Examining the Relationship Between Electricity Consumption, Economic Growth, Energy Prices and Technology Development in India

Towards sustainable development: The impact of transport infrastructure expenditure on the ecological footprint in India

This paper attempts to re-examine the relationship between economic growth and electricity consumption in India for the period 1971-72 – 2016-17 for the country as a whole and for the agricultural and industrial sectors separately. Using gross value added (GVA) and per capita net national product (NNP) as indicators of economic growth techniques like cointegration, error correction model and Granger causality tests are applied for the study. The results indicate that there is a long run positive relationship between economic growth and electricity consumption when GVA is the indicator of growth. However, the short run coefficients are not statistically significant. Per capita NNP does not have any long run relationship with per capita electricity consumption but there is a unidirectional Granger-cause from log per capita NNP to log per capita electricity consumption when lag length is three. There is unidirectional Granger-causality from log GVA to log electricity consumption in the agricultural sector also. For the industrial sector, however, neither variable Granger causes the other. The cross section analysis for thirty two states and union territories of India reveals that per capita net state domestic product (NSDP) positively and significantly affects per capita electricity consumption of states in each of the years from 2012-13 to 2016-17. But the responsiveness of electricity consumption with respect to NSDP declines over the years.

Exploring the nexus of electricity consumption, economic growth, energy prices and technology innovation in Malaysia

India is one of the largest producer and consumer of electricity in the world owing to being one of the most populous country in the world signifying the demand for electricity is only set to grow further. World has witnessed an era of economic growth aided pertinently by electricity consumption and growing demand. With FDI indorsed downright to this vital utilities sector, it becomes imperative to cognize the relationship of Electricity Consumption, Economic Growth and FDI in India. In this study we investigate the causal direction of relationship among Foreign Direct Investment, Electricity Consumption and Economic Growth in India by using time-series data for the period 1986–2021 and employing econometric models. We find two uni-directional causalities running from Electricity Consumption to Economic Growth and Economic Growth to FDI and a bi-directional causality between Electricity Consumption and FDI. The results of the study provide a novel perspective for policy makers while formulating policies related to the power sector and foreign direct investments in India. The focus of Policy makers should be on enabling electricity service providers to offer best services to commercial and non-commercial participants as it aids in Economic growth of the country. For enhanced economic growth a country like India must have good and world-class infrastructure, efficient and effective regulatory mechanism equitable for all stakeholders, an improved living standard for people of all economic strata and a stable, healthy business friendly environment coupled with policy stability through stable government.

Residential electricity consumption in India has increased by a factor more than 50 since 1971. India’s electrified households on average still consume less than one-third of the world’s average for electricity. Rapid electrification, increasing incomes and technology development can result in increased appliance ownership and higher electricity use. A better understanding of this demand can help to develop effective energy-efficiency policies, optimize the addition of generation capacity, and tackle challenges of climate change and environmental pollution. However, research on residential electricity consumption has received limited attention in India until now. A systematic examination of determinants of residential electricity consumption will require an interdisciplinary approach involving the fields of engineering, economics (traditional and behavioural), anthropology, architecture and others. A two-step approach is presented to advance understanding. First, a critical literature review from different disciplines is presented that explores residential electricity consumption in India. Public data sets are also analyzed to gather insights and highlight inconsistencies. Second, an interdisciplinary approach is proposed and developed that can be adopted for research on residential electricity consumption in India. The data needs and systems to facilitate such an approach are provided.

