Indian Economy
IEA Report Electricity 2024
- 02 Feb 2024
- 10 min read
For Prelims: International Energy Agency, Coal, Small Modular Reactor, Organisation for Economic Cooperation and Development, Renewable Energy
For Mains: Coal demand, Challenges and Opportunities for emerging economies in balancing growth with renewables, Mineral & Energy Resources
Why in News?
Recently, the International Energy Agency (IEA) unveiled key insights into India's energy future with its report "Electricity 2024."
- This comprehensive analysis highlights trends, such as the persistent role of coal, a surge in renewable energy, and the promising growth of nuclear power, shaping India's power sector until 2026.
What are the Key Highlights of the Electricity Report 2024?
- Continued Reliance on Coal:
- India is projected to rely on coal to meet rising electricity demand through 2026.
- Coal-fired generation is expected to meet 68% of India's electricity demand by 2026, despite a decrease from 74% in 2023.
- Coal-fired power generation is expected to rise by 2.5% annually (2024-2026).
- Despite India’s net-zero target by 2070, coal is expected to dominate, meeting 68% of demand.
- India is projected to rely on coal to meet rising electricity demand through 2026.
- Renewable Generation:
- Renewable energy (RE) generation remained relatively stable, with a 21% share of electricity generation in 2023. The rise in solar and wind was largely offset by reduced hydropower output
- Close to 21 gigawatts (GW) of RE capacity was added during 2023, with RE accounting for nearly 44% of total installed capacity in 2023.
- Electricity Demand Dynamics:
- India's electricity demand rose by 7% in 2023, driven by rapid economic growth and increased space cooling needs.
- Expected annual average growth of 6.5% between 2024 and 2026.
- India's electricity demand is projected to outpace China's by 2026, with the world's fastest growth rate.
- Global Comparison and Emerging Economies:
- China holds the largest volume of expected growth, India’s electricity demand in the three years might nearly be equivalent to the United Kingdom’s.
- Developed economies reported substantial reductions in manufacturing and industrial output, and high inflation.
- About 85% of new electricity capacity is expected from emerging economies, particularly in South Asia, with China and India in the lead.
- Hydropower Challenges and Mandates:
- Changing weather patterns led to a 15% fall in hydropower generation in 2023.
- To ensure uninterrupted power supply, the government mandated a blending of a minimum of 6% of imported coal with domestic coal until March 2024.
- Changing weather patterns led to a 15% fall in hydropower generation in 2023.
- Diversification Efforts:
- Besides adding wind and solar power capacity, large hydro and nuclear power projects are being developed in the country.
- Nuclear Power Surge:
- More than half of the nuclear power plants in the pipeline globally (between 2024-2026) are in China and India.
- IEA forecasts global nuclear generation will be almost 10% higher in 2026, compared to 2023.
- India announced plans in 2022 to triple its nuclear capacity by 2032, aiming to add 13 GW, with 6 GW currently under construction.
- India currently has 23 operable nuclear reactors providing about 2% of the country’s electricity.
- Report highlighted that the largest domestically built nuclear power plant, the 700 MWe Kakrapar Unit 3 reactor, commenced operations in Gujarat in June 2023 and reached full capacity in August 2023.
- Based on the country’s project timeline, Nuclear power generation is expected to increase rapidly during 2024-2026, with new plants totalling an estimated 4 GW of capacity entering commercial operation”.
- More than half of the nuclear power plants in the pipeline globally (between 2024-2026) are in China and India.
- Global Nuclear Landscape:
- According to the World Nuclear Association estimates as of November 2023, 68 GW of nuclear capacity is under construction, 9 GW is currently planned and 353 GW is proposed.
- Asia is expected to surpass North America's nuclear power growth by 2026, reaching a 30% share of global nuclear generation.
- Small Modular Reactor (SMR) Technology:
- The report highlighted that momentum is growing behind small modular reactor (SMR) technology.
- SMRs are advanced nuclear reactors that have a power capacity of up to 300 MW(e) per unit, which is about one-third of the generating capacity of traditional nuclear power reactors.
