“India is a major, single-most important driver of energy demand growth”
-Mr. Fatih Birol, Executive Director, International Energy Agency
This week marks the visit of International Energy Agency Executive Director Mr. Fatih Birol as India hosts India Energy Week from 6 to 8 February 2023. Mr. Birol is also the head of the energy board of the World Economic Forum.
He says that there is a lot of competition among nations for positioning themselves toward the next chapter of industrial growth. Given India’s strong economic fundamentals, it should be one of the leaders of this new industrial age.
Well, a plethora of factors make India a favorable investment destination. The country’s strong demographics, growing energy demand, business ecosystem, and geo-political stability, among others, make it an encouraging venture for overseas investments.
Not only that, the International Energy Agency is well aware of the impressive track record and political will of the incumbent government toward energy transition. In his interview with Business Standard, Mr. Birol highlighted that in recent years India has provided electricity to ~500 million people which is close to the population of Europe. He also pointed to the success of the UJALA scheme under which more than 365 million LED lights were distributed resulting in annual savings of ~48,000 million units.
Mr. Birol will meet India’s Prime Minister along with several other key ministers this week to discuss a roadmap for India to ‘quickly’ step up manufacturing capacity for green technologies.
His current visit comes on the back of a series of high-level discussions with a range of US and Canadian government leaders on major energy and climate issues just 4 days back. The discussions revolved around the 'urgency’ of mobilizing more financing for clean energy transitions in emerging and developing economies.
The developed economies are focusing on the production of new technologies, such as electric batteries, hydrogen cells, and electric vehicles. These are what will drive the next chapter of industrial growth, as pointed out by Mr. Birol.
The developed countries intend to provide financing for clean energy transitions in emerging and developing economies and India is one of the most promising markets in this subset.
India also stands to gain from China plus one theme, wherein the global supply chains are establishing shops in other developing geographies to eliminate over-reliance on China and mitigate supply risks.
Given its large population, India offers tremendous demand potential for renewables over the coming decade. Bank of America estimates that India may attract ~USD 10 billion in green energy investment in 2023.
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