New Delhi, Oct 6, 2025 – British Petroleum (BP) leaders and energy experts are closely observing India's escalating energy demands and its rapidly evolving market, emphasizing the country's pivotal role in shaping the future of global energy.
BP's Chief Economist, Spencer Dale, highlighted India's unique position as the world's fastest-growing energy market. Dale noted that India's energy consumption is increasing across all types of energy sources. This includes a rapid expansion in renewable energy sources like wind and solar power, alongside a continued reliance on coal, particularly domestically produced coal, and a push for greater oil and natural gas production.
Dale pointed out the complexities of the global energy landscape, which is currently being influenced by technological advancements, shifting social preferences, and geopolitical tensions. These factors create both challenges and opportunities for the energy transition. He also noted that Artificial Intelligence (AI) and Liquefied Natural Gas (LNG) are poised to become key drivers in global energy markets.
The rise of AI is expected to significantly impact energy demand, with data centers supporting AI growth accounting for approximately 10% of the global increase in power demand over the next decade. However, AI's influence extends beyond data centers, with the potential to transform energy systems' design and management, impacting both energy demand and supply.
According to a BP Energy Outlook, India's primary energy consumption is projected to more than double by 2050. Renewable energy is expected to grow substantially, becoming the largest energy source in accelerated and net-zero scenarios. Natural gas is predicted to be the only fossil fuel that will continue to grow in levels through 2050 across all scenarios. As a result, India is expected to account for approximately 14% of global primary energy consumption by 2050, a significant increase from around 7% in 2019.
However, challenges remain. Despite ambitious renewable energy targets, India may still need to boost coal and gas-fired generation to meet its growing energy demands. This has led to what Dale describes as "frustration and anger" in developing economies, stemming from the imposition of Western climate policies. Dale questioned whether financing and lending standards from banks and financial institutions adequately address the unique needs and arithmetic that developing economies face in their energy challenges.
Experts suggest that to meet the demand, India would need either a 20% increase in coal-fired generation or a tripling of gas-fired generation. This reflects the difficulty in reconciling the country's increasing energy needs with its climate goals.
Several specialist consultancy firms, such as Mercados Energy Markets India Private Limited (MEMI), are supporting clients across the energy sector value chain. These firms provide services to public, private, and nodal agencies, promoting efficient and sustainable energy markets and assisting energy businesses. They offer expertise in generation, transmission, trading, and distribution of electricity.
India's energy sector requires substantial investment to meet its goals. The International Energy Agency (IEA) estimates that India needs over $140 billion in energy investment per year to meet its 2040 targets. About $110 billion per year is needed for energy supply, with 75% of that to meet the burgeoning electricity demand, and a further $30 billion a year to improve energy efficiency. The growth in the renewable energy sector in India also presents increasing opportunities for strong financial returns.
Overall, experts agree that India stands at a critical juncture, with its energy decisions set to have a significant impact on both its own development and the global energy landscape. The country's ability to balance its growing energy needs with sustainable practices will be crucial in the coming years.
