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1/n
What happened to Indian energy consumption in 2019?
Short thread, looking at the preliminary sectoral and fuel data that has come out.
What does it tell us about the state of the economy going into COVID-19?
What happened to Indian energy consumption in 2019?
Short thread, looking at the preliminary sectoral and fuel data that has come out.
What does it tell us about the state of the economy going into COVID-19?
2/n
Primary energy consumption grew only 0.1% in 2019, or barely at all.
Primary coal consumption fell 3.4%, while oil grew 2.2% and gas by 13%.
Primary electricity (nuclear, hydro, RE), grew by 17%.
Primary energy consumption grew only 0.1% in 2019, or barely at all.
Primary coal consumption fell 3.4%, while oil grew 2.2% and gas by 13%.
Primary electricity (nuclear, hydro, RE), grew by 17%.
3/n
If we look at final consumption, we get an interesting picture.
Final coal consumption fell by 6%, indicating that the decline in primary coal was not just due to electricity generation, but also final consumption of coal in industry.
If we look at final consumption, we get an interesting picture.
Final coal consumption fell by 6%, indicating that the decline in primary coal was not just due to electricity generation, but also final consumption of coal in industry.
4/n
Final gas consumption increased substantially, indicating that the large increase in primary gas consumption was not due increases in gas for electricity, but rather for final consumption uses.
Other fuels showed small growth rates in terms of final consumption.
Final gas consumption increased substantially, indicating that the large increase in primary gas consumption was not due increases in gas for electricity, but rather for final consumption uses.
Other fuels showed small growth rates in terms of final consumption.
5/n
Now let's look at the sources of the decline in coal consumption
Coal consumption in energy industries, including electricity generation, fell 2%.
But final coal consumption in industry fell 6%. All was clearly not well in India's industry sector.
Now let's look at the sources of the decline in coal consumption
Coal consumption in energy industries, including electricity generation, fell 2%.
But final coal consumption in industry fell 6%. All was clearly not well in India's industry sector.
6/n
Oil product consumption grew in the transport sector, and buildings sectors. The latter may indicate increased consumption of LPG in buildings, as a result of connections under Ujjwala.
Oil product consumption grew in the transport sector, and buildings sectors. The latter may indicate increased consumption of LPG in buildings, as a result of connections under Ujjwala.
7/n
Gas consumption increased in a number of final consumption sectors, including industry and non-energy uses such as fertilizer and chemicals feedstock.
In terms of size, industry and non-energy uses are the most substantial, so these are the ones that made the difference.
Gas consumption increased in a number of final consumption sectors, including industry and non-energy uses such as fertilizer and chemicals feedstock.
In terms of size, industry and non-energy uses are the most substantial, so these are the ones that made the difference.
8/n
Electricity final consumption stagnated across all sectors, growing less than 1% in industry, buildings and agriculture.
Electricity final consumption stagnated across all sectors, growing less than 1% in industry, buildings and agriculture.
9/n
What does this tell us about the economy?
Manufacturing and construction were in sharp deceleration / negative growth for the last two quarters of 2019 (top left). This seems to account well for the slowdown in industrial energy (bottom left).
What does this tell us about the economy?
Manufacturing and construction were in sharp deceleration / negative growth for the last two quarters of 2019 (top left). This seems to account well for the slowdown in industrial energy (bottom left).
10/n
The economy as a whole has been on a decelerating trajectory since Q2 of 2016, just before demonetisation (top right
). We see this also in the slowing trajectory of energy demand, although 2017 is an outlier (bottom right ).
The economy as a whole has been on a decelerating trajectory since Q2 of 2016, just before demonetisation (top right
). We see this also in the slowing trajectory of energy demand, although 2017 is an outlier (bottom right ).
11/n
An unsolved mystery is why the sharp downturn in manufacturing and construction in 2017 (top left) did not feed into a contraction in industrial energy demand (bottom left). Perhaps the downswing related to sales not production, and didn't yet feed into energy demand?
An unsolved mystery is why the sharp downturn in manufacturing and construction in 2017 (top left) did not feed into a contraction in industrial energy demand (bottom left). Perhaps the downswing related to sales not production, and didn't yet feed into energy demand?
12/n
In summary:
1. Energy demand grew extremely slowly in 2019, driven by the poor economic situation, particularly in industry.
2. The collapse in coal was driven by power gen, but also industry coal consumption.
3. The economy was weak already heading into COVID.
In summary:
1. Energy demand grew extremely slowly in 2019, driven by the poor economic situation, particularly in industry.
2. The collapse in coal was driven by power gen, but also industry coal consumption.
3. The economy was weak already heading into COVID.
13/n
Full disclosure: energy data from the preliminary balances released by Enerdata. Economy data from the CSO.
Full disclosure: energy data from the preliminary balances released by Enerdata. Economy data from the CSO.
