IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v38y2010i11p6910-6918.html
   My bibliography  Save this article

Monitoring energy efficiency trends in European industry: Which top-down method should be used?

Author

Listed:
  • Cahill, Caiman J.
  • Ó Gallachóir, Brian P.

Abstract

Several index decomposition methods are commonly employed to provide a top-down view of energy consumption trends in manufacturing industry. These approaches typically use value added data for an industrial sector to decompose energy trends into structural, intensity and activity effects. Additionally in Europe a commonly employed top-down indicator called ODEX uses units of physical output, rather than value added, to analyse energy efficiency developments only. Therefore it has been difficult to compare ODEX directly to decomposition approaches. This paper presents a new decomposition method called VALDEX, based on the existing ODEX methodology, but using value added data. Extending ODEX to a full decomposition method allows tests commonly used in index decomposition theory to be applied and enables direct comparison with other methods. This helps evaluate the robustness of the existing ODEX methodology. Using industry data from three European countries, the results yielded by five decomposition methods are compared. In the cases examined, both the Laspeyres and VALDEX methods have significant residuals. Laspeyres consistently overestimates total energy consumption while VALDEX underestimates it. Methods that produce small or no unexplained residuals give converging results for each effect for the countries analysed, and provide a more reliable view of energy trends.

Suggested Citation

  • Cahill, Caiman J. & Ó Gallachóir, Brian P., 2010. "Monitoring energy efficiency trends in European industry: Which top-down method should be used?," Energy Policy, Elsevier, vol. 38(11), pages 6910-6918, November.
    • Handle: RePEc:eee:enepol:v:38:y:2010:i:11:p:6910-6918
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301-4215(10)00530-6
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    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. Ang, B. W., 2004. "Decomposition analysis for policymaking in energy:: which is the preferred method?," Energy Policy, Elsevier, vol. 32(9), pages 1131-1139, June.
    2. Ang, B.W & Zhang, F.Q, 1999. "Inter-regional comparisons of energy-related CO2 emissions using the decomposition technique," Energy, Elsevier, vol. 24(4), pages 297-305.
    3. Boonekamp, Piet G.M., 2006. "Evaluation of methods used to determine realized energy savings," Energy Policy, Elsevier, vol. 34(18), pages 3977-3992, December.
    4. Kamakaté, Fatumata & Schipper, Lee, 2009. "Trends in truck freight energy use and carbon emissions in selected OECD countries from 1973 to 2005," Energy Policy, Elsevier, vol. 37(10), pages 3743-3751, October.
    5. Greening, Lorna A. & Boyd, Gale & Roop, Joseph M., 2007. "Modeling of industrial energy consumption: An introduction and context," Energy Economics, Elsevier, vol. 29(4), pages 599-608, July.
    6. Nag, Barnali & Parikh, Jyoti, 2000. "Indicators of carbon emission intensity from commercial energy use in India," Energy Economics, Elsevier, vol. 22(4), pages 441-461, August.
    7. Ang, B.W & Zhang, F.Q & Choi, Ki-Hong, 1998. "Factorizing changes in energy and environmental indicators through decomposition," Energy, Elsevier, vol. 23(6), pages 489-495.
    8. Ang, B.W. & Liu, F.L., 2001. "A new energy decomposition method: perfect in decomposition and consistent in aggregation," Energy, Elsevier, vol. 26(6), pages 537-548.
    9. Shrestha, Ram M. & Anandarajah, Gabrial & Liyanage, Migara H., 2009. "Factors affecting CO2 emission from the power sector of selected countries in Asia and the Pacific," Energy Policy, Elsevier, vol. 37(6), pages 2375-2384, June.
    10. Albrecht, Johan & Francois, Delphine & Schoors, Koen, 2002. "A Shapley decomposition of carbon emissions without residuals," Energy Policy, Elsevier, vol. 30(9), pages 727-736, July.
    11. Lenzen, Manfred, 2006. "Decomposition analysis and the mean-rate-of-change index," Applied Energy, Elsevier, vol. 83(3), pages 185-198, March.
    12. Ang, B.W. & Liu, Na, 2007. "Energy decomposition analysis: IEA model versus other methods," Energy Policy, Elsevier, vol. 35(3), pages 1426-1432, March.
