Energy and Material Constraints in India’s Economic Growth

Abstract

The objective of the paper is to highlight two major challenges that India may face for sustained economic growth, i.e. energy and materials availability in the future. The first part of this study is concerned with the “net energy” availability to drive the economy (i.e. the energy available from an energy transformation system after subtracting the energy investment in the system), and the second part looks at the material requirements (of metals, minerals, biomass, etc.) by 2030.

Given India’s recent commitment to reduce its carbon intensity of GDP by 33–35% till 2030 in the Climate Change Summit at Paris and for future electricity generation on a large scale (e.g. from solar photovoltaic modules), one should take into account the manufacturing energy investments required for such systems. From the static and dynamic net energy analyses conducted by the author earlier for SPV module production in India, it is observed that very high growth rates in solar PV programme (more than 20%) would be counter-productive for economic growth. Hence, a focus on energy supply should not divert the focus on energy efficiency, so as to reduce the energy demand of the economy.

Assuming a GDP growth of 7–8%, India’s material consumption (metals, minerals, fossil fuels and biomass) will triple through 2030 from its base value in 2009. This demand is expected to be triggered from three strategic sectors: automotive, housing/construction and renewable energy. In the light of greater global competition for resources, supply vulnerabilities and rising commodity prices, India will have to find ways to meet this significant growth in demand. In order to reduce India’s dependence on imports and its environmental burden, the study builds the case for resource efficiency in these three strategic sectors.