India’s energy boom draws US investors

Washington, June 30 (IANS) India’s rapidly expanding economy will require its energy demand to grow by as much as three times over the next 25 years, creating one of the world’s biggest opportunities for investment, technology partnerships and energy collaboration with the United States, industry leaders said

Speaking at a US-India Strategic Partnership Forum (USISPF) Leadership Summit panel on energy security and infrastructure, ExxonMobil’s Director of Economics and Energy, Dr Prasanna Joshi, said India’s growth trajectory stood apart from every major economy.

“Our outlook is projecting that the global GDP will essentially double in the next 25 years, whereas India… going almost a factor of seven to eight times… to 25 to 30 trillion dollars,” Joshi said.

“Energy demand is expected to grow only about 12 to 15 per cent in the next 25 years. For India, that number is a factor of three.”

He said India’s ambitious growth plans would require massive investments across the entire energy value chain.

Joshi said India would need every available energy source to meet future demand while maintaining energy security and supporting economic growth.

He noted that India’s installed electricity generation capacity currently stands at about 500 gigawatts, with the country’s long-term ambition to increase that to around 2,100 GW by 2047.

Renewable energy alone presents enormous opportunities for investment, he said.

“The projection for solar and wind is… 100 gigawatts have to go to about 1,800 gigawatts… there’s so much opportunity for investment and opportunity for collaboration in India.”

At the same time, Joshi stressed that conventional energy sources would continue to play an important role.

“Only 10 per cent of India’s resources have been explored,” he said, adding that greater exploration would strengthen India’s energy security.

He also said natural gas currently accounts for about 6 per cent of India’s energy mix, with the country’s ambition to raise that to between 12 and 15 per cent by 2047 through new infrastructure, exploration and long-term investment.

Ernie Thrasher, President and CEO of Xcoal Energy & Resources, said India had become the largest overseas market for American coal exports.

“India as a destination is the largest consumer of US export coal. Currently approximately 23 per cent of US coal exports,” Thrasher said.

He said exports had risen from one million tonnes in 2005 to 21.5 million tonnes last year. “So the growth is phenomenal.”

Thrasher said no single source could meet India’s rapidly growing energy needs.

“India and the world needs all forms of energy today. One form of energy by itself is not going to solve the world’s sensational demand for energy and electricity.”

He also pointed to opportunities for American companies in underground mining, coal gasification, battery storage and other energy technologies.

Both speakers said India offered one of the world’s largest long-term investment opportunities.

Joshi said the scale of India’s infrastructure expansion required collaboration across governments, businesses and technology providers.

“This cannot be done by a single entity. You have to collaborate across the entire value chain,” he said.

He added that India’s greatest strength lay in its domestic market.

“India’s growth is going to come from internal… That’s what we can tap into is the consumer base in India.”

Thrasher said investors should adopt a long-term approach.

“We need a long-term horizon to make those energy investments and we need to focus on keeping the cost at a level that the Indian economy can.”

He said affordable energy would remain critical as India continued to raise living standards for its large population.

The discussion took place during the ninth USISPF Leadership Summit in Washington, which brought together senior government officials, diplomats and business leaders from India and the United States to discuss expanding cooperation in trade, energy, technology and strategic sectors.

India and the United States have significantly expanded cooperation in the energy sector in recent years, including liquefied natural gas, civil nuclear energy, renewable technologies, critical minerals and clean energy innovation.

–IANS

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