    13. Sorrell, Steve & Lehtonen, Markku & Stapleton, Lee & Pujol, Javier & Champion, Toby, 2009. "Decomposing road freight energy use in the United Kingdom," Energy Policy, Elsevier, vol. 37(8), pages 3115-3129, August.
    14. Sun, J. W., 1998. "Changes in energy consumption and energy intensity: A complete decomposition model," Energy Economics, Elsevier, vol. 20(1), pages 85-100, February.
    15. 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.
    16. Greening, Lorna A. & Davis, William B. & Schipper, Lee & Khrushch, Marta, 1997. "Comparison of six decomposition methods: application to aggregate energy intensity for manufacturing in 10 OECD countries," Energy Economics, Elsevier, vol. 19(3), pages 375-390, July.
    17. Chung, Hyun-Sik & Rhee, Hae-Chun, 2001. "A residual-free decomposition of the sources of carbon dioxide emissions: a case of the Korean industries," Energy, Elsevier, vol. 26(1), pages 15-30.
    18. Hoekstra, Rutger & van den Bergh, Jeroen C. J. M., 2003. "Comparing structural decomposition analysis and index," Energy Economics, Elsevier, vol. 25(1), pages 39-64, January.
    19. Ma, Chunbo & Stern, David I., 2008. "Biomass and China's carbon emissions: A missing piece of carbon decomposition," Energy Policy, Elsevier, vol. 36(7), pages 2517-2526, July.
    20. Boyd, Gale A. & Hanson, Donald A. & Sterner, Thomas, 1988. "Decomposition of changes in energy intensity : A comparison of the Divisia index and other methods," Energy Economics, Elsevier, vol. 10(4), pages 309-312, October.
    21. Ang, B.W. & Liu, F.L. & Chung, Hyun-Sik, 2004. "A generalized Fisher index approach to energy decomposition analysis," Energy Economics, Elsevier, vol. 26(5), pages 757-763, September.
    22. Ang, B.W., 2006. "Monitoring changes in economy-wide energy efficiency: From energy-GDP ratio to composite efficiency index," Energy Policy, Elsevier, vol. 34(5), pages 574-582, March.
    23. de Boer, Paul, 2009. "Generalized Fisher index or Siegel-Shapley decomposition?," Energy Economics, Elsevier, vol. 31(5), pages 810-814, September.
    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. Hannah Förster & Katja Schumacher & Enrica De Cian & Michael Hübler & Ilkka Keppo & Silvana Mima & Ronald D. Sands, 2013. "European Energy Efficiency And Decarbonization Strategies Beyond 2030 — A Sectoral Multi-Model Decomposition," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 4(supp0), pages 1-29.
    2. Guarino, Francesco & Cassarà, Pietro & Longo, Sonia & Cellura, Maurizio & Ferro, Erina, 2015. "Load match optimisation of a residential building case study: A cross-entropy based electricity storage sizing algorithm," Applied Energy, Elsevier, vol. 154(C), pages 380-391.
    3. Tan, Xianchun & Dong, Lele & Chen, Dexue & Gu, Baihe & Zeng, Yuan, 2016. "China’s regional CO2 emissions reduction potential: A study of Chongqing city," Applied Energy, Elsevier, vol. 162(C), pages 1345-1354.
    4. Beöthy, Ákos & Kácsor, Enikő & Bartek-Lesi, Mária & Kerekes, Lajos & Kotek, Péter, 2019. "Energiaköltségek hatása a feldolgozóipar költség-versenyképességére [Energy costs and cost competitiveness in the manufacturing sector]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(3), pages 256-285.
    5. Xu, Jin-Hua & Fan, Ying & Yu, Song-Min, 2014. "Energy conservation and CO2 emission reduction in China's 11th Five-Year Plan: A performance evaluation," Energy Economics, Elsevier, vol. 46(C), pages 348-359.
    6. Xu, Jin-Hua & Fleiter, Tobias & Eichhammer, Wolfgang & Fan, Ying, 2012. "Energy consumption and CO2 emissions in China's cement industry: A perspective from LMDI decomposition analysis," Energy Policy, Elsevier, vol. 50(C), pages 821-832.
    7. 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.
    8. Bertoldi, Paolo & Mosconi, Rocco, 2020. "Do energy efficiency policies save energy? A new approach based on energy policy indicators (in the EU Member States)," Energy Policy, Elsevier, vol. 139(C).
    9. Li, Li & Wang, Jianjun & Tan, Zhongfu & Ge, Xinquan & Zhang, Jian & Yun, Xiaozhe, 2014. "Policies for eliminating low-efficiency production capacities and improving energy efficiency of energy-intensive industries in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 39(C), pages 312-326.
    10. Rogan, Fionn & Cahill, Caiman J. & