India’s Energy Efficiency Grows Faster Than Global Average: RBI

India’s energy efficiency has improved by 1.9% between 2000 and 2023, outpacing the global average of 1.4%, according to a study published in the Reserve Bank of India's (RBI) latest monthly bulletin. While India still trails developed markets such as the US and Germany, which recorded over 2% improvement in the same period, it has surpassed its BRICS counterparts, which averaged 1.62%.

The study highlights that between 2012 and 2022, India added 706 million tonnes of carbon emissions, primarily driven by economic growth, which contributed over 1,000 million tonnes. However, rising energy efficiency played a crucial role in offsetting 399 million tonnes of emissions.

Looking ahead, the study suggests that the shift toward renewables and the expansion of green hydrogen usage in industries will play a more significant role in reducing emissions. "The emission factor effect is expected to gain prominence as renewable energy increasingly replaces fossil fuels," RBI researchers stated.

Despite progress in decoupling emissions from economic growth, the study underscores the need for further reforms to achieve India’s net-zero target by 2070.

"India should intensify its focus on expanding renewable energy. Solar and wind power tariffs are now lower than those for new coal power plants, dispelling earlier concerns about the high costs of renewables," the report noted.

However, despite significant capacity additions in recent years, solar and wind energy accounted for only 2.1% of India’s primary energy mix in 2022-23, indicating the need for accelerated adoption of clean energy sources.