Settling the metric selection debate for assessing the energy efficiency of energy-intensive industries

This study evaluates energy efficiency in India’s energy-­intensive industries using Total-­Factor Energy Efficiency (TFEE), contrasting it with the traditional Single-­Factor Energy Efficiency (SFEE) approach. Analyzing panel data from 2003–­04 to 2021–­22 from the Prowess database, we applied Data Envelopment Analysis (DEA), including the input-­oriented Slack-­based method with variable returns to scale, to assess attainable energy savings. While SFEE studies under the Perform Achieve and Trade (PAT) scheme show limited overall impact, with notable improvements in the cement and fertilizer sectors but not in pulp & paper, our TFEE analysis indicates significant efficiency gains in iron & steel and textile sectors but not in cement, pulp & paper, aluminium, or fertilizer. Despite a potential of 55.9% energy savings across industries, overall energy efficiency improved significantly during the period studied. The textile, iron & steel, and pulp & paper sectors show the greatest potential for improvements, at 65%, 61%, and 29%, respectively.