Purchased energy and policy impacts in the US manufacturing sector

The US manufacturing sector, which consists of industries that produce durable and nondurable goods, accounts for about 30 % of all the final energy consumed in the country. In this study, manufacturing sector data coming primarily from the Annual Survey of Manufacturers are used to estimate the total impact of one mode of energy efficiency policy, market persuasion programs, on aggregate electricity consumption and energy expenditures. Using a panel model consisting of data for 184 industries, the findings indicate that the cumulative effects since 2002 of this policy mode is a reduction in 2010 electricity consumption of 5.4 %, of electricity expenditures of 2.4 %, and of all other fuel expenditures of 5.7 %. These estimates are derived after controlling for changes in output, other production inputs, and economic conditions. Particular attention in this study is given to the effects of a permanent shift in demand, and temporary business cycle shock, on model external validity.     

Understanding industrial energy use: Physical energy intensity changes in Indian manufacturing sector

This study develops and examines physical energy intensity indicators in five industrial sub-sectors—iron and steel, aluminum, textiles, paper, and cement—and investigates mitigation options for energy related CO₂ emissions (during 1991–2005). Decomposition analysis has been employed to separate the structural effect (share of different products in the sector) from pure intensity effect (efficiency increase through technical improvement) for each industry. The results show that the combined effect (considering both structural and intensity effects together) on both iron and steel and paper and pulp industries is negative while it is positive for aluminum and textiles. The intensity effect for all the industries, barring textiles, is negative showing improvement in energy efficiency; iron and steel in particular, has seen a decrease of 134 PJ in energy consumption owing to improvements in efficiency. However, energy intensity in textiles has risen by 47 PJ due to increased mechanization. Structural effect is positive in aluminum and iron and steel industries indicating a movement towards higher energy-intensive products. In the case of aluminum, positive structural effect dominates over negative intensive effect whereas negative intensive effect dominates iron and steel industry. The paper helps in designing policies for improving productivity and reduce energy consumption in India's manufacturing sector.     

Interfuel substitution and energy consumption in the industrial sector

This paper examines the possibilities for fuel substitution in the industrial sector. First, we determine the total demand for fuel and power for the industrial sector from 1955 to 1972. We then examine fuel substitution possibilities for electricity and eight major fossil fuels consumed by the industrial sector. These are coal, natural gas, residual oil, distillate oil, kerosene, liquefied petroleum gas, still gas and petroleum coke. The analysis includes an estimation of the fuel split equations, the dynamic simulation of the industrial sector demands for fuel and the computation of short- and long-run demand elasticities for each fuel.     

Analysing energy productivity dynamics in the OECD manufacturing sector

This work aims at developing an understanding of the dynamics of energy productivity. We analyse energy productivities for a sample of 61 OECD country-sector groups in the manufacturing sector over the period 1980 to 2009. We employ two steps of analysis, a preliminary step using a clustering algorithm that sorts countries into groupings or “clubs,” then a second step analysing factors that impact on club membership. We find (i) each group has distinctive dynamics and (ii) evidence that technology structure of production and investment are associated with higher relative energy productivity performance. Further, we find adjusting for energy quality is important.     

The effects of energy price on energy intensity: evidence from Canadian manufacturing sector

This study provides estimates for the long-run elasticity of energy intensity with respect to energy price in Canadian manufacturing industries. The time-series properties of the data are investigated using panel unit root, and the long-run relationships are ascertained based on panel co-integration tests. Estimation of long-run elasticities is then conducted using panel error correction and panel fully modified ordinary least square (PFMOLS) methods. The estimated long-run elasticity is in the tune of ?0.4 for the overall manufacturing sector, but there is significant variation across the industries.     

A review on energy pattern and policy for transportation sector in Malaysia

Transportation has dominated global fuel consumption and greenhouse gas emissions have risen in an alarming rate. Gasoline and diesel consumption for road transport have a faster growing rate than other sector and the trend appeared to be rapidly moving upwards in the near future. This has caused much concern in many countries including Malaysia to improve the sustainable energy of this sector. The focus of this paper is to analyze the trends of energy pattern and emission of road transport in Malaysia. On top of that, the review of prospective policies such as fuel economy standards and fuel switching to natural gas as well as biodiesel are summarized in this study. The study found that there is an urgent need to adopt suitable energy policy to balance the energy demand and reduce emission in this sector. This study serves as a guideline for further investigation and research in order to implement and improve the transportation sector.     

