The agricultural demand for electricity in the united states

This study looks at how farmers adjust their consumption of electricity in response to changes in the price of energy. A demand model is specified and estimated. The conclusions suggest that the price of electricity is a factor impacting the quantity of electricity demanded by farmers for irrigation and for other (non-irrigation) uses, but there is no indication that other types of energy are substitutes for electricity. Additionally, the number of acres irrigated is an important factor driving the demand for electricity for irrigation and the number of acres planted is a factor determining the demand for electricity for other uses. Finally, the estimated models of electricity for irrigation and electricity for other uses are structurally stable over the period 1971–92.     

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.     

An empirical analysis of energy demand in Namibia

Using a unique database of end-user local energy data and the recently developed Autoregressive Distributed Lag (ARDL) bounds testing approach to cointegration, we estimate the long-run elasticities of the Namibian energy demand function at both aggregated level and by type of energy (electricity, petrol and diesel) for the period 1980–2002. Our main results show that energy consumption responds positively to changes in GDP and negatively to changes in energy price and air temperature. The differences in price elasticities across fuels uncovered by this study have significant implications for energy taxation by Namibian policy makers. We do not find any significant cross-price elasticities between different fuel types.     

Assessment of demand for natural gas from the electricity sector in India

Electricity sector is among the key users of natural gas. The sustained electricity deficit and environment policies have added to an already rising demand for gas. This paper tries to understand gas demand in future from electricity sector. This paper models the future demand for gas in India from the electricity sector under alternative scenarios for the period 2005–2025, using bottom-up ANSWER MARKAL model. The scenarios are differentiated by alternate economic growth projections and policies related to coal reforms, infrastructure choices and local environment. The results across scenarios show that gas competes with coal as a base-load option if price difference is below US $ 4 per MBtu. At higher price difference gas penetrates only the peak power market. Gas demand is lower in the high economic growth scenario, since electricity sector is more flexible in substitution of primary energy. Gas demand reduces also in cases when coal supply curve shifts rightwards such as under coal reforms and coal-by-wire scenarios. Local environmental (SO₂ emissions) control promotes end of pipe solutions flue gas de-sulfurisation (FGD) initially, though in the longer term mitigation happens by fuel substitution (coal by gas) and introduction of clean coal technologies integrated gasification combined cycle (IGCC).     

Demand for gasoline and diesel fuel by farmers in the USA

This study endeavours to determine whether farmers in the USA adjust their consumption of gasoline and diesel fuel in response to changes in the relative prices of different types of energy. A demand model is specified and estimated. The conclusions suggest that the price of gasoline (diesel fuel) is a factor impacting the quantity of gasoline (diesel fuel) demanded by farmers, but there is no indication that other types of energy are substitutes for gasoline (diesel fuel). Additionally, the level of farming activity is a very important factor driving the demand for gasoline (diesel fuel). Finally, the estimated models of gasoline and diesel fuel demand are structurally stable over the period 1971–1988.     

Multiple calibration decomposition analysis: Energy use and carbon dioxide emissions in the Japanese economy, 1970–1995

The purpose of this paper is to present a new approach to evaluating structural change of the economy in a multisector general equilibrium framework. The multiple calibration technique is applied to an ex post decomposition analysis of structural change between periods, enabling the distinction between price substitution and technological change to be made for each sector. This approach has the advantage of sounder microtheoretical underpinnings when compared with conventional decomposition methods. The proposed technique is empirically applied to changes in energy use and carbon dioxide (CO₂) emissions in the Japanese economy from 1970 to 1995. The results show that technological change is of great importance for curtailing energy use and CO₂ emissions in Japan. Total CO₂ emissions increased during this period primarily because of economic growth, which is represented by final demand effects. On the other hand, the effects such as technological change for labor or energy mitigated the increase in CO₂ emissions.     

Trends in household energy consumption in Canada, 1961–1980

This article analyses the pattern of energy consumption by the residential sector in Canada during the period 1961–1980 and its findings show that the two oil price shocks of 1973–1974 and 1979–1980 were accompanied by a considerable degree of interfuel substitution, primarily a shift from refined petroleum products to electricity and to a lesser extent, natural gas and wood. The contribution of ‘conservation’ was found to be modest, amounting to about 11% of potential energy use by the average household in 1980. In that year the average three member Canadian household consumed nearly 105 CJ of net energy, distributed in roughly equal proportions among the three major sources (electricity, oil products, and natural gas in ranking order), with solid fuel contributing a small share.     

The relationship between the price and demand for natural gas: A partially controlled study

Since the onset of the energy crisis, indicated by the start of the Arab oil embargo, the price of natural gas increased for most residential consumers. the relationship between price and monthly demand over five years is examined for a sample of almost identical owner-occupied town houses in a planned community in central New Jersey, USA. It is shown that, since the onset of the energy crisis, the average price, in current dollars, of gas has increased in the USA, and the average demand has decreased, leading to a significant negative estimate of elasticity. However, this disappears if the effects of overall inflation on demand are removed. Closer examination reveals that the relationship between current price and demand is not linear, since the major decrease in demand occurred during the winter immediately following the embargo, but the major increases in current price occurred during subsequent winters. Whether the large reduction in demand is due to price increases, overall inflation, or is a response to conservation appeals by US public officials is an open question. No short-term effects of price on demand are found.     

