A first approximation of a multidimensional index assessing the energy sector in India would be a dashboard that would measure trends through five summary dimensions. Such a dashboard provides revealing insights, even in their condensed form.
Energy is among the key drivers of human development (Dixit and Nhalur 2010: 5). This is particularly true for countries such as India where increases in per capita energy consumption correlate well with improvements in human development levels as measured through the Human Development Index (HDI).1 Therefore, objective assessments of
the energy sector are important to provide critical feedback to policy formulation, so that energy is harnessed effectively for human development. Given that energy production, transformation and consumption has impacts beyond the energy sector, such assessments must also consider energy’s relation to the socio-environmental context it is embedded in.
Many assessment methodologies in literature focus mainly on energy supply, i e, provision of affordable, reliable supplies of energy (Institute for 21st Century Energy 2012). Methodologies such as the “Energy Development Index” from the International Energy Agency (IEA) focus on energy consumption (IEA 2012), while others focus on the environmental impacts of energy production and consumption, particularly in the context of climate change (Sovacool et al 2011). We believe assessing the sector through any one of these lenses gives only a partial view of the sector, and thus provides potentially incomplete feedback to policy formulation. For example, focusing only on supply reliability may adversely affect environmental sustainability or providing universal energy access. Therefore, a multidimensional approach is appropriate to comprehensively understand the energy sector and its various trade-offs.
A Multidimensional Index
Sreenivas and Iyer (2014) present such a comprehensive multidimensional index for the Indian energy sector consisting of five independent dimensions:
(i) Energy demand or consumption, to assess energy’s contribution to the well-being of citizens.
(ii) Energy supply, to assess how well energy supply is managed.
(iii) Social impacts, to assess the impacts of energy on society.
(iv) Environmental impacts, to assess the impacts of energy on local and global environment.
(v) Economic impacts, to assess the impacts of energy on the country’s economy.
Each of these dimensions has a hierarchical structure culminating in a set of indicators, such as import dependence or greenhouse gas (GHG) emissions. Totally, there are 32 indicators across the five dimensions. Each indicator is scored between 1 and 100, and dimension scores are calculated from indicator scores in a bottom-up manner.
However, it may not be practically feasible to use this comprehensive index to frequently assess the energy sector because data for some indicators is not easy to obtain, and computing the index requires identifying values for 32 indicators which is time and effort intensive. In this article, we present a simpler “energy dashboard” that overcomes these difficulties and enables regular and comprehensive assessments of the sector.
1 Defining Energy Dashboard
The objective of the proposed dashboard is to enable quick, yet comprehensive, assessments of India’s energy sector. The dashboard retains the five dimensions from the energy assessment index, as energy supply and consumption are intrinsic to the energy sector and any comprehensive assessment must also include its impacts on society, environment and the economy. However, we use a smaller, but representative set of indicators for each dimension in the dashboard. Pragmatic considerations such as representativeness, data availability and manageability, rather than analytical rigour,2motivated the choice of indicators, so that the dashboard becomes a practical tool to get an overview of the country’s energy sector regularly, say once a year.
1.1 Structure of the Dashboard
Each dimension of the dashboard has two sub-dimensions of equal weights, and scoring each sub-dimension needs two to three indicators to capture its essence. The total number of data points required to score the dashboard is a manageable 13.
The indicators in the energy consumption dimension capture the effectiveness of energy in supporting productive lives for citizens. The first indicator examines the use of modern energy in households through two sub-indicators: percentage of households consuming above 500 kilowatt-hours (kWh) of electricity per year and the percentage of households primarily using clean fuels3 for cooking. Five hundred kWh per year is the minimum threshold for electricity consumption as defined by the IEA (2012)4 and should perhaps be increased in future. Data for this indicator is available from the National Sample Survey Office’s (NSSO) household consumer expenditure surveys, which are conducted once in approximately five years (MoSPI 2006, 2013). The second indicator assesses the role played by energy in supporting rural livelihoods by considering the percentage of rural enterprises (agricultural and non-agricultural) that use any form of modern energy. This information is collected by the Economic Census, though at a lower frequency than the consumption surveys (MoSPI 1998, 2005).
