Analysis of electricity consumption in Pakistan using index decomposition and decoupling approach

Abstract

Electricity consumption plays a significant role in increasing the share of total energy consumption worldwide and has a close association with the economy. This research analyzes the factors in two ways. First, this study estimates the electricity consumption in Pakistan during 1989–2018 using Index Decomposition Analysis between share of electricity consumption, economic development, energy intensity, per capita economy, and population. Second, an appropriate decoupling analysis method is taken to evaluate the relationship between related variables and the process of sustainable growth. These analyses are based on both sectorial and national levels. The outcomes show that the economic structure sector effect was the major driving factor growing total electricity consumption in Pakistan, and energy intensity occurred with positive fluctuations during 1989–2018. The agriculture, industrial, and domestic sectors were the top three sectors that increased electricity consumption. The effects of electricity variations caused by GDP growth and showed seven decoupling states during the whole period. Finally, in recent years, the agriculture sector has a weak decoupling, while energy-intensive sectors had an expensive decoupling and transferred to a weak decoupling over the future period. Consequently, electricity production, energy policies, and energy management need to be better integrated with economic planning exercises.