WEF 2024: India is taking incredible steps in the new energy space, says IEA's Fatih Birol

Fatih Birol, Executive Director of the International Energy Agency (IEA), is all praise for India for its substantive efforts in the clean energy space. Birol was speaking with CNBC-TV18's Shereen Bhan from the sidelines of the World Economic Forum (WEF) 2024 at the Swiss resort of Davos on Wednesday, January 17.

Commending India for its diverse initiatives, citing biofuels, bioenergy, and the Ujjwala program as significant steps toward providing sustainable solutions to rural areas, he said, "India is in terms of energy, making incredible good steps ranging from pushing biofuels and bioenergy to the big programme on Ujjwala, bringing LPG and other solutions to the people in the villages, in the rural areas,  LED lighting, efficient lighting, and also renewable solar is a big growth."

He highlighted the two upcoming chapters in India's green energy transition: the electrification of the transportation system, including electric cars and charging stations, and the exploration of green hydrogen, given India's immense renewable potential.

Birol emphasised, "There are two next chapters for India in terms of clean energy transitions – first electrification of the transportation system, electric cars, both cars and charging stations, and the second one is a bit later, the green hydrogen because when I look at the huge renewable potential in India, green hydrogen may well be a lucrative business. So these are the two next chapters I would see in the context of India’s green energy transition."

Discussing global trends, Birol pointed out the remarkable growth in renewable energy capacity. According to IEA data, renewable additions increased by a factor of 50% in 2023, with over 500 gigawatts, especially in solar and wind. Notably, China, India, and Brazil played critical roles, contributing significantly to the shift. In 2023, 85% of all power plants built worldwide were renewables, signaling a substantial move towards decarbonizing the power sector.

"Renewables is a star. According to our data, last year, in 2023, renewable additions increased by a factor of 50%. And about half more than 500 gigawatts, especially solar, but also wind. China, India, and Brazil played a critical role, and the entire world in 2023, of all power plants built, 85% were renewables, close to 5% were nuclear power, and only the rest were fossil fuels. A big change and decarbonisation of the power sector are very much on its way," Birol asserted.

Birol shed light on the rapid adoption of electric vehicles (EVs) globally, highlighting that 18 out of the top 20 car manufacturers consider EVs their top priority. He mentioned the challenges faced in terms of infrastructure and government policies but expressed confidence that electric car penetration is unstoppable.

"Three years ago, when we talked, one out of every 25 cars sold in the world was electric. And last year, it was one out of five cars sold was electric. And in a few years, every second car sold will be electric," Birol stated.

“The 20 top car manufacturers of the world—their CEOs, 18 out of 20 CEOs told me that for them, electric car is the top priority when it comes to their business strategy. It is not driven by climate change or anything; it is just a business because it is a new technology; it is innovation. So I think it is unstoppable—the electric car penetration,” he added.

On the energy markets, Birol shared positive news for energy-importing countries like India. He predicted a reasonable crude price range for 2024, attributing it to the escalating oil production in the United States, Canada, Brazil, and Ghana, surpassing expected demand growth. Additionally, he highlighted a forthcoming surge in LNG capacity from the United States and Qatar, transforming the market into a buyer's market and providing developing nations with stronger negotiating positions.

"Both oil and gas markets—barring some major geopolitical escalations—may see a reasonable price range, which is good for the economies of developing countries that import energy," Birol concluded.