Energy Intensity and Structural Change in Indian Industries: a Decomposition Analysis
Energy planning interventions is often made using integrated approaches that consider both the provision of energy supplies and the role of energy efficiency in reducing demands. This has two aspects – first is, supply-side energy efficiency i.e. efficiency in energy extraction, conversion, transportation, and distribution and second one, being end-use (or demand side) energy efficiency i.e. more efficient use of final energy in industry, services, agriculture, households, transportation, and other areas. Supply – side efficiency has been the focus of energy investment and research an d development but not much work and research has been done on end-use energy efficiency. Trends in energy intensity indicators increasingly serve not just as a monitoring tool, but as a basi s for energy efficiency policies and regulations aimed at achieving greater energy conservation. Consequently, many believe that measuring changes in energy intensity can provide both international and national policy-makers with the information needed to design appropriate policies to improve energy efficiencies and also design greenhouse gas mitigation strategies. The results of the study show that Indian industries have become more energy efficient over the years especially post 1992-93, which also coincides with the liberalisation policy turnaround of the government. This validates India’s stand that the growth of the country is not as energy intensive as is made out by the western world.