Role of Energy for Economic Development

Energy is a critical component of a country’s economic development. It is widely utilized in agricultural and allied fields such as the manufacturing and delivery of fertilizers, insecticides, and farm machinery. It is necessary for homes for cooking, lighting, and warmth. Coal, Petroleum, Natural Gas, Uranium, and electricity are all fuel materials that may be used to create energy.

Source of Energy:

• Commercial and non-commercial energy sources.
• Coal, petroleum, and electricity are commercial sources since they can be bought and sold.
• Firewood, agricultural waste, and dried dung are all non-commercial energy sources. Because they are found in nature/forests, they are non-commercial.
• Noncommercial sources of energy are typically renewable, whereas commercial sources are generally exhaustible (except hydropower).
• More than 60% of Indian households rely on conventional energy sources to cover their daily cooking and heating needs.

Analysis of Sectoral Pattern of Electricity Generation:

• In 1953-54, the transportation industry was the major consumer of commercial energy.
• The transportation sector’s share has been steadily declining, while the household, agricultural, and industrial sectors’ shares have risen.
• Oil and Gas have the biggest percentage of all commercial energy usage.

Commercial Energy Consumption Pattern:

Commercial energy consumption accounts for over 74% of total energy consumption in India. Coal and lignite account for 74% of total energy, with oil accounting for 10%, natural gas for 9%, and hydro and other new and renewable energy accounting for 7%. Over 26% of total energy consumption is accounted for by non-commercial energy sources such as firewood, cow dung, and agricultural waste. The import dependency on oil and petroleum products, which is anticipated to rise quickly shortly, is a crucial characteristic of India’s energy industry and its links to the economy.

In 1953-54, the transportation industry was the major consumer of commercial energy. However, the transportation sector’s share has been steadily declining, while the proportions of households, agriculture, and ‘others’ have been rising. Oil and gas account for the majority of commercial energy usage. The high rate of economic expansion has resulted in a similar increase in energy consumption.

Trends in Sectoral Share of Commercial Energy Consumption (in %)

Sector	1953-54	1970-71	1990-91	2017-18
Household	10	12	12	24
Agriculture	01	3	8	18
Industries	40	50	45	42
Transport	44	28	22	1
Others	5	7	13	15
Total	100	100	100	100

1. Household:

Households require energy to run a variety of devices and equipment, but more than half of a household’s yearly energy consumption (51% in 2015) is spent on just two energy end uses space heating and air cooling. Housing size and construction, and equipment and fuels utilized all play a role in these largely seasonal and energy-intensive applications.

Domestic energy demands such as water heating, lighting, and refrigeration are almost ubiquitous year-round. These three end-users accounted for 27% of total annual household energy consumption in 2015. Televisions, culinary appliances, laundry washers, and clothes dryers, as well as a growing list of consumer gadgets such as laptops, tablets, smartphones, video game consoles, and internet streaming devices, accounted for the remaining 21% of residential energy usage.

Factors affecting energy household uses

• Climate and geographical location
• The type of house and its physical features
• The number, kind, and efficiency of energy-consuming equipment in the house, as well as how much time they are utilized, are all factors to consider.

2. Agriculture:

Agriculture is an energy conversion process in and of itself, converting solar energy into food energy for people and feeding for animals through photosynthesis. Modern agriculture requires energy at every stage of production, including direct energy usage in farm machinery, water management, irrigation, growing, and harvesting. Food processing, storage, and transportation to markets are all examples of post-harvest energy consumption.

Agriculture accounts for a small fraction of total final energy consumption in both developed and developing countries, for example, the agriculture sector consumes about 3-5 per cent of total final energy consumption. Estimates are harder to come by in developing countries, but the quantity is likely to be comparable – between 4 and 8% of total final commercial energy use.  

Agricultural yields are often greater in places with higher energy usage. Different biological and climatic conditions throughout the world, however, have an influence on the correlations between energy input and agricultural production, with soil fertility and rain-fed water availability being two prominent examples. As a result, precise national comparisons are difficult to make, but energy inputs for individual crops can be used to provide more insight into the link between energy consumption and agricultural output.

3. Industries:

The industrial sector utilizes more delivered energy than any other end-use industry, accounting for around 54% of total delivered energy. There are three forms of manufacturing in the industrial sector:  

• Energy-intensive manufacturing,
• Nonemerging-intensive manufacturing, and
• Nonmanufacturing.

Depending on the degree and mix of economic activity as well as technical advancement, the mix and intensity of fuels consumed in the industrial sector vary among areas and states. Process and assembly, steam and cogeneration, process heating and cooling, and lighting, heating, and air conditioning for buildings are all examples of how energy is utilized in the industrial sector. The industrial sector consumes basic chemical feedstocks as well.

4. Transport:

Transportation and energy are closely related. Energy is a fundamental limitation on transportation nowadays, and transportation is a major factor of energy consumption. India’s commercial energy resource base is small in comparison to its population; despite having a sixth of the world’s population. India has just around 0.8 per cent of overall geological reserves, with 5.7 per cent of proved coal reserves and 0.4 per cent of proven hydrocarbon reserves. India’s transportation energy usage is expected to expand at the highest pace in the world, averaging 5.5 per cent per year, compared to the global average of 1.4 per cent per year, based on current patterns. India is becoming increasingly reliant on fuel imports.

While India’s dependency on imported petroleum is increasing to unacceptably high levels, its energy use efficiency in the transportation sector is predicted to be half that of developed countries. According to data from 1996–97, the road sector accounts for 85% of oil consumption in the transportation business, with energy-inefficient designs, poor vehicle maintenance, and inadequate and low-grade roads all being frequent. Energy conservation, the use of native fuels instead of imported fuels, and the development of transportation regulations have all become critical national priorities.

Transportation is estimated to consume 21% of total final energy and 14% of primary energy in 2020, compared to 16% of total final energy and 12% of basic energy in 2005. This industry is likely to expand fast, with an annual growth rate of 6.8% projected from 2005 through 2020. 

Conclusion:

Rapid economic expansion necessitates the use of energy. In India, there is a significant disconnect between consumer demand and electrical supply. Non-conventional energy sources can play a significant role in addressing energy shortages. The electricity sector is experiencing several challenges.