IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v211y2018icp743-754.html
   My bibliography  Save this article

Analysing the drivers of the intensity of electricity consumption of non-residential sectors in Europe

Author

Listed:
  • Gutiérrez-Pedrero, María Jesús
  • Tarancón, Miguel Ángel
  • del Río, Pablo
  • Alcántara, Vicent

Abstract

The electricity consumption of non-residential productive sectors represents a significant share of the overall energy consumption in the Member States of the European Union. Therefore, determining the main factors affecting the intensity of such consumption (defined as the ratio of the electricity consumed by the productive system of a given country to gross value added) is a research effort worth undertaking. The aim of this paper is to identify the main factors which affect such intensity with the help of a static panel data model, which is estimated with three different methods. Our results show that a higher degree of technological progress in the production systems and higher retail prices of electricity for non-residential consumers reduce such intensity. Other variables, which are statistically significant, lead to an increase of electricity intensity, including the accumulated stock of physical capital and the lagged gross fixed capital formation. The accumulated capital stock per unit of GDP is the variable with the highest influence on electricity intensity. Whereas the influence of price changes is limited, these results indicate that there is some rigidity to change energy intensity through demand-side policy measures, suggesting that they will need to be complemented with supply-side measures aimed at increasing low-carbon electricity generation capacity.

