World Energy Outlook 2007

80%. Past subsidies eliminated incentives to invest in more efficient
technologies or in research and development in order to cut costs. The
producers are now making efforts to reduce costs, particularly those related
to energy use, but these efforts are limited by controls on their product
prices.
Many fertilizer companies are switching to gas as feedstock. This move will
save energy as converting gas into fertilizer is considerably less energyintensive
than converting other feedstocks. Gas availability to meet
expected demand growth and gas pricing are, however, matters of concern
(see Spotlight in Chapter 15). LNG imports and indigenous output from
recently discovered fields are expected to contribute.
Other Industries
The non-metallic and other minerals, food, paper and textile industries account
for about a quarter of energy demand in the industry sector. Coal and oil meet
most demand, but electricity use is rising. The Indian aluminium industry is
poised for expansion and is a large consumer of electricity. The textile industries,
comprised largely of small enterprises, rely heavily on coal, used in boilers for
process heat. Coal and electricity are the two major fuels used in the pulp and
paper industry.
Cement production in India increased from 107 million tonnes in 2004 to
134 million tonnes in 2005, or 9.3%, driven by infrastructure development and
the country’s housing boom (TERI, 2007). India is the world’s second-largest
cement producer after China. Coal is the main fuel. Annual per-capita
consumption of cement is around 100 kg, much lower than the global average of
270 kg. India has 128 large cement plants, with an estimated combined capacity
of 152 Mt a year, and over 300 mini-plants, with a total capacity of 11 Mt.
Clinker production is the most energy-intensive step in the production of cement
and it can be produced through either a wet or dry process. The latter is much less
energy-intensive. Indian plants using the wet process have been phased out over
the past several decades and, today, according to The Energy and Resources
Institute of India, over 90% of cement is produced using the dry process.
Energy demand in these sectors as a whole is projected to grow by 4.8% per year
from 2005 to 2015 in the Reference Scenario, with rapid economic growth and
infrastructure development. Demand for cement to build highways and railway
infrastructure will rise particularly quickly. In 2015-2030, energy demand will
slow to 3.5% per year, as efficiency improves, yielding an average increase in
demand of 4% per year over the entire Outlook period. Demand for electricity
grows most rapidly, as it replaces oil currently used in inefficient pumps and
motors. Coal use expands by 4.3% per year from 2005 to 2030, by which time it
accounts for 53% of total energy demand in these sectors, up from 50% in 2005.
16
Chapter 16 – Reference Scenario Demand Projections 471