Dip in electricity usage a slowdown indicator: Experts

NEWDELHI: Economists and environmental experts at the Energy Policy Institute of the University of Chicago (Epic) have started documenting the initial signs of a massive economic slowdown resulting from the coronavirus disease pandemic -- closure of industries, shops and restaurants and a dip in power consumption, and an unintended benefit -- a decline in pollution

Historically, electricity consumption has proven to be a “reliable, early indicator” of broader economic trends, the team at EPIC said.

This time, too, the institution’s data tracker shows a 3.37% dip in electricity consumption in the US, European Union, China and India combined on February 29 relative to the average electricity consumption in December 2019. On January 1, the dip was 7.99%. The data tracker updates both electricity consumption and PM levels every day from government and nongovernment sources and documents the number of Covid-19 deaths in these countries. The graphs on the dashboard are interactive.

“The Covid-19 pandemic has forced governments around the world to impose tough restrictions on daily life to prevent the spread of the virus. With these restrictions, roads and airports are nearly empty, shops and restaurants are closed, and industrial activities are largely at a halt. In this environment, real-time information about economic activity is at a premium, but often hard to acquire,” Epic said in a statement on Monday.

An unintended benefit of the dip in electricity consumption is a 6% dip in particulate matter (PM) pollution on April 1 compared to December 2019 in these countries, the data tracker launched on Monday indicated.

“Declining and increasing consumption has historically preceded economic recessions and recovery. The Covid tracker is an indicator of the health of the economy at a higher temporal resolution (updated daily) than anything else that is available. Most other measures of economic health will only be available every quarter so tracking this information is critical,” Anant Sudarshan, South Asia director of the Energy Policy Institute at the University of Chicago, said by email.

The dip in both electricity consumption and PM pollution is significant in India as per EPIC’s data analysis. India recorded a dip of 18.72% in electricity consumption on April 3 compared to December 2019 and a 6.8% in PM pollution on April 1. The PM pollution had dipped by 36.72% on January 18.

“There is no robust evidence in India that PM level has gone down in pre-Covid era due to economic slowdown. Unless trends in source specific PM2.5 concentrations are estimated, it is not possible to conclude that way,” said Sagnik Dey, associate professor at the Centre for Atmospheric Sciences, IIT Delhi.

INDIA RECORDED A DIP OF 18.72% IN ELECTRICITY CONSUMPTION ON APRIL 3 COMPARED TO DECEMBER 2019 AND A 6.8% IN PM POLLUTION ON APRIL 1 — AN UNINTENDED BENEFIT