Suggested Citation

  • Gutiérrez-Pedrero, María Jesús & Tarancón, Miguel Ángel & del Río, Pablo & Alcántara, Vicent, 2018. "Analysing the drivers of the intensity of electricity consumption of non-residential sectors in Europe," Applied Energy, Elsevier, vol. 211(C), pages 743-754.
    • Handle: RePEc:eee:appene:v:211:y:2018:i:c:p:743-754
    DOI: 10.1016/j.apenergy.2017.10.115
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S030626191731560X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2017.10.115?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Fisher-Vanden, Karen & Jefferson, Gary H. & Liu, Hongmei & Tao, Quan, 2004. "What is driving China's decline in energy intensity?," Resource and Energy Economics, Elsevier, vol. 26(1), pages 77-97, March.
    2. Wang, Chunhua, 2013. "Changing energy intensity of economies in the world and its decomposition," Energy Economics, Elsevier, vol. 40(C), pages 637-644.
    3. Peter Mulder & Henri Groot, 2007. "Sectoral Energy- and Labour-Productivity Convergence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 36(1), pages 85-112, January.
    4. Miketa, Asami & Mulder, Peter, 2005. "Energy productivity across developed and developing countries in 10 manufacturing sectors: Patterns of growth and convergence," Energy Economics, Elsevier, vol. 27(3), pages 429-453, May.
    5. Liddle, Brantley, 2009. "Electricity intensity convergence in IEA/OECD countries: Aggregate and sectoral analysis," Energy Policy, Elsevier, vol. 37(4), pages 1470-1478, April.
    6. Inglesi-Lotz, R. & Blignaut, J.N., 2012. "Electricity intensities of the OECD and South Africa: A comparison," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(7), pages 4491-4499.
    7. Löschel, Andreas & Pothen, Frank & Schymura, Michael, 2015. "Peeling the onion: Analyzing aggregate, national and sectoral energy intensity in the European Union," Energy Economics, Elsevier, vol. 52(S1), pages 63-75.
    8. Filipović, Sanja & Verbič, Miroslav & Radovanović, Mirjana, 2015. "Determinants of energy intensity in the European Union: A panel data analysis," Energy, Elsevier, vol. 92(P3), pages 547-555.
    9. Ulrich Doraszelski & Jordi Jaumandreu, 2018. "Measuring the Bias of Technological Change," Journal of Political Economy, University of Chicago Press, vol. 126(3), pages 1027-1084.
    10. Filippini, Massimo & Pachauri, Shonali, 2004. "Elasticities of electricity demand in urban Indian households," Energy Policy, Elsevier, vol. 32(3), pages 429-436, February.
    11. Cao, Jing & Karplus, Valerie J., 2014. "Firm-level determinants of energy and carbon intensity in China," Energy Policy, Elsevier, vol. 75(C), pages 167-178.
    12. Hankinson, G. A. & Rhys, J. M. W., 1983. "Electricity consumption, electricity intensity and industrial structure," Energy Economics, Elsevier, vol. 5(3), pages 146-152, July.
    13. Wesley Burnett, J. & Madariaga, Jessica, 2017. "The convergence of U.S. state-level energy intensity," Energy Economics, Elsevier, vol. 62(C), pages 357-370.
    14. Beck, Nathaniel & Katz, Jonathan N., 1995. "What To Do (and Not to Do) with Time-Series Cross-Section Data," American Political Science Review, Cambridge University Press, vol. 89(3), pages 634-647, September.
    15. Igor Bagayev & Boris Najman, 2013. "Less quality more costs: Does local power sector reliability matter for electricity intensity?," Erudite Working Paper 2013-03, Erudite.
    16. Crompton, Paul & Wu, Yanrui, 2005. "Energy consumption in China: past trends and future directions," Energy Economics, Elsevier, vol. 27(1), pages 195-208, January.
    17. Andersson, Fredrik N.G. & Karpestam, Peter, 2013. "CO2 emissions and economic activity: Short- and long-run economic determinants of scale, energy intensity and carbon intensity," Energy Policy, Elsevier, vol. 61(C), pages 1285-1294.
    18. Mulder, Peter & de Groot, Henri L.F., 2012. "Structural change and convergence of energy intensity across OECD countries, 1970–2005," Energy Economics, Elsevier, vol. 34(6), pages 1910-1921.
    19. Vaona, Andrea, 2013. "The sclerosis of regional electricity intensities in Italy: An aggregate and sectoral analysis," Applied Energy, Elsevier, vol. 104(C), pages 880-889.
    20. Marcel Timmer & Abdul A. Erumban & Reitze Gouma & Bart Los & Umed Temurshoev & Gaaitzen J. de Vries & I–aki Arto & Valeria Andreoni AurŽlien Genty & Frederik Neuwahl & JosŽ M. Rueda?Cantuche & Joseph , 2012. "The World Input-Output Database (WIOD): Contents, Sources and Methods," IIDE Discussion Papers 20120401, Institue for International and Development Economics.
    21. Marvin J. Horowitz, 2007. "Changes in Electricity Demand in the United States from the 1970s to 2003," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 93-120.