Electricity has a peculiar characteristic that it cannot be economically stored in large quantities. Electricity demand is the fastest growing form of energy consumed worldwide and it is predicted that the world's net electricity consumption will double by 2030. Therefore its generation and consumption need to be matched at all times. Demand side management (DSM) refers to the ability to alter end user electrical consumption in response to system conditions. It aims at improving energy efficiency through reduction of Kilowatt hours of energy consumption for the same service or activity. Other benefits of DSM could include higher end-use energy efficiency, improvement in quality and reduction in cost of power. Energy-efficiency improvements can slow the growth in energy consumption, save consumers money and reduce capital expenses for energy infrastructure. Innovative and efficiency improvements through DSM programmes have been carried out in a more open energy market. At the same time, government intervention has also been strengthened by the worsening of environmental situation and the need to significantly reduce emissions of greenhouse gases. DSM programmes are used to eliminate or reduce the need for additional peak or base load generating capacity and/or distribution facilities. Losing this opportunity to build efficiency into new economies would have serious financial, environmental and social consequences in the future. India is the world's sixth largest energy consumer. The power generating capacity increased from 66086 MW to 97846 MW during 1990-91 to 1999-2000 at an annual rate of 4.5%. The installed capacity of the power sector increased 60 fold between 1950 and 2000 at an annual growth rate of 8.5%. The per capita electricity consumption in India increased from 354.75 kWh in 1999-2000 to nearly 704.00 kWh in 2007-2008. The CO2 production in India has been showing an increasing trend in the new millennium in consonance with the rate of growth of Indian economy. Emissions per unit of electricity supplied from fossil fuels are estimated at 167 tonnes of carbon per GWh in 2005. In India power plants burn mostly coal with approximately 10-30% excess air. The national inventory of green house gases indicates that 55% of the total emissions in India come from energy sector. While public is interested in using energy more efficiently, there are several market barriers that prevent it from making rational investments in efficient technologies and practices. As the economy develops, households switch over from traditional fuels to modern and cleaner energy. Hence it is certain that household consumption of electricity is expected to increase rapidly with the increase in the growth of the economy and rise in per capita income. Urbanisation and increased flow of income call for ever-expanding sets of diverse needs. If those appliances are used efficiently, they will augment electric supply. Energy conservation potential for the economy as a whole has been assessed as 23% with maximum potential in industrial and agricultural sectors. At present new rare-earth phosphors have been developed to provide a warm light that is close in quality to the light of an incandescent. The new phosphors improve the colour of fluorescents with the same efficiency. Electricity for lighting represents approximately 34% of Indian peak power and roughly 17% of the electrical energy consumed. Incandescent lighting is estimated to constitute at least 17% of the peak demand, and roughly 10% of the national electricity consumption (135 TWh in 1984-85). Experts suggest that transferring subsidies from electricity to compact fluorescent lamps (CFLs) is a good proposition. Energy labelling provides information in a form that is objective and easy to understand for customers. The specified products are required to supply and declare energy data that has been determined when tested to the relevant Standard. The operating cost is also known as the 'second price tag,' and can help customers choose between models. Both energy labelling and standards stimulate technological change or innovation. This paper aims to examine electricity production and consumption at the All-India level and analyse the social and environmental aspects of electricity in the household sector.

