Characteristics of Rural Energy
Use: Insights from India
Large Developing Economies
The Rural-Urban Divide, Air Pollution and Climate Policy
May 7th, 2013; Oslo
Email: aditya.ramji@teri.res.in
Energy Access– a perception
 Defining Access: The Global Understanding
 Energy poverty is a lack of access to modern energy services. These services are defined
as household access to electricity and clean cooking facilities (e.g. fuels and stoves that
do not cause air pollution in houses) (IEA, 2012; ADB, 2011; UNDP/ESMAP, 2010)
 Electricity access considered as the existence of a first connection (IEA, 2012)
 Clean cooking fuels considered as LPG, Biogas among others (Masera, et. al, 2000; Johnson &
Bryden, 2012)
 Defining Access: To the household (Pandey, 2002; Rehman, 2010; Pundo & Fraser, 2006)
 Reliability
 Actual consumption
 Do we need to standardize?
 Access to clean energy fuels is a challenge: Ensuring equity and access are critical
 What is transition? (Kojima, et. al, 2010; Pachauri, 2011; Jiang & O’Neill, 2004)
 To facilitate a shift to cleaner fuels or a mix of fuels such that the overall benefits of
energy access are greater in terms of additional health and livelihood benefits
Page  2
?
Rethinking Energy Access
 Mandla, Madhya Pradesh, India
 Sonabai’s daily routine –
 Early morning walk to the forest to collect firewood
 Cook at home
 Tend to the fields
“Electricity comes for only one hour a day
in total….the bulb is always on….It
suddenly lights up in the middle of the night
or in the day… what is the use….it was
better without electricity….We still spend
Rs.100 every month on kerosene and now
we have to pay another Rs.60 for electricity
which is of no use.”
Page  3
Understanding household energy choices
Changes in Income
flows
Value of Labor
(Gender roles)
(Occupation and
Opportunities)
Household
Energy Basket
Intervention
(Energy or livelihoods)
Development
Priorities
(Importance of energy)
Page  4
Percentage HHs reporting primary
lighting fuel
75.92
64.6
100
90
80
70
60
50
40
30
20
10
0
1.38
0.79
LPG
Rural
6.38
2.46 0.92
Urban
93.83
65.61
33.54
4.85
Kerosene
Electricity
Rural
Urban
th
Page  5 Source: NSSO 66 Round, 2009-10
0.28 0.54
0.28 0.25
No lighting
arrangement
Others
1.53
6.55
No cooking
arrangement
6.11
Others
12.09
Kerosene
17.56
Dungcake
80
70
60
50
40
30
20
10
0
Firewood and Chips
Percentage HHs reporting primary
cooking fuel
The Indian context
 Almost 76% rural households
are still dependent on traditional
biomass fuels for cooking.
 Cleaner fuels such as LPG have
very little coverage (about 12%)
among rural households.
 In comparison, almost 65%
urban households indicate use
of LPG as a cooking fuel.
 Only 65% of rural households
indicate electricity as their
primary source of lighting.
 Issues of regularity of supply
 In urban areas, in comparison,
more than 90% households
have access to electricity as a
primary source of lighting.
National Sample Survey (NSS)
Data Analysis
55TH(1999-00), 61ST(2004-05), 66TH (2009-10) ROUNDS
Page  6
Energy Consumption patterns across rural households in
India
Source: NSSO 66th Round, MoSPI, Govt. of India
Page  7
Key Observations for Rural India – Penetration Rates
across income classes
Fuel
Cooking
FW
LPG
Lighting
Kerosene
Electricity
Page  8
NSSO
Round
Low Income
(bottom 20%)
Med Income
High Income
(top 20%)
55
82-84%
79-81%
46-75%
61
78-81%
79-81%
43-75%
66
85-87%
81-85%
38-75%
55
0-1%
1-5%
5-29%
61
0-1%
3-9%
9-39%
66
0-2.5%
2.5-11%
12-42%
55
65-73%
47-61%
17-45%
61
60-70%
40-59%
13-40%
66
54-61%
23-50%
9-20%
55
24-30%
33-50%
57-81%
61
28-35%
40-58%
63-85%
66
37-54%
51-71%
74-90%
Energy Usage Patterns Across households for cooking
& lighting
66
61
55
-
Firewood still remains the major cooking fuel
Switch from firewood to LPG is occurring
only among the higher income classes
-
Switch to modern lighting fuels is occurring at
lower income classes over time, indicating
improved access to modern lighting fuels and
a clear transition path
Findings based on three rounds of NSSO data (1999-00, 2004-05, 2009-10):
Energy transition to modern fuels for cooking is lagging in comparison to lighting
Page  9
Inequality across income classes
PETROLEUM FUELS
BIOMASS FUELS
ELECTRICITY
•
•
•
•
Page  10