    22. Choi, Ki-Hong & Ang, B.W., 2012. "Attribution of changes in Divisia real energy intensity index — An extension to index decomposition analysis," Energy Economics, Elsevier, vol. 34(1), pages 171-176.
    23. Adom, Philip Kofi, 2015. "Asymmetric impacts of the determinants of energy intensity in Nigeria," Energy Economics, Elsevier, vol. 49(C), pages 570-580.
    24. Zha, DongLan & Zhou, DeQun & Ding, Ning, 2012. "The determinants of aggregated electricity intensity in China," Applied Energy, Elsevier, vol. 97(C), pages 150-156.
    25. Duro, Juan Antonio & Alcántara, Vicent & Padilla, Emilio, 2010. "International inequality in energy intensity levels and the role of production composition and energy efficiency: An analysis of OECD countries," Ecological Economics, Elsevier, vol. 69(12), pages 2468-2474, October.
    26. Ma, Hengyun & Oxley, Les & Gibson, John, 2009. "Substitution possibilities and determinants of energy intensity for China," Energy Policy, Elsevier, vol. 37(5), pages 1793-1804, May.
    27. Gilbert E. Metcalf, 2008. "An Empirical Analysis of Energy Intensity and Its Determinants at the State Level," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 1-26.
    28. Jenne, Charles & Catell, Roy, 1983. "Electricity intensity in UK industry," Energy Policy, Elsevier, vol. 11(4), pages 369-371, December.
    29. Al-Ghandoor, A., 2012. "Analysis of Jordan's industrial energy intensity and potential mitigations of energy and GHGs emissions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(7), pages 4479-4490.
    30. Voigt, Sebastian & De Cian, Enrica & Schymura, Michael & Verdolini, Elena, 2014. "Energy intensity developments in 40 major economies: Structural change or technology improvement?," Energy Economics, Elsevier, vol. 41(C), pages 47-62.
    31. Herrerias, M.J. & Liu, G., 2013. "Electricity intensity across Chinese provinces: New evidence on convergence and threshold effects," Energy Economics, Elsevier, vol. 36(C), pages 268-276.
    32. Kaufmann, Robert K., 1992. "A biophysical analysis of the energy/real GDP ratio: implications for substitution and technical change," Ecological Economics, Elsevier, vol. 6(1), pages 35-56, July.
    33. Bjorner, Thomas Bue & Togeby, Mikael & Jensen, Henrik Holm, 2001. "Industrial companies' demand for electricity: evidence from a micropanel," Energy Economics, Elsevier, vol. 23(5), pages 595-617, September.
    34. 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.
    35. Rafael E. De Hoyos & Vasilis Sarafidis, 2006. "Testing for cross-sectional dependence in panel-data models," Stata Journal, StataCorp LP, vol. 6(4), pages 482-496, December.
    36. Kepplinger, D. & Templ, M. & Upadhyaya, S., 2013. "Analysis of energy intensity in manufacturing industry using mixed-effects models," Energy, Elsevier, vol. 59(C), pages 754-763.
    37. Kim, Young Se, 2015. "Electricity consumption and economic development: Are countries converging to a common trend?," Energy Economics, Elsevier, vol. 49(C), pages 192-202.
    38. Noel Alter & Shabib Haider Syed, 2011. "An Empirical Analysis of Electricity Demand in Pakistan," International Journal of Energy Economics and Policy, Econjournals, vol. 1(4), pages 116-139.
    39. Lars Wenzel & Andr Wolf, 2014. "Changing Patterns of Electricity Usage in European Manufacturing: A Decomposition Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 4(4), pages 516-530.
    40. Mohammadi, Hassan & Ram, Rati, 2012. "Cross-country convergence in energy and electricity consumption, 1971–2007," Energy Economics, Elsevier, vol. 34(6), pages 1882-1887.
    41. Torrie, Ralph D. & Stone, Christopher & Layzell, David B., 2016. "Understanding energy systems change in Canada: 1. Decomposition of total energy intensity," Energy Economics, Elsevier, vol. 56(C), pages 101-106.
    42. Zhang, Dayong & Cao, Hong & Wei, Yi-Ming, 2016. "Identifying the determinants of energy intensity in China: A Bayesian averaging approach," Applied Energy, Elsevier, vol. 168(C), pages 672-682.
    43. Verbruggen, Aviel, 2006. "Electricity intensity backstop level to meet sustainable backstop supply technologies," Energy Policy, Elsevier, vol. 34(11), pages 1310-1317, July.
    44. Kwon, Sanguk & Cho, Seong-Hoon & Roberts, Roland K. & Kim, Hyun Jae & Park, KiHyun & Edward Yu, Tun-Hsiang, 2016. "Short-run and the long-run effects of electricity price on electricity intensity across regions," Applied Energy, Elsevier, vol. 172(C), pages 372-382.
    45. Richard B. Howarth & Lee Schipper, 1991. "Manufacturing Energy Use in Eight OECD Countries: Trends through 1988," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 15-40.
    46. Markandya, Anil & Pedroso-Galinato, Suzette & Streimikiene, Dalia, 2006. "Energy intensity in transition economies: Is there convergence towards the EU average?," Energy Economics, Elsevier, vol. 28(1), pages 121-145, January.
