IEA Projects Natural Gas Production to Increase 40 Percent by 2040

However, a combination of factors are causing economists to reevaluate China's status as the world's most important energy consumer.

"Some markets (such as China) undergo structural change in their economies and others reach a saturation point in demand for energy services". Brent oil declined 43 percent in the past year, dragging down oil-linked gas contracts. A major course correction is still required to achieve the world's agreed climate goal, says the report by the global Energy Agency (IEA). The IEA carved out a special section on India to highlight the central role it will play in the future of energy markets.

Lower oil prices could also hamper the world's transition from fossil fuels to renewable energy, the report warned.

Take coal, for example. India, which produces around half of its electricity from coal, has planned a series of ultra mega coal power projects, each having a mammoth capacity of 4,000MW or above.

"From a position as a perceived safe bet, China is becoming the wild card of coal markets, with the risks to our projection of a plateau and then a slow decline in coal demand arguably weighted to the downside", the IEA said.

India's 1 billion tons of coal consumption still pales in comparison to China's (more than 4 billion tons annually).

The potential for growth is hard to fathom. The agency highlights one particular country to underscore this trend - though there are many other candidates - India, home to 1.3 billion people, 240 million of whom lack electricity, a lot of them living in rural areas. "That means after this, coal demand is pretty stable".

Nuclear's share of world electricity generation rises slightly from 11 percent in 2013 to 12 percent in 2040, with nuclear powered generation forecast to increase by 86 percent. Also, China's net oil imports would be almost five times that of the United States, while India's will exceed that of the European Union.

"Some of these concerned smaller and more speculative projects for which lower oil and gas prices were the last straw; but a few also concerned large-scale projects from major companies". It has modest oil reserves but only produces 900,000 barrels of crude per day, as regulatory uncertainty and unfavorable pricing arrangements hold back investments by oil producers. Cheap gas and tighter environmental regulations led coal use to plummet 9.2 percent from 2014 to 2015. India - the subject of an in-depth focus in WEO-2015 - moves to centre stage in global energy, with high levels of economic growth, a large (and growing) population and low (but increasing) levels of energy use per capita all pushing energy demand to two-and-a-half-times current levels.

They said coal is a leading source of energy, has a tremendous contribution to energy mix and will continue to lead in the foreseeable future despite hype created against its use due to global warming related concerns. The Jawaharlal Nehru National Solar Mission calls for 100 GW of solar by 2022.

It would have been even rosier though if the IEA had done a decent job of assessing the headwinds that are forcing the coal industry to a standstill.

At the heart of the IEA's coal analysis lie two critical challenges: the need to have a credible up-to-date analysis of what is happening in China and India. In the last decade, coal has been used to satisfy 45 per cent of new demand for global energy, the agency said, but it is likely to meet 10 per cent of such demand until 2040.

Energy experts such as Tim Buckley and Tony Wood say the latest IEA report should make the Government think again before allowing projects such as this to go ahead. In 2014, mandatory efficiency regulations expanded to cover over a quarter of global energy consumption. Under the more aggressive 450 Scenario, the 2025 projection if 7 percent and the 2040 projection is 18 percent.

The IEA report warns that India must prepare for the fallout of the rise in energy consumption, chiefly air pollution and water stress.