Managing India’s household energy challenge

Various schemes in the power sector and the Pradhan Mantri Ujjwala Yojana (PMUY) have resulted in nearly every Indian household having an electricity and LPG connection. While this is welcome, India’s per-capita energy consumption remains low at only about a third of the global average and is seen as a limiting factor in India’s human development. This article proposes some ideas to ensure that households shift to clean-burning cooking fuel options, and to effectively plan and manage the resultant increase in residential energy demand. The electricity issue was dealt with in the article ‘100% rural electrification is not enough’ (published in BusinessLine , April 27).

Cooking energy challenge

Over seven crore new LPG connections have been given to poor households under PMUY. But ensuring that households continue to use LPG or other clean-burning cooking fuels on a sustained basis is a harder task and requires a four-pronged approach.

One, the supply push such as PMUY should be augmented with a demand pull from households. This requires building awareness about the severe health impact on women and children of cooking on traditional stoves, and overcoming any relevant gender, behavioural and cultural barriers.

Two, the supply initiative should also include other clean-burning fuels such as electricity, biogas and piped natural gas, as LPG may not always be the preferred or appropriate choice for all households.

Three, to go beyond connections and ensure consistent usage of modern fuels, policy measures are required to provide adequate and well-directed subsidy, establish countrywide supply chains, and develop viable business models for rural distribution.

And, four, there should be well-defined targets for sustained use of modern fuels and reduction in household air pollution.

Coordinating and managing these four approaches require a multi-ministerial programme anchored in the Ministry of Health, since this is primarily a health challenge, and driven from the Prime Minister’s Office.

As rising incomes, increased electrification and a shift to modern cooking fuels lead to an increase in residential energy consumption, the drivers and patterns of this change need to be understood.

Richer information related to energy use in households can provide insights into income and price elasticities for energy demand, drivers for appliance purchase, fuel switching, etc., which can support better energy demand estimation and energy efficiency programmes.

Periodic surveys should be instituted to collect nationally and sub-nationally representative data regarding building characteristics, appliance ownership, appliance use and other factors that drive residential energy use. Several countries conduct such surveys, and current Indian surveys do not capture such information. Therefore, India should also institute such a survey, which can be conducted by the National Sample Survey Office.

Enhancing efficiency

Energy efficiency measures will have a pivotal role in managing future residential energy demand. Ownership of large appliances like refrigerators and air-conditioners (ACs) is still very low in India and will increase steeply, making energy efficiency measures very important.

The Bureau of Energy Efficiency (BEE) runs a “star rating programme” to promote energy efficient appliances. Three steps can help to strengthen the programme further. First, BEE should regularly revise the efficiency ratings upwards for all appliances. While the revision has happened for refrigerators and ACs, resulting in the energy consumption of such a 5-star appliance in 2019 being much lower than its 2009 equivalent, the ratings have not been revised for ceiling fans since 2010. This has resulted in 80-90 per cent of the three to four crore ceiling fans sold annually in India being very inefficient. Second, BEE should conduct national level awareness campaigns about star labels for various appliances, including the possible monetary savings over their lifetime that can offset their high upfront cost.

Third, BEE should scale-up performance testing of a random sample of star-rated models in the market, and make the test results public. This will increase consumer trust in star labels and consequently increase the adoption of efficient appliances.

India is potentially on the cusp of a rapid increase in residential energy consumption. This needs to be facilitated by suitable policy and institutional design, planned through a better understanding of the likely drivers and patterns of residential energy demand, and managed as efficiently as possible.

The writers are with Prayas (Energy Group). This is the second of the three articles on crucial challenges facing the Indian energy sector

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