The Indian Dash for Gas: Will Gas Be the Fuel of Choice for Power Projects?
At first glance, it would seem that India is now poised for its own version of the ‘dash for gas’; high demand for electricity, aging power infrastructure, a new regulatory climate and newly discovered, large supplies of natural gas have provided a confluence of forces, which may well make gas the fuel of choice for Indian power companies. With annual GDP growing at 8%, and electricity-sector growth normally even faster, power demand is likely to increase by more than 10% per year. To meet this demand, a broad range of technologies and fuels are available. The long time frames for power sector capital investment means that decisions now will have long-term implications for the Indian economy and the development of a sustainable and reliable energy portfolio. This note examines the various options, and concludes that gas proponents should remain cautious in their investment approach.