Understanding industrial energy use – Physical energy intensity changes in Indian manufacturing sector

Binay Kumar Ray, B. Sudhakara Reddy
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We develop and analyze physical energy intensity indicators for Indian manufacturing sector.
Energy consumption in five industrial sub-sectors, viz., iron and steel, aluminium, textiles,
paper and cement is examined for the period 19902005. It is feasible to develop specific
energy consumption indicators that reflect the physical reality more accurately than monetary
energy intensities. These indicators allow us to analyze the effect of change in product mix over
time. The use of physical energy intensity indicators improves comparability between countries,
offers valuable input for policy-makers regarding intra-sectoral structural changes, and
provides detailed explanation for observed changes in energy intensity. Hence, the results of
the study point out the need to use physical indicators for policy making.