Market conditions and future oil prices

This paper analyses the relationship between price elasticities of oil demand and supply and the real price of oil. With the help of a two-equation model it is shown that under market conditions prevailing during the 1973–1978 period. OPEC countries could have imposed even higher real oil prices if they had acted as a revenue-maximizing cartel. It is also shown that market conditions in the longer term were not supportive of the oil price escalation of 1979–1980.The real price of oil has already receded from its level in 1980 and further downward adjustments may be necessary to restore balance in the market if the world economy does not resume sustained growth and the pace of off-oil substitution does not subside.     

Long-term energy projections for the U.S.A.

This report starts by surveying a series of papers that are representative of recent U.S. work on national and international energy policy. Among professional analysts, there are the beginnings of a consensus on energy demand projections and on energy-economy interactions. Moreover, it is recognized that conservation policies will be difficult to implement unless domestic prices are raised to the international level. The paper includes a series of long-term energy projections based upon ETA-MACRO. This model allows for: energy-economy interactions, cost-effective conservation and interfuel substitution between electric and nonelectric energy. the calculations are based upon a somewhat less optimistic view of synthetic fuels and of ‘backstop’ technologies than appear in the Carter Administration's recent proposals. With synfuels, backstops and nuclear energy—and with realistically reduced projections of demand growth—there is a reasonable prospect that the U.S. could meet an international commitment to limit oil and gas imports. U.S. import reductions could be achieved directly through the market price mechanism, without tariffs or quota limitations. For this to happen, however, the international price of oil would have to be doubled (in constant dollar terms) by the year 2000. A policy of gradual OPEC oil price increases would facilitate the transition away from oil, and could serve the long-run interests of both the producing and consuming nations.     

Fossil energy savings and GHG mitigation potentials of ethanol as a gasoline substitute in Thailand

One of the Thai government's measures to promote ethanol use is excise tax exemption, making gasohol cheaper than gasoline. The policy in favour of biofuels is being supported by their contribution to fossil energy savings and greenhouse gas (GHG) mitigation. An analysis of energy balance (EnB), GHG balance and GHG abatement cost has been done to evaluate molasses-based ethanol (MoE) in Thailand. A positive EnB of 19.2 MJ/L implies that MoE is a good substitute for gasoline, effective in fossil energy savings. GHG balance assessment based on the baseline scenario shows that emissions are most likely to increase with the substitution. Scenarios using biogas captured from spent wash treatment and rice husk to substitute coal used in ethanol conversion give encouraging results in improving the GHG balance. However, the higher price of MoE over gasoline currently has resulted in high GHG abatement costs, even under the best-case scenario. Compared to the many other climate strategies relevant to Thailand, MoE is much less cost effective. Governed by the rule of supply and demand, a strong fluctuation in molasses price is considered the main cause of volatile MoE price. Once supplies are stable, the trend of price drops would make MoE a reasonable option for national climate policy.     

Significance of CO2-free hydrogen globally and for Japan using a long-term global energy system analysis

In this paper, the significance of CO₂-free hydrogen is discussed using a long-term global energy system. The energy demand–supply system including CO₂-free hydrogen was assumed, though there are still large uncertainties as to whether a global CO₂-free hydrogen energy system will be deployed. System analysis was conducted using the global and long-term intertemporal optimization energy model GRAPE under severe CO₂ emission constraints. Applied global CO₂ constraints for 2050 were a 50% reduction from 1990 levels. CO₂ constraints accounting for Intended Nationally Determined Contributions (INDCs) in each region were also considered. A variety of energy resources and technologies were considered in this model. Hydrogen can be produced from low-grade coal or natural gas with CO₂ capture and electricity from renewable energy. The hydrogen CIF (cost, insurance, and freight) price for Japan was about 3.2 cents/MJ in 2030. Hydrogen demand technologies considered in this paper are hydrogen-fired power plants, direct combustion, combined heat and power (fuel cells, gas engines, and gas turbines), fuel cell vehicles, and hydrogen internal combustion engine vehicles. The majority of CO₂-free hydrogen was deployed in the transportation sector. CO₂-free hydrogen was utilized in the power sector, where deployment of other zero emission technology has some constraints. From an economic viewpoint, CO₂-free hydrogen can reduce the global energy system cost. From the viewpoint of a localized region, such as Japan, deployment of CO₂-free hydrogen can improve energy security and environmental indicators.     

Energy conservation : An elasticity of substitution approach

Long-term forecasts of demand, used in energy planning, are based on assumptions alleged to be reasonable at the time of projections. The political debate can then focus on whether these assumptions are indeed reasonable. Common considers two sets of projections, and estimates the implicit price and income elasticities, thereby translating assumptions entailed in two different reports into concepts which are directly comparable. It is argued here that this approach need be taken a step further and elasticities of substitution between energy and other inputs should be calculated. Possibilities of energy conservation could then be taken into account.     

