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Convergence in electricity consumption across Indian states: a disaggregated analysis

Bhushan Praveen Jangam (Department of Liberal Arts, Indian Institute of Technology Hyderabad, Hyderabad, India)
Pradipta Kumar Sahoo (Department of Liberal Arts, Indian Institute of Technology Hyderabad, Hyderabad, India)
Vaseem Akram (Department of Liberal Arts, Indian Institute of Technology Hyderabad, Hyderabad, India)

International Journal of Energy Sector Management

ISSN: 1750-6220

Article publication date: 11 December 2019

Issue publication date: 19 March 2020

Abstract

Purpose

The purpose of this study is to examine whether the electricity consumption patterns across Indian states do converge.

Design/methodology/approach

This study considers 18 Indian states spanning over the period 1970-1971 and 2014-2015, using the recently developed Phillips and Sul panel convergence technique that accounts the multiple steady states.

Findings

The results provide the following insights. First, the authors find evidence of convergence in electricity consumption among all Indian states. This suggests that electricity consumption patterns for Indian states are converging to a common steady state. Second, to provide broader insights, we further investigate the convergence in electricity consumption among user groups such as agriculture, industry, commercial, domestic and miscellaneous. The results reveal that commercial, domestic and miscellaneous groups are also converging. Third, the non-convergence patterns in agriculture and industry enable us to investigate the possibility of clubs or the multiple common steady states. The results indicate the occurrence of three clubs in case of agriculture and two clubs in case of the industry. Fourth, this study also inspects the relative speed of convergence among the user groups. The results reveal the higher speed of convergence in case of the domestic user group.

Practical implications

The findings enable policymakers to formulate an appropriate energy policy to accommodate the future electricity demand across Indian states and prioritize low electricity consumption states so that they receive a greater share.

Originality/value

This is the first study that examines the convergence in electricity consumption across Indian states at aggregate and user groups using a new panel club convergence technique.

Keywords

Acknowledgements

The authors gratefully acknowledge the valuable suggestions received from the editor and anonymous referees in the earlier draft of this paper. The usual disclaimer applies.

Citation

Jangam, B.P., Sahoo, P.K. and Akram, V. (2019), "Convergence in electricity consumption across Indian states: a disaggregated analysis", International Journal of Energy Sector Management, Vol. 14 No. 3, pp. 624-637. https://doi.org/10.1108/IJESM-03-2019-0009

Publisher

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Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited