India has emerged as one of the fastest growing economies in the world,
with an annual average growth rate of 8% during the last four years. The
energy sector played a key role in accelerating the country's economic
growth. Driven by the rapidly growing industrial base, urbanization and a quest
for improved quality of life, energy usage is growing phenomenally, widening
the gap between supply and demand. At the current growth levels of 7 to 8%,
and an estimated energy elasticity of 0.80, the energy requirement is expected
to grow 5 to 6% per annum, which implies a fourfold increase and significant
challenges to policy makers going forward. This is the reason why energy
security has become a core focus of the government.
Despite the growing requirements of energy, the world's fifth largest
energy consumer has poorly managed its oil assets, and imports about 75% crude
oil to meet a major share of its energy demand. Coal is the most
important source and accounts for 50% of the primary energy consumption, which
is largely mined in the central and eastern regions of the country. Around 30%
of commercial energy requirements are met by petroleum products, 7.5%
by natural gas and 3.5% by primary electricity. One of the greatest
challenges before the Indian government
is—how to secure diversified source of
energy. On the rural economy front, still a large proportion of people depend on
traditional sources of energy like firewood, cow dung and biomass.
|
