What Happened
- A new India-focused scenarios report released by Shell India at TERI's World Sustainable Development Summit 2026 projects that India's total energy demand will surpass that of the United States in the 2040s and overtake China in the 2060s.
- The report, titled "India's energy transition in a security-focused age," outlines three possible energy futures for India shaped by geopolitics, digitalisation, and climate priorities.
- India's energy demand has grown nearly 40% over the past decade driven by rapid economic growth, industrialisation, and population expansion. This trajectory is set to continue.
- Gas demand is separately projected by Shell India to rise by more than 50% over the next decade, driven by power generation, city gas distribution, and industrial use.
- Fossil fuels' share in India's energy mix is projected to peak this decade, but absolute fossil fuel consumption could continue rising as total energy demand potentially doubles over the next two to three decades.
- The report notes that artificial intelligence (AI) data centre expansion, industrial growth, and electrification of transport are significantly reshaping India's energy demand profile.
Static Topic Bridges
India's Energy Mix — Current Profile and Transition Trajectory
India is the world's third-largest energy consumer (after China and the US) and is undergoing a dual transition: expanding total energy access while shifting the fuel composition toward renewables. This is unlike the US and EU experience, where energy transitions occurred on a stable or declining demand base.
- India's installed power capacity (December 2025): ~490 GW total; renewables (including large hydro) ~42%
- Coal: Still ~55% of electricity generation; India is the world's second-largest coal producer and consumer
- India's per-capita energy consumption (2024): ~0.6 tonnes of oil equivalent (TOE) — compared to US (~7 TOE) and China (~2.8 TOE); significant headroom for demand growth
- Renewables installed capacity (February 2026): ~220 GW (solar ~85 GW, wind ~47 GW, large hydro ~47 GW, small hydro, bio, others)
- 2030 renewable target: 500 GW installed renewable capacity (PM's COP26 pledge)
- India's primary energy consumption growth (2024): Among the fastest globally, driven by manufacturing and services expansion
- AI data centres: India's digital economy expansion, including hyperscale data centres, is creating new high-density electricity demand clusters in Pune, Chennai, Hyderabad, and Noida
Connection to this news: The Shell projection translates India's demographic and economic fundamentals into energy numbers. Surpassing the US by the 2040s requires sustained ~6-7% GDP growth, continued urbanisation, and mass electrification — all of which are government policy targets. Energy planning and infrastructure investment must scale accordingly.
India's Energy Security Framework — Key Policy Documents
India's energy policy is driven by multiple overlapping priorities: affordability (energy poverty elimination), availability (supply security), and sustainability (climate commitments). These are articulated across several key policy documents.
- National Electricity Policy 2005: Establishes universal electrification goals; being updated as National Electricity Policy 2025 (draft)
- Integrated Energy Policy 2006 (Planning Commission): First comprehensive cross-sector energy roadmap; called for diversification across coal, nuclear, renewable, gas
- National Energy Policy 2017 (NITI Aayog, draft): Proposed 40% primary energy from non-fossil sources by 2040
- India's NDC (Updated, 2022): 45% reduction in emission intensity of GDP by 2030 (vs. 2005); 50% installed electricity capacity from non-fossil fuels by 2030; net zero by 2070
- PM Surya Ghar Muft Bijli Yojana (2024): Rooftop solar for 1 crore households; 300 units free monthly
- One Sun One World One Grid (OSOWOG): International solar grid interconnection initiative championed by India
- International Solar Alliance (ISA): India-France co-founded (2015, Paris COP21); 120+ member nations; mobilising $1 trillion for solar by 2030
Connection to this news: As India's energy demand approaches and eventually surpasses the US, the policy frameworks will face mounting pressure. India's per-capita emissions will rise even if emission intensity falls — creating tension between development rights and net-zero commitments that will define India's negotiating positions at future COPs.
Natural Gas — India's Transitional Fuel
The Shell report separately highlights that India's gas demand will rise by over 50% in the next decade. Natural gas occupies a complex position in India's energy transition: cleaner than coal for power generation, but still a fossil fuel with methane leakage concerns.
- India's current gas consumption: ~60 MMSCMD (million metric standard cubic meters per day); meets ~6% of primary energy demand — well below the global average (~25%)
- Government target: Raise gas share in energy mix to 15% by 2030 (from current ~6%)
- City Gas Distribution (CGD) network: Expanded to 305+ districts (2025); covers Piped Natural Gas (PNG) for households and Compressed Natural Gas (CNG) for vehicles
- LNG imports: India is one of the world's largest LNG importers; imports from Qatar, Australia, US, UAE
- PM Urja Ganga pipeline: 2,655 km gas pipeline connecting Jagdishpur (UP) to Haldia (West Bengal) via Varanasi, Patna, and Bokaro; serves eastern India's gas deficit
- Gas pricing: Administered Price Mechanism (APM) for domestic fields; market-determined prices for new and difficult fields
- PM KUSUM Scheme: Solar pumps for farmers (3.5 million target) — reduces rural diesel demand and serves as a decentralised energy transition instrument
Connection to this news: Shell's projection of 50%+ gas demand growth aligns with India's stated 15% share target. However, India's LNG import dependence creates energy security vulnerability — global LNG price volatility (as seen in 2021-22) directly impacts domestic gas availability and pricing.
Climate Negotiations and the Development-Emissions Dilemma
The Shell report implicitly raises a fundamental equity issue in global climate negotiations: India is growing its energy demand as a developmental imperative, while the global carbon budget is shrinking.
- Paris Agreement 1.5°C target: Requires global net-zero CO2 emissions by ~2050; India's 2070 net-zero target is 20 years later
- Common But Differentiated Responsibilities (CBDR) principle: Acknowledges different responsibilities for developed vs. developing nations based on historical emissions
- Climate Finance commitment (COP21/Paris): Developed nations pledged $100 billion/year by 2020; consistently unmet; revised at COP29 (Baku, 2024) to $300 billion/year by 2035
- India's cumulative CO2 emissions (historical): ~4% of global total (compared to US ~25%, EU ~22%)
- India's per-capita emissions: ~2.5 tonnes CO2/year — about one-third of global average; compared to US ~15 tonnes and China ~8 tonnes
- India at COP28 (Dubai, 2023): Supported "transition away from fossil fuels" language but opposed "phaseout" framing; pushed for climate finance and technology transfer conditionalities
- India at COP29 (Baku, 2024): Emphasised inadequacy of $300 billion finance commitment; reiterated CBDR
Connection to this news: India's projected energy demand growth — surpassing the US by 2040s — will make India the world's largest energy market by the 2060s. Managing this growth on a low-carbon pathway is the central challenge of India's energy policy and a defining factor in whether the Paris Agreement targets are achievable globally.
Key Facts & Data
- Projection source: Shell India, "India's energy transition in a security-focused age" (released at TERI WSDS 2026)
- India's energy demand growth (past decade): ~40%
- Timeline: India to surpass US energy demand — 2040s; China — 2060s
- Gas demand growth projection: 50%+ over next decade
- India's installed renewable capacity (Feb 2026): ~220 GW
- India's 2030 renewable target: 500 GW
- India's current gas share in energy mix: ~6%; target: 15% by 2030
- India's net-zero target: 2070
- India's NDC intensity target: 45% reduction in emission intensity of GDP by 2030 (vs. 2005)
- India's per-capita energy consumption: ~0.6 TOE (vs. US ~7 TOE, China ~2.8 TOE)