Interfuel Substitution and Energy Use in the UK Manufacturing Sector
This paper investigates interfuel substitution in the UK manufacturing sector. Econometric models of interfuel substitution are applied to energy inputs aggregated by their energy use, and separately for thermal heating processes, where interfuel substitution is technologically feasible. Compared to aggregate data, estimated own-price fuel demand elasticities for all fuels and cross-price elasticities for fossil fuels are considerably higher for thermal heating processes. Nonetheless,electricity is found to be a poor substitute for other fuels based on both aggregate data and separately for the heating process. This study also finds that an increase in real fuel prices resulted in higher substitution elasticities based on aggregate data, and lower substitution elasticities for the heating process. The results of counterfactual decomposition of change in the estimated elasticities indicate that technological change was the major determinant of the differences in observed elasticities before and after the energy price increase.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Brannlund, Runar & Lundgren, Tommy, 2004.
"A dynamic analysis of interfuel substitution for Swedish heating plants,"
Elsevier, vol. 26(6), pages 961-976, November.
- Brännlund, Runar & Lundgren, Tommy, 2001. "A Dynamic Analysis of Interfuel Substitution for Swedish Heating Plants," Umeå Economic Studies 550, Umeå University, Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:cam:camdae:1032. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jake Dyer)
If references are entirely missing, you can add them using this form.