Countries

India
Last Updated: June 26, 2014 (Notes)
full report
Overview
India was the fourth-largest energy consumer in the world after China, the United States, and
Russia in 2011, and despite having notable fossil fuel resources, the country has become
increasingly dependent on energy imports.
India was the fourth-largest energy consumer in the world after China, the United States,
and Russia in 2011, and its need for energy supply continues to climb as a result of the
countrys dynamic economic growth and modernization over the past several years. Indias
economy has grown at an average annual rate of approximately 7% since 2000, and it
proved relatively resilient following the 2008 global financial crisis.
The latest slowdown in growth of emerging market countries and higher inflation levels,
combined with domestic supply and infrastructure constraints, have reduced Indias annual
inflation-adjusted gross domestic product (GDP) growth from a high of 10.3% in 2010 to
4.4% in 2013, according to the International Monetary Fund (IMF). India was the third-largest
economy in the world in 2013, as measured on a purchasing power parity basis. Risks to
economic growth in India include high debt levels, infrastructure deficiencies, delays in
structural reforms, and political polarization between the countrys two largest political
parties, the Indian National Congress and the Bharatiya Janata Party (BJP).
The BJP, elected as the majority party in May 2014 to govern India in the following five years,
faces challenges to meet the countrys growing energy demand by securing affordable
energy supplies and attracting investment for infrastructure development. Highly regulated
fuel prices for consumers, fuel subsidies that are shouldered by the government and state-
owned upstream companies, and inconsistent energy sector reform currently hinder energy
project investment. Some parts of the energy sector, chiefly coal production, remain
relatively closed to private and foreign investment, while others such as electric power,
petroleum and other liquids, and natural gas have regulated price structures that
discourage private investment.
Despite having large coal reserves and a healthy growth in natural gas production over the
past two decades, India is increasingly dependent on imported fossil fuels. In 2013, Indias
former petroleum and natural gas minister, Veerappa Moily, announced that his ministry
would work on an action plan to make India energy independent by 2030 through increased
fossil fuel production, development of resources such as coalbed methane and shale gas,
foreign acquisitions by domestic Indian companies of upstream hydrocarbon reserves,
reduced subsidies on motor fuels, and oil and natural gas pricing reforms. The current
petroleum and natural gas minister, Dharmendra Pradhan, who took office in late May 2014,
reiterated the goal of making India self-sufficient in energy resources. India is also looking
to further develop and harness its various renewable energy sources. These actions would
effectively increase Indias energy supply and create more efficiency in energy consumption.
India already began implementing oil and gas pricing reforms over the past two years to
foster sustainable investment and help lower subsidy costs.
Primary energy consumption in India has more than doubled between 1990 and 2012,
reaching an estimated 32 quadrillion British thermal units (Btu). The country has the
second-largest population in the world, at more than 1.2 billion people in 2012, growing
about 1.3% each year since 2008, according to World Bank data. At the same time, Indias
per capita energy consumption is one-third of the global average, according to the
International Energy Agency (IEA), indicating potentially higher energy demand in the long
term as the country continues its path of economic development. In the International Energy
Outlook 2013, EIA projects India and China will account for about half of global energy
demand growth through 2040, with Indias energy demand growing at 2.8% per year.
Indias largest energy source is coal, followed by petroleum and traditional biomass and
waste. Since the beginning of the New Economic Policy in 1991, Indias population
increasingly has moved to cities, and urban households have shifted away from traditional
biomass and waste to other energy sources such as hydrocarbons, nuclear, biofuels, and
other renewables. The power sector is the largest and fastest-growing area of energy
demand, rising from 22% to 36% of total energy consumption between 1990 and 2011,
according to the IEA. Indias National Sample Survey Organization estimates that about 25%
of the population (over 300 million people) lack basic access to electricity, while electrified
areas suffer from rolling electricity blackouts. The government seeks to balance the
countrys growing need for electricity with environmental concerns from the use of coal and
other energy sources to produce that electricity. Indias transportation sector, primarily
fueled by petroleum products, is set to expand as the country focuses on improving road
and railway transit. The government plans to mandate some alternative fuel use, particularly
with biofuel blends, and develop greater use of mass transit systems to limit oil demand
growth.
Source: U.S. Energy Information Administration
Representation of international boundaries and names is not
necessarily authoritative.
Petroleum and other liquids
India was the fourth-largest consumer of crude oil and petroleum products in the world in
2013, after the United States, China, and Japan. The country depends heavily on imported
crude oil, mostly from the Middle East.
India was the fourth-largest consumer of oil and petroleum products after the United States,
China, and Japan in 2013, and it was also the fourth-largest net importer of crude oil and
petroleum products. The gap between Indias oil demand and supply is widening, as
demand reached nearly 3.7 million barrels per day (bbl/d) in 2013 compared to less than 1
million bbl/d of total liquids production. EIA projects Indias demand will more than double
to 8.2 million bbl/d by 2040, while domestic production will remain relatively flat, hovering
around 1 million bbl/d. The high degree of dependence on imported crude oil has led Indian
energy companies to diversify their supply sources. To this end, Indian national oil
companies (NOCs) have purchased equity stakes in overseas oil and gas fields in South
America, Africa, Southeast Asia, and the Caspian Sea region to acquire reserves and
production capability. However, the majority of imports continue to come from the Middle
East, where Indian companies have little direct access to investment.
Sector organization
Indias upstream petroleum liquids industry is still mainly owned by state-owned firms, although the sector
is open for competition and attracts some level of private and foreign investment. The government
regulates the fuel price for petroleum products, although the mounting costs of fuel subsidies in recent years
have encouraged the government to lift retail price caps on some oil products.
Almost two decades after nationalizing the countrys hydrocarbon resources in the 1970s,
the Indian government embarked on the New Economic Policy in 1991 that pushed for open
market competition across a variety of energy sectors. The government introduced the New
Exploration Licensing Policy (NELP) in 1999 that allowed investors to bid on development
blocks with up to 100% foreign control. Currently, the government is preparing to issue the
10th round of bidding for the NELP after more than two years of awarding contracts for the
9th round of the NELP. The 9th round resulted in 13 contracts signed (1 for each block
awarded) out of 34 blocks that were offered.
International investment is still relatively low, and most analysts agree that the NELP has
had only limited success in reducing Indias oil dependence. India is offering 46 exploration
blocks under the new NELP round, including 17 onshore, 15 shallow-water, and 14
deepwater blocks. The round was scheduled to officially open in February 2014, although
the government is in the process of determining the structure of petroleum contracts
between the government and companies. The current system includes a production-
sharing mechanism allowing producers to recover exploration costs during production
before sharing profits with the government.
