South Asia’s energy intensity of output is high, despite a decline over the past decade
Slower growth in total energy consumption, enabled by faster declines in energy intensity, would help South Asian countries meet their climate commitments and reduce air pollution. This is because the energy sector is a major source of greenhouse gas (GHG) emissions and particulate matter pollution in most South Asian countries.
Energy intensity of output has declined mainly within sectors, among firms
The region’s firm-level energy intensity declined by 4 percent per year between 2006 and 22, faster than in other emerging markets and developing economies (EMDEs). The fastest decline occurred in India, where the average manufacturing firm’s energy intensity halved between 2001 and 2018.
South Asian firms lag in the adoption of advanced energy-efficient technologies
While South Asian firms are relatively rapid adopters of basic energy-efficient technologies, they lag in the adoption of more advanced technologies. For example, a recent survey finds that more than three-quarters of South Asian firms have adopted basic energy-efficient lighting, a larger share than in other EMDEs. In contrast, fewer than 7 percent of firms have installed a more advanced technology, programmable thermostats—a rate in the lower half of the range across other EMDEs.
Unreliable grid energy perpetuates the use of inefficient backup power sources
An estimated three-quarters of firms in India and Bangladesh use diesel generators, three times as many as the one-quarter of firms, on average, in other EDME regions. In India, firms that have experienced outages are significantly more likely to be using a generator, suggesting that unreliable electricity supply prompts firms to use such inferior in-house energy-generation technologies.
Inadequate information is another constraint to energy-efficient technology adoption
In a study of leather goods firms in Bangladesh, the actual energy savings from a new technology--a more energy-efficient motor for stitching machines used in the leather goods industry-- were more than twice those initially expected by firms. Perhaps as a result, the firms’ average willingness to pay for this technology was only 56 percent of its market price.
This blog is part of a series on the World Bank's latest South Asia Development Update, Toward Faster, Cleaner Growth.