CERAWeek: India to invest $143 bil in energy infrastructure, most of it natural gas
India is gearing up to spend invest $143 billion on energy infrastructure to pursue Prime Minister Narendra Modi's plan to "consciously" move the country's carbon-intensive coal-based economy to one powered by natural gas.
At CERAWeek by IHS Markit, Dharmendra Pradhan, who heads the ministry of steel as well as petroleum and natural gas, shared India's vision for moving out of energy poverty and securing gas supplies with IHS Markit Vice Chairman Daniel Yergin.
Pradhan said the country plans to invest in more energy terminals, add grid capacity, boost its gas production, expand its pipeline network, add more refineries and petrochemical plants, as well as building more fertilizer facilities.
"Though the entire world is moving towards decarbonization, we want to move away from energy poverty," Pradhan said.
Modi's energy strategy is that "all kinds of energy should be available," as long as they are affordable, accessible, and sustainable, he said.
Third largest GHG emitter
India, which is the third largest emitter of greenhouse gases (GHG) has not made a pledge to reduce its total GHGs, let alone reach net-zero carbon levels by the middle of the century, as have many of the top-emitting countries. But it did pledge under the Paris Agreement to reduce its emissions intensity (emissions per output of energy) by 40% from 2005 to 2030.
Pradhan's words came as a fillip to executives like ExxonMobil President Darren Woods and Hess Corporation President John Hess who have told CERAWeek attendees that global demand for oil isn't about to wane.
The minister said global investors, especially international oil companies, already are scouting for possibilities in India. He pointed to Total, BP, Shell, and Saudi Aramco, and said "they all are in India" and that the country is in talks with ExxonMobil.
Over 80% of India's energy needs of 880 million metric tons of oil equivalent (Mtoe) are met by three fuels — coal, oil and biomass, according to the International Energy Agency's recently released outlook on the country.
Of this total, coal supplies 44% of India's energy demand, oil provides 25% and solid biomass 13%. The 6% share that gas holds is what Pradhan said India wants to expand.
US & India: Two natural friends
Pradhan said India looks forward to continuing its strategic energy partnership with the US under the Biden administration. During Modi's tenure, Pradhan said energy business with the US has increased, with India engaging in $9 billion worth of deals, which included purchases of crude oil and LNG.
"There shouldn't be any problem between two natural friends," he said.
He pointed to the synergies between the two countries over technology, biofuels, hydrogen, ethanol, and compressed natural gas.
A big part of Indian government's clean energy commitment is to reach installation of 175 GW of renewable power by 2022 and 450 GW by 2030, but analysts say it will be difficult to reach those targets unless the government intervenes and stops building new coal-fired capacity other than the ones that already are in the pipeline.
The government's recently released budget included a national hydrogen roadmap that sets up a task force for technology transfer with the US, Pradhan said, adding "green" renewables-origin hydrogen is a priority, though some companies have been producing "blue" hydrogen, or hydrogen derived from gas extraction.
India wants to tap into its solar resources and compressed biomass to produce "green" hydrogen, he said.
When Yergin asked Pradhan about India's participation in the upcoming UN climate meeting in Glasgow, Scotland, he responded: "Whatever my Prime Minister committed in COP-21… we are committed to honoring that in COP-26 also."
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