Projecting India's energy requirements for policy formulation

Energy policy has to have a long-term perspective. To formulate it one needs to know the contours of energy requirements and options. Different approaches have been followed in literature, each with their own problems. A top down econometric approach provides little guidance on policies, while a bottom up approval requires too much knowledge and too many assumptions. Using top-down econometric approach for aggregate overall benchmarking and a detailed activity analysis model, Integrated Energy System Model, for a few large sectors, provides a unique combination for easing the difficulties of policy formulation. The model is described in this paper. Eleven alternate scenarios are built, designed to map out extreme points of feasible options. Results show that even after employing all domestic energy resource to their full potential, there will be a continued rise of fossil fuel use, continued importance of coal, and continued rise of import dependence. Energy efficiency emerges as a major option with a potential to reduce energy requirement by as much as 17%. Scenario results point towards pushing for development of alternative sources.