India's Journey to Becoming the Third-Largest Electricity Consumer by 2050

Electricity Consumer India: The International Energy Agency (IEA) has projected that the world is entering a new era, the "Age of Electricity," marking a significant shift towards green energy. In its recent report, the IEA indicates that India will become the third-highest consumer of electricity by 2050. This increase in demand is largely driven by climate-related uncertainties, resulting in a greater need for cooling solutions globally.

Global Electricity Demand Growth

The IEA’s World Energy Outlook 2024, released on Wednesday, reveals that the growth of global electricity demand is expected to accelerate in the coming years. This surge will be fueled by clean energy sources. The report highlights a new energy market context emerging shortly, characterized by geopolitical challenges but also an abundance of various fuels and technologies.

The IEA notes that there will be a significant supply of oil and liquefied natural gas during the latter half of the 2020s, along with a strong manufacturing capacity for essential clean energy technologies, such as solar photovoltaic (PV) panels and batteries. The agency states, “We’ve witnessed the Age of Coal and the Age of Oil – and we’re now moving at speed into the Age of Electricity.” This shift will fundamentally shape the global energy system, increasingly relying on clean electricity sources.

India’s Electricity Demand

India's electricity demand is projected to grow at an impressive rate of over 4% annually until 2050, exceeding the average annual global demand growth during this period. The IEA estimates that from 2023 to 2050, global electricity demand growth will rise to over 3% if countries meet their national energy and climate targets, including their net zero emission goals. According to the IEA, "India will become the third-largest electricity consumer in the world by 2050, with only China and the US having higher demand."

Factors Driving Electricity Consumption

The primary driver of electricity demand in India will be the increasing need for air conditioning as more people gain the financial means to afford such appliances. This trend is expected to be mirrored across emerging markets and developing economies (EMDEs). The IEA predicts that as incomes rise and global temperatures increase, there will be an additional demand for cooling of over 1,200 terawatt-hours (TWh) by 2035—more than the entire electricity consumption of the Middle East today.

The IEA estimates that demand for cooling buildings will grow by 3.7% annually until 2035, with 90% of this demand arising in EMDEs as higher temperatures force air-conditioners to work harder.

Challenges to Power Grids

As cooling demands rise, the IEA warns that this will create higher peaks in electricity demand, placing extra strain on power grids. However, the report suggests that the impact of home appliances on boosting electricity demand may decline over the next decade as governments focus on developing green hydrogen to achieve their net zero emission targets. India aims to reach its net zero emissions goal by 2070.

The Role of Renewable Energy

The IEA emphasizes that cleaner renewable energy sources, such as solar PV and wind, are likely to produce more electricity than before as dependence on coal for energy generation diminishes. “Renewables, led by solar PV and wind, are set to play a much larger role in power systems over the next decade and beyond. By 2035, solar PV and wind will provide over 40% of electricity generation, a level that few countries have achieved to date,” the IEA reports.

Climate Change as a Risk

The IEA also identifies climate change as a significant risk to the global energy transition. Unpredictable weather patterns and prolonged heat waves could undermine energy security worldwide. The report states, “Energy security and climate action are inextricably linked: extreme weather events, intensified by decades of high emissions, are already posing profound energy security risks.”

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The IEA's findings highlight a future where electricity consumption will grow substantially, particularly in countries like India. As the world transitions into the Age of Electricity, a strong focus on renewable energy will play a crucial role in reshaping the global energy landscape while addressing the challenges posed by climate change.