Current Affairs 2022: India and International Energy Agency (IEA)

By M. Harikrishna

Recently IEA invited India to become a full-time member of the International Energy Agency. Read here in detail the significance of the invitation to India.

International Energy Agency (IEA) is a global intergovernmental organization that was established in 1974. The aim of the International Energy Agency is to maintain the stability of the international oil supply and recently, it has been expanded to emphasize the up-gradation of renewable energy resources focused on environmental protection and stopping climate change. 

The International Energy Agency has three E’s of policies: 

• Economic Development.
• Energy Security.
• Environment Protection.

International Energy Agency has made a number of interventions in recent years; especially in 1991, 2005 and 2011. Its main theme is to regulate the temporary disruptions in oil supply throughout the world as well as to serve as a thrust for International Research and collaboration related to energy security issues predominantly. 

The International Energy Agency’s Clean Coal Centre furnish reports, literature reviews and databases of clean coal information, in addition to listings of news and events and training opportunities. This Clean Coal Centre also come up with advice, facilitates networking, and organizes conferences and workshops. The International Energy Agency’s Clean Coal Centre is situated in the United Kingdom, London. It is dedicated to providing autonomous information on how coal can become a cleaner source of energy in reconcilable with the United Nation Sustainable Development Goals (SDGs). 

International energy agency operates under the framework of OECD (Organization for economic cooperation and development) that is based in Paris. It is a global organization with 38 countries that perpetrate democracy and market economy. International Energy Agency not only maintains a steady supply of oil to the nations but also strive to advise nations on developing, implementing and measuring the impact of efficiency policies. The agency also issues a significant amount of data and policy analysis on energy in association with many other organizations such as the G-20, carbon sequestration leadership forum International Partnership for Energy Efficiency Co-Operation (IPEEC). 

The International Energy Agency has 30 membership countries; apart from that, there are 8 association countries which are China, Brazil, Morocco, Indonesia, Thailand Singapore, India and Mexico and 3 countries seeking succession to full-time membership which are Chile, Israel and Lithuania. 

Coming to India, our nation became an associate member of the International Energy Agency in 2017 while Mexico became the 30th member in 2018. International Energy Agency released the Indian Energy outlook report in 2021. A nominee country to International Energy Agency must be a member country of the Organization for Economic Cooperation and Development (OECD). 

International Energy Agency invited India to strengthen its cooperation with them by becoming a full-time member.

India became a very predominant country in global energy trends. We can conclude this based on the research and development and also, this was mentioned in IEA reports as per 2021. India’s energy policies which were released in January 2020 states that country’s demand for energy is set to widen rapidly in the forthcoming decade, with electricity use set to increase particularly fast. The country’s dependence on fuel imports is enhancing day to day and also, improved energy security is a key priority for the Indian Economy. 
International Energy Agency released the following reports: 

• World Energy Outlook report
• World Energy Investment report
• World Energy Statistics
• World Energy Balances
• Energy Technology Perspectives
• India Energy Outlook report

Recently, International Energy Agency has invited India to become a full-time member as India is the world’s fourth-largest energy consumer behind China, the US and the European Union. If India accepts the proposal then the country requires to maintain strategic reserves for 90 days. 

Oil Minister Hardeep Singh Puri said he held discussions with IEA Executive director Faith Birol. India’s current strategic oil reserves are equal to 9.5 days of its requirement. Also, a member of the International Energy Agency a demand restraint programme reduces the national oil consumption to 10 per cent. But over the past few years the agency’s mission has expanded substantially and today, the agency is working with the global economies to enhance energy security and to regulate clean energy solutions.

As per the report, over the next two decades, India will drive up the biggest share of energy demand growth at a rate of 25 per cent. Prior to the global pandemic, India’s energy demand was projected to increase by almost 50 per cent between 2019 and 2030, but growth over this period is now closer to 35 per cent.

India’s energy consumption is expected to nearly double as the nation’s Gross Domestic Product would expand to an estimated USD 8.6 tn by 2040 under its current national policy scenario. Over the last three decades, India accounted for 10 perfect of world growth in industrial value-added in Purchasing Power Parity terms.

By 2040, India is set to account for almost 20 per cent of the global growth in industrial value-added services and the country is about to lead global growth in industrial energy consumption especially in steel making. Rising oil demand could double India’s oil economy to about USD 181bn by 2030 and triple it to USD 255 bn by 2040 when compared with 2019.

India’s net dependence on oil imports comparing both the import of crude oil and export of oil products would increase to more than 90 per cent by 2040.  India will become the fastest-growing market for natural gas with demand more than tripling by 2040. Coal is the major component when it comes to electricity generation and thus, the demand for coal would be rising to 772mn by 2040 from the latest 590mn in 2019. India’s share in the growth in renewable energy is the second-largest in the world after China. 

The 2021 report puts pressure on governments to push for greater climate access at the conference of parties (COP 26) which was held in Glasgow, United Kingdom. Recently, International Energy Agency released a report on Net Zero Emissions (NZE) – Roadmap named “Net-zero by 2050”, and gave the world an opportunity to limit the global temperature to 1.5°c. 

Initially, International Energy Agency had supported continuous investment in fossil fuels. However, it generally moved towards a more definite urging decision to reduce climate change. 

International Energy Agency inquires two possible scenarios, looking at the measures and policies that the government had already put in and also, the temperatures that would be 2.6°c higher than pre-industrial levels in the year 2100. 

About the Author

M. Harikrishna, done his BTech(Mechanical engineering) from Sri Venkateswara college of engineering and technology Chittoor. Currently working as a Bank employee in Bank of India.