The energy supply dimension measures the country’s dependence on imports and non-renewable sources of energy. The first indicator is net energy import dependence, i e, the share of net energy imports in total energy supply. The second indicator assesses the sustainability of energy supply by measuring the share of renewable sources5 in total energy supply. Total energy supply is defined to include consumption of biomass and other solid fuels (but not human or animal motive power). Data on commercial energy for these indicators is available on an annual basis from various energy ministries (CEA 2004–2012; CCO 2013; PPAC 2014). Unfortunately, reliable data regarding use of biomass is not available, though it forms a significant part of India’s total energy supply. Hence, this value has currently been estimated using data from a few official documents (GoI 2006; MoSPI 2012). In future, it is hoped that availability of biomass-related data would improve and its usage would decrease, thus making this indicator score more robust.
The dashboard attempts to measure two social impacts of energy. The first assesses the effectiveness of rehabilitation and resettlement (R&R) efforts undertaken by energy projects which often lead to displacement of households and disruption of livelihoods. This is measured by the percentage of households which were satisfactorily resettled and rehabilitated out of the total households affected by energy projects in a year. Unfortunately, there is no systematic data collected for this indicator, though if the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance, 2014 (MoRD 2014) is implemented well, such data may become available in future. Nonetheless, this indicator is retained in the dashboard as we believe it is important to capture this oft-neglected aspect of the working of the energy sector. The second social indicator captures the inequality in consumption of modern energy in households, measured as the average of two Gini coefficients: household electricity consumption and household LPG consumption. Data for this indicator is available from NSSO household consumption surveys (MoSPI 2006, 2013).
Environmental impacts are assessed through annual average concentration levels of two pollutants: particulate (respirable suspended particulate matter –RSPM) and chemical (represented as the average of SO2 and NOx concentrations), at locations in the vicinity of energy projects.6 For each location, the ratio of the pollutant concentration to its permissible limit is calculated, and the average of these ratios across locations is considered for scoring. Scoring for chemical pollution is based on the average of scores for SO2 and NOx. This data is available for many locations from the Central Pollution Control Board’s environmental data bank and from the Government of India’s Open Government Data Platform.7 GHG emissions are not included in the dashboard as India’s per capita GHG emissions are very low and likely to stay below the global average in the foreseeable future, and hence may not provide any useful insights.
The economic impacts of the energy sector are captured through two indicators. The first is the energy intensity of the economy (energy required to produce one unit of economic output), and is scored based on India’s rank among G-20 nations (arranged in ascending order) since there is no “ideal value” for energy intensity. Energy intensity data is available regularly from the Energy Information Administration website (
www.eia.gov). The second indicator is the share of energy imports in the country’s trade balance, for which data is available from the Economic Survey and energy-related ministries (GoI 2014; CEA 2004–2012; CCO 2013; PPAC 2014).
These proposed indicators in the dashboard capture both positive and negative facets of energy, and hence provide a good overview of various aspects of the energy sector. Data for most indicators is available at reasonable frequencies from public sources, and hence the dashboard can be scored regularly with relatively little effort, making it a practical tool to assess the health of the energy sector. Table 1 (p 15) summarises the dashboard structure.
1.2 India’s Energy Dashboard Scores
We computed India’s energy dashboard scores for three years, namely, 2004–05, 2008–09 and 2012–13, to illustrate its usefulness. As no reliable data is available for the R&R indicator in the social dimension, we only considered the two Gini coefficients for the social indicator in this evaluation. We only considered LPG consumption for clean cooking fuel in this evaluation, since there is negligible use of other clean fuels in India currently. Some indicator values had to be interpolated or extrapolated as they were not available for the specific year in question, while the nearest available year’s data was used for some.8 The scores are presented in Figures 1 and 2, and reveal some interesting insights:
(i) The scores are below (or close to) 50 for all dimensions across all years, which is of some concern. Perhaps of greater concern is the fact that scores for two dimensions — supply and environment — steadily deteriorate over this period.