The Ministry of Petroleum and Natural Gas (MOPNG) regulates the entire value chain of the
oil sector, including exploration and production (E&P), refining, supply, and marketing. The
ministry releases five-year plans that serve as rough guidelines to the energy sector. Under
the MOPNG, the Directorate General of Hydrocarbons regulates the upstream side of the oil
sector, as well as coalbed methane (CBM) projects. Another sub-ministry, the Petroleum
and Natural Gas Regulatory Board (PNGRB), acts as a downstream regulator, including
petroleum product sales and distribution.
Until 2002, the government set the price of petroleum products through the Administered
Pricing Mechanism (APM), which followed the principle of allowing a predetermined return
(rather than market-based prices) on investments in the oil sector. After 2002, only certain
products (namely kerosene and liquefied petroleum gases, or LPG, often used for cooking
or home heating) remained regulated, while oil companies could set their own prices for
other fuels. However, many oil marketing companies still set retail prices at below-market
levels so they could claim under-recoveries (the difference between a global market price
and the local price) from the Ministry of Finance for certain products at favorable rates. The
government began domestic fuel price reform and officially deregulated gasoline prices in
June 2010 (to take effect in 2012). High international oil prices in recent years and growing
demand for oil products have increased the countrys fiscal deficit as a result of its
mounting fuel subsidy bill. In January 2013, India began a phased deregulation of retail
diesel prices each month to reduce some of the countrys subsidies.
Competition in the oil sector is now relatively open, particularly when it comes to the
upstream market. On one hand, two state-owned companies, the Oil and Natural Gas
Corporation (ONGC) and Oil India Limited (OIL), control the majority of production and
refining activity in India. ONGC is Indias largest oil producer, accounting for about 69% of
the domestic production in 2012 according to the companys annual report. On the other
hand, the government has slowly reduced its share of ownership in ONGC in an effort to
raise revenue, and several private companies have emerged as important players in the
past decade. Cairn India, a subsidiary of British company Cairn Energy, controls more than
20% of Indias crude oil production through its operation of major stakes in the Rajasthan
and Gujarat regions and the Krishna-Godavari basin. Private companies like Reliance
Industries (RIL) and Essar Oil have become major refiners. Other international oil
companies have few stakes in the Indian oil market.
Exploration and production
India held nearly 5.7 billion barrels of proved oil reserves at the beginning of 2014, mostly in the western
part of the country. Domestic production has not kept pace with demand in recent years, leading to
exploration of deepwater and marginal fields and investment in improving recovery rates of existing fields.
In addition, Indian national oil companies are purchasing more upstream stakes in overseas oil fields to
increase supply security from imported crude oil.
According to the Oil & Gas Journal (OGJ), India held nearly 5.7 billion barrels of proved oil
reserves at the beginning of 2014. About 44% of reserves are onshore resources, while
56% are offshore. Most reserves are found in the western part of India, particularly the
Western offshore area near Gujarat and Rajasthan. The Assam-Arakan basin in the
northeastern part of the country is also an important oil-producing region and contains more
than 23% of the countrys reserves and 12% of the production.
Historically, ONGC dominated the upstream oil sector and relied on production from
Mumbai High basin and its associated fields in the western offshore area. Indias total
petroleum and other liquids production increase has been very gradual during the past two
decades, growing at less than 2% total and peaking at 996,000 bbl/d in 2011. Production
has declined slightly to 982,000 bbl/d in 2013. The Mumbai High, Gujarat, and Assam-
Arakan basins contain mature fields experiencing production declines, although several
redevelopment projects, enhanced oil recovery efforts, and marginal field development
projects in these basins are underway to lift production by 2030.
Indian and foreign companies are investing in more frontier developments and marginal
fields to help offset production declines from mature basins. In recent years, major
discoveries in the Barmer basin in Rajasthan and the offshore Krishna-Godavari basin by
smaller companies such as Gujarat State Petroleum Corporation and Andhra Pradesh Gas
Infrastructure Corporation hold some potential to diversify the countrys production.
Indias relatively small land-based resource endowment means companies require more
upstream technical expertise to tap into offshore reserves, especially in technically
challenging deepwater reserves. Foreign companies historically took the lead in exploring
new offshore opportunities. For example, Cairn India brought online the largest field,
Mangala, of the RJ-ON-90/1 block in Barmer basin in 2009, with a production capacity of
130,000 bbl/d. The Rajasthan fields, including Mangala, produced 179,000 bbl/d in 2013,
according to FACTS Global Energy (FGE), and Cairn India reports production from the fields
could peak at 300,000 bbl/d. Despite Cairns successful drilling in Rajasthan, foreign
investment in India has waned in recent years, both because of increased competition from
domestic Indian companies and Indias complex exploration and production laws.
The government has encouraged companies to acquire overseas upstream assets as a
way to shield the domestic energy sector from global price volatility. Indian companies hold
large stakes in Sudans GNOP block, Russias Sakhalin-1 project, and Venezuelas San
Cristobal and Carabobo blocks. Amerada Hess Corporation sold key oil fields in Azerbaijan
to ONGC in 2012. Also, ONGC, OIL, and RIL have taken stakes in gas plays in Mozambique,
shale gas assets in the United States and Canada, and oil and gas assets in Myanmar,
and the companies are actively pursuing other overseas upstream deals. In 2011, several
government agencies agreed to establish a sovereign wealth fund that could also aid in
financing overseas energy acquisitions.
Downstream and refining
Indias government promotes the countrys refining sector, and India became a net exporter of petroleum
products in 2001. India has several world-class refineries, and the private sector has significant investments
in the countrys refining industry.
Indias government started encouraging energy companies to invest in refineries at the end
of the 1990s, and the investment helped the country become a net exporter of petroleum
products in 2001. In particular, the government eliminated customs duties on crude
imports, lowering the cost of fuel supply for refiners. These reforms made domestic
production of petroleum products more economic for Indian companies. In its 11th Five
Year Plan (2007-2012), Indias government set the goal of making India a global exporting
hub of refined products.
However, India still imports kerosene and liquefied petroleum gas (LPG) products for
domestic use, and some export-oriented refineries began reorienting production for
domestic use in 2009 to help ease shortages of motor gasoline, gasoil, kerosene, and
LPG. These products make up 73% of Indias petroleum product consumption, according to
FGE. In particular, many rural areas of India use LPG and kerosene along with traditional
biomass as cooking fuels (see Biomass and Waste below). The government is
encouraging a shift from kerosene used in cooking fuel in rural areas to LPG, a cleaner and
less-expensive fuel. Liquid fuels have competed with natural gas in the past few years as
the power and fertilizer industries are using natural gas as a substitute for some naphtha
and fuel oil supply. Diesel remains the most-consumed oil product, accounting for 42% of
petroleum product consumption in 2013.