The energy demand in the manufacturing sector of Pakistan: some further results

The purpose of this study was to re-examine the role of energy in the manufacturing sector of Pakistan using a Partial Equilibrium Approach. GL restricted cost function along with the factor demand equations were estimated using Zellner’s iterative procedure. Higher energy prices do not seem to adversely affect investment in capital. Substitution possibilities between energy and non-energy inputs are very limited and therefore energy price hikes may directly affect the cost of production. Inter-fuel cross price elasticities indicate that there are substitution possibilities between electricity and gas.     

Model projections and policy reviews for energy saving in China's service sector

Energy efficiency of buildings in the service sector is becoming increasingly important in China due to the structural shift of the economy from industry to services. This paper employs a bottom-up cohort model to simulate current energy saving policies and to make projections for future energy use and CO₂ emissions for the period 2000–2030 in the Chinese service sector. The analysis shows that energy demand in the service sector will approximately triple in 2030, far beyond the target of quadrupling GDP while only doubling energy use. However, it is feasible to achieve the target of emission reduction by 40% in 2020 even under the poor state of compliance rate of building standard. This paper also highlights four crucial aspects of designing optimal energy saving policies for China's service sector based on the model results.     

Household energy consumption in west Sumatra. Implications for policy makers

The results of a field survey on domestic energy consumption in West Sumatra are discussed within the context of Indonesian energy policy, particularly with regard to the problem of domestic kerosene subsidisation. Many energy planners believe that the heavy subsidies on kerosene are necessary to prevent deforestation and protect the poor. Inequalities in fuel consumption for different sectors of the population may vary for different uses. In formulating policies aimed at reducing inequalities it is helpful to consider the end uses of the fuels separately. Energy use in cooking and lighting and the villagers' attitudes towards different fuels are investigated to see what effect a removal of the kerosene subsidies would have. In the case of lighting, a removal or reduction in the subsidies would primarily affect the lowest income sector of the population, unless a system of loans or subsidies is established for the initial installation charges of electricity. For cooking the higher income group would primarily be affected, and reducing the subsidies would not cause considerable hardship to the villagers or adverse environmental effects as there are considerable underutilized forest resources in the region. However, unless suitable alternatives to kerosene are made available at reasonable prices, the villagers now using kerosene would consider it a retrogressive step in their standard of living to return to the use of smoky and inconvenient open wood fires.     

Capital-energy substitution in manufacturing for seven OECD countries: learning about potential effects of climate policy and peak oil

The simultaneous influence of increasing oil scarcity, greenhouse gas control and renewable energy targets will result in a future of sustained energy prices. Whether modern economies can find a smooth path away from fossil fuels is a fundamental socio-economic and political question, which according to standard economics depends to a large extent on the degree of substitution between energy and capital. We study this issue by modelling the manufacturing sector with a translog cost function in seven OECD countries using the EU-KLEMS database for the period 1970–2005. After a literature survey, different production structures accounting for input substitution, returns to scale and technical change are estimated, and substitution elasticities are derived. Our results indicate a general complementarity or weak substitution relationship between energy and capital, suggesting that an increase in energy price, e.g. due to climate policy or scarcer fossil fuels, will likely reduce capital inputs, which might lead to a lower output of manufacturing.     

The non-energy intensive manufacturing sector.: An energy analysis relating to the Netherlands

This paper focuses on an area that has been neglected in energy analysis: the non-energy intensive industries. Using data at the 3-digit level for the Dutch manufacturing industry, we analyzed the performance of the sector with respect to its energy intensity, value added, value of production and energy costs. We found that energy consumption has increased by 30% between 1988 and 1999 while there has not been a decrease on energy intensity. A decomposition analysis was performed in order to separate structural, production and intensity effects. We found that structural changes played a minor role and that in fact, intensity effects added further energy requirements to those induced by output growth. The results of our study highlight the need for policy-makers and scientists to increase their attention to the non-energy intensive sector and encourage industries in these sectors to adopt energy-efficient technologies and management practices.     