Inequality in consumption of biomass and
petroleum fuels increases with increase in
incomes
Inequality in electricity consumption decreases
with increase in incomes
Higher incomes have wider choices unlike
lower income households
Income – Electricity correlated as electricity
access is related to ability to pay and HH
economic status
India – Agro-climatic Zones
Page  11
Inequality across regions – Biomass and Petroleum
• For biomass and petroleum products, Zones 1 and 6, that have very low income inequality, have high
energy inequality.
• Zone 6 includes the rich states of Punjab, Haryana and Delhi. These states have high income and as a
result the inequality in energy consumption is probably due to availability of more choices
• Zone 1 includes the mountain states of Kashmir and Himachal Pradesh. Here, inequality could be due to
substitution from other forms of fuel (this requires further study)
Page  12
Inequality across regions - Electricity
• Conforming to previous results regarding electricity, regions with lower income
inequality have lower electricity inequality.
• Possible cause would be lack of substitutes for electricity, ability to pay and/or
willingness to pay for electricity
Page  13
NSS data – Key Findings
 Transitions in cooking fuel choices is a major challenge
 If income is a prime determinant, expected causation would be that
energy inequality would have a direct correlation to income inequality
– NSS data indicates significant deviations from this hypothesis
 Traditional notion of access to electricity vis-à-vis field experience
– Access differs across income groups and regions
 Different bandwidths exist across income classes and within/across
regions for transitions
 Responsiveness of livelihood interventions will differ across regions and
income groups – approach should be acceptable within a particular sociocultural construct
 Use of natural resources is defined locally – differential impacts of prices
across regions and income classes
– While biomass resource price is determined locally (distance and availability),
Page  14
price of cleaner fuels determined by state/regional boundaries
Analyzing Rural Energy Transitions
and Inequities in India
TERI-NFA
SUPPORTED BY THE NORWEGIAN MINISTRY OF FOREIGN AFFAIRS
Page  15
Project Objectives
To analyze rural energy inequalities and transitions
How transitions to clean energy can
be enabled in rural India?
 Calculate inequality measures in energy consumption patterns in rural India
 Reasons for differing energy consumption patterns
 Drivers of transition to clean energy: relationships between socio-economic
parameters, household fuel choice and energy demand
 Barriers and effectiveness of interventions
 Gender implications
Page  16
PILOT SURVEY ANALYSIS
MANDLA, RAISEN, RATLAM, & BETUL DISTRICTS OF MADHYA PRADESH
Page  17
Pilot Survey – Madhya Pradesh
 Madhya Pradesh comprises of 50 districts that are grouped into 10 divisions. A
primary survey was conducted in four districts of four divisions of Madhya
Pradesh.
– Bhopal Division: Raisen district
– Jabalpur Division: Mandla district
– Narmadapuram Division: Betul district
– Ujjain Division: Ratlam district
 Data was collected for 200 households on various indicators ranging from
primary cooking fuel, primary activity for men and women, education level of
household.
 Two Blocks from each district were covered and two villages from each block
were surveyed to maintain a good sample of the households.
 The data collected at the household and village level was based on interviews
with the village residents with the help of a pre-designed questionnaire.
Page  18
Pilot Sites
Page  19
Logit Model (1) – With electricity access
Estimated Coefficients
Primary cooking
fuel
Robust Coef.
Std.Err.
z
P>|z|
socialstatus
-0.1432212
0.801239
-0.18
0.858
-1.713621
1.427178
Primary livelihood
activity (Men)
2.018577
0.885418
2.28
0.023**
0.2831907
3.753964
mpceclass
0.8372557
0.413984
2.02
0.043*
0.0258613
1.64865
logedumale
2.393379
2.112356
1.13
0.257
-1.746763
6.533521
logedufemale
1.726696
0.973183
1.77
0.076
-0.180708
3.634099
timelive
-3.242136
1.241909
-2.61
0.009***
-5.676233
-0.808039
loghhsize
2.145111
2.08919
1.03
0.305
-1.949626
6.239848
logpLPG
-156.4151
35.97687
-4.35