The impacts of energy prices on energy intensity: Evidence from China

In this paper, we present a review of the deregulation of energy prices in China between 1985 and 2004 and assess the impacts of changes in energy prices on aggregate energy intensity and coal/oil/electricity intensity. We used time series data to provide estimates of energy price elasticities. Empirical results showed that: (1) The own-price elasticities of coal, oil, and aggregate energy were negative in periods both before and after 1995, implying that higher relative prices of different energy types lead to the decrease in coal, oil, and aggregate energy intensities. However, the positive own-price elasticity of electricity after 1995 probably indicates that the price effect was weaker than other factors such as income effect and population effect. (2) The impacts of energy prices were asymmetric over time. (3) Sectoral adjustment also drove the decrease in aggregate energy intensity. Although raising energy prices to boost efficiency of energy use seems to be an effective policy tool, other policy implications concerned with energy prices, such as energy supply security and fuel poverty, must also be considered.     

Three laws of energy transitions

The paper formulates and explores a hypothesis on three general energy transition laws: the law of stable long-term energy costs to income ratio; the law of improving energy quality; and the law of growing energy productivity. These laws are essential for shaping long-term projections and checking for their consistency. All three are rooted in amazingly stable in time and universal across countries energy costs to income ratios. Limited energy purchasing power sets up thresholds, which, if exceeded, bring asymmetry to energy demand to price elasticity. The author believes, that the theoretical postulate on the substantial substitution among production factors, which is used in the production functions theory, may be incorrect. In reality, innovations mainly lead to the substitution of a low-quality production factor with the same yet of a better-quality. Improving energy quality with stable costs to income ratio is accompanied by growing energy productivity. Energy costs to income thresholds are indicators allowing for better projections of oil prices.     

Energy structure,marginal efficiency and substitution rate: An empirical study of China

Energy efficiency is an important factor in developing energy policies as it represents the extent to which resources support economic output. In recent literature, relevant studies have mainly focused on aggregate energy efficiency, but rarely touched on the marginal efficiency of diverse energy resources and their comparative substitution rate. During 1978–2003, China's energy efficiency continually increased; and consequently became a hot topic in contemporary literature. However, there is no empirical study on the relationship between energy structure and energy efficiency. In order to close the gap, this paper reports the empirical study of the impact of China's energy structure on its energy efficiency from 1978 to 2003. The work covered primary estimation of the marginal efficiency of coal and petroleum in China, as well as the comparative substitution rate. Results indicate that the substitution rate between petroleum and coal is a factor of 5.38.     

Substitution between energy and classical factor inputs in the Chinese steel sector

China’s steel sector is the largest in the world and has been a major driving force behind China’s high rate of economic growth. This sector, however, is also a major consumer of energy and, in particular, coal. As a result, the iron and steel sector in China is a major contributor to greenhouse gas emissions and other pollutants. In this article we examine the potential for inter-factor substitution between capital, energy and labor in the Chinese steel sector and find that capital and energy and energy and labor are substitutes. This result suggests that removal of price ceilings on energy would tend to reduce energy use and increase capital intensiveness. While the potential for substitution between energy and labor is less than that between energy and capital, the elasticity of substitution between energy and labor is high compared with previous findings for other countries. This fact suggests that there may be potential for substituting labor for energy, given China’s abundance of labor.     

Thailand's national energy plan

The paper outlines the actual energy situation in Thailand and the country's energy management plans for the period 1978 to 1989, when the population is expected to grow from 48.0 to 55.8 million.As almost everywhere else, the planning was prompted by the dramatic increase in the price of oil, which in 1978 was used to satisfy 75% of the country's total energy demand.The planning of energy production is oriented toward a gradual replacement of imported oil by domestically available sources of fuel. Thailand has considerable deposits of lignite, oil-bearing shale, natural gas, hydropower, and some radioactive ores.Statistical data included in the paper illustrate the amount and breakdown of energy reserves, the anticipated energy demand by different sectors of the national economy, and the planned production of energy from various resources.     

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 price elasticity of the residential demand for electricity in the Vepco service area

In this study, we derive seasonal estimates of price elasticities of the residential demand of electricity in the Vepco service area from a detailed integrated economietic and end-use model that does not constrain the demand function to constant elasticities with respect to the explanatory variables. The elasticity coefficients derived from the model conform to expectations based on theoretical considerations.We also examine the structural stability of the demand function for residential electricity in the Vepco service area during 1969: 2–1980: 4. Two shifts are detected, one at the beginning of 1976 and the other at the end of 1978. The first shift is attributed to the delayed reaction of Vepco residential customers to the oil embargo and the subsequent increases in energy prices; the second relates to increased energy consciousness brought about by continued high prices of energy and also by encouragement from the federal government to conserve.