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A study of changing patterns of energy consumption and energy efficiency in the Indian manufacturing sector

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  • Jena, Pradyot

Abstract

In the present economic scenario, the key concerns in policy making in India are: how to achieve higher energy efficiency in the key sectors and how to reduce the vulnerability of the economy to external shocks. In this paper, an attempt is made to study the changing pattern of commercial energy consumption in the manufacturing sector, which is the largest user of commercial energy and to identify the alternative energy saving processes through technological upgradation. For this purpose, we have adopted Divisia index decomposition method, which decomposes the aggregate energy intensity index into structural intensity index and the energy intensity index. The findings of the paper suggest that while several sub-sectors have shown increasing trends of technical efficiency, there is still a lot of scope for energy saving potential in the industrial sub-sectors. Further, it is found out that the change in the aggregate energy intensity index has not been influenced much by the structural effects. Instead, major segment of the change in aggregate intensity index is explained by the reduced energy intensity index.

Suggested Citation

  • Jena, Pradyot, 2009. "A study of changing patterns of energy consumption and energy efficiency in the Indian manufacturing sector," MPRA Paper 31195, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:31195
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    File URL: https://mpra.ub.uni-muenchen.de/31195/1/MPRA_paper_31195.pdf
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    References listed on IDEAS

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    1. B. W. Ang & Ki-Hong Choi, 1997. "Decomposition of Aggregate Energy and Gas Emission Intensities for Industry: A Refined Divisia Index Method," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 59-73.
    2. G. Boyd & J. F. McDonald & M. Ross & D. A. Hansont, 1987. "Separating the Changing Composition of U.S. Manufacturing Production from Energy Efficiency Improvements: A Divisia Index Approach," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 77-96.
    3. Gale A. Boyd and Joseph M. Roop, 2004. "A Note on the Fisher Ideal Index Decomposition for Structural Change in Energy Intensity," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 87-102.
    4. Diewert, W E, 1974. "Functional Forms for Revenue and Factor Requirements Functions," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 15(1), pages 119-130, February.
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    Cited by:

    1. Jain, Princy & Goswami, Binoy, 2021. "Energy efficiency in South Asia: Trends and determinants," Energy, Elsevier, vol. 221(C).
    2. Shakya, S.R. & Adhikari, R. & Poudel, S. & Rupakheti, M., 2022. "Energy equity as a major driver of energy intensity in South Asia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 170(C).

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    More about this item

    Keywords

    Energy consumption; Divisia decomposition method; India; Efficiency;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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