Page 10 - Transitions in Indian Electricity Sector- A Report by TERI
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TRANSITIONS IN INDIAN E LECTRICITY SECTOR 2017–2030
2.5 Forecasting of electricity demand is always a challenging task, especially for fast developing economies. It is
especially so in case of countries such as India considering the expanse, large variations in agro-climatic and
socio-economic conditions, fast changing consumption patterns, purchasing capacity of consumers, shortage
caused by infrastructure constraints, and progress in implementation of various government programmes to
promote efficiency, e-mobility and energy access.
2.6 The present study is a first step towards understanding electricity demand patterns at the state and national
level and projecting the demand up to 2030 based on select key drivers. It will be modified and strengthened
as further research is undertaken.
Demand Analysis
2.7 In the present study, econometric and statistical analysis of electricity consumption since 2001–02 has been
carried out with a view to establish significant factors influencing electricity consumption. The relationship of
electricity consumption with factors such as GDP, per capita GDP, industrial GDP, agricultural GDP, agricultural
pump-sets energized, gross area sown, gross area irrigated, etc. was examined. The data was analysed using
statistical methods, such as correlation and regression, to determine the dependence of electricity demand
on these parameters. The study was undertaken at the national level and for some select states, which had
marginal shortage of power and high connectivity, in order to capture the measured electricity consumption
as unrestricted demand for these states.
2.8 The analysis revealed that, in the past 15 years, electricity demand at the national level was strongly correlated
with total GDP and its components and derivatives including industrial GDP, agricultural GDP, and per capita
GDP. The results are shown in Exhibits 2.2–2.4. Analysis at state level, however brought out findings which
varied widely from the national-level results. This is particularly true at the sectoral level as the socio-
economic parameters, and therefore, the sectoral activity level varies across states and leads to diverse
demand patterns.
Exhibit 2.2: Analysis of all India total electricity Exhibit 2.3: Analysis of all India industrial electricity
consumption with total GDP consumption with industrial GDP
Total Consumption (MU)a) R2 = 0.9978 R2 = 0.8016
300000 400000 500000 600000 700000
4000 6000 8000 10000 12000
Industrial Consumption (MU)
100000 150000 200000 250000 300000
20000 30000 40000 50000 60000
Total GDP (Rs. Billion) Industrial GDP (Rs. Billion)
Total Power Consumption Fitted values Industrial Power Consumption Fitted values
2.9 Incase of Gujarat, total electricity consumption indicated statistically significant correlation with Gross State
Domestic Product (GSDP) with R2 = 0.9632, industrial GSDP (R2 = 0.928), and agricultural GSDP (R2 = 0.8057).
However, when sectoral electricity consumption is analysed with sectoral GSDP, a different picture emerges.
While the industrial electricity consumption is highly correlated with industrial GSDP with R2 of 0.9269, the
agricultural consumption does not have a significant relationship with agricultural GSDP, as shown in Exhibit
2.5. While electricity consumption in the agriculture sector did not indicate a correlation with gross sown
area and gross irrigated area, agricultural consumption between 2005–06 and 2012–13 showed a strong
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2.5 Forecasting of electricity demand is always a challenging task, especially for fast developing economies. It is
especially so in case of countries such as India considering the expanse, large variations in agro-climatic and
socio-economic conditions, fast changing consumption patterns, purchasing capacity of consumers, shortage
caused by infrastructure constraints, and progress in implementation of various government programmes to
promote efficiency, e-mobility and energy access.
2.6 The present study is a first step towards understanding electricity demand patterns at the state and national
level and projecting the demand up to 2030 based on select key drivers. It will be modified and strengthened
as further research is undertaken.
Demand Analysis
2.7 In the present study, econometric and statistical analysis of electricity consumption since 2001–02 has been
carried out with a view to establish significant factors influencing electricity consumption. The relationship of
electricity consumption with factors such as GDP, per capita GDP, industrial GDP, agricultural GDP, agricultural
pump-sets energized, gross area sown, gross area irrigated, etc. was examined. The data was analysed using
statistical methods, such as correlation and regression, to determine the dependence of electricity demand
on these parameters. The study was undertaken at the national level and for some select states, which had
marginal shortage of power and high connectivity, in order to capture the measured electricity consumption
as unrestricted demand for these states.
2.8 The analysis revealed that, in the past 15 years, electricity demand at the national level was strongly correlated
with total GDP and its components and derivatives including industrial GDP, agricultural GDP, and per capita
GDP. The results are shown in Exhibits 2.2–2.4. Analysis at state level, however brought out findings which
varied widely from the national-level results. This is particularly true at the sectoral level as the socio-
economic parameters, and therefore, the sectoral activity level varies across states and leads to diverse
demand patterns.
Exhibit 2.2: Analysis of all India total electricity Exhibit 2.3: Analysis of all India industrial electricity
consumption with total GDP consumption with industrial GDP
Total Consumption (MU)a) R2 = 0.9978 R2 = 0.8016
300000 400000 500000 600000 700000
4000 6000 8000 10000 12000
Industrial Consumption (MU)
100000 150000 200000 250000 300000
20000 30000 40000 50000 60000
Total GDP (Rs. Billion) Industrial GDP (Rs. Billion)
Total Power Consumption Fitted values Industrial Power Consumption Fitted values
2.9 Incase of Gujarat, total electricity consumption indicated statistically significant correlation with Gross State
Domestic Product (GSDP) with R2 = 0.9632, industrial GSDP (R2 = 0.928), and agricultural GSDP (R2 = 0.8057).
However, when sectoral electricity consumption is analysed with sectoral GSDP, a different picture emerges.
While the industrial electricity consumption is highly correlated with industrial GSDP with R2 of 0.9269, the
agricultural consumption does not have a significant relationship with agricultural GSDP, as shown in Exhibit
2.5. While electricity consumption in the agriculture sector did not indicate a correlation with gross sown
area and gross irrigated area, agricultural consumption between 2005–06 and 2012–13 showed a strong
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