India's power and upstream energy sectors such as coal, oil and gas need investments to the tune of $120-150 billion over the next five years, a study by KPMG has said. Maintaining that public sector spending alone would not suffice, the advisory services provider said, “It is imperative that private sector investment is strong in order to complement the public sector’s and to bring in the required technologies to enhance energy resource extraction.”

The study underlined the recent efforts by the Government in recognising the need for private participation and ensuring that policies to promote investments are being implemented. “Private participation in coal mining for captive use, in oil & gas exploration and in the power sector is already seeing significant progress. It is also expected that private participation in nuclear energy would be allowed as and when the Indo-US Nuclear deal goes through,” the study titled ‘India Energy Outlook 2007’ said.

The report also stated that energy transport infrastructure such as ports, railways, pipelines and power transmission networks need significant investments. By world standards, India’s current level of energy consumption is very low. For the year 2004-05, the total annual energy consumption for India is estimated at 572 mtoe (million tons oil equivalent) and the per capita consumption at 531 kgoe (kilograms oil equivalent), it said.

However, with a targeted GDP growth rate of over 8 per cent and an estimated energy elasticity of 0.80, the energy requirements of the country are expected to grow at over 6.4 per cent every year over the medium to long term. “This implies a four-fold increase in India’s energy requirement over the next 25 years, which is a significant challenge for the country,” KPMG said.

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