World Energy Outlook 2007

CHAPTER 18
ALTERNATIVE POLICY SCENARIO PROJECTIONS
HIGHLIGHTS
New policies that the Indian government is considering could result in
significant energy savings. In the Alternative Policy Scenario, in which these
policies are assumed to be fully implemented, primary energy demand is
17% lower than in the Reference Scenario in 2030.
Coal savings are the greatest in both absolute and percentage terms. Most
of the coal saved arises from reduced requirements for power generation.
Lower electricity-demand growth, higher power-generation efficiency and
fuel-switching explain this trend. More efficient production of iron and
steel and cement, combined with higher efficiency in less energy-intensive
industries, contributes to the savings.
In the Alternative Policy Scenario oil imports are 1.1 mb/d lower in 2030
than in the Reference Scenario, but oil import dependence remains high at
90%. Gas imports fall by 4.8 bcm. Most remarkably, coal imports fall by
97 Mtce, mostly thanks to lower demand for steam coal for power
generation.
Lower energy demand in the power and transport sectors reduces SO 2
emissions by 27% and NO x
emissions by 23% in 2030, compared with
the Reference Scenario. Lower overall energy consumption, combined
with a larger share of less carbon-intensive fuels in the primary energy
mix, yields savings of 27% in carbon-dioxide emissions by 2030. Energyefficiency
improvements on both the demand and supply sides account
for most of the savings.
Implementation of the policies considered in the Alternative Policy
Scenario reduces cumulative investment by $78 billion over the Outlook
period, with total supply-side investment savings of $132 billion being
offset by increased investment on the demand side of $54 billion. These
policies are cost-effective, though the payback periods for those investing
in efficient appliances in India are longer than in many other countries
because of price subsidies. Electricity-tariff reform, combined with
improvements in bill collection, would increase the cost-effectiveness of
the policies.
Because of lower demand, India's cumulative energy-import bill is much
lower in the Alternative Policy Scenario. The cost of India's coal imports
is $73 billion less over 2006-2030 than in the Reference Scenario. The
oil-import bill is reduced by about $250 billion, and the gas bill by
$7 billion.
Chapter 18 - Alternative Policy Scenario Projections 531