Energy is the key factor for the development of any Economy.Its requirement spreads from the simple work of transport to the complexity of Industrial production. It is an integral component of any industry.It would not be an exaggerate statement to say that energy is the base of the growth and development of an economy.The Indian oil & gas industry constitute around 15% of India's GDP.The Indian power sector is undergoing a significant change that is redefining the industry outlook. Sustained economic growth continues to drive power demand in India. The Government of India’s focus to attain ‘Power For All’ has accelerated capacity addition in the country. Energy intensity is a measure of the energy efficiency of a nation's economy. It is calculated as units of energy per unit of GDP. High energy intensities indicate a high price or cost of converting energy into GDP. Low energy intensity indicates a lower price or cost of converting energy into GDP.The energy intensity of India is over twice that of the matured economies, which are represented by the OECD (Organization of Economic Co-operation and Development) member countries .
Demand and supply scenario
In the recent years, India’s energy consumption has been increasing at one of the fastest rates in the world due to population growth and economic development. India ranks fifth in the world in terms of Primary energy consumption accounting for about 3.5% of the world commercial energy demand in the year 2003. Despite the overall increase in energy demand, per capita energy consumption in India is still very low compared to other developing countries. India is well-endowed with both exhaustible and renewable energy resources. Coal, oil, and natural gas these are the three primary commercial energy sources. Coal was by far the largest source of energy. India’s primary energy mix has been changing over a period of time.
Strantum of Energy Sector
Coal:
India ranks third amongst the coal producing countries in the world. Being the most abundant fossil fuel in India till date, it continues to be one of the most important sources for meeting the domestic energy needs. It accounts for 55% of the country’s total energy supplies. The Planning Commission’s 12th Plan expects total domestic energy production to reach 669.6 million tonnes of oil equivalent (MTOE) by 2016–17 and 844 MTOE by 2021–22. The Indian power sector has an investment potential of Rs 15 trillion (US$ 237.35 billion) in the next 4-5 years, providing immense opportunities in power generation, distribution, transmission and equipment.
Road Ahead:
The immediate goal of the government is to produce two trillion units (kilowatt hours) of energy by 2019. This will mean doubling the current production capacity in order to achieve provide 24x7 electricity for residential, industrial, commercial and agriculture use.
Top Pick:Coal India
Oil& Gas:
The oil and gas sector is one of the six core industries in India. It is of strategic importance and plays a pivotal role in influencing decisions across other important spheres of the economy. India increasingly relies on imported LNG. The country was the fifth-largest LNG importer in 2013, accounting for 5.5 per cent of global imports. India’s LNG imports are forecasted to increase at a CAGR of 33 per cent during 2012–17.
Road Ahead:
By 2015-16, India’s demand for gas is set to touch 124 MTPA against a domestic supply of 33 MTPA and higher imports of 47.2 MTPA, leaving a shortage of 44 MTPA, as per projections by the Petroleum and Natural Gas Ministry of India. Moreover, Business Monitor International (BMI) predicts that India will account for 12.4 per cent of Asia-Pacific regional oil demand by 2015.
Top Pics: BPCL ,IGL ,IOC ,Relaince ,ONGC
Renewable Source : Solar/Hydro Power
The government National Solar Mission targeted at 100,000 MW capacity by 2022. The government has also sought to restart stalled hydro power projects and increased the wind energy target from 20 GW to 60 GW by 2022.
Top Picks: Suzlon
Future scenario
Increasing pressure of population and increasing use of energy in different sectors of the economy is an area of concern for India. According to The International Energy Outlook 2005 (EIA 2005b) projects India’s gas consumption to grow at an average annual rate of 5.1%, thereby reaching 2.8 trillion cubic feet by 2025 with the share of electric power sector being of 71% by that time. Coal consumption is expected to increase to 315 MT over the forecast period.
The Planning Commission’s 12th Plan expects total domestic energy production to reach 669.6 million tonnes of oil equivalent (MTOE) by 2016–17 and 844 MTOE by 2021–22..By 2030 – 35, energy demand in India is projected to be the highest among all countries according to the 2014 energy outlook report by British oil giant BP.The industry has attracted FDI worth US$ 9,548.82 million during the period April 2000 to February 2015 .The RE-INVEST 2015 initiative by government of India , is a significant step in making India self-reliant in energy. The Indian power sector has an investment potential of Rs 15 trillion (US$ 237.35 billion) in the next 4-5 years, providing immense opportunities in power generation, distribution, transmission and equipment.
According to the IMF India’s growth is likely to improve from 7.2% in 2014 to 7.5% both in 2015 and 2016 (up 1.2% and 1% from the January WEO forecast) China’s growth is projected to slip from 7.4% in 2014 to 6.8% this year and further down to 6.3% next year.With direct correlation to the growth the sector will irrefutably perform steady in the medium to long term.