5.1. Fixed Assumptions:The fixed assumptions on GDP growth rate, population, share of manufacturing and urban-ization would remain same in both the scenarios i.e. BAU and High Gas Scenario. 5.1.1.GDP Growth Rate:A GDP growth rate of 8.5% (CAGR) between 2012 and 2047 is assumed. The graph below clearly depicts the GDP trajectory followed by India. 29
5.1.2. Population, Rate of Urbanization and Share of Manufacturing:The population of India will rise from 1.2 billion in 2012 to 1.7 billion in 2047. (Population Foundation of India). The urbanization rate, in line with the patterns followed by many major economies, is assumed to increase to 51% in 2047 from 31% in 2012. (United Nations World Urbanization Prospects, 2014). The share of manufacturing would rise to 34% in 2047 from 16% in 2012, thereby increasing the share of energy demand by industry by 2047. 5.1.3. Attainment of India’s Development Ambitions:Both the scenarios i.e. BAU & High Gas scenario takes into account the developmental ambitions of the Government – 175 GW of Renewable energy capacity by 2022, 24X7 power for all by 2022, Housing for all by 2022, 100 smart cities mission, meeting of India’s INDC targets etc. Therefore, the BAU scenario is nevertheless ambitious too as it incorporates all the developmental targets of the Government, but, the High Gas scenario is even more ambitious. 5.2. Gas Demand in the demand side sectors:Three sectors have been identified on the demand side where the gas is fed in – industry, cooking and transport. The BAU scenario considers a moderate penetration of gas in the above three sectors, but, the High Gas Scenario considers a higher penetration of gas in these sectors. 7.8%8.5%10.0%9.8%8.5%7.5%7.4%0.0%2.0%4.0%6.0%8.0%10.0%12.0%12-1717-2222-2727-3232-3737-4242-47GDP Trajectory30
5.2.1. Industry :Natural gas is used in various sectors such as Iron & Steel, Textiles, Chlor-Alkali, and Pulp-Paper etc. in Industry. IESS 2047 gives the user different technology options in the steel sector which could lead to fuel switching in that sector. Therefore, a technology option of high gas based DRI is chosen in the high gas scenario which will increase the penetration of gas, whereas the BAU scenario considers the default technology option which assumes high penetration of solid fuels rather than gas. Also, the high gas scenario assumes increased efficiency of industrial process over the BAU scenario. Therefore, we tried identifying the impact on the gas demand on the entire industry sector if there were a fuel switch in the steel sector towards gas based technology from the present reliance on the Blast Furnace – Basic Oxygen Furnace (BF-BOF) technology which consumes coal. Figure 2 gives the penetration of different fuels like solid, liquid, gaseous or electricity in the steel sector along with the natural gas demand in the industry sector in the BAU scenario. In the BAU scenario, the penetration of gaseous hydrocarbons remains the same i.e. 6% till the year 2047.