0.000***
-226.9285
-85.90176
logpsko
62.84464
56.72915
1.11
0.268
-48.34246
174.0317
logpfw
15.45975
37.37725
0.41
0.679
-57.79832
88.71782
logland
2.163311
0.964814
2.24
0.025**
0.2723105
4.054312
elecaccess
7.249156
2.177322
3.33
0.001***
2.981684
11.51663
_cons
760.6622
.
.
.
.
.
Page  20
Number of Observations = 185
Log pseudolikelihood = -14.4382
AIC*n = 54.877
Hosmer-Lemeshow chi2(8) = 0.36
Correctly classified = 96.76%
Pseudo R2
=
[95% Conf. Interval]
0.6750
BIC' = 2.666
Area under ROC curve = 0.9851
Logit Model (1) - Results
 The results show that primary occupation of men, MPCE class, timelive, log of
price of LPG, land ownership and electricity access is found to be significant.
These variables influence households decision over cooking fuel.
 Odds ratio can be interpreted as the probability of going higher up the energy
ladder to the probability of not going.
 For a unit change in primary livelihood activity for men, the odds of choosing cleaner cooking fuels
are expected to change by a factor of 7.52, ceteris paribus. It can also be interpreted as, for every
unit increase in primary livelihood activity for men, the odds of choosing a cleaner cooking fuel is
expected to increase by about 652% [100*(7.52 – 1)], ceteris paribus.
 The signs for ‘price of firewood’ and ‘price of LPG’ are opposite – indicating
substitutes
Page  21
Logit Model (2) – without electricity access
Estimated Coefficients
Primary cooking
fuel
Robust Coef.
Std. Err.
z
P>|z|
socialstatus
0.4367723
0.450506
0.97
0.332
-0.4462
1.319748
Primary livelihood
activity (Men)
0.8744928
0.476518
1.84
0.066
-0.05947
1.808451
mpceclass
0.3709437
0.252937
1.47
0.142
-0.1248
0.866691
logedumale
2.8849850
1.803539
1.60
0.110
-0.64989
6.419856
logedufemale
0.7711796
0.664561
1.16
0.246
-0.53134
2.073694
timelive
-1.4702760
0.583332
-2.52
0.012**
-2.61359
-0.32697
loghhsize
-0.2291600
1.319293
-0.17
0.862
-2.81493
2.356608
logpLPG
-103.02280
12.38131
-8.32
0.000***
-127.29
-78.7559
logpsko
36.704110
19.78822
1.85
0.064
-2.08008
75.48831
logpfw
-0.9883915
13.12615
-0.08
0.940
-26.7152
24.73838
logland
1.5319420
0.548026
2.80
0.005***
0.457831
2.606052
_cons
531.87870
.
.
.
.
.
Page  22
Number of Observations = 185
Log pseudolikelihood = -22.775
AIC*n = 69.551
Hosmer-Lemeshow chi2(8) = 2.11
Correctly classified = 95.14%
Pseudo R2
=
0.4874
BIC' = 14.120
Area under ROC curve = 0.9456
[95% Conf. Interval]
Logit Model (2) - Results
 ‘Elecaccess’ defined as ‘receiving satisfactory electricity supply between 6PM 9PM for at least 20 days in a month’
 Without ‘elecaccess’, the model’s robustness changes
 Dropping ‘elecaccess’ has resulted in indirect income variables being
insignificant
 Thus, productive use of electricity has significant impacts on household energy
choices
Page  23
Inequality across Income groups – Biomass and
Petroleum
GINI = 0.44
Trends similar
to NSSO
Page  24
Beyond existing data
 Secondary data indicates significant gaps in explanations for energy
consumption patterns and energy inequalities across regions
 Considerable variations (in traditions and norms, livelihood sources,
market responsiveness) exist across regions
 Income is not the only factor in determining household fuel choices
 Socio-cultural factors need to be accounted for
– Cultures have evolved as a response to natural environment which varies across agro-climatic zones
– Differing food habits, cooking habits – leading to differing energy use patterns
 Variations exist both within and across regions – thus a particular state
cannot be representative of a region
 Facilitate more action-oriented approaches with better impacts
Page  25
Primary Household Survey
Page  26
Survey Plan
Selected States
Maharashtra
Karnataka
Goa
Madhya Pradesh
Odisha
Rajasthan
Himachal Pradesh
Page  27
Selected States
Enabling transitions…Bridging the divide
Understanding of key barriers and drivers
Relevance to Policy
Towards an integrated approach
Page  28
Case Study 1: Goa
Nadke village, Canacona taluk, Goa
 Background:
– Forest-dwelling community
– Nearest road access about 10 kms.
– No electricity lines
 Intervention:
– Govt. installed solar-wind hybrid
system to generate electricity for the
village
– Meters installed in all houses – pay
for use

