Daily Update: India's Future Energy Landscape
Today is?Tuesday, February 21, 2023, and here’s your?curated selection of essential intelligence on financial markets and the global economy?from?S&P Global . Subscribe?to be notified of each new?Daily?Update.?
The Russia-Ukraine war and subsequent geopolitical and economic backlash toward Russia continue to ricochet through the global energy system, forcing countries to reconcile ambitious climate agendas with the realities of hydrocarbon dominance. At the same time, it has underscored the importance of energy security and self-sufficiency for import-dependent nations like India.
A diversified, affordable and secure future energy landscape is a priority for the Indian government and many others. Although?a national priority , the implications of the steps to get to, and eventually realize, that future are global in scope. India's massive population is increasingly urbanizing as the nation's economy grows and industrializes, boosting electricity demand and requiring transformational change in the country's electricity sector to achieve adequate generation reserves and a robust nationwide grid to support connectivity.
India relies heavily on?coal generation to meet its power demand . While India meets much of its coal demand with domestic supply, the ebb and flow of supply and demand, magnified in the 2020s, make it almost impossible to balance the ledger. COVID-19 pushed demand down, causing a decrease in India's raw coal production. Then demand surged amid the gradual economic resurgence in late 2021 and 2022, outpacing India's coal output. As if that wasn’t whiplash enough, the tremors in global energy prices following Russia’s invasion of Ukraine, combined with a brutal heat wave in April-May 2022, meant India had to lean more on coal.
The Indian government quickly pivoted from its February 2020 stated intent to?halt thermal coal imports ?by financial year 2023-2024 to a decision in late April 2022 that penalizes power plants for not importing coal. Coal generation in India?increased 8.7% in 2022 , according to S&P Global Commodity Insights, which is less than ideal from an emissions standpoint, but necessary to keep the economy on track.
The Indian government is incentivizing domestic renewables, eyeing decarbonization to increase energy security. The country's 2023-2024 Union Budget earmarked $4.3 billion to support its energy transition, and in January the Indian government approved the National Hydrogen Mission, adding $2.4 billion in financial support for green hydrogen. Such incentives have led Indian companies to?explore green hydrogen projects ?and other decarbonization solutions.
Meanwhile, Indian oil and gas companies are ramping up production. India imports most of what it needs to satisfy its oil demand, unlike with coal. Before Russia invaded Ukraine, India imported over 60% of its crude oil from the Middle East and only about 2% from Russia; at the end of 2022,?Russian crude made up 15% of India's total purchases . Reliance on imports is a source of energy insecurity, but the country has vast untapped potential that could help reduce its import dependence.
Estimates place India's untapped fossil fuel potential at 30 billion barrels of oil equivalent, and possibly significantly more, if unexplored areas are included. Under a new exploration and licensing policy, and armed with the latest recovery techniques, Indian?oil and gas companies are accelerating exploration and production .
Amid the market volatility and energy geopolitics that defined the past several years, the Indian government has found itself whipsawing energy policies along a spectrum with ambitious climate efforts on one side and affordable and secure energy on the other; a tricky balancing act, but one that can find harmony in the inherent synergies between decarbonization and energy security.
With its huge scope for future growth, India's economic dynamism and sheer size make decarbonizing and reducing energy import dependence national priorities with global implications.
Today is?Tuesday, February 21, 2023, and here is today’s essential intelligence.
Written by Wyatt Scott.
Economy
Week Ahead Economic Preview: Week Of Feb. 20, 2023
Flash PMI data will be released in the week ahead for a first look into February economic conditions across the major developed economies. Monetary policy meetings in New Zealand and South Korea will also unfold, while the Fed's January Federal Open Market Committee meeting minutes and appearances by Fed members through the week will further keep us busy on the central bank front. Other economic data releases include revised U.S. Q4 GDP, January personal income, consumption and core PCE data, alongside inflation figures from the eurozone, Germany and Japan.
—Read the article from?S&P Global Market Intelligence
Capital Markets
Fundraising Sentiment Still Sour; A Slow Start To 2023 Dealmaking
Private equity fundraising got significantly harder in 2022, and prospects for 2023 are not looking much better. More than three-quarters of the private equity executives who participated in the S&P Global Market Intelligence 2023 Private Equity Outlook Survey said they expected fundraising conditions to remain the same or grow even worse this year. The largest portion of respondents, over 45%, predicted conditions would deteriorate.
—Read the article from?S&P Global Market Intelligence
Global Trade
Listen: The Return Of Freeport LNG
The Freeport LNG terminal in Texas started exporting LNG cargoes in mid-February for the first time since a fire and explosion in June 2022 forced a shutdown of the facility, marking a milestone in the history of U.S. LNG. In the global LNG market, the Freeport outage initially exacerbated supply shortages that sent sky-high spot prices even higher. In the U.S., the shutdown took the lid off a really hot domestic gas market, as a key source of domestic demand went offline. But global LNG and U.S. gas market dynamics have changed dramatically in the eight months since Freeport went offline. In this episode, S&P Global Commodity Insights LNG experts Harry Weber and Corey Paul discuss these issues as Freeport returns, as well as LNG market fundamentals more broadly in the Atlantic.
领英推荐
—Listen and subscribe to Commodities Focus, a podcast from?S&P Global Commodity Insights
Sustainability
EDF's New CEO Confirms 2023 French Nuclear Output Target Despite Further Delays
French utility EDF's new CEO, Luc Remont, has confirmed a nuclear output target of 300 TWh to 330 TWh this year after output plunged 23% in 2022 to 279 TWh. The 82 TWh deficit, largely due to stress corrosion outages at a dozen reactors, forced the utility to buy back lost volumes at record high prices in the market, prompting a Eur3.6 billion financial net loss for the year, annual results data showed Feb. 17.
—Read the article from?S&P Global Commodity Insights
Energy & Commodities
India To Surpass 2030 Natural Gas Share Target Amid Firm Demand, Says GEECL CEO
India could surpass its target to increase the share of natural gas in the country's total energy mix as its economic growth prospects and thrust on decarbonization temper the impact of recent events, namely the COVID pandemic and the Russia-Ukraine war, Great Eastern Energy Corporation Limited Managing Director and CEO Prashant Modi said. The Indian government has set a goal to increase the share of natural gas in the country's total energy mix to 15% by 2030, from about 6%.
—Read the article from?S&P Global Commodity Insights
Technology & Media
Streamers Balance Growth And Pricing Strategies In India
Following the intensive price wars between Walt Disney Co.-owned Disney+ Hotstar, Amazon.com Inc.'s Prime Video and Netflix Inc. in the second half of 2021, streamers in the Indian subscription-video-on-demand market continued to adjust pricing strategies in 2022. While there is still room for most platforms to raise prices, companies are also revising their pricing structures to generate more growth.
—Read the article from?S&P Global Market Intelligence
Upcoming Events
CERAWeek by S&P Global — Navigating A Turbulent World: Energy, Climate and Security
Join global leaders, policymakers and executives from across energy, climate, finance, technology and industry at CERAWeek 2023 for timely dialogue, shared learning and connection.
—Register for?CERAWeek
Powering Prime Projects | $100M to $5B+ | Project Finance Assistance for Oil and Gas, Renewable Energy, Agriculture, Data Centers, Infrastructure and More | Sustainable Growth
1 年Reliable and inexpensive energy is required for prosperity! How will this be achieved?
Blaming squarely on Russia for tormenting world future energy needs is like robbing future generation whilst it's the faulty policy decision. Every Country has the foremost responsibility to maintain its territorial integrity & sovereignty.