India's energy demand to surpass US in 2040s, China in 2060s: Shell scenarios

New Delhi, Feb 26 (PTI) India's role in the global energy system is set to expand significantly, with its energy demand projected to surpass that of the United States in the 2040s and overtake China in the 2060s, according to a new India-focused scenarios sketch released by Shell India.

The analysis also indicates that fossil fuels' share in India's energy mix is expected to peak this decade. However, while their proportion declines thereafter, absolute consumption could continue rising in certain scenarios as overall energy demand potentially doubles over the next two to three decades.

Titled 'India's energy transition in a security-focused age', the report outlines three possible futures shaped by geopolitics, digitalisation and climate imperatives: Archipelagos, Surge and Horizon.

"India's energy demand has grown nearly 40 per cent over the past decade due to rapid economic and population growth. The country's role in global energy will expand, with energy demand surpassing the USA in the 2040s and China in the 2060s," it said.

The report highlights a structural pivot from imported fossil fuels to domestically produced renewable energy, improving energy security while advancing decarbonisation.

Solar and wind energy have expanded from around 3 per cent of final electricity consumption in 2015 to over 20 per cent currently and are projected to account for 59 per cent or more of electricity generation by 2050 across scenarios.

"Low-carbon fuels will play a major role in India's future energy mix, especially for hard-to-electrify sectors, with strong domestic bioenergy potential and supportive policies driving future growth," it said. "Fossil fuels share in India's energy demand peaks this decade; however, the pace of decline thereafter varies significantly across scenarios." That said, even with a declining share, the absolute volumes of fossil fuels continue to increase in all scenarios as India's energy needs double over the next two to three decades.

Electricity's share in total energy demand is now comparable to advanced economies.

Natural gas and LNG are expected to play a key transition role, with demand rising by 50 per cent or more in the next decade to support grid reliability, industrial growth and AI-driven power consumption.

The analysis underscores the importance of industrial transformation, electrification of transport, scaling low-carbon fuels such as bioenergy and renewable hydrogen, and enabling carbon removals through geological storage and natural sinks.

The report said the scenarios are intended to support policymakers and businesses in navigating uncertainty while strengthening India's long-term energy security, competitiveness and resilience.

Sharing insights on the report, Mallika Ishwaran, chief economist, Shell, said "India's energy demand is accelerating and meeting it strategically and securely will require decisive choices and long-term vision." "Our new Shell Scenarios Sketch, 'India's energy transition in a security focused age', provides a structured view of those choices through three scenarios Archipelagos, Surge and Horizon shaped by geopolitics, digitalisation, and climate imperatives. By mapping these futures, we aim to help policymakers and businesses navigate uncertainty and strengthen India's energy resilience in the decades ahead." Five key areas of action for the next decade that emerge from the analysis include accelerating low-carbon electrification, driving electrification of road transport, improving industrial competitiveness, maintaining transition fuels where needed and making carbon removals investible. PTI ANZ HVA