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Decomposition of Industrial Energy Consumption in Indian Manufacturing : The Energy Intensity Approach

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  • Sahu, Santosh
  • Narayanan, K

Abstract

Increasing energy consumption has been one of the major issues in the environmental and industrial economics in the context of global climate change. Recent literature has dealt with several methodological and application issues related to the technique of decomposing changes in industrial energy consumption. In this paper, we examine these issues in the context of another commonly adopted approach to decomposition of aggregate changes in energy intensity of Indian manufacturing industries. The industrial sector accounts for about 37 percent of the total final energy consumption in India. Of this the manufacturing sector consumes about 66 percent (2004-05). The manufacturing sector is one of the energy intensive industries among other industries in India. The scope of the study includes an empirical analysis of General Parametric Divisia Method. This paper follows the energy intensity approach rather the energy consumption approach. This method involves decomposition of the aggregate energy intensity index measured in terms of energy consumption per unit of output. The analysis also includes a comparison of the time series analysis versus the period-wise decomposition. The factors considered are changes in production structure and sectoral energy intensities. The results of the analysis confirm that the changes in sectoral energy intensity play a greater role in the variation in the total energy intensity of Indian Manufacturing compared to the changes in the production structure of the Industries.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 21719.

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Date of creation: 19 Mar 2010
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Handle: RePEc:pra:mprapa:21719

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Keywords: Decomposition Methodology; Energy Intensity; Manufacturing Industries; India;

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  1. Bossanyi, Ervin, 1979. "UK primary energy consumption and the changing structure of final demand," Energy Policy, Elsevier, vol. 7(3), pages 253-258, September.
  2. Ang, B. W. & Lee, S. Y., 1994. "Decomposition of industrial energy consumption : Some methodological and application issues," Energy Economics, Elsevier, vol. 16(2), pages 83-92, April.
  3. Jenne, C. A. & Cattell, R. K., 1983. "Structural change and energy efficiency in industry," Energy Economics, Elsevier, vol. 5(2), pages 114-123, April.
  4. Soytas, Ugur & Sari, Ramazan, 2003. "Energy consumption and GDP: causality relationship in G-7 countries and emerging markets," Energy Economics, Elsevier, vol. 25(1), pages 33-37, January.
  5. Ang, BW, 1994. "Decomposition of industrial energy consumption : The energy intensity approach," Energy Economics, Elsevier, vol. 16(3), pages 163-174, July.
  6. Ang, B. W., 1995. "Multilevel decomposition of industrial energy consumption," Energy Economics, Elsevier, vol. 17(1), pages 39-51, January.
  7. G. Boyd & J. F. McDonald & M. Ross & D. A. Hansont, 1987. "Separating the Changing Composition of U.S. Manufacturing Production from Energy Efficiency Improvements: A Divisia Index Approach," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 77-96.
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Cited by:
  1. 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.
  2. P. Fernández-González & M. Landajo & M.J. Presno, 2013. "Factors Influencing Changes In Aggregate Energy Consumption. An European Cross-Country Analysis," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 13(2), pages 18-30.

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