India's transition to less polluting fuels faster than in other countries

India’s transition to less polluting fuels is happening faster than in many other countries.
 

India was ranked 67th among 120 countries in the Energy Transition Index (ETI) released by the Geneva-based World Economic Forum (WEF) on June 28. It was ranked 94 in 2014. The index measures the progress of different nations towards making the transition to clean energy. Like much of the world, India’s score has begun to improve again after plateauing during the Covid-19 pandemic (chart 1).


 

The report listed replacement of solid fuels with cooking gas, universal electricity access and rising renewable energy deployment as among the key reasons for an improved score. A comparison with the other top economies shows that India is more dependent on imports for meeting its energy needs than many other countries. Only Japan, Germany and France have higher net energy imports relative to use (chart 2).


 

This is despite India’s per capita consumption being lower than other large economies. India’s energy consumption per capita is 26 gigajoules. It is 257 gigajoules in the United States (chart 3). 


 

India’s economy grew at nearly 6 per cent over the last 10 years. Energy consumption has grown less than 3 per cent. This has meant that energy intensity, or energy consumed for generating one unit of gross domestic product (GDP), has shown a -2.4 per cent growth rate over the same period — a sign of improved energy efficiency (chart 4). 

But India remains more dependent on polluting energy sources than many peers. The carbon intensity among major economies is higher only for China and Japan (chart 5). 

The WEF report noted an 85 per cent increase in oil subsidies in 2022 globally following energy price volatility. Fluctuations in international energy prices can also affect energy intensive industries and ‘firms are seeking to shift operations to markets with cheaper and more reliable energy, raising concerns over employment in local communities’, according to the report.
 

Renewable energy can help plug some of the gap. The government reportedly is moving to encourage electricity grid battery production in India, which can make renewable energy supply a more stable source of power. The share of renewables in India’s electricity production increased to 20.5 per cent in 2022 from around 15 per cent a decade ago (chart 6).