Scenario Analysis on Future Electricity Supply and Demand in India

This article delves into the factors determining the overall electricity demand in India, employing an autoregressive distributed lag model (ARDL) bounds cointegration approach from 1991 to 2021. Investigating the level relationship reveals that gross domestic product (GDP), industrial efficiency, urbanisation level, and economic structural changes could be the primary ‘long-run forcing’ variables that explain aggregate domestic electricity demand in India. The findings indicate a positive relationship between the explanatory variables and electricity consumption, aligning with earlier studies. The scenario analysis shows that the projected electricity demand for 2027 is in line with that of the projections of Central Electricity Authority. JEL Classification: Q40, Q43