Energy is an essential building block of economic development.

In an effort to meet the demands of a developing nation, the Indian energy sector has witnessed a rapid growth. Areas like the resource exploration and exploitation, capacity additions, and energy sector reforms have been revolutionized.

However, resource augmentation and growth in energy supply have failed to meet the ever increasing demands exerted by the multiplying population, rapid urbanization and progressing economy. Hence, serious energy shortages continue to plague India, forcing it to rely heavily on imports.

It has been noted by the Planning Commission 2002 that primary commercial energy demand has grown at the rate of six per cent between 1981 and 2001.

India currently faces coal shortage of 23.96 MT . Production of petroleum reserves has been stretched from 5.7 MT during 1970/71 to 110 MT in 2003/04.

Natural gas demand too has been steadily growing at the rate of about 6.5% during the last 10 years.

Comprehending that the dependence on energy is expected to increase further to achieve the targeted Gross Domestic Product (GDP) growth rate of 8% during the Tenth Five-year Plan, the Government of India has granted high priority to the energy sector.

It is estimated that the total primary energy consumption is expected to about 412 MTOE (million tonnes oil equivalent) and 554 MTOE in the terminal years of the Tenth and Eleventh Plans, respectively (Planning Commission 1999).

Renewable energy sources offer viable option to address the energy security concerns of a country. Today, India has one of the highest potentials for the effective use of renewable energy. There is a significant potential in India for generation of power from renewable energy sources—wind, small hydro, biomass, and solar energy.

Other renewable energy technologies, including solar photovoltaic, solar thermal, small hydro, and biomass power are also spreading. Greater reliance on renewable energy sources offers enormous economic, social, and environmental benefits.

The detailed outline of the Indian energy sector explains the demand and supply scenario of coal, power, oil and natural gas in India. It illustrates India’s energy current status, future concerns, and the alternatives available to sustain the developmental process.