Jitendra Roychoudhury

The future of India’s energy 

sector

05/June/2018
The Future of India’s Energy Economy

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EIA Energy Conference 2018

Introduction: KAPSARC’s 

mission and structure
The Future of India’s Energy Economy

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EIA Energy Conference 2018

An independent non-profit research center focused on energy 

economics & policy

Advance understanding of energy economics and act as a catalyst for dialogue, 

charting a path to better welfare for societies, locally and globally.

Strategic Objectives

Develop sustainable economic frameworks that lead to:

• Lower societal costs of energy supply

• Higher value created from energy consumption

• Better alignment between energy policy objectives and outcomes
The Future of India’s Energy Economy

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EIA Energy Conference 2018

A KAPSARC research paper

Discussion Papers

A short, 7-10 page, non-attributional, summary 

of a KAPSARC Energy Workshop 

Workshop Briefs

Databases (such as policy dB, weather ... etc.) 

or “tools” such as models (e.g. CGE model 

source code or models for collective decisionmaking processes)

Tools and Datasets
The Future of India’s Energy Economy

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Research Programs and Focus Areas

Energy 

Systems and 

Macroecono

mics

Policy and 

Decision 

Science

Energy 

Demand 

Efficiency 

and 

Productivity

Transportation

and Urban 

Infrastructure

Markets 

and 

Industrial 

Developme

nt

Energy 

Transitions 

and Climate 

Change

Allocating Energy Resources in an Economy

Energy Flows and Market Impacts

Energy Transitions

Social and Environmental Spillovers of Energy Policy Choices

Energy Productivity

Transportation: Modes, Fuels and Technologies
The Future of India’s Energy Economy

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EIA Energy Conference 2018

Energy Systems and 

Macroeconomics

Policy and Decision 

Sciences

Energy Demand, 

Efficiency, and 

Productivity

Transportation and 

Urban Infrastructure

Energy Transitions 

and Climate Change

Markets and Industrial 

Development

Energy Data Portal 

&

Web Applications

• Productivity and Economic Diversification

• Energy and Economic Vulnerability

• Opportunity costs for oil and gas in Saudi Arabia

• Future of transportation fuel demand (freight and 

passenger)

• Future of global oil and natural gas markets

• Regional energy markets (GCC, India, China)

• Electricity sector transitions

• Climate change policies and governance

Research Initiatives 2018
The Future of India’s Energy Economy

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 Government, Industrial, Academic and 

Global Institution

 Joint-research, Workshop Brief

 Publications, Data, and Models

 Workshops

 OpenKAPSARC

 Visiting Researchers

 Non-Profit Advisory Services
The Future of India’s Energy Economy

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EIA Energy Conference 2018

• KAPSARC launched open data portal to public in 2016, 

grown to over 1000 public datasets 

• The portal is designed to enable users to better 

understand energy, economy and environment 

• Critical energy data from many sources is now available 

in easy to use platform

• The portal is available to anyone seeking energy data for 

research

About KAPSARC Data Portal 
The Future of India’s Energy Economy

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Web Apps

• Several open web applications and tools for researchers are published on OpenKAPSARC showcasing 

the models developed by KAPSARC
The Future of India’s Energy Sector

EIA Energy Conference 2018
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0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

GDP per Capita (US$)

Energy Production Share (%) 

Coal & Lignite Crude Petroleum Natural Gas

Electricity* GDP Per Capita (Current US$)

Source: MOSPI, CEA, KAPSARC Analysis

 Coal remains a key energy source for 

India. Cheap, domestically available and 

can be priced politically.

 Per Capita GDP has doubled over the past 

decade, with the expectation that political 

stability will help it rise further.

 Early promise of domestic gas fizzled out 

over supply issues. Pricing remains a key 

aspect. Low domestic prices hampering 

exploration.

 Oil imports have turned India the third 

largest importer behind US and China.

* Hydro, Nuclear and Renewables
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0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

1950

1960-611968-691971-721973-741975-761977-781979-801981-821983-841985-861987-881989-901991-921993-941995-961997-981999-002001-022003-042005-062007-082009-102011-122013-142015-16

Consumption of Electricity from Utilities, by Sector (GWh)

Domestic Commercial Industrial Traction Agriculture Others

Source: MOSPI, CEA, KAPSARC Analysis

 Electricity sector remains highly susceptible to 

political influence. Recent policy moves to 

transition the sector towards reforms are a case 

in point.

 Political stability critical to the electricity sector 

as its impacts on the sector, fester for long.

 Changing structure of Indian economy will 

impact Indian electricity sector. Services sector 

increased commercial consumption, policy 

push for manufacturing should incentivize 

industrial consumption.
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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1970-711972-731974-751976-771978-791980-811982-831984-851986-871988-891990-911992-931994-951996-971998-992000-012002-032004-052006-072008-092010-112012-132014-152016-17

Consumption Share of the Sectors (%)

Domestic Commercial Industrial Traction Agriculture Others

0

1

2

3

4

5

6

Revenue Gap in Electricity

Average Cost of Supply (INR/Unit)

Average Revenue Realization (INR/Unit)

Source: MOSPI, CEA, KAPSARC Analysis Source: PFC, CEA, KAPSARC Analysis

 Critical to understand 

Indian energy policies to 

be able to look at long 

term reform issues.

