Impact of Electricity Distribution Loss on Energy Intensity in the SAARC Countries

Abstract

Electricity is necessary for modern life, industries, households, healthcare, and overall economic activities. It drives economic growth, creates technological development, and improves living standards by access to education, essential services, and clean water, but distribution losses are the grave issue, especially in developing countries such as SAARC economies. For this purpose, the study aims to examine the influence of electricity distribution losses on energy intensity in SAARC countries for the data period consisting of 2000 to 2023, employing robust econometric techniques and panel data analysis. The outcomes show a significant positive association between electricity distribution losses and energy intensity, enhancing the need for targeted reforms to increase energy efficiency. Renewable energy integration depicts an adverse relationship with energy intensity, highlighting its key role in promoting sustainable energy usage and diminishing per capita energy use. Industrial growth illustrates a favorable correlation with energy intensity, highlighting the issues of balancing economic expansion with energy efficiency. Technical cooperation and CPIA quality depict a negative influence on energy intensity. Granger causality study further depicts a bidirectional association between energy consumption and industrial growth, as well as renewable energy, while energy consumption unidirectionally impacts electricity distribution loss, renewable energy, and technical assistance. The study provides some recommendations, consisting of reducing electricity distribution losses, enhancing renewable energy integration, strengthening regional cooperation, and implementing energy-efficient industrial policies.