The refining industry is an important part of Indias economy, and the private sector owns
about 38% of total capacity. At the end of 2013, India had 4.35 million bbl/d of refining
capacity, making it the second-largest refiner in Asia after China, according to FGE. The two
largest refineries by crude capacity, located in the Jamnagar complex in Gujarat, are world-
class export facilities and are owned by Reliance Industries. The Jamnagar refineries
account for 29% of Indias current capacity. These refineries are close to crude oil-
producing regions in the Middle East, which allows them to take advantage of lower
transportation costs.
India projects an increase of the countrys refining capacity to 6.3 million bbl/d by 2017
based on its current five-year plan to meet rising domestic demand and export markets,
although this projection hinges on all proposed projects becoming operational. Some
refinery projects have faced delays in the past few years, and there is now greater
competition within Asia from countries such as China that has built large refineries able to
process more complex crude oil types. Two refineries, Paradip in Odisha and Cuddalore in
the southern state of Tamil Nadu, are scheduled to be operational by 2015, adding 420,000
bbl/d of capacity. Also, refiners have plans to upgrade several existing refineries to produce
higher-quality auto fuels to comply with more stringent specifications for vehicle fuel
standards. India plans to adopt the equivalent of Euro IV fuel efficiency standards on a
nationwide basis by 2015 and Euro V standards on passenger cars by 2016. Refineries
have proposed several expansions to existing facilities and a few new refineries by 2020,
although the timeline of these projects depends on economic recovery and fuel sales in
both domestic and export markets.
India refining sector
Refinery location Name of company
Crude refining
capacity
(1,000
barrels/day)
Public Sector
Barauni, Bihar Indian Oil Corp. Ltd. 120
Bongaigaon, Assam Indian Oil Corp. Ltd. 47
Digboi, Assam Indian Oil Corp. Ltd. 13
Guwahati, Assam Indian Oil Corp. Ltd. 20
Haldia, West Bengal Indian Oil Corp. Ltd. 151
Koyali, Gujarat Indian Oil Corp. Ltd. 275
Mathura, Uttar Pradesh Indian Oil Corp. Ltd. 160
Panipat, Haryana Indian Oil Corp. Ltd. 301
Mahul, Mumbai Hindustan Petroleum Corp. Ltd.
(HPCL)
131
Visakhapatnam, Andhra
Pradesh
Hindustan Petroleum Corp. Ltd.
(HPCL)
166
Mahul, Mumbai Bharat Petroleum Corp. Ltd. 241
Kochi, Kerala Bharat Petroleum Corp. Ltd. 191
Manali, Chennai Chennai Petroleum Corp. Ltd. 211
Nagapattinam, Tamil Nadu Chennai Petroleum Corp. Ltd. 20
Numaligarh, Assam Numaligarh Refinery Ltd. 60
Mangalore, Karnataka Mangalore Refinery &
Petrochemicals Ltd.
302
Tatipaka, Andhra Pradesh Oil & Natural Gas Corp. Ltd.
(ONGC)
1
(ONGC)
Joint-Venture
Bina, Madhya Pradesh Bharat-Oman Refinery Ltd. 120
Bathinda, Punjab HPCL-Mittal Energy Ltd. 180
Private Sector
Jamnagar Reliance Industries Ltd. 660
SEZ, Jamnagar Reliance Industries Ltd. 580
Vadinar, Gujarat Essar Oil Ltd. 405
Total 4,351
Note: SEZ = Special Economic Zone
Sources: U.S. Energy Information Administration, India Ministry of Petroleum &
Natural Gas, Oil & Gas Journal, FGE.
Trade
India is a significant importer of crude oil, as the countrys demand growth continues to outstrip domestic
supply growth. The Middle East was the major source of crude oil imports to India in 2013, although the
Western Hemispheres share has risen in recent years.
India has increased its total net oil imports from 42% of demand in 1990 to an estimated
71% of demand in 2012. Indias demand for crude oil and petroleum products is projected
to continue rising, barring a serious global economic recession. Oil import dependence will
continue to climb if India fails to achieve production growth equal to demand growth.
The Indian Ocean historically has been a major transit route, bringing crude oil from
suppliers in the Persian Gulf and Africa to markets in Asia. Tanker sea lanes pass near
Indian waters between major chokepoints such as the Strait of Malacca and the Strait of
Hormuz (see the World Oil Transit Chokepoints report). The majority of Indian oil ports are
located on the countrys western side to receive shipments of crude oil that passes through
these routes.
Indias crude oil imports reached nearly 3.9 million bbl/d in 2013, according to Global Trade
Atlas. Saudi Arabia is Indias largest oil supplier, with a 20% share of crude oil imports. In
total, approximately 62% of Indias imported crude oil came from Middle East countries. The
second-biggest source of imports is the Western Hemisphere (19%), with the majority of
that crude oil coming from Venezuela. Africa contributed 16% of Indias crude oil imports.
Supply disruptions in several countries, including Iran, Libya, Sudan, and Nigeria, in tandem
with Indias growing dependence on imported crude oil, have compelled India to diversify its
crude oil import slate. Iran accounted for 5.5% of Indias crude imports in 2013, down from
8.3% in 2011-12 as a result of the U.S. and European sanctions imposed on Iranian oil
exports. Also, Indian refiners are trying to reduce crude oil import costs by purchasing less
expensive crude oil. Prices of Middle Eastern crude oil grades in the past year have been
high relative to prices of oil from the Western Hemisphere, prompting Indian companies to
import more crude oil from Latin America, primarily from Venezuela, Colombia, and Mexico.
Despite being a net importer of crude oil, India has become a net exporter of petroleum
products by investing in refineries designed for export, particularly in Gujarat. Essar Oil and
RIL export naphtha, motor gasoline, and gasoil to the international market, particularly to
Singapore, Saudi Arabia, the United Arab Emirates, and the Netherlands. Reliance
Industries has also targeted U.S. markets and leased storage space in New York harbor in
2008. However, the government encourages the companies to focus on supplying domestic
markets before selling abroad.
India liquid fuels infrastructure
Source: U.S. Energy Information Administration, IHS Edin
Representation of international boundaries and names is not
necessarily authoritative.
Pipelines and infrastructure
According to the Ministry of Oil and Natural Gas, Indias crude oil pipeline network spans
just under 5,900 miles and has a total capacity of 2.8 million bbl/d. Approximately 30
terminals, mostly on the northwest coast, take in crude oil imports. Pipelines run from these
ports and producing areas (particularly from Gujarat) to major oil refineries in Gujarat,
Mathura, Uttar Pradesh, and Haryana. On the eastern part of the country, pipelines run from
West Bengal to the Paradip oil refinery. Refineries are generally located in coastal areas,
because the majority of crude oil comes from tanker imports and offshore fields. Central
and southern areas have few major pipelines, because the bulk of refining capacity is in the
northwest and northeast.
