India's Clean Energy Transition Faces Challenges Amid Rising Gas Demand
India's clean energy transition faces bottleneck from soaring gas demand
Image: Asianet Newsable
India's transition to clean energy may be hindered by a projected increase in natural gas demand, expected to rise from 131 million metric standard cubic metres per day (mmscmd) in FY16 to 496 mmscmd by FY40. Structural constraints in gas supply infrastructure could limit the country's ability to meet this demand.
- 01Natural gas demand in India is projected to increase nearly fourfold by FY40, according to a report by Equirus.
- 02Natural gas currently accounts for only about 7% of India's energy mix, significantly lower than the global average of 24%.
- 03The gas supply chain in India faces constraints at every stage, including production, liquefaction, and pipeline connectivity.
- 04High price sensitivity among consumers leads to fuel switching, which contributes to volatility in gas demand.
- 05The report highlights that India's reliance on coal remains a significant barrier to increasing natural gas usage.
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India's clean energy transition is at risk due to a projected surge in natural gas demand, which is expected to rise from 131 million metric standard cubic metres per day (mmscmd) in FY16 to 496 mmscmd by FY40. This increase is driven by the country's shift towards cleaner energy sources. However, a report by Equirus indicates that India's gas supply infrastructure is not equipped to handle this demand effectively. Currently, natural gas constitutes only 7% of India's energy mix, compared to nearly 24% globally, highlighting a significant structural constraint. The report emphasizes that the gas supply chain faces bottlenecks at every stage, including production, liquefaction, and transportation, which makes it less responsive to demand fluctuations. Additionally, consumer price sensitivity leads to fuel switching, further complicating reliable gas consumption planning. As India aggressively expands its renewable energy capacity, addressing these structural hurdles will be crucial for a successful energy transition.
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The rising demand for natural gas could lead to increased energy prices and affect energy reliability for consumers in India.
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