Sian Crampsie
Energy demand in India has almost doubled since 2000 and the country is set to contribute more than any other in the world to the rise in global energy demand over the next 25 years, according to the IEA.
The Paris-based organization says that India will have an increased influence in Asia and on the world stage because of its growing energy needs, but needs to attract more capital to the energy sector in order to improve energy access.
In a new special report, India Energy Outlook 2015, launched by the IEA as part of its World Energy Outlook series, the IEA states that some 240 million people - one in five Indians - lack access to electricity. To ensure that energy is a spur, rather than a hindrance, to India's advancement, policy makers must redouble efforts to bring capital into the sector, particularly in more efficient and low-carbon technologies, says the report.
"India's energy transformation requires three things: investment, investment and investment," said IEA Executive Director Fatih Birol. "A lot is being done already to overhaul the energy regulatory system and get the incentives in place; this is vital, as India will need to call upon a wider range of investors and sources of finance than it has in the past."
In the main scenario of the India Energy Outlook 2015, India needs more than INR 9 lakh crore ($140 billion) in energy investment per year to 2040, around INR 7 lakh crore ($110 billion) per year in energy supply - 75 per cent of which is required to meet India's burgeoning need for electricity - and a further INR 2 lakh crore ($30 billion) per year to improve energy efficiency.
India will need to make provision for nearly 600 million new electricity consumers by 2040, as well as a growing urban population. It will therefore have to sustain momentum gained on recent initiatives designed to improve the business environment in its energy sector, says IEA.
The IEA also believes that India will become the largest source of worldwide coal demand growth, and will also expand its oil consumption.
Coal demand could be met through growth in the domestic coal industry, but India will have to import oil from foreign sources to keep up with oil demand.
India will also become the world's second-largest market for solar PV, with over half of the new electricity generation capacity to 2040 projected to come from non-fossil fuels, led by solar and wind power.
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