The Indian Oil Corporation (IOC) controls and operates the oil product pipelines and
supplies most of the oil products going to the domestic market. Oil product pipelines cluster
in the north and northeast parts of India, while central and southern areas must rely on oil
distributed through other means, such as cargo trucks. IOC plans to build additional crude
oil and product lines including one to move supplies from its Paradip refinery in the eastern
Odisha state to growing demand centers in Odisha and adjacent states of Jharkhand and
Chhattisgarh.
Strategic petroleum reserve
In 2005, the Indian Government decided to set up strategic storage of 37 million barrels of
crude oil at three locations (Visakhapatnam, Mangalore, and Padur). The Indian Strategic
Petroleum Reserves Limited (ISPRL), a special purpose legal entity owned by the Oil
Industry Development Board, would manage the proposed facilities, which are expected to
be completed by 2015. The government unveiled plans to add another 91 million barrels to
the states crude oil capacity to protect India from supply disruptions by 2017. The country
anticipates having crude oil stocks to cover 90 days of the countrys oil demand by 2020.
Natural gas
Natural gas serves as a substitute for coal in electricity generation and fertilizer production
in India. The country began importing liquefied natural gas from Qatar in 2004 and
increasingly relies on imports to meet domestic natural gas needs.
Natural gas mainly serves as a substitute for coal for electricity generation and as an
alternative for LPG and other petroleum products in the fertilizer and other sectors. The
country was self-sufficient in natural gas until 2004, when it began to import liquefied
natural gas (LNG) from Qatar. Because it has not been able to create sufficient natural gas
infrastructure on a national level or produce adequate domestic natural gas to meet
domestic demand, India increasingly relies on imported LNG. India was the worlds fourth-
largest LNG importer in 2013, following Japan, South Korea, and China, and consumed
almost 6% of the global market, according to data from IHS Energy. Indian companies hold
both long-term supply contracts and more expensive spot LNG contracts.
Natural gas consumption has grown at an annual rate of 8% from 2000 and 2012, although
supply disruptions starting in 2011 resulted in declining consumption. Natural gas
consumption in India was tied closely to domestic production until imports became
available in 2004. In 2012, India consumed 2.1 trillion cubic feet (Tcf) of natural gas. LNG
imports accounted for about 29% of 2012 demand, and LNG is expected to account for an
increasing portion of demand at least in the next several years as Indian energy firms
attempt to reverse the countrys recent domestic production declines. Increasing LNG
imports will depend on the pace of expansion in regasification terminal capacity and
pipeline infrastructure connecting gas to markets that currently lack access. The countrys
pricing system is undergoing revision to unlock regulated prices that are well below the
import price levels. Raising gas prices would provide oil and gas firms with economic
incentives for upstream development, especially in deepwater plays and technically
challenging fields, and would allow LNG importers to compete more effectively for gas
consumers in a higher-priced environment.
The majority of natural gas demand in 2012 came from the power sector (33%), the fertilizer
industry (28%), and the replacement of LPG for cooking oil and other uses in the residential
sector (15%), according to Indias MOPNG. The government has labeled these as priority
sectors for domestic programs, which ensures that they receive larger shares of any new
gas supply before other consumers. The fertilizer sector, which is highly price-sensitive, has
been able to maintain low fuel costs by using natural gas. The recent unexpected natural
gas production declines since 2011 have forced electric generators to seek fuel
alternatives, primarily coal. The government is promoting the use of natural gas in the
residential sector as an alternative to LPG as a cooking fuel.
Sector organization
In 2013, India began natural gas pricing reforms, and the government approved a new pricing scheme to
further align domestic prices with international market prices and to raise investment for the sector.
As with the oil sector, Indias Ministry of Petroleum and Natural Gas (MOPNG) oversees
natural gas exploration and production activities. MOPNGs Directorate of Hydrocarbons
functions as an upstream regulator and monitors coalbed methane projects. Until 2006, the
Gas Authority of India Limited (GAIL) functioned as a near-monopoly operating Indias
natural gas pipelines.
However, the government began to reform gas pricing and created the Petroleum Natural
Gas Regulatory Board to regulate downstream activities such as distribution and marketing.
Different producers of natural gas have different pricing schemes in India. The government
directly sets prices for public sector companies through the Administered Price Mechanism
(APM), while joint-venture producers generally index their prices to international rates. LNG
prices are completely market-driven and are about triple the price of the APM benchmark on
average. The Indian government approved a new natural gas pricing regime in June 2013 in
an effort to attract investment critical to increase domestic gas production and mitigate
upstream project delays. Most of Indias gas consumers pay rates that are much lower than
the prices of imported gas. The proposed pricing scheme would more closely align Indias
gas prices to international market rates and attempt to create a more uniform pricing
structure. The current APM benchmark rate of $4.20 per million Btu would double under the
new formula, according to industry sources. Although the pricing scheme was slated to take
effect on April 1, 2014, Indias oil ministry delayed the price increase until after the countrys
general elections when the new government is expected to review the new pricing system
and determine its course of action.
New private companies such as Petronet LNG Limited have formed in recent years aiming
to benefit from growing LNG imports in India by building regasification plants. Privately-
owned RIL emerged as an important upstream player in the natural gas market after
discovering significant reserves in the Krishna-Godavari basin in 2002. RIL also operates
the important East-West gas pipeline from Andhra Pradesh to Gujarat.
International firms have some stake in the natural gas sector. BP owns part of the KG-D6
field in the Krishna-Godavari basin, and Royal Dutch Shell has invested in potential future
LNG facilities.
Exploration and production
India had 47 trillion cubic feet of natural gas reserves at the beginning of 2014, mostly located offshore.
The two largest state-owned oil companies, ONGC and Oil India, dominate the countrys upstream gas
sector.
According to the Oil & Gas Journal, India had 47 Tcf of proved natural gas reserves at the
beginning of 2014. About 34% of total reserves are located onshore, while 66% are
offshore, according to Indias Ministry of Oil and Gas. In 2002, energy companies made a
number of large gas discoveries in the Krishna-Godavari (KG) basin off of Indias eastern
coast, pushing up both the reserve base and production. However, production from some of
the more mature fields have declined in recent years, and RIL cut the recoverable reserves
of its two major gas fields in the major D6 block (D1 and D3) in the KG basin from 10.3 Tcf
estimated in December 2006 to 3.1 Tcf in 2012 because of unexpected declines and
reservoir performance problems.
Total gas production in India amounted to around 1.5 Tcf in 2012. The two biggest state-
owned companies, ONGC and Oil India Ltd. (OIL), dominate Indias upstream gas sector.
