A Dynamic India looks to see seasonal changes to electrical power demand as the holiday season is here. India will see a variety of growth issues because of continuing power demands. The IEA sees India with the largest energy demand growth of any country in the mid-future. Demand is increasing across many sectors. This is common to industry, consumer willingness to adopt air conditioning, and oncoming growth into the future of electric vehicles, energy intensive factories, and transportation in general.
India is pursuing a series of green energy transformations. In mid-transformation a Dynamic India’s infrastructures and economics need matching evolution of policy and performance. The changes can be illustrated looking at electrical power generation.
Economic growth all comes with energy infrastructure needs. Most obvious are locations and wiring/fiber needs for telecommunications, networks, and cloud datacenters. Less visible are the infrastructure requirements for new, or expanded, factories and high employment service centers. Large scale electrical equipment has lead times of 12-18 months. Larger efforts have even longer lead times for efforts like electrical grids, distribution of fuels, and transportation/logistics facilities. Lead times for constructing refining capacity, export terminal logistics, and financing capabilities have come together “just in time” for the current boom in crude oil margins.
The increased demand from consumer electrical usage is easily seen by the tripling of household air conditioning use to 24% of homes. Time-of-day and other adjustments aren’t enough to meet a grid demand pattern where renewable generation can’t fully meet needs. In the last four years (2019-2022) air condition uses climbed 21%. Almost 10% of all electrical power goes to air conditioning usage now.
The global economic conditions bringing discounts to buys of Russian crude oil are also affecting global trade in Russian-sourced thermal coal. Russian imports of coal to the critical electrical generation sector, in India’s energy usage, have tripled over July 2021. USA, South African, and Australian imports have dropped over a similar period. As global trade replaces imports from one source to another the demands for non-Russian coal (of multiple uses) have shifted. Global shifts in import destinations, and volatility in spot pricing, have created a window of benefit for India during current Challenging Times.
Evolution in policy and performance are needed in India to support continued economic growth and continue green energy transformations. Evolution in policy for electricity is desirable just as refining margins provide an opportunity to reform and restructure liquid fuels. Updating generation capacity technology, better managing transmission and distribution, and integrating new renewable technologies into the entire grid are givens. The needs to improve the mix of generation, storage, and distribution of electricity across India are challenges only approachable by the Federal government.
The difficult part is acting decisively in the window of benefits from global conditions. Failure to act to meet clearly foreseeable changes, as the window of benefits closes, will create an energy-crisis. An energy crisis will slow economic growth (due to the infrastructure lead times), make people uncomfortable (literally, as access to air conditioning slows), and create even larger capital demands for the energy sector (common to any course of policy).
A Dynamic India needs to apply its current benefits in energy costs to investment in future growth.
For more analysis and notes on a Dynamic India see http://www.ekalore.com/india-business
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