Page 14 - Money in Energy
P. 14
Money in energy -Investment Opportunities and risks 2010
3. Energy Requirement of India as per the Planning
Commission report.
Long-term projections for energy requirements depend on assumptions of
growth of the economy, growth of population, the pace at which “non-
commercial energy” is replaced by “commercial energy”, the progress of energy
conservation, increase in energy efficiency as well as societal and lifestyle
changes.
3.1 Total Energy Needs - next – 5,10,15 years
Total primary commercial as well as total primary energy consumption including
non-commercial energy consumption on the basis of elasticities w.r.t. GDP,
which give percent change in energy consumption for one percent, change in
GDP. These elasticities are summarised below:
The two elasticity estimates are consistent. For India, the elasticity for electricity
is only 1.06 for the period since 1990-91 compared to 1.25 for the relevant GDP
range from the cross country regression w.r.t. per capita GDP. India’s elasticity is
comparable to that of countries with per capita GDP exceeding 8000 in PPP
US$2000. Normally the overall elasticity falls over time as corroborated by the
time series data for India. However, there is also a feeling that for India the
energy elasticity of GDP growth will not fall any further as rising income levels
14 Etree Projects Consultants Pvt Ltd.
3. Energy Requirement of India as per the Planning
Commission report.
Long-term projections for energy requirements depend on assumptions of
growth of the economy, growth of population, the pace at which “non-
commercial energy” is replaced by “commercial energy”, the progress of energy
conservation, increase in energy efficiency as well as societal and lifestyle
changes.
3.1 Total Energy Needs - next – 5,10,15 years
Total primary commercial as well as total primary energy consumption including
non-commercial energy consumption on the basis of elasticities w.r.t. GDP,
which give percent change in energy consumption for one percent, change in
GDP. These elasticities are summarised below:
The two elasticity estimates are consistent. For India, the elasticity for electricity
is only 1.06 for the period since 1990-91 compared to 1.25 for the relevant GDP
range from the cross country regression w.r.t. per capita GDP. India’s elasticity is
comparable to that of countries with per capita GDP exceeding 8000 in PPP
US$2000. Normally the overall elasticity falls over time as corroborated by the
time series data for India. However, there is also a feeling that for India the
energy elasticity of GDP growth will not fall any further as rising income levels
14 Etree Projects Consultants Pvt Ltd.
