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Latest Working Paper: Energy Access in India - Today and Tomorrow
2 Jul 2014

Karthik Ganesan and Rajeev Vishnu have written a paper highlighting the present and future prospects of energy access in India. The complete paper can be read here.

Some of the key findings and conclusions derived from the paper are as follows:

The first section of the report provided a detailed breakdown of the energy access scenario in the country. Despite six decades of independence and nearly two decades into the post-liberalization era, the situation in terms of energy access remains grim. Nearly 20% of the households in the country consume no electricity and of these nearly 94% are in rural areas. The situation when it comes to cooking fuels is less optimistic. Nearly two thirds of the households in the country do not consume any LPG and nearly 85% of these households are in the rural areas where firewood is the predominant (possibly preferred) form of cooking fuel. This has serious consequences for the indoor air quality in the households and the health of women and children who are often exposed to the emissions from firewood burning and kerosene fumes that result from their respective usage.

With increasing income per-capita energy consumption rises, but the fraction of income expended to meet energy requirements decreases simultaneously. Thus, removal of energy poverty assumes foremost importance in alleviating income poverty; else a significant share of household income in poor households will be diverted to meet sustenance energy demand. Our analysis also indicates that the price useful energy consumed by a poorest household is costlier than that by a richest household by more than 35%. The choice of fuel varies with income and hence the share of expenditure on various fuels. On an average, as one moves up the income ladder, more efficient fuels like LPG and electricity are preferred to firewood and kerosene.

The fuel consumption mix depends on a large number of economic, technical, socio-demographic, geographic and lifestyle factors. For example, Himalayan states which faces severe winter compared to rest of India consumes significantly more energy during winter than non-winter months. Extent of urbanization and economic affluence of a particular state can positively influence the per capita energy consumption. There exists a strong link between energy demand and household attributes such as household income (as represented by the expenditure), social status, location of household (rural/urban) etc.

There is also a large variation in consumption across the varied geography (political and physical) of India. This can be explained by the differential resource endowment of the states and the concomitant economic growth rates witnessed by each. While state specific policies have also played a key role, it may be necessary for targeted interventions by the central government to ensure national growth and aspirations have a commensurate impact on poorest states of the country. This will be a significant assumption going forward, in the estimation of future energy access pathways and the extent to which energy poverty is alleviated.

A transition to cleaner and efficient fuels over the next few decades is evident and desirable. At projected rates of macroeconomic growth and population growth, the reliance on solid fuels (traditional biomass, coal and charcoal) is set to continue. Given that a bulk of the kerosene usage today is for lighting services, where electricity has yet to reach, this consumption will dwindle down to insignificant levels. The consumption of LPG/PNG and electricity on the other hand, are likely to witness a meteoric increase with the rising aspiration levels of the population, driven by higher incomes and use of appliances and an increasing awareness of the socio-economic benefits of consuming these fuels. While factors such as education levels of adult women and income levels contribute to the transition, it will not be realized without active intervention on part of the government. Equitable distribution of resources is a must if the aspirations of the lower income groups are to be realized and here the state must play a stronger role to ensure more efficient last mile delivery and a rationalized subsidy regime to ensure equality in outcomes and not just in the opportunities.

For more details: Energy Access in India – Today and Tomorrow

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CEEW’s Fact of the day...
In India, around 74 million rural households lack access to modern lighting services and a larger proportion of the population (around 840 million) continue to be dependent on traditional biomass energy sources
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