An Empirical Study on Factors Influencing Energy Efficiency in Metal Industry Cluster

Micro, small and medium enterprises (MSMEs) are crucial to the Indian economy. The majority of the metal manufacturing industries exist in clusters. In the contemporary globalized world, such clusters’ survival and expansion depend on three critical sustainability characteristics: economic, environmental, and social. The first two dimensions of energy-intensive metal industries depend on the efficient use of energy, which is a critical input in their operations. Improved energy efficiency (EE) contributes to increased competitiveness through cost reduction and reduced environmental damage. However, understanding the elements that influence EE is critical for its advancement. This research investigates these aspects in metal sector clusters that use energy. Cobb–Douglas production function based on source data from eighty metal industries is used to determine the relevance of energy input. The energy efficiency level is calculated in terms of Specific Energy Consumption, and the Principal Component Analysis (PCA) approach is used to identify variables impacting energy efficiency. Multiple regression models are used to explore and analyse these variables. Through analysis, it has been found that, the economic and attitudinal factors are most contributing towards energy efficiency in metal manufacturing industries. Whereas, government policies, subsidy, and personal factors are least contributing.