OCTOBER 19-20, 2012 - YMCA University of Science & Technology

Proceedings of the National Conference on
Trends and Advances in Mechanical Engineering,
YMCA University of Science & Technology, Faridabad, Haryana, Oct 19-20, 2012
DECOMPOSITION OF ENERGY CONSUMPTION IN INDIA: A DISCUSSION IN
THE CONTEXT OF INDEX DECOMPOSITION ANALYSIS (IDA)
Ponnala Vimal Mosahari 1* , D. Ganeshwar Rao 2 , Rajeev Satsangi 3
1,3
Department of Mechanical Engineering, Technical College, Dayalbagh Educational Institute, Dayalbagh, Agra
2
Department of Mechanical Engineering, Faculty of Engineering, Dayalbagh Educational Institute, Dayalbagh,
Agra
1*
pvimalmosahari@gmail.com
Abstract
India is a developing country with enormous growth in the Industrial sector. A major concern however lies in the
limited energy resources which are the driving force of any industry or country as a whole. Hence, it becomes
important to focus on the energy consumption pattern of the country and to identify where optimization is
needed. Energy consumption is also related to the environment i.e. CHG emissions and therefore CHG
monitoring is also important to check the emissions. Index Decomposition Analysis (IDA) is an analytical tool
based on the Index Number Theory used in Economics and Statistics. It is at present a much sought after
research area to analyse the energy consumption pattern or to decompose energy indicators. IDA is widely used
to disentangle and separate changes in energy consumption, energy intensity and CHG emissions in energy and
environmental field. In the present work an attempt has been made to review the energy consumption in India
and discuss IDA.
Keywords: IDA, CHG
1. Introduction
India is not a resource rich country in terms of energy; it relies mostly on oil imports from Middle East. India is a
developing country which needs to use its capital wisely, so it becomes necessary to monitor the energy
consumption pattern and try to optimise it economically. The industrial sector in India consumes about 37% of
the energy (2004-05) [Sahu & Narayanan] and is an energy intensive sector. This work is concerned with the
study and discussion on the use of Index Decomposition Analysis (IDA) to compute the energy consumption. An
attempt has been made to study IDA, its attributes, its methods and how it can be used to calculate energy
consumption. A simple discussion on energy consumption and energy intensity in India follows after the
description of IDA that shows why aggregate indicators are important.
Indian Energy Scenario: India is an oil importing country, depending on the Gulf countries for most of its energy
needs. India faced the oil shock of rising prices, and then it faced with rising inflation and a balance of payment
crisis in mid 1991. The Government of India introduced comprehensive policy reform package comprising
currency devaluation, deregulation, de-licensing, and privatization of the public sector [Sahu & Narayanan]. The
rising oil prices has always been a serious concern for India since long due to its limited energy resources.
Commercial sources of Energy (sources that cost i.e. Coal, Petroleum and Electricity) are only 50% of total
energy consumption in India. It means non-commercial sources like wood, agricultural waste & animal dung
constitute half of the total energy consumption in India. More than 60% of Indian households depend on
traditional sources of Energy for cooking & heating needs. At the present rate of production &
consumption, Coal reserves in India would last for about 130 years, Oil for only about 30 years. The commercial
energy consumption in India is also diversified; Coal constitutes 29%, Oil & Gas 54% & Electricity 17%. At
present only 15% of total hydro-power potential has been used, more Hydro Power Projects are in construction
although the estimated annual energy potential from hydro-electric sources is around 90000 MW. Out of the total
electricity production, 65.8% comes from Thermal power plants (which basically rely on
Coal), 26.3% from hydro electricity & only 3.1% from nuclear power. Non-conventional, renewable energy
sources like solar, wind energy constitute nearly 4.9%. (Source: Ministry of Power). The share of Public
sector producing electricity is 558 billion kWh while private sector produces 58 billion kWh. Uranium reserves
in country amounting to 70,000 tonnes (equivalent to 120 billion tonnes of coal) and Thorium reserves
amounting to 3,60,000 tonnes (equivalent to 600 billion tonnes of coal) is about 5 times the coal reserves in
country. 65% of total rural energy consumption is met from fuel woods (180 million tonnes for households + 43
million tonnes for cottage industry, hotels etc). From 1951 to 2004, the coal production has increased 12
times, crude oil 110 times & electricity 65 times. In 1973, price for petroleum crude oil in global market was
only $2 per barrel ($2.09 exactly). Only 0.3% of world’s known oil reserves are in India. Transport sector
accounts for 56% of total oil consumption in India. Demand for coal rises @ 4 to 5% per year, for petroleum
products 6 to 7% per year & for electricity 9 to 10% per year. India is second largest exploiter of Wind Energy –
1000 MW (70% by private sector). There are 33 lakh bio-gas plants, 2 lakh solar cookers & 10000 street lighting
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