Importance of China And India On Projections of Future Energy Needs - Research Paper Example

Importance of China and India on projections of future energy needs Introduction India and China re tow rapidly developing economies in the world. Even though these two countries share the top two spots in the world as far as population is concerned, they were able to utilize their immense population in a substantial way to boost their economic growth. The recent economic crisis has destroyed the economy of many developed countries including US and UK, but India and China managed to escape from the crisis without many damages to their economies. The agricultural and industrial growths in these countries are huge and many people believe that India and China may surpass America in the near future itself to become superpowers in the world. India and China are the major consumers of energy in the world at present because of their rapid growth. Because of the above fact, the energy crisis in the world cannot be solved without addressing the energy issues of these two Asian countries. India recently signed a nuclear agreement with United States in order to get nuclear equipments required for the production of nuclear energy in India. The industrial and agricultural growth increased the energy needs in these countries. It is a fact that the oil resources are exhausting day by day and it is impossible for the developing countries to depend heavily on the conventional energy sources. India is mainly focussing on developing nuclear energies whereas China is looking for developing solar energy also apart from nuclear energy for their energy requirements. This paper briefly analyses the importance of China and India on projections of future energy needs Projections of future energy needs of India and its importance Bajpaee, (2005) has mentioned that the Indian oil imports account for two-thirds of oil consumption, while China imports a third of its crude oil consumption. Furthermore, Chinas proven oil reserves stand at 18 billion barrels, compared to 5 billion barrels in India. Moreover, Indian-owned Oil and Natural Gas Company (ONGC) has invested US$3.5 billion in overseas exploration since 2000, while Chinese-owned China National Petroleum Corporation (CNPC) has made overseas investments of an estimated $40 billion (Bajpaee, 2005). In other words, the energy crisis in India is severe compared to that of China. Being one among the top ten energy consumers in the world, India’s investments in the energy sector was not adequate which resulted in severe energy crisis in India because of the huge expansion and increased energy needs. India would increase nuclear energy generation from 4,000 MW at present to 20,000 MW by 2020 according to Meera Shankar, the Indian Ambassador to the United States. She also said that "India is today the most competitive producer of small nuclear power plants and the Indo-US civil nuclear deal will boost bilateral economic ties and address "shared concerns" on energy security and climate change amid deepening strategic relations (‘Indo-US nuclear deal to boost economic ties’, 2010). Even the anticipated 20000 MW energy production by 2020 from nuclear sources might not be sufficient enough for India’s energy requirements that time, if India develops in its present way. Energy is the much needed entity for economic growth and human development. No natural resources can be mobilized without using energy. India accounted for about 3.5% of the world commercial energy demand in the year 2003 even though per capita energy consumption in India is still very low compared to other developing countries. India is targeting a GDP growth rate of 8% in the coming years and subsequently the energy demand is expected to grow at 5.2%. Primary energy consumption is expected to reach about 412 MTOE (million tonnes oil equivalent) and 554 MTOE in the terminal years of the Tenth and Eleventh Plans, respectively. The International Energy Outlook 2005 projects India’s gas consumption to grow at an average annual rate of 5.1%, thereby reaching 2.8 trillion cubic feet by 2025 with the share of electric power sector being of 71% by that time. Coal consumption is expected to increase to 315 MT over the forecast period (Indian energy sector: an overview, n. d) The rapid population growth, industrial growth and changing life styles may increase the energy requirements of India further than forecasted. For example, mobile phone and automobile usages in India has increased a lot in the last two decades. It is difficult to see a family without a vehicle in the urban areas now. Even in rural areas many people using motor bikes for their travelling needs. Same way mobile phones are a house hold entity now. In fact most of the people in urban areas have their own cell phones. Thus the energy requirements in India are rapidly growing because of the changing life styles or advancements in life standards. India is making every effort to utilize the possibilities opened by globalization and their huge and skilled manpower resources enabled them in doing so. Small scale industries are developing rapidly in India which again increases the energy requirements further. Projections of future energy needs of China and its importance Li (2005) has mentioned that the Chinese parliament has passed a historic law in February 2005 in order to cut the domestic usages of coal and oil and to increase the solar energy usage by 10% by 2020 by encouraging the use of solar photovoltaics (PV), solar water heating, and renewable energy fuels (Li, 2005). China has realized that their energy requirements cannot be met in future if they fail to develop renewable energy sources. They have taken every measure to discourage the usages of non-renewable energy sources like the coal and oil and encourage the usage of renewable energy source like solar energy. In fact China is one of the rarest countries in the world which made even legal frameworks for the solar energy usages. Gupta (2006) has mentioned that world Energy Requirements to increase by approximately 60% between 2004 and 2030 and two-thirds of this increase might be from the developing world and China may account for 21% of total increase (Gupta, 2006, p.7-8). The above statistics clearly shows china’s substantial role in the projections of future energy requirements. East Asia is developing more rapidly than any other regions in the world (See Appendix 1) and hence the energy requirements of this region might be comparatively higher than other regions. Demand for energy grew by 2.9% in 2003 and that of oil increased by 2% during the same year. China contributed approximately one third of the above increase. The demand for natural gas also increased during the same period and Asia has major role in that also (Gupta, 2006, p.9). Share of developing world for the increase in energy demand including China and India is given in Appendix 2. The statistics given in the appendix 1, 2 & 3 clearly shows the Asian countries are developing rapidly than any other countries in the world. In fact as per the 2007 statistics China acquired the number one spot in GDP growth followed by Vietnam and India (See Appendix 3). US and Europe are far below than these countries as far as GDP growth is concerned. The 2008 global financial crisis has broken the back bone of US and European economies even further. At the same time the Asian countries like India and China continued their growth without much problems. Energy requirement of a country is associated with its economic growth. Countries with higher economic growth need more energy than countries with lower economic growth. In that sense, because of higher economic growth, India and China may require more energy than any other countries in the world. Conclusions Energy requirements of a country depend on its economic growth, population growth and changing living standards. China and India are the two major countries in the world at present which are developing more rapidly than any other countries in the world. The huge energy crisis in the world at present is because of the immense developments in these heavily populated countries. The GDP growths of these two countries are one among the top five countries in the world whereas population wise they are the number one and two. China is currently developing more solar energy equipments whereas India is more focussed on developing nuclear energy sources in order to meet their future energy requirements. In short, India and China have significant role in increasing the global energy demand and it is necessary fro them to develop renewable energy sources further. References 1. Bajpaee Chietigj (2005), India, China locked in energy game, Retrieved on 1 May 2010 from http://www.atimes.com/atimes/Asian_Economy/GC17Dk01.html 2. Gupta Sidhartha (2006) Global Energy Trends: Changing Energy Requirements of the Developing World Retrieved on 1 May 2010 from https://netfiles.uiuc.edu/ro/www/EnergyClubattheUniversityofIllinoisatUrbana-Champaign/Presentations/GlobalEnergyTrends.pdf 3. ‘Indo-US nuclear deal to boost economic ties’, (2010), Retrieved on 1 May 2010 from http://www.zeenews.com/news605860.html 4. Indian energy sector: an overview, (n. d), Retrieved on 1 May 2010 from http://www.indiaenergyportal.org/overview_detail.php 5. Li Zijun (2005). Solar Energy Booming in China, Retrieved on 1 May 2010 from http://www.worldwatch.org/node/41 Appendix 1 Average Annual GDP Growth (Gupta, 2006, p.4) Appendix 2 (Gupta, 2006, p.10) Appendix 3 (Gupta, 2006, p.5) Read More