    47. Marvin J. Horowitz, 2004. "Electricity Intensity in the Commercial Sector: Market and Public Program Effects," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 115-138.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Trespalacios, Alfredo & Cortés, Lina M. & Perote, Javier, 2020. "Uncertainty in electricity markets from a semi-nonparametric approach," Energy Policy, Elsevier, vol. 137(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kim, Young Se, 2015. "Electricity consumption and economic development: Are countries converging to a common trend?," Energy Economics, Elsevier, vol. 49(C), pages 192-202.
    2. Karimu, Amin & Brännlund, Runar & Lundgren, Tommy & Söderholm, Patrik, 2017. "Energy intensity and convergence in Swedish industry: A combined econometric and decomposition analysis," Energy Economics, Elsevier, vol. 62(C), pages 347-356.
    3. Dayong Zhang and David C. Broadstock, 2016. "Club Convergence in the Energy Intensity of China," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    4. Hann-Earl Kim & Yu-Sang Chang & Hee-Jin Kim, 2021. "Dynamic Electricity Intensity Trends in 91 Countries," Sustainability, MDPI, vol. 13(8), pages 1-26, April.
    5. Balado-Naves, Roberto & Baños-Pino, José Francisco & Mayor, Matías, 2023. "Spatial spillovers and world energy intensity convergence," Energy Economics, Elsevier, vol. 124(C).
    6. Peter Mulder, 2015. "International Specialization, Structural Change and the Evolution of Manufacturing Energy Intensity in OECD Countries," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    7. Mulder, Peter & de Groot, Henri L.F., 2012. "Structural change and convergence of energy intensity across OECD countries, 1970–2005," Energy Economics, Elsevier, vol. 34(6), pages 1910-1921.
    8. Wan, Jun & Baylis, Kathy & Mulder, Peter, 2015. "Trade-facilitated technology spillovers in energy productivity convergence processes across EU countries," Energy Economics, Elsevier, vol. 48(C), pages 253-264.
    9. Mulder, Peter & de Groot, Henri L.F. & Pfeiffer, Birte, 2014. "Dynamics and determinants of energy intensity in the service sector: A cross-country analysis, 1980–2005," Ecological Economics, Elsevier, vol. 100(C), pages 1-15.
    10. Löschel, Andreas & Pothen, Frank & Schymura, Michael, 2015. "Peeling the onion: Analyzing aggregate, national and sectoral energy intensity in the European Union," Energy Economics, Elsevier, vol. 52(S1), pages 63-75.
    11. Perillo, Frederico & Pereira da Silva, Patrícia & Cerqueira, Pedro A., 2022. "Decoupling efficiency from electricity intensity: An empirical assessment in the EU," Energy Policy, Elsevier, vol. 169(C).
    12. Parker, Steven & Liddle, Brantley, 2017. "Economy-wide and manufacturing energy productivity transition paths and club convergence for OECD and non-OECD countries," Energy Economics, Elsevier, vol. 62(C), pages 338-346.
    13. Payne, James E. & Vizek, Maruška & Lee, Junsoo, 2017. "Stochastic convergence in per capita fossil fuel consumption in U.S. states," Energy Economics, Elsevier, vol. 62(C), pages 382-395.
    14. Payne, James E. & Vizek, Maruška & Lee, Junsoo, 2017. "Is there convergence in per capita renewable energy consumption across U.S. States? Evidence from LM and RALS-LM unit root tests with breaks," Renewable and Sustainable Energy Reviews, Elsevier, vol. 70(C), pages 715-728.
    15. Wang, Na & Fu, Xiaodong & Wang, Shaobin & Yang, Hao & Li, Zhen, 2022. "Convergence characteristics and distribution patterns of residential electricity consumption in China: An urban-rural gap perspective," Energy, Elsevier, vol. 254(PB).
    16. Liu, Tie-Ying & Lee, Chien-Chiang, 2020. "Convergence of the world’s energy use," Resource and Energy Economics, Elsevier, vol. 62(C).
    17. Michał Gostkowski & Tomasz Rokicki & Luiza Ochnio & Grzegorz Koszela & Kamil Wojtczuk & Marcin Ratajczak & Hubert Szczepaniuk & Piotr Bórawski & Aneta Bełdycka-Bórawska, 2021. "Clustering Analysis of Energy Consumption in the Countries of the Visegrad Group," Energies, MDPI, vol. 14(18), pages 1-25, September.
    18. Tafadzwa Ruzive & Thando Mkhombo & Simbarashe Mhaka & Nomahlubi Mavikela & Andrew Phiri, 2019. "Electricity Intensity and Unemployment in South Africa: A Quantile Regression Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 9(1), pages 31-40.
    19. Ivanovski, Kris & Awaworyi Churchill, Sefa & Smyth, Russell, 2018. "A club convergence analysis of per capita energy consumption across Australian regions and sectors," Energy Economics, Elsevier, vol. 76(C), pages 519-531.
    20. Jiang, Lei & Folmer, Henk & Ji, Minhe & Zhou, P., 2018. "Revisiting cross-province energy intensity convergence in China: A spatial panel analysis," Energy Policy, Elsevier, vol. 121(C), pages 252-263.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:211:y:2018:i:c:p:743-754. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.