- SMRs, which can produce a large amount of low-carbon electricity, are:
- Small: physically a fraction of the size of a conventional nuclear power reactor.
- Modular: making it possible for systems and components to be factory-assembled and transported as a unit to a location for installation.
- Reactors: harnessing nuclear fission to generate heat to produce energy.
- The SMR Technology development and deployment are progressing, but not without challenges. R&D is starting to accelerate.
- The report highlighted that momentum is growing behind small modular reactor (SMR) technology.
Glance of India’s Power Sector:
- Installed Electricity Generation Capacity (Fuelwise) as of May 2023:
- Total Installed Capacity (Fossil Fuel & Non-Fossil Fuel) is 417 GW.
- The share of various energy sources in the total Electricity Generation are:
- Fossil fuel (including Coal)- 56.8%
- Renewable Energy (including Hydropower)- 41.4%
- Nuclear fuel- 1.60%
India's Renewable Energy Target:
- India is set to achieve its short term and long term targets under the Panchamrit action plan, like
- Reaching a non-fossil fuel energy capacity of 500 GW by 2030.
- Fulfilling at least half of its energy requirements via renewable energy by 2030
- Reducing CO2 emissions by 1 billion tons by 2030; reducing carbon intensity below 45 percent by 2030.
- Net-Zero emission target by 2070.
- In August 2022, India updated its Nationally Determined Contribution (NDC) according to which the target to reduce emissions intensity of its GDP has been enhanced to 45% by 2030 from 2005 level.
What is the International Energy Agency (IEA)?
- About:
- The IEA was created in 1974 by member countries of the Organisation for Economic Co-operation and Development (OECD) to help industrialized countries respond to major 1973-1974 oil crisis.
- Since then, its work has expanded to cover energy security, economic development, and clean energy.
- The IEA is an autonomous forum that provides analysis, data, and policy recommendations to help countries provide secure and sustainable energy.
- The IEA has four main areas of focus: energy security, economic development, environmental awareness and engagement worldwide.
- Headquartered in Paris, France.
- The IEA was created in 1974 by member countries of the Organisation for Economic Co-operation and Development (OECD) to help industrialized countries respond to major 1973-1974 oil crisis.
- Members:
- The IEA family is made up of 31 member countries, 13 association countries including India, and 4 accession countries.
- A candidate country to the IEA must be a member country of the OECD.
- The IEA family is made up of 31 member countries, 13 association countries including India, and 4 accession countries.
- Major Publications:
- World Energy Outlook reports.
- India Energy Outlook Report.
- World Energy Investment Report.
- The IEA Technology Roadmap and Policy Pathway series.
- The Annual Energy Efficiency Market Report.
- The Energy Technology Perspectives.
UPSC Civil Services Examination, Previous Year Questions (PYQs)
Prelims:
Q1. Consider the following statements: (2019)
- Coal sector was nationalized by the Government of India under Indira Gandhi.
- Now, coal blocks are allocated on lottery basis.
- Till recently, India imported coal to meet the shortages of domestic supply, but now India is self-sufficient in coal production.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 and 3 only
(c) 3 only
(d) 1, 2 and 3
Ans: (a)
Q2. Which of the following is/are the characteristic/characteristics of Indian coal? (2013)
- High ash content
- Low sulphur content
- Low ash fusion temperature
Select the correct answer using the codes given below:
(a) 1 and 2 only
(b) 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
Ans: (a)
Q3. Consider the following statements:
- “The Climate Group” is an international non-profit organization that drives climate action by building large networks and runs them.
- The International Energy Agency in partnership with the Climate Group launched a global initiative “EP100”.
- EP100 brings together leading companies committed to driving innovation in energy efficiency and increasing competitiveness while delivering on emission reduction goals.
- Some Indian companies are members of EP100.
- The International Energy Agency is the Secretariat to the ‘Under2 Coalition’.
Which of the statements given above are correct?
(a) 1, 2, 4 and 5
(b) 1, 3 and 4 only
(c) 2, 3 and 5 only
(d) 1, 2, 3, 4 and 5
Ans: (b)
Mains
Q. “In spite of adverse environmental impact, coal mining is still inevitable for development”. Discuss. (2017)
