Energy technology alternatives for India till 2030

Abstract

PurposeIndia aspires for high economic growth of around 8‐9 percent over next few years. Higher economic growth would lead to higher production and consumption, more energy use and more CO2 emissions. At a time when CO2 emissions reductions are becoming an important point of debate and fast erosion of fossil fuel reserves all over the world, it is necessary to identify technological choices that reduce CO2 emission and dependence on fossil fuels. A few modeling studies have explored India's technology options. The Integrated Energy Policy (IEP) report of the Planning Commission of India presents different scenarios for energy supply. The IEP model is however an energy technology model and does not consider a feed back into the economy due to changes in technological choice. This paper aims to follow the IEP in the kind of scenario's envisaged and attempts to investigate its macro‐economic impacts.Design/methodology/approachThe Integrated Research and Action for Development model is an activity analysis model that uses a social accounting matrix to account for inter‐sectoral influence and which allows for a two‐way interaction between energy sectors (coal, oil, natural gas, and electricity) and other sectors of the economy. This paper tries to have three scenarios that are comparable to IEP in terms of specifications and their resultant energy demand (Mtoe).FindingsThe analyses prove that changing technological choice results in gross domestic product gains, and reduction in energy demand and CO2 emission. The results show that the policies considered can have adverse welfare impacts.Originality/valueThis paper helps in providing an insight into the macro‐economic impacts of the IEP scenarios. The two‐way dependence of technological choice and output shows the gains and loses out of moving to more costlier but low emission‐based power generation technology.