As the energy landscape of the world shifts towards sustainability, innovation, and a greater awareness of the climate crisis, ES Ranganathan, renowned energy expert and former Director (Marketing) of GAIL, shares insightful perspectives on the future of India’s oil and energy industries in 2024. His forward-thinking insights provide valuable insight into the changes that will shape the country’s energy trajectory. According to ES Ranganathan, India can expect significant shifts in its oil and energy sectors in 2024, with a focus on increasing investments and initiatives for renewable energy sources such as solar and wind. This will coincide with changes in consumption patterns and technological advancements, which will play a crucial role in reshaping the country’s energy landscape.
During the second quarter of FY 2023-24, India’s Ministry of Commerce and Industry reported a 9% increase in Foreign Direct Investment (FDI) in the nation’s renewable energy sector. FDI reached $505 million in Q2, a rise from the previous fiscal year’s Q2 amount of $461.51 million. Notable growth in FDI was observed across multiple market segments, including solar, pumped hydro storage, and wind projects. This aligns with India’s ambitious 36.6 lakh crore investment pledge by the Government to support its target of adding 40 GW of renewable energy capacity by 2024-2025 with an aim for an annual addition of 50 GW in renewable energy projects. Additionally, Ranganathan highlights the increasing significance of electric vehicles (EVs) in India’s energy landscape and anticipates a notable increase in EV adoption driven by government incentives, technological advancements, and growing environmental awareness among consumers. As per ES Ranganathan, this shift will significantly impact demand dynamics in the oil sector potentially leading to a gradual decline in traditional fossil fuel consumption.
Solar and wind energy advancements
Policies advocating for environmentally friendly sources of energy such as solar and wind power are steadily gaining popularity, signaling a shift away from fossil fuels. The government’s ambitious renewable energy targets demonstrate a commitment to reducing carbon emissions and embracing sustainability. According to ES Ranganathan, advancements in technology and lower costs have contributed to the rapid growth of solar energy, while wind power projects and advancements in energy storage have also played a significant role. In fact, Ranganathan predicts that renewable energy will significantly impact our energy sources by 2024, reducing our dependence on traditional fuels. He further notes that India has the potential to achieve a record-breaking 4 GW of rooftop solar power in 2024. However, reaching this milestone hinges upon resolving regulatory issues and other obstacles that currently exist within the country. Studies show that by addressing these challenges, India’s rooftop solar market can experience substantial growth by 2024.
The emergence of green hydrogen
The ongoing shift towards renewable energy in India is a major game-changer. According to ES Ranganathan, the use of green hydrogen, generated from renewable sources, will be crucial in energy distribution by 2024. Advancements in electrolyzer technology are expected to significantly improve efficiency and reduce production costs of green hydrogen. As ES Ranganathan points out, these developments have immense value in making green hydrogen more practical for industrial and transportation purposes across various sectors. This transformation marks a significant milestone in expanding the use of renewable energy and highlights the potential of green hydrogen in driving the transition towards sustainable energy systems.
India’s oil prices are tapering off
By 2024, experts project a reduction in oil demand growth in India. This trend is expected to show an increase of approximately 150,000 barrels per day, which is significantly lower than the robust average of 290,000 barrels per day seen from 2021 to 2023. This anticipated deceleration brings the growth rate closer to the levels observed between 2011 and 2019. It marks a shift from the rapid surge witnessed in recent years in India, a key market in Asia. According to ES Ranganathan, this slowing demand could be due to various factors such as changes in energy policies, greater adoption of renewable energy sources, and potential shifts in consumer or industrial habits. Additionally, Ranganathan emphasizes the growing role of electric vehicles (EVs) in India’s energy landscape. He predicts a significant increase in EV usage fueled by government incentives, technological advancements, and a rising environmental consciousness among consumers. Overall, this expected decline in demand represents a critical phase for India’s energy sector that could impact global oil trends, concludes Ranganathan.
Artificial Intelligence: Shift towards it
In 2024, India’s oil and energy sector will see a significant transformation with the integration of artificial intelligence (AI). By 2030, McKinsey & Company predicts potential savings of $1.2 trillion in the sector through extensive use of AI. This impact is largely due to the industry’s pioneering role as an early adopter of AI technology. According to ES Ranganathan, this strategic implementation of AI will effectively address critical challenges within the sector and lead to heightened efficiency, sustainability, and competitiveness. The use of AI-powered predictive analytics and machine learning algorithms will revolutionize operations by optimizing resource utilization and increasing overall efficiency. With advanced AI models accurately forecasting demand patterns, production schedules and inventory management can be streamlined. Furthermore, AI-driven predictive maintenance can identify equipment issues before they become major problems, reducing maintenance costs and improving safety measures.
Additionally, AI is playing a key role in advancing exploration and extraction methods. These advanced algorithms are efficiently analyzing seismic data, accurately identifying potential reserves, and optimizing drilling techniques. This not only improves the chances of discovering new oil fields but also helps to lower exploration expenses. In fact, ES Ranganathan asserts that incorporating AI into India’s oil and energy sector by 2024 is more than just a technological improvement – it is a strategic change that guarantees greater productivity, cost-effectiveness, and sustainability, ultimately positioning the country as a leader in energy innovation.
Managing challenges and ensuring sectoral growth
Issues such as energy security, sustainability, and market volatility continue to be significant focuses for India’s energy industry. Effective strategies to address these challenges are crucial for the country’s ongoing progress. To enhance energy security, efforts are underway to diversify energy sources and reduce dependence on imports. At the same time, research into energy storage technologies is key in mitigating the intermittency problems associated with renewable sources. Sustainability efforts, including promoting energy-efficient practices and implementing circular economy models, are gaining momentum. Meanwhile, measures such as innovative pricing methods, hedging strategies, and investments in resilient infrastructure are being taken to address market volatility. As India works towards meeting its renewable energy goals, the sector’s ability to adapt and withstand challenges will play a vital role in shaping a more sustainable and secure future for its energy landscape.