VISUALIZING LONG TERM ELECTRICITY DEMAND PATHWAYS FOR TAMIL

NADU
Indo-German Centre for Sustainability, IIT Madras
Much has been talked about the bleak picture painted by the electricity sector in
Tamil Nadu with persistent supply deficits, power interruptions and load shedding.
Apart from the various problems plaguing the supply and distribution side of this
sector, a key question that deserves attention is whether this points towards
problematic demand estimations. The estimation of electricity demand has typically
been characterized by a lack of long-term plans, and the use of aggregated macrolevel data and models, the assumptions of which are not readily available in the
public domain. This is worsened by the fact that projections for the future years are
based on current demand. But in the context of interrupted power supply and nonelectrified areas, current demand is suppressed demand in the first place. This
prompted us to investigate the methodologies for demand estimation which use
disaggregated data, have transparent assumptions and whose intermediary steps
can be easily understood, and if necessary, critiqued. LEAP or Long-range
Alternatives Planning System1 is one such model that relies on the technique of
bottom-up modeling.
Bottom-up modeling for electricity demand begins by dividing the economy into
sectors and sub-sectors based on the electricity end use. It is followed by the
identification and the mathematical representation of social, economic and
technological factors to determine the relationships and evolution of the sectors
with respect to their electricity demand. The next step is to identify a reference
year, which is the latest year for which data about these various factors are
available. Demand is estimated for this reference year and finally, quantitative
forecasting tools are used to make projections for the future years. This final step
may or may not include the creation of multiple scenarios (rather than a single fixed
scenario) of the trajectories demand is likely to take in the future years. The
advantage of bottom-up models like LEAP are that they can capture electricity
demand better that price based models, particularly because the latter assume
price to be market determined, while it is not so in reality. LEAP also has its basis on
technological changes and processes and hence can capture the non-price factors
that affect the demand. Finally, a bottom up modeling can estimate the actual
demand, as opposed to the suppressed demand. However, a challenge with bottom
up models is the need for reliable data for the various factors that drive demand at
disaggregated sector-by-sector levels. Although on one hand, this implies that the
robustness of the study is subject to data limitations, on the other hand, this
1 LEAP is an energy policy software used for scenario construction developed by the
Stockholm Environment Institute. See http://www.energycommunity.org/default.asp?
action=47 for further details.

exercise helps to throw some light on those very limitations and suggests ways of
overcoming them.

Figure 1 Screenshot of LEAP Modeling

We recently conducted a study using LEAP to make our case for bottom-up end use
models to estimate electricity demand. For this study, the economy was divided
broadly into the Industrial, Residential, Agricultural, Commercial and Transport
Sectors. Each of these sectors was further divided into various subsectors. For
instance, the Residential Sector can be further divided as Rural and Urban.
Electricity consumption in each sub-sector was defined in terms of an end-use and a
device. For instance, an end-use in an Urban Household is cooling and the devices
used could be coolers and refrigerators. Thus, the entire economy got sub-divided
into sectors, sub-sectors, end-uses and devices.
For each device, electricity consumption was recorded in terms of the usage and the
device (Activity Level) and the electricity consumed per unit of usage (Energy
Intensity). Thus, for an air conditioner, the activity level might be in terms of the
number of hours of usage and the energy intensity might be in terms of the number
of units of electricity consumed.
The long term electricity demand of the state was analyzed around two different
narratives or electricity pathways, viz, the Business As Usual pathway that served
as the Reference scenario and the Low Carbon scenario. The Reference Scenario
assumed a lack of any major effort to tackle the supply shortage, carbon footprint
and climate change. It was assumed that there will not be any major shift in the
economic and energy policies. In the Low Carbon Scenario, a policy environment
was visualized wherein there was explicit focus upon achieving energy efficiency,
and the use of renewable energy and cleaner technology. The aim was to reduce the
carbon emissions by 2030 to match the 2005 levels. However, there was no
particular focus on achieving any development goals. The study employed, as far as

possible, publicly available databases on Tamil Nadu for getting data on the various
sectors.
The results of this exercise proved to be quite insightful. To start with, the 16
subsectors in the industrial sector demonstrated the possibility of large electricity
savings with consistent energy efficiency improvements in the low-carbon scenario.
This was also noticed in the 12 sub-sectors of the commercial sector. However, the
expected drop in electricity demand from the commercial sector was lower given
that the sector itself is projected to grow at a very high rate.

The residential sector was divided on the basis of income and region. On the basis
of income, the households were categorized as the 0-30 percentile, 30-90 percentile
and the top 10 percentile. On the basis of region, they were classified into the rural
and the urban.
The percentage shares of the three income categories in the rural and urban sectors
were assumed to remain the same for all years in the analysis, although the share
of urban population was assumed to increase at an annual growth rate of 0.95% 2. It
was expected that in the LC scenario, efficiency leads to reductions in the electricity
demand from the top income categories which offsets the increased consumption
from the other two groups to result in the effective demand being the same. For the
rural sector, the decline in the 30-90 percentile was more evident than the top 10
percentile because the latter accounts for very little in the rural total population. For
the urban households, the decrease in electricity demand from the top 10 percentile
and 30-90 percentile categories were only marginal because the savings from
energy efficiency itself encourages more electricity consumption. A sense of the
savings from the LC scenario in the urban sector was accentuated with the fact that
overall demand decreased despite increasing migration to urban areas.
The estimation of electricity demand for the agricultural sector was rather difficult
given the lack of accurate data for the number and type of pump sets, extent of
electrification and unmetered electricity consumption. This study arrived at the
amount of electricity used per hectare based on the share of electric pump sets for
each district of Tamil Nadu, the cropping pattern of the district, its water
requirement, height of the ground water resources and assuming that 5 HP pumps
were used with a pump efficiency of 30%. An advantage of using this methodology
was that the demand estimates include the unmet demand as well. That is, the
estimates would show how much electricity would be required for the agricultural
sector had there been adequate supply of electricity and pump sets, as opposed to
how much electricity is currently being consumed. As expected, the LC scenarios
2 As calculated as the compounded annual growth rate from the shares of urban
population in the total population as per censuses 2001 and 2011.