ONGC operates the Mumbai High Field, which provides a large amount of Indias natural
gas supply. ONGC remains Indias largest natural gas producer, accounting for 62% of the
domestic production in 2012 as reported in the companys annual report. However, the
government has encouraged private and foreign companies to enter the upstream sector in
recent years. RIL is becoming a major upstream force because of natural gas discoveries
in the Krishna-Godavari basin. RIL has a strategic partnership with BP, which has a 30%
stake in 21 of RILs production-sharing contracts. Other major international oil companies
do not have significant investments in Indias natural gas upstream sector. Indias MOPNG
estimates that gas production continued to decline during 2013.
The KG-D6 field came online in early 2009, ramping up production to hit a peak of more
than 2.4 billion cubic feet per day (Bcf/d) or 876 Bcf per year (Bcf/y), in 2010. However, the
field has experienced production shortfalls in recent years, and output dropped to 0.4 Bcf/d
(146 Bcf/y) at the end of 2013. RIL and BP plan to tie in production from satellite fields and
invest $5-10 billion to restore the production of the D6 block to more than 2.1 Bcf/d (767
Bcf/y) by 2020.
ONGC and Gujarat State Petroleum Corporation Limited (GSPCL) are also developing
several offshore areas in Krishna-Godavari basin. Another promising producing area is the
Cambay basin in western India, where independent company Oilex has done some
preliminary work assessing the potential for tight natural gas.
Coalbed Methane and Shale Gas
India began awarding coalbed methane (CBM) blocks for exploration in 2001, although it
has taken more than a decade to begin producing at these fields. The Indian Ministry of Oil
partnered with the U.S. Geological Survey (USGS) and ONGC to conduct a resource
assessment and estimates anywhere between 9 and 92 Tcf of CBM resources both
onshore and offshore India. Foreign companies have largely been absent from CBM
production, leaving domestic Indian companies struggling to attract enough expertise and
technology to develop these resources. Great Eastern Energy Corporation (GEEC) has
developed the Raniganj block in West Bengal, with an estimated 1 Tcf of gas potential.
Essar Oil and RIL have also been developing blocks in Bengal, although there has not
been any significant commercial production. Total CBM production in 2013 amounted to
about 5.8 Bcf.
Companies are interested in exploring the Cambay basin in Gujarat, the Assam-Arakan
basin in northeast India, and the Gondwana basin in Central India for shale gas resources,
although there has been no commercial production or publicly released reserve figures. In
its 2013 assessment of global shale gas reserves, EIA estimates India has 96 Tcf of
technically recoverable shale gas reserves. Joshi Technologies made the first shale oil
discovery in Cambay Basin in mid-2010. Indias oil ministry announced that the government
will unveil a shale gas and oil policy in the near future and will begin to sell shale gas
development blocks, although it has not made any awards to date.
Pipelines and infrastructure
The two most important companies operating Indias large gas pipeline system are GAIL
and Reliance Gas Transportation Infrastructure Limited (RGTIL). GAIL, the state-owned gas
transmission and marketing company, operates two major gas pipelines in northwestern
India with a combined length of 3,328 miles: the Hazira-Vijaipur-Jagadishpur (HVJ) line
running from Gujarat to Delhi, and the Dahej-Vijaipur (DVPL) line. The company services
primarily the northwestern region of India and makes up over 70% of the countrys pipeline
network. Reliance Gas Transportation Infrastructure (RGTIL, owned by RIL) is the biggest
private investor in the gas transmission structure and brought the 881-mile East-West
pipeline online in 2009 to link the promising KG-D6 gas field to GAILs pipeline network and
demand centers in the northern and western regions. However, RILs East-West pipeline
remains relatively underutilized as a result of lower-than-expected production from the KG-
D6 field. Other players like Assam Gas Company and Gujarat State Petronet Limited
(GSPL) have significant pipeline assets that service regional demand centers in
northeastern India and Gujarat, respectively.
Insufficient pipeline infrastructure and lack of a nationally integrated system are key factors
that constrain natural gas demand in India, although GAIL and other companies are
investing in several pipeline projects. The countrys natural gas pipeline network totaled
over 9,200 miles in 2013, and the current Five Year Plan proposes expanding the gas
network to 18,000 miles by 2017. GAIL plans to expand its network and further integrate
southern India with the pipeline system in the northwest of the country. In early 2013, GAIL
commissioned the 600-mile Dabhol to Bengaluru (Bangalore) pipeline, the first line to
connect the southern part of the country to the national grid. GAIL also plans to build a
pipeline from its newly commissioned LNG regasification terminal at Kochi in southwestern
India to Mangalore and other parts of southern India, although regulatory and land rights
issues have delayed the project.
The Indian government has considered importing natural gas via pipeline through several
international projects, although many of these have proved unfeasible. In 2005, negotiations
over a transnational pipeline between the Indian and Bangladesh governments fell through.
In 2006, India withdrew from the Iran-Pakistan-India (IPI) pipeline project. However, the
government still participates in a pipeline project to import natural gas from Turkmenistan to
India natural gas infrastructure
Source: U.S. Energy Information Administration, IHS Edin
Representation of international boundaries and names is not
necessarily authoritative.
India. The Turkmenistan-Afghanistan-Pakistan-India (TAPI) project, also known as the
Trans-Afghanistan Pipeline, has seen a decade of discussion, although major geopolitical
risks and technical challenges have prevented the project from actually starting. However,
the countries have made some progress in moving TAPI forward. The partners signed a
framework agreement in 2010 and agreed on unified transit tariffs for the route in early
2012. In May 2012, India signed gas supply and purchase agreements with Turkmenistan.
In early February 2013, Indias government approved a special-purpose legal entity to which
participating members of the pipeline would contribute investment funds. In November
2013, the four participants appointed the Asian Development Bank (ADB) as the projects
technical and financial advisor. The ADB estimated the pipelines cost at about $10-12
billion.
Liquefied natural gas
Indian companies are investing in new regasification facilities to meet the countrys rising natural gas
demand. India was the worlds fourth-largest liquefied natural gas importer in 2013.
Liquefied natural gas (LNG) has become an important part of Indias energy portfolio since
the country began importing it from Qatar in 2004. In 2013, India was the worlds fourth-
largest LNG importer, importing 638 Bcf, or 6%, of global trade, according to data from IHS
Energy. Petronet, a joint venture between GAIL, ONGC, IOC, and several foreign firms, is the
major importer of LNG supplies to India. Petronet owns two existing LNG terminals, Dahej
(480 Bcf/y) and Kochi (120 Bcf/y). Shell (74% share) and Total (26% share) jointly own the
Hazira terminal (240 Bcf/y), which operates as a merchant facility, importing only short-term
and spot cargoes at present. Indias total regasification capacity now stands at 936 Bcf, and
terminal owners have proposed capacity expansions at all existing terminals. Expansion
under construction at Dahej will increase the terminals capacity to 720 Bcf by 2016.