Green waste to biogas: Renewable energy possibilities for Thailand's green markets

Today, the production of energy from waste is not a new process; however, its implementation and application continue to be a challenge in developing countries. Despite the abundance of valuable waste in the urban markets of these countries, practices aiming at renewable energy generation are missing. In Thailand, so-called green markets are replete with renewable energy potential, but the practical implementation of this potential is rare. Therefore, the main purpose of this study is to show that the conversion of green waste into renewable energy is not only environmentally beneficial but also financially rewarding. This is demonstrated by exploring the energy potential of the market and conducting a benefit–cost analysis under two scenarios. The results illustrate that for the selected market, converting organic waste into biogas is advantageous both environmentally as well as financially; further, the benefit–cost ratio is three times higher after conversion, compared to before. Additionally, there is a huge margin of conversion and production of biogas. The policy makers and planners of Talaad Thai (Thailand's largest green market) should invest greater effort in initiating plans, and set an example for other markets in Thailand, in order to make this planet clean and green.     

Effects of energy price rise on investment: Firm level evidence from Indian manufacturing sector

This paper analyses the effects of the rising prices of energy products on the investment of a large panel of manufacturing firms in India during 1993–2013. The prime motivation behind this study is the absence of an empirical study into this research issue exclusively on Indian economy. The empirical results obtained by estimating an Error Correction Model (ECM) using Generalized Method of Moments (GMM) show that energy price rise has negative effect on the investment of firms in the manufacturing sector. The negative effect is transmitted to the firm's investment through both demand-side and supply-side factors. The transmission also depends upon factors such as the energy intensity of production. The results also show that the sales–growth–investment relationship becomes weak in the face of the rising prices of the energy which could be due to the cautious approach to investment adopted by the firms. Therefore, it calls for the attention of the policy makers to evolve a comprehensive energy-policy to ensure continuous supply of energy at affordable prices to the manufacturers.     

Costs of meeting a cellulosic biofuel mandate with perennial energy crops: Implications for policy

We develop an analytical framework to examine the extent to which farmers' risk and time preferences, availability of credit to cover establishment cost, and subsidized crop insurance for conventional crops influence the decision to allocate land to a perennial energy crop and affect the costs of meeting a biofuel mandate using this crop as feedstock and its implications for the effectiveness of two alternative policies to supplement the mandate: an establishment cost subsidy and subsidized energy crop insurance. We examine the design of these policies to minimize the total (public and private) costs for meeting a one-billion-gallon biofuel mandate by using miscanthus as feedstock. We find that a high degree of risk aversion, high discount rate, credit constraint, and availability of crop insurance for conventional crops can increase the cost of producing enough biomass for a one-billion-gallon biofuel mandate by up to 43% and increase the land required by 16% as compared to otherwise; removal of subsidized crop insurance and credit constraints could lower these costs by 50%. We find that in most cases the cost-effective energy crop insurance subsidy rate is 0% whereas the cost-effective establishment cost subsidy rate is 100%. Relative to the case with no policy intervention for energy crops, energy crop insurance can reduce the total costs (net of government expenditures on subsidies) of meeting the 1 billion gallon mandate by 1.3% whereas establishment cost subsidy can reduce these costs by 34%.     

Purchasing-Power-Parity (PPP) approach to energy-efficiency measurement: Implications for energy and environmental policy

The weaknesses of the traditional measure of national output are well known and, in recent years, efforts to find more appropriate alternatives have intensified. One such methodology is the PPP approach which may capture the real value of the GDP. In general, this approach raises the incomes of developing countries by a substantial amount, and this has serious implications for energy indicators on which policies are usually based. A further problem is that non-commercial energy is usually left out of energy-intensity calculations. We analyze the issue of energy-efficiency and carry out calculations based on three approaches: the traditional approach, the PPP-based income approach and an approach which includes non-commercial energy. The results confirm the limitations of using the PPP approach, as it results in a spuriously high energy-efficiency level suggesting high technological sophistication for developing countries. The inclusion of non-commercial energy gives a more complete picture. The main conclusion is that applying the PPP method in energy-intensity calculations may be misleading.     