focus on improving energy efficiencies led to a marked reduction in agricultural

electricity consumption as opposed to the reference scenario.
Railways accounted for much of the electricity demand from the transport sector.
The sector was further divided into freight and passenger. As expected, freight
accounted for the major portion of the electricity usage in the transport sector. An
interesting observation that comes up is the fact that in the low carbon scenario,
there was more electricity demand from the railways than in the reference scenario.
This could be accounted to the idea that LC scenario gives more importance to
public transport, especially trains over private vehicles. Also, the efficiency gains for
the railways were assumed to be very low.

Figure 2 Final Electricity Demand from Reference Scenario

Figure 3 Final Electricity Demand from Low Carbon Scenario

The final demand estimates for the two scenarios by sector are given in the Figures
1 and 2. As expected, the industrial sector accounts for the larger part of the
electricity demand followed by the residential, agricultural, commercial and

transport sectors. Incidentally, in the initial years, the agricultural demand seems to
outstrip the residential demand. This may be due to the fact that for the
agricultural, estimation captured a large part of the unmet demand in the sector
while for the residential sector the data used was largely for the current
consumption.
Table 1 TNEB vs. LEAP
Electricity Demand in Billion KWh
Years

Industry

Residential

Farming

Commercial

Total*

Reference
Low
Carbon
TNEB

12.45

2005
11.19

12.28

3.21

39.14

11.19

12.28

3.21

39.14

9.77

3.77

40.29

Reference
Low
Carbon
TNEB

28.29

11.08
2012
14.46

12.29

6.07

61.12

21.31

14.32

11.01

5.8

52.48

22.66

10.43

6.50

59.75

Reference
Low
Carbon

45.14

16.25
2020
18.94

12.30

12.78

89.19

29.29

18.1

9.80

11.52

68.83

Reference
Low
Carbon

59.69

2030
26.97

12.31

36.48

134.69

33.85

23.92

8.43

30.06

96.32

12.45
13.57

Source of TNEB data: Department of Economics and Statistics, Tamil Nadu

Table 1 shows a comparison between the LEAP results and the TNEB data. For
2005,except the agricultural sector, LEAP estimates for all the other sectors seems
very close to the TNEB estimates of electricity consumption but a little lower. For
the industrial sector, it is easier to track the electricity consumption and hence the
TNEB estimates may reasonably reflect the actual situation. Two points where
discrepancies can arise are in the industrial captive generation and co-generation
and in the electricity consumption in the small and marginal industries, both of
which unfortunately could not be incorporated into this study yet. The promise of a
good estimate of the true electricity demand for the residential sector is lower,
considering that fact that a large number of households still lack electricity and the
actual consumption by electrified households are skewed by the unannounced
power interruptions. Although a bottom-up model focusing on the end-use could
have been a solution to this problem, the lack of availability of Tamil Nadu specific
data on the appliance penetration rates have led to the an underestimation of
demand. The farming sector estimates from LEAP far outstrip the TNEB estimates
for the base year, perhaps pointing out that large amount of unmet electricity needs
in the sector. The commercial sector estimates from LEAP and TNEB go along to a
certain extent. However, this study could not get an estimate of the unaccounted

use of electricity by way of drawing them illegally from electric lines. This again
could be focused on in any future iteration.
As mentioned earlier, this study being data intensive, could also be used as a tool to
point out data gaps when it comes to bottom-up modeling. Table 2 shows sector-bysector reliance on data and suggestions where data could be made better available.
Table 2 Data Summary and suggested improvements
Sectors
Industrial
Residenti
al
Farming

Commerc
ial
Transport

Data
Reliability
High
Medium

Key areas where accurate figures are needed

High

Pump-set usage as opposed to number of pump-sets

distributed, technical specification of pump-sets by
district
Energy intensity by unit floor space

Low
Low

Production and energy intensity by industry for TN

Appliance usage and penetration rate

Passenger and tonne-kms as opposed to route length

data

Thus, to conclude, a comparison between the two electricity pathways that Tamil
Nadu could follow, viz the Reference and the Low Carbon scenarios point out that it
is possible to meet its growing electricity demand while also following a more
climate friendly pathway. As the bottom up modeling shows, it is important to
consider the end-uses in each sector to understand the complete picture the
economy poses and this is often not done by conventional models. At this point, it
might be useful to point out that creating and maintaining updated databases such
as that for appliance penetration by energy rating for households, electrification and
metering of pump sets, data on the energy intensity of different types of buildings
and captive power production in industries might help in ensuring that policy
making is more informed of the ground realities. Finally, recognizing that certain
data gaps may not have been adequately filled, this study is leaves it opens for
suggestions about alternative methodologies.