Unexpected production declines in Indias KG-D6 gas field mean the country must rely on
higher LNG imports. Average imported LNG prices have increased to three times the price
of domestically produced natural gas because they are not subject to the government
setting prices through the Administered Price Mechanism (see Sector Organization). Indian
producers such as RIL have asked the government to raise the wellhead price for gas (the
wholesale price at the point of production) as a way of justifying investment into deepwater
projects. If the proposed gas pricing reform is implemented, there will be greater
investment incentives for domestic gas development that could increase competition for
LNG imports.
Indian companies have invested in increasing the countrys LNG regasification capacity in
recent years to meet rising demand. In early 2013, GAIL, NTPC, and several other smaller
players restarted the Dabhol project, originally proposed by now-defunct Enron, which
includes a regasification terminal to fuel three gas-fired power stations. Dabhol LNG also
ships natural gas to southern India through the new pipeline to Bengaluru. GAIL is installing
a breakwater facility to double Dabhols capacity by 2017. Petronets LNG terminal at Kochi
was commissioned in late 2013. However, the terminal is experiencing low utilization
because of delays in the approval and construction of a proposed pipeline to Mangalore
and other parts of southern India, according to PFC Energy. The eastern side of India lacks
pipeline infrastructure and gas supply following declines in the KG basin; thus companies
are quickly planning terminals to come online in the next few years. IOC proposed the
Ennore project in Tamil Nadu in southeastern India. Other proposed projects are located
along Indias eastern coast include three floating terminal projects at Kakinada and one at
Gangavaram. Several proposed regasification projects along the western coast include
GSPCs Mundra terminal in Gujarat, expected to be built by 2016.
Qatars RasGas is Indias sole long-term supplier of natural gas, with two contracts for a
total of 360 Bcf. In 2013, Qatar was the source of 84% of Indias total LNG imports,
according to IHS Energy. India has been an active importer of spot cargoes following
interruptions in the KG-D6 field production after 2010 and began receiving LNG cargoes
from a variety of exporting countries. Nigeria, Egypt, and Yemen have become Indias
largest short-term LNG suppliers.
Indian LNG importers actively sought supply from various new LNG sources and signed
several short- and long-term purchase agreements in the past few years. India signed
agreements to receive supply from Australias Gorgon LNG terminal and several U.S.
terminals (Sabine Pass, Cove Point, and Main Pass) and from the portfolio of various global
LNG suppliers such as BG, GDF Suez, Gas Natural Fenosa, and Gazprom. As Indian
companies become more active in pursuing overseas upstream oil and gas plays, OIL has
invested in gas projects in Canada (Pacific Northwest LNG) and an offshore gas project in
Mozambique (jointly with ONGC) to secure LNG imports for India.
Coal
Coal is Indias primary source of energy. The country has the worlds fifth-largest coal
reserves, and ranked third largest in terms of both production and consumption in 2012. The
state retains a near-monopoly on the coal sector. The power sector makes up the majority of
coal consumption.
Coal is Indias primary source of energy, and the country was the third-largest global
consumer in 2012. The country has the fifth-largest coal reserves in the world. At the same
time, the coal sector is one of the most centralized and inefficient sectors in India. Two
state-owned companies have a near-monopoly on production and distribution. The country
also faces a widening gap between demand and supply. Although production has
moderately increased by about 4% per year since 2007, producers have failed to reach the
governments production targets. Meanwhile, demand grew more than 7% annually
between 2007 and 2012, and reached 826 million short tons in 2012. Because coal
production cannot keep pace with demand, particularly from the power sector, India has met
more of its coal needs with imports.
The power sector is the largest consumer of coal, accounting for 69% of coal consumption
in 2011, according to the IEA. Because power plants rely so heavily on coal, coal shortages
are a major contributor to shortfalls in electricity generation and consequent blackouts
throughout the country. Also, coal demand has escalated in the past few years from the
power sector, which encountered problems accessing natural gas supply and lower
hydroelectricity-sourced generation during the weak monsoon season in 2012.
Steel and cement industries are also significant coal consumers. India has limited
reserves of coking coal, which is an important raw material for steel production. The state of
Jharkhand holds most of Indias coking coal reserves, but it does not supply enough to
meet the industrys needs. Because of this shortage, India imports large quantities of
coking coal from abroad.
Sector organization
Indias government took control of the countrys coal reserves with the 1973 Coal Mines
Nationalization Act, establishing Coal India Limited (CIL) in 1975 as the state-owned sole
producer and aggregating coal production and investment. After 1993 it tried to encourage
foreign and private investment into the coal sector through the National Mineral Policy. By
2000, the government deregulated coal prices, allowing CIL and other companies to
increase prices when there is a rise in the cost of production. However, the Ministry of Coal
and Mines continues to control the distribution of coal resources and subsidies to various
companies. In 2007, the government passed the New Coal Distribution Policy that
attempted to allocate limited coal supplies to priority sectors, particularly the power and
fertilizer industries, and Indias 12th Five Year Plan calls for CIL to link indigenous coal
production with part of the fuel requirements of power plant projects coming online by 2017.
CIL remains the countrys largest coal producer; and they produced about 81% of the
countrys coal in 2012, according to the IEA. CIL underwent an initial public offering (IPO) in
2010 and divested 10% of its government share, Indias largest IPO to date. Singareni
Collieries Company Limited (SCCL), another public-owned company, was responsible for
nearly 10% of the countrys coal production in 2012, mainly to the southern region of the
country, according to Indias Ministry of Coal. Other smaller companies operate throughout
the country.
Exploration and production
India ranks as the third-largest coal producer in the world. However, the country continues to experience
regulatory, land acquisition, technical, and distribution challenges that limit production growth and create
bottlenecks hindering efficient transportation of coal to key demand centers.
India had 66.8 billion short tons of proven coal reserves in 2011, the fifth-largest in the world
(third-largest reserves in anthracite and bituminous after the United States and China),
according to the World Energy Council. The Indian Ministry of Coal estimated proven
reserves to be 137 billion short tons in 2012. Indian coal typically has high ash, low sulfur
content, and a low-to-medium calorific value.
Most coal reserves are located in the eastern parts of the country. Jharkhand, Chhattisgarh,
and Odisha account for approximately 64% of the countrys coal reserves, according to the
IEA. Other significant coal-producing states include West Bengal, Andhra Pradesh, Madhya
Pradesh, and Maharashtra.
India is the third-largest global coal producer, with coal output nearly doubling between
2000 and 2012 to 650 million short tons. Despite its sizeable reserves and rising
production, India has increasing supply shortages and systemic problems with its mining
industry. According to an IEA report, about 90% of the countrys coal mines are opencast, or
surface, mines (less than 1,000 feet deep), which is more cost-effective and less
dangerous for workers but causes more environmental impact. India lacks more advanced
technology to engage in large-scale underground mining operations, which keeps
productivity levels low. A lack of competition within the coal sector inhibits private and foreign
investment that could be used to improve underground mining techniques. Also, many coal
deposits are located in areas that pose environmental issues or potential dislocation of
people. Regulatory hurdles continue to pose delays in obtaining environmental and land
acquisition approvals for mining companies.