(ii) The consumption dimension scores improved from a poor 25 in 2004–05 to 33 in 2012–13. The percentage of households consuming electricity above the threshold reached 54% in 2012–13, and the percentage of households using clean cooking fuels increased to 33% in 2012–13, with both increasing at about 5% annually. However, growth in usage of modern energy in rural enterprises has been very slow. It has marginally increased from 21% in 2004–05 to 23% in 2012–13, and it will take more than 100 years for all rural enterprises to use modern energy at current rates of progress.
(iii) The supply dimension scores fell from 54 to 46 between 2004–05 and 2012–13. The import exposure score in particular decreased alarmingly, as India’s import dependence went up to 33% of all energy and 43% of commercial energy in 2012–13. The decreasing score for the share of renewables in total energy supply may actually be a welcome sign. The share of renewables in India’s energy mix was about 24% in 2012–13, which is quite healthy. But this high figure is because of the large share of biomass usage, which has many negative health and social impacts. The share of this indicator reduced from 31 to 24 over this period, because of the welcome fact that the share of biomass use reduced from about 32% to 23%,9 even as the share of modern renewables increased.
(iv) The scores for the social indicators, which only consist of inequality measures for consumption of electricity and LPG in this evaluation, improved over the years though the scores are still not good. The Gini coefficient for electricity reduced from 0.64 to 0.53, while the Gini coefficient for LPG consumption reduced from 0.82 to 0.72 which is quite high.
(v) The environmental dimension scores show a very disturbing trend. Over the years, they reduced from 36 to a poor 29. The RSPM concentrations in the vicinity of energy projects have consistently been above permissible limits, resulting in a score of 0 for all three years. The average RSPM concentration at the chosen locations was 1.9 times the permissible limit in 2010, with three locations (near Jharia in Jharkhand and Chandrapur in Maharashtra) recording average concentrations over 3.5 times the permissible limit. Chemical pollution also worsened over time with SO2 concentrations going up from 20% of norms to 30%, and NOx concentrations going up from 38% of norms to 56%. This alarming trend, with potentially severe health impacts, should be addressed at the earliest.
(vi) India’s scores on the economic dimension improved from 35 to 46 between 2004–05 and 2012–13, as the contribution of India’s energy imports to its trade balance reduced from 74% to 64%, and India’s energy intensity rank improved from 11th to 9th among the G-20 nations.10
2 Concluding Remarks
Given the close relationship between energy and human development, the energy sector should be regularly assessed to understand all its positive and negative impacts, so that it can inform policy formulation accordingly. In this article, we propose a practical, yet comprehensive, dashboard to easily assess the energy sector periodically, and illustrate its usefulness by scoring the dashboard for three years and analysing the results. The key findings of the analysis are:
(i) Energy is not contributing sufficiently to peoples’ lives as indicated by the low consumption scores. In particular, there needs to be greater attention to provision of modern cooking fuels to households and modern energy to rural enterprises. One hopes that recent government pronouncements on providing reliable power supply to all by 2019 will help to address some of these concerns (MoP 2014).
(ii) Rapidly growing energy imports are a serious concern for energy security, and need to be addressed through measures such as improved efficiency, responsible harnessing of domestic resources and better diplomatic initiatives.
(iii) Data regarding key social indicators related to R&R after displacement is not collected systematically. This gap should be addressed.
(iv) The impact of energy projects on the local environment is bad and worsening, with particulate matter concentrations consistently above prescribed limits. This needs to get more attention than it currently does, and addressed on a priority basis.
These findings demonstrate that it is important to regularly assess the energy sector using a mechanism such as the proposed dashboard to get a bird’s-eye view of the sector and identify important trends.
