indoor air pollution.

Only modern renewables (outside traditional biomass) will play a role in delivering sustainable development and energy access for isolated areas (see below for further analysis of air pollution and climate change as well as Chapter 5 on renewable energy). The share of modern renewables (which includes hydro but excludes traditional biomass) accounted for 9.8% of TFC in 2018, at the same level as 10 years ago (as energy demand has been on a steep rise).

Reflecting the extensive growth potential for modern renewables, the government set a renewable capacity goal of 175 GW by 2022, targeting 60 GW of utility-scale solar photovoltaic (PV), 40 GW of rooftop solar PV, 60 GW of wind power, 5 GW of small hydro and 10 GW of bioenergy. It plans for 227 GW by 2022 (114 GW of solar, 67 GW of wind, 31 GW of floating solar and offshore wind, 10 GW of bioenergy and 5 GW of small hydro). By 2019 India had a total installed renewable electricity capacity of 80 GW, and in the same year India announced its ambition to increase its renewable energy capacity to 450 GW.

Figure 3.3 Modern renewables and renewables including traditional biomass, share of TFC, 2000-30

Note: STEP = Stated Policies Scenario, a projection based on existing policy frameworks and announced policy intentions.

Sources: IEA (2018c), Renewables 2018, IEA (2019b), World Energy Outlook 2019.

IEA projections based on India’s stated policies show the share of modern renewables rising to 13% of TFC by 2030 and 17.5% by 2040. The share of traditional biomass in TFC is expected to decline from 22% today to 12% in 2030 (and 8% in 2040). Electricity generation from renewables sees considerable growth, from 18% today to around 45% of electricity by 2040, while the share of coal declines from 74% today to 46% in 2040. This calculation is based on India meeting its renewable capacity target of 175 GW by 2022, and seeing capacity growth to almost 430 GW by 2030 and 800 GW by 2040. With this growth, India will fulfil the SDG 7.2 objective of substantially increasing the share of renewables in its energy mix.

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3. ENERGY AND SUSTAINABLE DEVELOPMENT

Energy efficiency: SDG 7.3

Energy intensity in India, defined as the ratio of primary energy supply to gross domestic product (GDP), stood at 0.09 toe/USD 1 000 (2018) in 2017, well below the world average of 0.107 toe/USD 1 000 (Figure 3.4).

Figure 3.4 Energy intensity (TPES/GDP) in India, the region and the world

Notes: TPES = total primary energy supply; STEP = Stated Policies Scenario, a projection based on existing policy frameworks and announced policy intentions

Source: IEA (2019b), World Energy Outlook 2019; IEA (2019c), Energy Efficiency 2019.

A decrease in energy intensity (Total Primary Energy Demand TPED/GDP) of 27% over the past ten years has taken place against the backdrop of a near doubling of India’s primary energy demand, driven by strong economic growth rates of 6.8% on average since 2010. The gradual decoupling of energy use and economic growth in India resulted from energy efficiency improvements and, to smaller degree, from structural changes in its economy. The IEA estimates that energy efficiency improvements in India since 2000 have avoided an additional 15% of energy use in 2018 (IEA, 2019c).

Efficiency gains were largely achieved in the industrial and service sectors, as well as in residential buildings. IEA analysis confirms that such efficiency improvements avoided nearly 300 Mt CO2-eq in emissions or 14% more carbon dioxide (CO2) emissions in 2018, 8% of more oil and 12% of more gas imported that year, while structural changes in the economy were responsible for only avoiding 1% more energy use in 2018. These structural changes entail the shift of economic activity from energy-intensive industry sectors to lessintensive manufacturing and service sectors. However, total energy efficiency improvements were almost completely offset by other factors that boosted energy use, specifically increases in residential building floor area and appliance ownership, shifts to less-efficient modes of transport, and decreasing vehicle occupancy rates.

The GoI has introduced a range of new policy measures to further improve the energy efficiency of its economy. IEA estimates suggest that these will result in an energy intensity reduction of over 30% by 2030 and almost 50% by 2040. Given that announced policies result in an estimated improvement in energy efficiency of 3.3% per year until 2030, the GoI is on track to surpass the global SDG 7.3 of doubling the global rate of improvement in energy efficiency to 2.7% per annum.

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