Indias coal mines are also located far from the highest-demand markets in southern and
western India, posing a significant logistical challenge to coal producers and distributors.
Railcars transport the majority of Indian coal, according to CIL. Limited railway capacity,
delays to railroad projects, and high transport costs to demand centers are other factors
negatively affecting Indias coal output and deliveries to users.
Trade
Although traditionally not a major importer of coal, India has imported small volumes of
coking coal for over two decades to meet high demand in the steel and iron industry. The
countrys recent supply shortages spurred Indias significant increase of coal imports over
the past few years from several key exporting countries. India purchased 179 million short
tons from overseas and was the third-largest coal importer behind China and Japan in
2012. India imports thermal (steam) coal used in power plants mainly from Indonesia and
South Africa and coking coal for steel production from Australia. Indonesia is the largest
source of coal imports to India, accounting for 55% of total coal imports in 2012.
Electricity
India had 249 gigawatts of installed electricity generation capacity connected to the national
network in early 2014, mostly coal-powered plants. Because of insufficient fuel supply and
power generation and transmission capacity, the country suffers from a severe electricity
shortage, leading to rolling blackouts.
As of May 2014, India had 249 gigawatts (GW) of utility-based installed electricity generating
capacity, mostly from coal-fired power plants, according to Indias Central Electricity
Authority (CEA). Generation capacity from smaller captive power plants, or those that serve
specific industries for in-house consumption and may not be connected to the grid,
registered about 39 GW in 2014. According to the IEA, installed capacity from coal and
natural gas power plants is heavily clustered in the more populated western region of the
country, particularly in Maharashtra and Gujarat. For example, Maharashtra, the largest
Indian state by GDP (its capital is Mumbai, the countrys largest city), contains 14% of the
nations generating capacity. Hydropower is the second largest source of electricity,
accounting for 16% of Indias utility-based installed capacity in early 2014 and supplying
about 13% of the countrys electricity in 2011. The industrial sector has been a key driver of
electricity consumption in the past decade, as a result of Indias rapidly expanding
economy.
India suffers from severe shortages of electricity, particularly during peak hours of demand,
and often experiences shut-downs lasting from several hours to days in certain areas. India
suffered an unprecedented electricity blackout for two days in July 2012 that affected an
estimated 680 million people across the countrys northern states. This outage highlights
the increasing pressure on Indias power system to secure more fuel supplies and
infrastructure investment in each stage of power transmission. Utilization rates in Indian
power plants using fossil fuels have fallen steadily since 2007 (from a peak of nearly 79%)
to about 70% in 2013 because of disruptions in steady domestic fuel supplies and
transmission and distribution constraints, according to the IEA and Indias CEA.
Deficiencies in coal and natural gas supply to power plants have caused some plant
owners to curtail operations and even mothball some plants. Transmission and distribution
losses and technical problems in moving electricity between various states also impair
system reliability.
Other factors contributing to power shortages are the lag of power capacity expansions and
the need to replace older, less efficient units. India has historically fallen short of its capacity
addition targets for electricity, although the country has successfully attracted private
investment for power plant construction in the past decade. In its 12th Five Year Plan (2012-
17), India plans to add 120 GW of power capacity to the grid, with more than half of it
composed of coal-fired generation capacity. By early 2014, more than a third of this capacity
had been brought online.
In efforts to diversify the generation portfolio and offset some carbon dioxide emissions
from fossil fuel sources, the government is promoting renewable energy use, with a 32-GW
planned capacity expansion from sources such as wind, solar, biomass, and waste during
the current Five Year Plan. For instance, India launched a national solar mission with a goal
of adding 22 GW of solar capacity by 2022.
In addition, significant parts of the country, particularly in rural areas, do not have access to
electricity. The Indian government reported overall household electrification in India was
75%, representing more than 300 million people without electricity, in 2011. While 94% of
urban households had electricity, only 67% of rural households had access, and often the
rural consumers experienced much more frequently interrupted electricity supply. The
government began a program in 2005 called Rajiv Gandhi Grameen Vidyutikaran Yojana to
provide all villages electricity within five years through significant investments in rural
electrification. While the program has succeeded in electrifying many rural areas, power
supply is unreliable and frequent blackouts persist.
India utility-based installed power
capacity Megawatts
Source
Coal 147,568
Natural Gas 22,608
Petroleum and other liquids 1,200
Hydroelectricity 40,662
Nuclear 4,780
Other renewables 31,692
Total 248,509
Source: Indias CEA.
Sector organization
The Ministry of Power is responsible for planning and implementing Indias power sector
policy, with various subunits handling different parts of the sector, including thermal,
hydropower, and distribution. The CEA advises the central government on long- and short-
term policy planning. The Central Electricity Regulatory Commission and State Electricity
Regulatory Commissions set generation and transmission policies.
The source of Indias current electricity regulatory framework is the 2003 Electricity Act,
which attempted to reform the state electricity boards, open access to transmission and
distribution networks, and create state electricity regulatory commissions (SERCs) to
manage electricity on a regional basis. Several key private investors, namely Reliance
Power, Tata Power, and Essar Power, have entered Indias power generation sector, and
the share of private sector to state-run generation capacity is on the rise. The government
has not fully implemented many parts of the Act, and Indias electricity sector continues to
face serious challenges in procurement and distribution of sufficient fuel for generation.
Power tariffs for end-users are highly regulated and kept low for the residential and
agricultural sectors. Low retail prices often do not match higher generation costs, triggering
financial losses for transmission and distribution companies and lower investment in
electricity distribution. Higher costs from imported fuels and price swings in international
fuel markets create financial constraints for power producers who cannot pass full costs to
some of their customers. In order to mitigate supply risk from fuel sources with high price
volatility and reduce carbon dioxide emissions growth, Indias government is encouraging
more generation from renewable energy sources.
The government established the Power Grid Corporation of India (POWERGRID) to operate
five regional electricity grids, while state transmission utilities (with some private sector
participation) run most transmission and distribution segments. Although the central
government finances electricity development projects, delivering electricity to customers is
the responsibility of state governments. Therefore, more-efficient states such as
Maharashtra tend to have better electricity availability. The southern grid was integrated with
the other four grids at the end of 2013, creating a more unified national grid. However, the
transmission sector still requires substantial investment for capacity expansion as well as
improved grid management to ensure power supply reliability across states and to reduce
technical losses in transmission and distribution.
