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Interfuel substitution and decomposition of changes in industrial energy consumption

Author

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  • Liu, X.Q.
  • Ang, B.W.
  • Ong, H.L.

Abstract

Several recent studies have dealt with the methodology of decomposing the change in industrial energy consumption between two years into three separate components. Each component is associated with one of the following three effects: changes in production level, product-mix, and sectoral energy intensity. The component attributable to sectoral energy intensity gives the overall effect of interfuel substitution, changes in the physical efficiencies of fuel use, and factors which are unaccounted for. In this paper, we present a method for isolating the effect of interfuel substitution such that the change in energy consumption is decomposed into four separate components. With this extension, the mechanisms of change in energy use in industry can be studied in depth and with improved understanding. We have applied our method to data of Taiwan and the results are presented. We also discuss the assumptions made and some practical considerations in the use of our method.

Suggested Citation

  • Liu, X.Q. & Ang, B.W. & Ong, H.L., 1992. "Interfuel substitution and decomposition of changes in industrial energy consumption," Energy, Elsevier, vol. 17(7), pages 689-696.
    • Handle: RePEc:eee:energy:v:17:y:1992:i:7:p:689-696
    DOI: 10.1016/0360-5442(92)90076-C
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    Cited by:

    1. Patterson, Murray G, 1996. "What is energy efficiency? : Concepts, indicators and methodological issues," Energy Policy, Elsevier, vol. 24(5), pages 377-390, May.
    2. Sandeep Kumar Kujur, 2018. "Impact of Technological Change on Employment: Evidence from the Organised Manufacturing Industry in India," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 61(2), pages 339-376, June.
    3. Fernández González, P. & Landajo, M. & Presno, M.J., 2014. "Multilevel LMDI decomposition of changes in aggregate energy consumption. A cross country analysis in the EU-27," Energy Policy, Elsevier, vol. 68(C), pages 576-584.
    4. Velasco-Fernández, Raúl & Dunlop, Tessa & Giampietro, Mario, 2020. "Fallacies of energy efficiency indicators: Recognizing the complexity of the metabolic pattern of the economy," Energy Policy, Elsevier, vol. 137(C).
    5. Velasco-Fernández, Raúl & Giampietro, Mario & Bukkens, Sandra G.F., 2018. "Analyzing the energy performance of manufacturing across levels using the end-use matrix," Energy, Elsevier, vol. 161(C), pages 559-572.
    6. Liu, Na & Ang, B.W., 2007. "Factors shaping aggregate energy intensity trend for industry: Energy intensity versus product mix," Energy Economics, Elsevier, vol. 29(4), pages 609-635, July.
    7. Xu, Xianshuo & Zhao, Tao & Liu, Nan & Kang, Jidong, 2014. "Changes of energy-related GHG emissions in China: An empirical analysis from sectoral perspective," Applied Energy, Elsevier, vol. 132(C), pages 298-307.
    8. Schipper, Lee & Ting, Michael & Khrushch, Marta & Golove, William, 1997. "The evolution of carbon dioxide emissions from energy use in industrialized countries: an end-use analysis," Energy Policy, Elsevier, vol. 25(7-9), pages 651-672.
    9. Shahiduzzaman, Md. & Alam, Khorshed, 2013. "Changes in energy efficiency in Australia: A decomposition of aggregate energy intensity using logarithmic mean Divisia approach," Energy Policy, Elsevier, vol. 56(C), pages 341-351.
    10. Su, Bin & Ang, B.W., 2012. "Structural decomposition analysis applied to energy and emissions: Some methodological developments," Energy Economics, Elsevier, vol. 34(1), pages 177-188.
    11. Khademvatani, Asgar & Gordon, Daniel V., 2013. "A marginal measure of energy efficiency: The shadow value," Energy Economics, Elsevier, vol. 38(C), pages 153-159.
    12. Qu, Chenyao & Shao, Jun & Shi, Zhenkai, 2020. "Does financial agglomeration promote the increase of energy efficiency in China?," Energy Policy, Elsevier, vol. 146(C).
    13. Rongrong Li & Rui Jiang, 2019. "Is carbon emission decline caused by economic decline? Empirical evidence from Russia," Energy & Environment, , vol. 30(4), pages 672-684, June.
    14. He, Yongda & Lin, Boqiang, 2019. "Heterogeneity and asymmetric effects in energy resources allocation of the manufacturing sectors in China," Energy, Elsevier, vol. 170(C), pages 1019-1035.
    15. Iwona Bąk & Małgorzata Tarczyńska-Łuniewska & Anna Barwińska-Małajowicz & Paweł Hydzik & Dariusz Kusz, 2022. "Is Energy Use in the EU Countries Moving toward Sustainable Development?," Energies, MDPI, vol. 15(16), pages 1-26, August.
    16. Ebohon, Obas John & Ikeme, Anthony Jekwu, 2006. "Decomposition analysis of CO2 emission intensity between oil-producing and non-oil-producing sub-Saharan African countries," Energy Policy, Elsevier, vol. 34(18), pages 3599-3611, December.
    17. Wang, Qunwei & Zhao, Zengyao & Zhou, Peng & Zhou, Dequn, 2013. "Energy efficiency and production technology heterogeneity in China: A meta-frontier DEA approach," Economic Modelling, Elsevier, vol. 35(C), pages 283-289.
    18. Ang, B. W., 1995. "Multilevel decomposition of industrial energy consumption," Energy Economics, Elsevier, vol. 17(1), pages 39-51, January.
    19. Li, Ming-Jia & Tao, Wen-Quan, 2017. "Review of methodologies and polices for evaluation of energy efficiency in high energy-consuming industry," Applied Energy, Elsevier, vol. 187(C), pages 203-215.
    20. Liu, Gengyuan & Hao, Yan & Zhou, Yun & Yang, Zhifeng & Zhang, Yan & Su, Meirong, 2016. "China's low-carbon industrial transformation assessment based on Logarithmic Mean Divisia Index model," Resources, Conservation & Recycling, Elsevier, vol. 108(C), pages 156-170.
    21. Ang, B.W. & Zhang, F.Q., 2000. "A survey of index decomposition analysis in energy and environmental studies," Energy, Elsevier, vol. 25(12), pages 1149-1176.

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