Electing the Future: India's Modi Continues as PM, but Faces Energy Challenges

---

Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--Of the recent elections in India, in which longtime prime minister Narendra Modi's Bharativa Janata Party (BJP) lost its ability to govern without a coalition, one analyst was quoted by Bloomberg as saying, "This is not an election--it is a kind of political earthquake." Niranjan Sahoo, senior fellow with the New Delhi-based Observer Research Foundation added, "Even if Modi becomes the prime minister, his position will be diminished to a great extent. He will not be the same Modi."

As the world's most populous nation (about 17.8% of the world's people) struggles with economic issues and energy/climate issues, a Modi government that must include other parties may face compromises that alter many policies, including the nation's energy balance.

Modi Still Operandi
The nation's prime minister for the last 10 years, Modi's BJP had won a record 303 seats in the last elections, in 2019, and Modi had projected his party winning as many as 400 seats this time.

But after failing to secure even the 272 seats needed for a simple majority this time, BJP was forced into discussions about sharing power. Fortunately for Modi, two key allies in BJP's existing coalition, the National Democratic Alliance (NDA), have signaled their support, enabling him to continue. Nitish Kumar of Janata Dal (United) and N. Chandrababu Naidu of the Telugu Desam Party, met with Modi in New Delhi to iron out the details.

Founded in 1998, the NDA comprises center-right and right-wing political parties.

Power Struggles: Meeting Demand Means Marshalling All Kinds of Power
On the energy front India, in addition to being the most populous nation, is the world's third largest energy user and, unsurprisingly, the third largest emissions producer. As the nation continues to develop its economy and infrastructure, its energy needs are projected to double by 2070 compared to 2020 levels. This growth in energy use and in economic power, will make it increasingly difficult to meet climate goals regardless of who's in charge.

In recent years the Modi government has pushed solar power, leading the nation to build four of the world's ten largest solar parks. Since 2014 India has boosted renewable capacity as a whole by 128%, with the world's fourth-best renewable power growth rate.

At the same time, India's energy sector proposed construction of 11.4 gigawatts (GW) of new coal capacity in 2023, placing it second in the world in that category. To be fair, that puts them a very distant second to China's world-leading numbers, which had 47.4 GW of power come online in 2023 and authorized another 70.2 GW of new construction that year, according to Global Energy Monitor (GEM) figures.

In April of this year, the Hindu Business Line quoted Petroleum Planning & Analysis Cell (PPAC) data saying that India imported 21.4 million tonnes (MT) of crude oil, a growth of 3% over the previous month and 7% over 2023 numbers. This was just short of the 21.6 MT imported in April of 2022 and the 21.5 MT of January 2024. Some of this was caused by record power demand due to a heat wave, as detailed below.

Power to the People
The biggest challenge is that the nation needs a massive influx of all kinds of energy to supply energy demands that are expected to double over the next 50 years. With Modi's mandate gone due at least in part to a growing gap between rich and poor, his administration will have to use creativity and a large number of rupees to stay in power and to meet the growth demands.

The nation's climate, for centuries known as one of the world's hottest already, has struggled to meet cooling demand as temperatures have soared in recent weeks. Peak electricity demand broke records at 250 GW recently, causing blackouts in many areas.

The blackouts were not due to ignoring the problem--the nation added gas-fired plants to pick up the slack when its solar plants turn out the lights at bedtime, and older plants were asked to defer maintenance to stay online. Coal shipments also set records during that time. It was just not enough to meet the demand.

One problem, says a report, was that gas-fired power in India is more expensive than what comes from other sources. Bloomberg's Rajesh Kumar Singh says, "Cash-strapped retailers chose load-shedding, and areas where voting had already taken place--the country voted for six weeks--saw long blackouts. Many transformers, old and overloaded, simply stopped working."

It will likely take energies of all colors, from green on down, to make India a leader in manufacturing as Modi has envisioned. Whatever configuration his new government takes, it will take laser focus to keep everyone in power.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).