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Impact of BRPL air-conditioner replacement scheme on residential electricity consumption

Student name: Ms Manpreet Kaur Suri
Guide: Dr Gopal Sarangi
Year of completion: 2021
Host Organisation: TERI School of Advanced Studies
Supervisor (Host Organisation): Dr Soumendu Sarkar

Share of residential sector in total electricity consumption in India has increased three times since 2000. In 2018 this share was equal to 24.76% which is equal to the share in some of the developed countries like Germany and Italy and higher than many developing countries. Delhi’s share is much larger than the national average as well as than the states like Gujrat with relatively higher population. Since 2017, Delhi’s peak residential electricity load in summer months is rising rapidly. One of the main reasons behind this is increased ownership as well as usage of air conditioners by households in Delhi. Electricity consumption can be reduced significantly by replacing energy inefficient appliances with energy efficient ones. BSES Rajdhani Power Limited initiated air conditioner replacement scheme in May 2018 under which a consumer would get a discount of 60% (on MRP) on the purchase of new super energy efficient air conditioner in replacement of old working energy inefficient one. Most of the subsidies given on the energy efficient appliances can have direct and indirect rebound effects on residential electricity consumption. Direct rebound effect implies increase in air conditioner consumption due to substitution and income effect, indirect rebound effect implies increase in the use hours of other energy inefficient appliances owing to the savings from the discount availed on the purchase of new air conditioner. Either of these rebound effects would increase the residential electricity consumption as a result of the scheme instead of reducing it. This study has analyzed the impact of BRPL airconditioner replacement scheme on household residential electricity consumption by using propensity score matching and have found that participation in the scheme impact electricity consumption negatively.