Page  29
Current Status:
-
System stopped working after 6 months
-
No training provided to the locals on O&M
-
Reverse transition from electricity to
kerosene and biomass
Case Study 2: Maharashtra
Pachghar village, Thane District, Maharashtra
 Background:
– Forest-dwelling community; Mainly daily
wage earners
– Nearest road access about 8 kms.
– No electricity lines
 Intervention:
– Reliance Industries installed solar home
systems in every house as part of CSR
project for 5 year duration
– Systems are not functioning properly now (4th
year); in spite of O&M training , costs too high

Page  30
Current Status:
˗
Returning back to a situation of no electricity
˗
Too poor to afford kerosene, hence, use
candles as and when possible
˗
Reverse transition from electricity to
candles/no lighting
Case Study 3: Karnataka
 Shapur village, Bidar District, Karnataka
 Background:
– Forest-dwelling community; Mainly daily wage earners
– Nearest road access about 10 kms.
– No LPG connections due to land-holding issues and
general access issues
 Intervention:
– No interventions

Page  31
Current Status:
-
Restricted access to forests under FRA households buy firewood at
Rs.400/quintal/month
-
Local innovation is the key – initiative by
the District Forest Department
-
Use of locally grown Glyceria plant to meet
biomass needs thus reducing pressure on
forests
Key Insights so far… (1/3)


Income measures may not be most relevant for targeting in interventions:

Inverse relation between income inequality and energy inequality

Econometric models vis-à-vis qualitative factors

Designing clean energy interventions in rural India requires evidence-base of other
social and cultural factors
Financing mechanisms and delivery models need to be supplemented by
technical support:

According to the pilot survey, most households indicate that financial assistance is
not given to households for meeting specific requirements related to clean energy

Financing mechanism targeted at enabling energy transitions should consider the
possibility of staggered payments
Page  32
Key Insights so far… (2/3)

Information, Education and Communication (IEC) activities for clean energy
options needs further strengthening
 Integrating energy efficiency into mainstream school curriculum (ex. Mandla and
Raisen, Madhya Pradesh, India)
 There is need to strengthen awareness and education related policies and activities
around clean cookstoves as the perceived environmental and health benefits of
improved cookstoves are not deemed significant enough to outweigh the financial
costs involved

Entrepreneur-led models could help in the revival of biogas programmes
 Land availability is a significant concern for individual biogas plants
 Success of community plants is questionable due to variable levels of social capital and
trust regarding land as a common pool resource
 Biogas programmes could be revived through entrepreneur-led models for biogas
Page  33
Key Insights so far… (3/3)
 Demonstration projects may lead to greater uptake
 Bandwagon effects are visible in villages of Mandla and Betul
 Demonstration projects may lead to greater uptake and acceptability of a
particular technology
Page  34
Bridging the Gap – On-ground Policy Scenario
URBAN
RURAL
Ministry of Urban Development:
Jawaharlal Nehru National Urban
Renewal Mission
Mission
for
Basic
Services to the Urban
Poor
Ministry of Housing and Urban
Poverty Alleviation:
Swarna Jayanti Shahari Rozgar
Yojana
Providing gainful
employment to the
urban unemployed and
under-employed poor
Page  35
Ministry of Rural Development:
National Rural Livelihood Mission;
Mahtama Gandhi National Rural
Employment Guarantee Scheme
Public Distribution
System
(Fair Price Shops)
Enabling rural poor to
increase household income
through sustainable livelihood
enhancements
Ministry of New and Renewable
Energy:
National Program for Improved
Cookstoves; National Biogas &
Manure Management Program;
Ministry of Power:
Rajiv Gandhi Grameen Vidyutikaran
Yojana
What we need to know…
 What framework can help us in assessing energy transitions at the
household level?
 How should more state specific or regional energy policy interventions
(both government as well as non-government) be designed?
 What is the baseline electrical energy needed by a rural household given
its geographical, socio-economic and cultural context? Given the
constraints, how should its delivery be prioritized?
 How can energy access interventions be integrated with other
development interventions so as to make them locally appropriate?
 How can new metrics and field insights related to energy access help
facilitate informed decision making?
Page  36