Madhumitha Jaganmohan
Research expert covering climate and environmental sustainability
Fossil fuel industry in India - statistics & facts
For the economic growth, development and welfare of nations, power acts as a crucial component. The power sector in the south Asian country of India is very diversified. Sources of power generation across the country ranged from conventional fuels such as coal, natural gas, crude oil to renewable sources such as hydro, wind and nuclear power. The demand for electricity in the country has increased rapidly and was expected to grow further in the years to come. A major portion of the electricity generation came from thermal energy. The private sector had a strong grip on the energy sector, amounting to an installed energy capacity of around 217 thousand megawatts. The industry, however, had been subject to significant changes in the recent years to shift focus to more renewable sources of energy.
Natural gas and crude oil had been equally important fossil fuels along with coal. Natural gas could lead the way for a gradual transition from high carbon-intensive sources as the country aims to cut emissions. The installed natural gas capacity in India was over 25 thousand megawatts as of August 2023. Unlike coal, the power sector was not the leading consumer for natural gas within the nation - it was the heavy industries instead. Due to its abundant availability as well as its economic benefits, the natural gas sector had been an attractive investment area for the Indian government as well as foreign players.
In 2013, net crude oil and petroleum product imports made India the fourth largest consumer and net importer of oil related products. The transportation industry was one the major drivers for this demand. Despite having an onshore production volume of 15 million metric tons in 2022, the crude oil import volume into the country increased by just 8.1 percent that year. The government aimed to cut the oil imports dependence by more than 60 percent by the year 2022. However, falling domestic production due to ageing fields and foreign competition, the policies and initiatives had been struggling to give satisfactory results.
India's dependence on fossil fuels
Coal production had been the focus of the government to meet energy demands of the world’s second largest population. In 2022, primary energy consumption in the country was dominated by coal. According to the Central Electricity Authority, renewable sources of energy were expected to generate half of the country’s power by 2030, the other half however, was still expected to be generated through coal.Natural gas and crude oil had been equally important fossil fuels along with coal. Natural gas could lead the way for a gradual transition from high carbon-intensive sources as the country aims to cut emissions. The installed natural gas capacity in India was over 25 thousand megawatts as of August 2023. Unlike coal, the power sector was not the leading consumer for natural gas within the nation - it was the heavy industries instead. Due to its abundant availability as well as its economic benefits, the natural gas sector had been an attractive investment area for the Indian government as well as foreign players.
In 2013, net crude oil and petroleum product imports made India the fourth largest consumer and net importer of oil related products. The transportation industry was one the major drivers for this demand. Despite having an onshore production volume of 15 million metric tons in 2022, the crude oil import volume into the country increased by just 8.1 percent that year. The government aimed to cut the oil imports dependence by more than 60 percent by the year 2022. However, falling domestic production due to ageing fields and foreign competition, the policies and initiatives had been struggling to give satisfactory results.
India's plan to cut coal and boost green energy
The fossil fuel industry in India was likely to face some competition from renewable energy sources in the near future. The government had introduced taxes on fossil fuels, but on the other hand, subsidizes bulk purchases. A majority of the coal consumption came through power plants to generate electricity, whereas oil and natural gas were mainly used by the transportation industry. Climate change and climate action are likely to influence the dependency on fossil fuels. Fossil fuel combustion in India was responsible for about seven percent of global carbon dioxide emissions. The gas sector was estimated to emerge as the leading energy supplier across the country going forward. Gas was anticipated to fuel the robust economic growth in the country.
