Energy prices, production and the adoption of cogeneration in the UK and the Netherlands
AbstractThis paper investigates economic incentives influencing the adoption of energy saving technology by industry, namely, CHP in UK and Dutch manufacturing sectors. The empirical analysis is based on a cross sectional time series econometric model, and examines how industrial output and historical increases in the price of electricity relative to gas prices, spark the diffusion of CHP. Production and price elasticities are estimated across heterogeneous industrial groups. Using data for 13 manufacturing sectors the model shows that fuel cost savings and industry output impact significantly on CHP uptake. Model outcomes are found to differ depending on the period of estimation and the estimation period is key in determining the impact of gas price and purchased power prices on adoption of CHP.
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Bibliographic InfoPaper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0646.
Date of creation: Jun 2006
Date of revision:
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Web page: http://www.econ.cam.ac.uk/index.htm
energy; manufacturing sector; econometric modeling; electricity prices; energy conservation; technology diffusion;
Find related papers by JEL classification:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
- Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
- L6 - Industrial Organization - - Industry Studies: Manufacturing
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-06-24 (All new papers)
- NEP-ENE-2006-06-24 (Energy Economics)
- NEP-INO-2006-06-24 (Innovation)
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- Fox-Penner, Peter S., 1990. "Regulating independent power producers : Lessons of the PURPA approach," Resources and Energy, Elsevier, vol. 12(1), pages 117-141, April.
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