India has hopes for all of its hills to be lit with domestically produced energy.
This article is part of a six-month BULLETIN series exploring GE’s innovation, technology, and manufacturing initiatives in India.
The new Indian government has promised to put the economy back on an accelerated growth path with reforms in the energy, financial, and employment sectors. Energy is the backbone of the Indian economy, so the right energy policies will spur growth in all other sectors. With India soon expected to be the world’s third largest energy consumer, there is an urgent need to get these right: current demand for imported coal, oil, and natural gas is significantly outpacing domestic production, and the country is being forced to spend valuable foreign capital to procure additional energy resources. Investing in domestic oil and natural gas exploration is a long-term solution that will help quench India’s growing energy demands, smartly.
To understand India’s energy landscape–and the increasing importance of domestic energy production–consider the following facts:
Coal: From a mere 2% of overall coal consumption in 1990, imports made up 16% of coal consumed in 2012, with the imported resources costing twice as much as those produced domestically.
Natural Gas: Between 2000 and 2012 the consumption of natural gas doubled, and a dependency on imported gas was established, growing from zero to 22% of consumed natural gas.
Oil: In 1990 India imported 37% of oil it consumed while in 2012 it imported a staggering 82% of consumed oil, pushing the import bill to $120 billion and making it the energy source with the highest import dependency.
Furthermore, since oil and natural gas also play a critical role in deciding the inflation rate, the rising prices for these energy commodities have long been a point of contention in Indian politics.