Portal $160 billion savings possible from energy efficiency for India by 2031
The Indian Bureau of Energy Efficiency has estimated that the country presents an energy efficiency potential of about $160 billion for the 2022-2031 period, which can be achieved through implementation of energy efficiency measures.
Let’s look at how this number translates as a proportion of some key data.
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section 1
0.4% of India’s GDP
India’s annual GDP was approximately $3 trillion at the start of 2022. Assuming a 5% annual GDP growth over the 2022-2031 period, the total GDP for 2022-2031 period (10 years) would be about $40 trillion, so we are talking about a monetary saving of 0.4% of the total GDP from energy efficiency. Not a bad sum, given that we are also talking about simultaneous reductions of CO2 emissions owing to the energy efficiency measures.
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section 2
6% of India’s total energy expenses
India’s energy sector is worth about $200 billion per year. Assuming India’s energy expenses increase at the same rate as GDP for the 2022-2031 period (5%), the total energy expenses for India during the 2022-2030 period would be about $2.65 trillion. That’s a far more significant 6% savings from energy efficiency on total energy expenses.
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section 3
Equivalent to 18 months’ oil import bill
India’s imports a large portion of its crude oil requirements, and its oil import bill is about $110 billion a year. If the energy savings potential is achieved to the fullest, it will mean an equivalent of India’s oil import bill for almost 18 months - a year and a half.
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section 4
Twice the cumulative clean energy investments in India until 2020
As per data available, India’s clean energy investment for the 2014-2019 period was about $65 billion. The investments prior to that in clean energy were fairly low. In 2020 it was about $6.2 billion. Thus, the total investment in clean energy in India since 2000 and until 2020 would have been about $80 billion. The savings from energy efficiency for the 10 year period 2022-2031 would thus be twice the total invested in clean energy for a 20 year period.
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section 5
Can install 320 GW of solar capacity
It costs about $0.5 million/MW to instal a solar PV power plant in India, or about $500 million per GW. The savings from energy efficiency is thus equal to installing about 320 GW of solar power plants.
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section 6
Sectors for these savings
Studies indicate that about half the potential is from the industrial sector (pretty large swathe of a category, though), about 25% from the transport sector and 12-15% from the residential sector. Perhaps agricultural accounts for the rest?
Industry presenting the highest potential for energy savings is fortunate. Because this is the sector that can be made to implement energy efficiency measures more easily than the transport, residential or agricultural sectors. The carrot-and-stick template (incentives and regulations/penalties) works much better with this segment than others, in most parts of the world.
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section 7
Useful references
For those interested, here is a detailed document (from an earlier year’s work) on how India plans to implement energy efficiency across the nation for the 2017-2031 period.
India’s Energy Efficiency Landscape - a compilation of policies, priorities and potential - an excellent overview of the various government departments involved, their actions, policies and the extent of their implementation
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section 8
What could mean for
Entrepreneurs: This could be an excellent area for profitable business opportunities. Learn more about the opportunities, approach the government and understand how they can help you.
Corporates: Reiterates the importance of energy efficiency for corporate efforts towards decarbonization. In the process, corporates can also realize reasonable monetary savings on the side!
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