India requires a whopping $2.8 trillion investment to meet its growing energy needs in the coming years, with 75% of that for the power sector, a special report by the International Energy Agency (IEA) said on Monday.
"India's energy needs require a huge commitment of capital to the tune of $2.8 trillion. Mobilising cost-efficient investment above $100 billion per year will be a challenge for the Indian policy at national and state levels," the report noted.
"A transparent system of approvals and clearances for viable projects with timelines and accountability is essential to win public consent. India will also need to tap investors and sources of finance on suitable terms for low-carbon investment," the report pointed out.
As the release coincided with the UN Climate Summit (COP-21) in Paris, the report said sustainable and affordable energy was indispensible to India's economic growth and poverty reduction, as the country's carbon intensity was a critical measure of the success or failure of efforts to tackle climate change.
The Paris-based autonomous agency (IEA) was set up in 1974 to promote energy security among its 29-member countries through collective response to disruptions in oil supply and provide research and analysis on ways to ensure reliable, affordable and clean energy for its members and others.
Observing that what happened in India would influence the global energy economy, the report highlighted that as the country was growing fast, energy was central to its socio-economic growth and fuel demand for greater mobility and infrastructure development to meet the needs of the world's populous country.
"Though home to 18% (1.3 billion) of world population, India uses only six% of the world's primary energy despite its consumption almost doubling since 2000 with potential to grow further," the report noted.
More than any country, India will contribute to the projected rise in global energy demand though its energy demand per capita will be still 40% below the world average.
"India's total energy demand doubles, propelled by an economy that is five times larger in 2040 and a demographic expansion that makes it the world's most populous country," the report indicated.
With energy use declining in many developed countries and China entering a less energy-intensive phase in its development, India emerges as a major driving force in global trends, with modern fuels and technologies playing a part.
"Surging consumption of coal in power generation and industry makes India the largest source of growth in global coal use. Oil demand increases by more than in any other country, approaching 10 million barrels per day by 2040," report added.