India Sticks With Fossil Fuels, But Gas Struggles

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  • War and a heat wave have exposed India’s energy security vulnerability.
  • Spiking energy import prices and a heat wave-related demand surge mean India has found comfort sticking with cheaper coal, with gas sidelined.  
  • Longer term, India's transition will focus on building local supply chains and lowering the cost of renewables and green hydrogen.

Prime Minister Narendra Modi's earlier focus on making gas one of his key planks to cut carbon emissions is right now falling by the wayside. In September 2016, his government launched the Gas4India campaign and set a goal of more than doubling gas' share in the energy mix to 15% by 2030 from 6.7%. But Russia’s war on Ukraine has upended those goals, with a sharp spike in spot LNG prices crowding out price-sensitive buyers like India, which meets half of its demand via imports.

Policy and Regulation, Coal, Hydrogen, CO2 Emissions
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