Page 9 - Transitions in Indian Electricity Sector- A Report by TERI
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TRANSITIONS IN INDIAN E LECTRICITY SECTOR 2017–2030
2. Demand Pattern Analysis and Future Scenario
2.1 The electricity sector in India has experienced considerable growth in the last two decades encompassing all
consumer sectors from residential to industrial as well as agricultural. Growth in average per capita income
levels, urbanization levels, improved electricity access, increased economic activity, and greater electrification
impacting end use demands, such as agricultural practices, are some of the factors that have contributed
significantly to the growth in electricity demand as well as changes in patterns of electricity consumption
across the country. At the same time, the last decade has seen the introduction and implementation of several
measures towards enhancing energy efficiency. The introduction of Star Labelled Appliances, standards, the
PAT scheme, etc. are some of the additional measures that were initiated during the last decade. India’s
electricity demand across sectors is therefore a complex function of the growth resulting from increasing
aspirations, economic growth, and higher electrification of activities on the one hand, and the reduction in
electricity requirements due to efficiency improvements across different sectors on the other.
2.2 Total electricity consumption Exhibit 2.1: Electricity Consumption
in the country grew at a CAGR 900
of more than 7% between 2001 Electricity Consumption (BU) 800 Others
and 2015 reaching 814.3 BU 700 Commercial
in 2014–15 from 322.5 BU in 600 Domestic
2001–02.2 (Exhibit 2.1). This 151% 500
growth in total consumption 400 Agricultural
was a result of 177% growth 300 Industrial
in residential consumption, 200
241% rise in commercial 100
-
consumption, 148% growth in
industrial consumption, and Industrial Agriculture Domestic Commercial Others
112% growth in agricultural
consumption. This escalation in Source: CEA General Reviews
power consumption occurred in
tandem with economic development as the GDP also grew at a CAGR of 7.3% over this period.3
2.3 As the country aspires to maintain a high and robust economic growth as well as to provide a thrust to
infrastructure– and manufacturing-led growth, the growth and pattern of electricity consumption in future is
also expected to change significantly. The change in consumption patterns and likely trajectories of electricity
demand in the short term and long term are therefore crucial aspects that need to be examined in planning
for optimal and efficient use of resources.
2.4 Given the importance of studying the drivers of power demand across various electricity consumption sectors
and evaluating the implications on future demand levels and patterns, TERI undertook this study to identify
and examine various factors that influence electricity demand across different sectors at the national as well
as state level. Using some of these explanatory factors, a forecasting exercise was carried out to obtain power
demand till 2030. Reduction in transmission & distribution (T&D) losses, energy efficiency improvement,
accelerated rural household electrification, and electric mobility additionally, were accounted for in order to
incorporate these incremental changes, since the effects of these elements would not be adequately captured
in the past trends of deemed electricity consumption, as used in our estimation.
2 CEA, 2015. Growth of Electricity Sector in India from 1947-2015
3 RBI, 2016. Handbook of Statistics on Indian Economy
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2. Demand Pattern Analysis and Future Scenario
2.1 The electricity sector in India has experienced considerable growth in the last two decades encompassing all
consumer sectors from residential to industrial as well as agricultural. Growth in average per capita income
levels, urbanization levels, improved electricity access, increased economic activity, and greater electrification
impacting end use demands, such as agricultural practices, are some of the factors that have contributed
significantly to the growth in electricity demand as well as changes in patterns of electricity consumption
across the country. At the same time, the last decade has seen the introduction and implementation of several
measures towards enhancing energy efficiency. The introduction of Star Labelled Appliances, standards, the
PAT scheme, etc. are some of the additional measures that were initiated during the last decade. India’s
electricity demand across sectors is therefore a complex function of the growth resulting from increasing
aspirations, economic growth, and higher electrification of activities on the one hand, and the reduction in
electricity requirements due to efficiency improvements across different sectors on the other.
2.2 Total electricity consumption Exhibit 2.1: Electricity Consumption
in the country grew at a CAGR 900
of more than 7% between 2001 Electricity Consumption (BU) 800 Others
and 2015 reaching 814.3 BU 700 Commercial
in 2014–15 from 322.5 BU in 600 Domestic
2001–02.2 (Exhibit 2.1). This 151% 500
growth in total consumption 400 Agricultural
was a result of 177% growth 300 Industrial
in residential consumption, 200
241% rise in commercial 100
-
consumption, 148% growth in
industrial consumption, and Industrial Agriculture Domestic Commercial Others
112% growth in agricultural
consumption. This escalation in Source: CEA General Reviews
power consumption occurred in
tandem with economic development as the GDP also grew at a CAGR of 7.3% over this period.3
2.3 As the country aspires to maintain a high and robust economic growth as well as to provide a thrust to
infrastructure– and manufacturing-led growth, the growth and pattern of electricity consumption in future is
also expected to change significantly. The change in consumption patterns and likely trajectories of electricity
demand in the short term and long term are therefore crucial aspects that need to be examined in planning
for optimal and efficient use of resources.
2.4 Given the importance of studying the drivers of power demand across various electricity consumption sectors
and evaluating the implications on future demand levels and patterns, TERI undertook this study to identify
and examine various factors that influence electricity demand across different sectors at the national as well
as state level. Using some of these explanatory factors, a forecasting exercise was carried out to obtain power
demand till 2030. Reduction in transmission & distribution (T&D) losses, energy efficiency improvement,
accelerated rural household electrification, and electric mobility additionally, were accounted for in order to
incorporate these incremental changes, since the effects of these elements would not be adequately captured
in the past trends of deemed electricity consumption, as used in our estimation.
2 CEA, 2015. Growth of Electricity Sector in India from 1947-2015
3 RBI, 2016. Handbook of Statistics on Indian Economy
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