Electricity has a peculiar characteristic that it cannot be economically stored in large quantities. Electricity demand is the fastest growing form of energy consumed worldwide and it is predicted that the world's net electricity consumption will double by 2030. Therefore its generation and consumption need to be matched at all times. Demand side management (DSM) refers to the ability to alter end user electrical consumption in response to system conditions. It aims at improving energy efficiency through reduction of Kilowatt hours of energy consumption for the same service or activity. Other benefits of DSM could include higher end-use energy efficiency, improvement in quality and reduction in cost of power. Energy-efficiency improvements can slow the growth in energy consumption, save consumers money and reduce capital expenses for energy infrastructure. Innovative and efficiency improvements through DSM programmes have been carried out in a more open energy market. At the same time, government intervention has also been strengthened by the worsening of environmental situation and the need to significantly reduce emissions of greenhouse gases. DSM programmes are used to eliminate or reduce the need for additional peak or base load generating capacity and/or distribution facilities. Losing this opportunity to build efficiency into new economies would have serious financial, environmental and social consequences in the future. India is the world's sixth largest energy consumer. The power generating capacity increased from 66086 MW to 97846 MW during 1990-91 to 1999-2000 at an annual rate of 4.5%. The installed capacity of the power sector increased 60 fold between 1950 and 2000 at an annual growth rate of 8.5%. The per capita electricity consumption in India increased from 354.75 kWh in 1999-2000 to nearly 704.00 kWh in 2007-2008. The CO2 production in India has been showing an increasing trend in the new millennium in consonance with the rate of growth of Indian economy. Emissions per unit of electricity supplied from fossil fuels are estimated at 167 tonnes of carbon per GWh in 2005. In India power plants burn mostly coal with approximately 10-30% excess air. The national inventory of green house gases indicates that 55% of the total emissions in India come from energy sector. While public is interested in using energy more efficiently, there are several market barriers that prevent it from making rational investments in efficient technologies and practices. As the economy develops, households switch over from traditional fuels to modern and cleaner energy. Hence it is certain that household consumption of electricity is expected to increase rapidly with the increase in the growth of the economy and rise in per capita income. Urbanisation and increased flow of income call for ever-expanding sets of diverse needs. If those appliances are used efficiently, they will augment electric supply. Energy conservation potential for the economy as a whole has been assessed as 23% with maximum potential in industrial and agricultural sectors. At present new rare-earth phosphors have been developed to provide a warm light that is close in quality to the light of an incandescent. The new phosphors improve the colour of fluorescents with the same efficiency. Electricity for lighting represents approximately 34% of Indian peak power and roughly 17% of the electrical energy consumed. Incandescent lighting is estimated to constitute at least 17% of the peak demand, and roughly 10% of the national electricity consumption (135 TWh in 1984-85). Experts suggest that transferring subsidies from electricity to compact fluorescent lamps (CFLs) is a good proposition. Energy labelling provides information in a form that is objective and easy to understand for customers. The specified products are required to supply and declare energy data that has been determined when tested to the relevant Standard. The operating cost is also known as the 'second price tag,' and can help customers choose between models. Both energy labelling and standards stimulate technological change or innovation. This paper aims to examine electricity production and consumption at the All-India level and analyse the social and environmental aspects of electricity in the household sector.

The paper explores the nexus between energy consumption (oil and electricity) and economic growth in the five SAARC countries over the period 1970-2006. Using cointegration and Error Correction Model (ECM), the paper finds a unidirectional short run and long run causality from oil consumption to economic growth in Bangladesh and Nepal, a unidirectional short run and long run causality from electricity consumption to economic growth in Pakistan and Sri Lanka, a unidirectional short run and long run causality from economic growth to oil consumption in India and Sri Lanka, and a unidirectional causality from economic growth to electricity consumption in India and Nepal. It also finds the bidirectional causality between electricity consumption and economic growth in Bangladesh and between oil consumption and economic growth in Pakistan. The paper at the end suggests that energy and environmental policies should recognize the differences in the energy consumption-growth nexus in order to maintain sustainable economic growth in the region.

PurposeThe purpose of this paper is to examine whether remittance inflow stimulate electricity consumption in India with other macroeconomic variables such as FDI, trade openness and urbanization in energy demand function from 1975–2017.Design/methodology/approachWe have applied structural break and co-integration tests for stationarity and long-run relationship between the variables. The Toda–Yamamatoo causality is employed for investigation of causal relationship between the variables, and robustness of causality linkages is also tested by applying innovative accounting approach (IAA).FindingsOur empirical analysis shows there is presence of long-run relationship among the variables. We find that remittance inflows stimulate electricity consumption in India. Industrialization is positively linked with electricity demand. However, trade openness declines the electricity consumption, but urbanization increases it. Furthermore, remittances inflows cause electricity consumption.Originality/valueOn the basis of findings, we conclude that due to positive impacts of remittances inflows, trade openness and urbanization, policymakers in the Indian economy need to be careful while designing sustainable environment policy. Otherwise, any sustainable environment policy in the name of protecting green environment will hamper the growth of remittance inflows, urbanization and FDI. If this exists, it may be argued that sustainable growth in India will not be possible in the face of sustainable environment policy.