Factors affecting the adoption of energy efficiency in the manufacturing sector of developing countries

This paper analyzes the drivers for and barriers to the adoption of energy efficient technologies among a sample of firms based in Viet Nam, the Philippines, and Moldova. The current debate on the fight against climate change emphasizes the need to adopt environmentally friendly measures at the global level. We therefore need to better understand the obstacles to the adoption of energy saving measures, especially in developing countries. By applying discrete choice modeling techniques, we find that firms’ internal management and organizational factors rather than top-down or other external market conditions increase firms’ likelihood to invest in energy efficient technologies. Moreover, experience in the adoption of energy efficient technologies and the commitment of top management are also crucial in this regard.     

Is cluster policy useful for the energy sector? Assessing self-declared hydrogen clusters in the Netherlands

Research on science-based industries has shown that it is important for organisations to be active in interorganisational networks. Cluster policy has been developed as a means to stimulate the development of these networks and thereby the success rate of these industries. Cluster policy is however not a common policy instrument in the energy sector. In this paper, we focus on three self-declared clusters active in hydrogen-related R&D in the Netherlands and address several characteristics of these clusters. We conclude that cluster policy is a useful addition to existing energy R&D policies but that monitoring whether self-declared clusters actually function as clusters and what their contribution is to the overall system is pivotal in reaping the benefits of cluster policy.     

Policing the environment : Environmental and energy policy and its effect on the RE sector

Considering the EU's move not only towards the development of RE but also towards environmental protection, you may think from a policy point of view the development of RE projects would not cause too many problems. This is not always the case, however, due to the need to weigh policies favouring such schemes in the balance with other considerations for example if the development is perceived to have negative impacts on the environmental. Peter Cassidy, Partner and Head of Masons Energy Group, UK takes a look a new european environmental legislation, and if it might affect renewable projects.     

Impact of energy policy instruments on the estimated level of underlying energy efficiency in the EU residential sector

The promotion of energy efficiency is seen as one of the top priorities of EU energy policy (EC, 2010). In order to design and implement effective energy policy instruments, it is necessary to have information on energy demand price and income elasticities in addition to sound indicators of energy efficiency. This research combines the approaches taken in energy demand modelling and frontier analysis in order to econometrically estimate the level of energy efficiency for the residential sector in the EU-27 member states for the period 1996 to 2009. The estimates for the energy efficiency confirm that the EU residential sector indeed holds a relatively high potential for energy savings from reduced inefficiency. Therefore, despite the common objective to decrease ‘wasteful’ energy consumption, considerable variation in energy efficiency between the EU member states is established. Furthermore, an attempt is made to evaluate the impact of energy-efficiency measures undertaken in the EU residential sector by introducing an additional set of variables into the model and the results suggest that financial incentives and energy performance standards play an important role in promoting energy efficiency improvements, whereas informative measures do not have a significant impact.     

A network analysis using metadata to investigate innovation in clean-tech – Implications for energy policy

Clean-technology (clean-tech) is a large and increasing sector. Research and development (R&D) is the lifeline of the industry and innovation is fostered by a plethora of high-tech start-ups and small and medium-sized enterprises (SMEs). Any empirical-based attempt to detect the pattern of technological innovation in the industry is challenging. This paper proposes an investigation of innovation in clean-tech using metadata provided by CrunchBase. Metadata reveal information on markets, products, services and technologies driving innovation in the clean-tech industry worldwide and for San Francisco, the leader in clean-tech innovation with more than two hundred specialised companies. A network analysis using metadata is the employed methodology and the main metrics of the resulting networks are discussed from an economic point of view. The purpose of the paper is to understand specifically specializations and technological complementarities underlying innovative companies, detect emerging industrial clusters at the global and local/metropolitan level and, finally, suggest a way to realize whether observed start-ups, SMEs and clusters follow a technological path of complementary innovation and market opportunity or, instead, present a risk of lock-in. The discussion of the results of the network analysis shows interesting implications for energy policy, particularly useful from an operational point of view.