 Recent policy measures 

have focused on turning 

around the electricity 

sector. 

 Populist missteps have 

increased banking risks 

and saddled the sector 

with multiple challenges.

$1 = ₹ 67.40 
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0

10

20

30

40

50

60

70

80

90

1996-971997-981998-991999-002000-012001-022002-032003-042004-052005-062006-072007-082008-092009-102010-112011-122012-132013-142014-152015-162016-17

2017-18*

0

5,000

10,000

15,000

20,000

25,000

Utilization and Thermal Capacity Addition

Thermal Capacity Added (MW) PLF of Thermal generating Stations (%)

Source: CEA, KAPSARC Analysis

 Revenue issues meant that there was limited resources to invest in capacity expansion.

 Huge build up in a short period has meant that utilizations have fallen and assets have turned non productive 

impacting several sectors.

 -

 20,000

 40,000

 60,000

 80,000

 100,000

 120,000

Jan-08

Aug-08

Mar-09

Oct-09

May-10

Dec-10

Jul-11

Feb-12Sep-12

Apr-13

Nov-13

Jun-14

Jan-15

Aug-15

Mar-16

Oct-16

May-17

Dec-17

Electricity Generation (GWh)

Hydro Nuclear Gas Lignite Coal

 -

 10.00

 20.00

 30.00

 40.00

 50.00

 60.00

 70.00

 80.00

 90.00

Jun-10

Nov-10

Apr-11

Sep-11Feb-12

Jul-12

Dec-12

May-13

Oct-13

Mar-14

Aug-14

Jan-15

Jun-15

Nov-15

Apr-16

Sep-16Feb-17

Jul-17

Dec-17

Coal Production and Imports (Million 

Tons)

Imported Coal (Mt) Domestic Production (Mt)

Mine Stockpiles (Mt)

Source: ICMW, Commodity Insights Source: CEA , ICMW, Commodity Insights
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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Oil Imports - By Source (%)

Middle East Africa Asia South America Eurasia North America Europe

Source: MoPNG

 Dependent on imports. More 80% of oil consumption is 

imported. Primarily from Middle East.

 US Crude now being imported into India. Price discounts 

and need to diversify sources primary reasons along with 

the political need to cater to US economic concerns.

 Provides an opportunity to balance OPEC’s actions.

 Disruption from EV to Indian oil markets are a bit 

optimistic currently given the structure of the Indian 

vehicular fleet. Car ownership still an aspirational draw 

for a growing middle class, especially from the emerging 

rural markets.
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0

10,000

20,000

30,000

40,000

50,000

60,000

Gas Production and Imports (MMSCM)

Imports (Long Term, Spot) Domestic Production

Source: PPAC, MoPNG

 Imports have more than doubled over the past 

decade. Low prices, increased availability and 

willingness of suppliers to renegotiate terms.

 Increased policy focus on clean cooking fuel and 

city gas projects provides opportunities to increase 

market depth.

 Higher spending on gas infrastructure and policy 

reforms in gas sector provides opportunities for 

growth.

 Domestic policies will provide a direction in terms 

of pricing and availability.
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Key Points

 Indian energy economy remains dependent upon imports and its quest for energy security will drive 

policymaking.

 Growth of Indian energy economy and its impact on global commodity markets remains largely under 

studied. The growth in petroleum coke exports from US to India is a case in point.

 Indian energy markets are increasingly policy driven and it is important to understand the 

development of Indian policy making to be able to understand energy transitions and their global 

repercussions.
Jitendra Roychoudhury

jitendra.roychoudhury@kapsarc.org

T +966 11 2903181

www.kapsarc.org

Thank You
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EIA Energy Conference 2018

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2,000

4,000

6,000

8,000

10,000

12,000

14,000

Renewable Generation (MU)

Bio Mass Solar Bagasse Small Hydro Waste to Power/ Other Wind

 Renewables still in a nascent stage and increase in 

generation and installed capacity should help in reducing 

fossil fuels in the electricity mix.

 Challenges are varied from evacuation to grids, 

curtailment, state of finances of the state utility boards.

 Falling prices increase incentive for utility boards to 

renegotiate terms.

 A couple of years ago, NTPC was bundling “costly” solar 

with cheap coal, things have turned around and it’s the 

opposite now.

Back Up Slides

Source: CEA, KAPSARC Analysis
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EIA Energy Conference 2018

0

0.5

1

1.5

2

2.5

Apr-09

Jul-09

Oct-09

Jan-10

Apr-10

Jul-10

Oct-10

Jan-11

Apr-11

Jul-11

Oct-11

Jan-12

Apr-12

Jul-12

Oct-12

Jan-13

Apr-13

Jul-13

Oct-13

Jan-14

Apr-14

Jul-14

Oct-14

Jan-15

Apr-15

Jul-15

Oct-15

Jan-16

Apr-16

Jul-16

Oct-16

Jan-17

Apr-17

Jul-17

Oct-17

Jan-18

Petroleum Coke Imports (Million Tons)

Source: ICMW, KAPSARC Analysis

 Greater availability, volatility, still growth has been slowing down. Policy impacts are visible