Precise electricity forecasting is a pertinent challenge in effectively controlling the supply and demand of power. This is due to the inherent volatility of electricity, which cannot be stored and must be utilised promptly. Thus, this study develops a framework integrating canonical cointegrating regressions (CCR), time series artificial neural network (ANN) and a multilayer perceptron ANN model for analysing and projecting India's gross electricity consumption to 2030. Annual data for the years 1961–2020 have been collected for variables like gross domestic product (GDP), population, inflation GDP deflator (annual %), annual average temperature and electricity consumption. The study was conducted in three phases. In the first phase of the study, the CCR method was used to check the significance of the selected variables. In the second phase, the projected values of independent variables (GDP, population, inflation GDP deflator [annual %] and annual average temperature) were predicted using the time series ANN model. Finally, a multilayer perceptron ANN model with independent variables was used to forecast the gross electricity consumption in India by 2030. The result shows that the electricity consumption in India will increase by around 50% in the next 10 years, reaching over 1800 TWh in 2030. The proposed approach can be utilised to effectively implement energy policies, as an accurate prediction of energy consumption can help capture future demand.

The present paper tries to examine the Granger causality between per capita electricity consumption and per capita gross domestic product (GDP) at 2004-2005 prices for India using annual data covering the period 1970-1971 to 2015-2016. It applies error-correction model to examine the causal relationship between these two variables. The estimated results indicate that the per capita real GDP and per capita electricity consumption are co-integrated and there is unidirectional Granger causality running from real GDP to electricity consumption but not vice-versa. In the short run, the results of the causality test show that bidirectional causality flow from economic growth to electricity consumption in India. Thus the Government of India has to face the numerous energy challenges in the future.

Potential benefits from improved energy efficiency of key electrical products: The case of India

Domestic renewable electricity generation vs electricity imports: Meeting India’s long-run electricity consumption

Still the world witnessed an upturn in environmental degradation in spite of commitment to climate change across the nations. However, this study attempts to examine linkages among environmental degradation, technological innovation, and electricity consumption in India from 1981 to 2018 using time series data. To examine the long-run equilibrium relationship among the studied variables, we used robust econometric methods such as the autoregressive distributed lag (ARDL), fully modified ordinary least square (FMOLS), and dynamic ordinary least square (DOLS) methods. Furthermore, Granger causality also investigates through the vector error correction model (VECM) model, to assess inter-connotation among the underlying variables. From our empirical findings, urbanization, financial development, and technological innovation have a negative impact on carbon emissions, indicating long-term improvements in environmental quality. While economic development and electricity consumption are deteriorating environmental quality in India. The study's findings suggest that policymakers should prioritize renewable energy, which decreases environmental damage without impeding economic growth.

Purpose By disentangling the impact of positive and negative shocks of GDP, FDI and oil consumption on electricity consumption, the purpose of this paper is to investigate whether this bifurcation significantly determines the level of electricity consumption in the short run and long run. Design/methodology/approach Using the recently developed nonlinear autoregressive distributed lag (NARDL) bounds approach, the study investigates the changes in the level of electricity consumption over a period of 1980–2015. The inclusion of a dummy variable for the possible structural break makes the electricity demand function more reliable. After checking the stationarity of data series, the study has employed the bounds test, which confirms the existence of the long run stability in the system. Further, using the VECM, the causality among the comprised variables has also been examined. Findings The findings confirm that not only the positive shocks but also the negative shocks in GDP have a positive and significant impact on electricity consumption in the long run. Similarly, the increased FDI has widened the scope of electricity consumption in the region, whereas the negative shocks’ impact is found negative in the long run. In comparison to GDP and FDI, the influence of the increased oil consumption on electricity demand is found negative and significant in India, which reveals that electricity acts as a significant substitute for oil consumption in the long run. Originality/value To the best of the literature evidences available, none of the studies in the past has examined electricity demand in an NARDL framework. The study may help in estimating the demand for electricity consumption comprehensively, as this approach captures the separate influence of favourable and unfavourable changes while determining the level of electricity consumption. This approach may be crucial for policy makers, especially in an energy importer country, such as India.