Different states also have varying energy mixes based on their natural resource
endowment. For example, Gujarat is close to major gas fields and LNG terminals, allowing
regional power plants to use a larger share of natural gas. Renewable power generation is
concentrated in a few states so far. Wind power generation, which makes up the bulk of non
hydroelectric renewable capacity, is found in southern states such as Tamil Nadu, and
solar power generation is located in Gujarat and Rajasthan. Hydroelectricity is located
mostly in the northeastern states.
Fossil fuels
Fossil fuel generation, mostly from coal, accounted for about 81% of total electricity
generation in the country in 2011. Coal-fired power plants dominate Indias electricity
generation sector and accounted for nearly 148 GW (or 59%) of the utility-based installed
capacity in early 2014. India plans to add more than 72 GW in fossil fuel-fired power
capacity to the grid, with almost 70 GW from coal-fired stations, between 2012 and 2017.
The government is attracting private investment for its Ultra-Mega Power Plants Program,
which involves installing large-scale, coal-fired supercritical plants that are more energy-
efficient for plant operations. Many of these plants are under construction, and about half of
the proposed coal-fired capacity slated to come online during the 12th Five Year Plan
(through 2017) are designed with more advanced technology. To alleviate fuel
transportation constraints, these plants will be located near domestic coal supplies and the
coasts to accommodate imports.
Natural gas fuels most of the remaining share of fossil fuel-fired electricity generation. After
the newly developed Krishna Godavari basin (including the KG-D6 field) began producing
significant amounts of natural gas and India began importing LNG during the past decade,
natural gas use in power began to rise. Since 2011, natural gas-fired generation has
waned, and some plants have ceased operation since the KG-D6 field production began to
decline. Natural gas-fired generation capacity was nearly 23 GW in early 2014, or 9% of total
generation capacity. The governments expansion plans for gas-fired capacity through 2017
are much lower compared to other fuel sources. It plans to use natural gas-fired power as a
supply source for peak requirements.
Hydroelectric
India was the worlds seventh-largest producer of hydroelectric power in 2012, with 115
billion kilowatthours generated. Total utility-based installed capacity of hydropower in early
2014 was nearly 41 GW, according to the CEA.
India benefits from a tropical climate, which gives the country increased hydropower
potential, particularly during the summer months. In particular, states with significant river
systems such as Himachal Pradesh, Jammu, Kashmir, and Uttarakhand benefit from
energy surpluses as a result of abundant precipitation during the monsoon period.
However, coal and natural gas generation is related inversely to hydropower capacity; when
hydropower utilization falls, for example with a weak monsoon season, coal-fired power
plants will generate more electricity to compensate for the shortfall. In 2012, India
experienced a drought during the summer and saw a dip in hydroelectric generation which
reversed in 2013 when the monsoon season was stronger than normal.
Nuclear
India has 20 operational nuclear reactors at six nuclear power plants with a generation
capacity of 4.8 GW, representing about 2% of total utility-based generation capacity. The
Kudankulam plant in the southern state of Tamil Nadu was connected to the electricity grid
at the end of 2013 and is expected to become operational in mid-2014 according to the
Nuclear Power Corporation of India, adding another 1 GW to the countrys nuclear capacity.
As of April 2014, six additional reactors with a combined 4.3 GW of capacity are under
construction and expected to come online by 2017. As India seeks reliable electricity supply
to accommodate its swiftly growing power demand, the government has indicated that it
plans to increase the nuclear share of total generation from 3% in 2011 to 25% by 2050.
In September 2008, India became a party to the Nuclear Suppliers Group agreement,
which opened access to nuclear technology and expertise through several cooperative
agreements. The government has signed several such agreements with countries
including the United States, Russia, France, the United Kingdom, South Korea, and
Canada. In addition, India gained access to reactor parts and uranium fuel from other
countries as a result of these agreements.
Indians protested nuclear power after the Fukushima disaster in Japan, and the
government responded by organizing safety audits for existing reactors. The Atomic Energy
Regulatory Board (AERB) conducted stress tests of all nuclear power plants. The Indian
government has a three-stage nuclear development plan to gradually shift from powering
reactors with natural uranium to accumulating reserves of other fissile materials such as
thorium. While the Indian nuclear sector historically has had limited access to uranium, it
has abundant thorium reserves that can power more sophisticated reactors. Indias
commitment to the thorium fuel cycle sets it apart from most nations with nuclear power
programs.
Biomass and waste
The lack of electricity in some parts of India results in a substantial use of traditional
biomass and waste products primarily for household uses in rural areas. A small portion of
biomass and bagasse contributes to power plant feedstock.
Rural areas of India tend to rely on traditional biomass (including firewood, animal dung,
and agricultural residue) for cooking, heating, and lighting because they lack access to
other energy supplies. These sources can be burned directly to produce heat and electricity.
Large parts of India rely on biomass as the primary fuel for cooking. According to the 2011
India census, 62.5% of rural households use firewood as the primary fuel for cooking,
12.3% use crop residue as the primary cooking fuel, and 10.9% use dung. By contrast,
more than 3% of urban households use crop residue and dung, and only 20% use firewood
as the primary fuel source for cooking. These uses can cause health problems from
exposure to waste products and pollution or environmental problems when forests or crops
are harvested unsustainably. On the whole, about 66% of Indias total population used
traditional biomass for cooking purposes in 2011, according to the IEA.
India also uses biomass in the power sector. According to the CEA, India had at least 3.4
GW of utility-based installed capacity in biomass power and bagasse-based cogeneration
plants as of mid-2013. Indias Ministry of New and Renewable Energy reports the country
has 18 GW of potential biomass electricity generation capacity and 5 GW of potential
bagasse-based generation. A large amount of biomass used for electricity generation
comes from bagasse (crushed sugarcane or sorghum stalks), which can be used in
combustion-powered generators. Biodiesel and other liquid biofuels consumption in India
is fairly low and mostly comes from several states that mandate 5% blending of ethanol in
gasoline.
India households by
primary fuel used for
cooking Percentage
Fuel Type Total Rural Urban
Firewood 49.0 62.5 20.1
Crop residue 8.9 12.3 1.4
Cowdung cake 7.9 10.9 1.7
Coal, Lignite, Charcoal 1.4 0.8 2.9
Kerosene 2.9 0.7 7.5
Liquefied Petroleum
Gases/Piped Natural Gas
28.5 11.4 65.0
Electicity 0.1 0.1 0.1
Bio-gas 0.4 0.4 0.4
Any other 0.5 0.6 0.2
No cooking 0.3 0.2 0.5
Source: India Census 2011
Notes
Data presented in the text are the most recent available as of June 26, 2014.
Data are EIA estimates unless otherwise noted.
Sources
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Associated Press
BBC
Business Standard
Census of India
CIA World Factbook
Economist Intelligence Unit
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International Energy Agency (IEA)
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Indian Chamber of Commerce
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Oil India Limited
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PIRA
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Nuclear Association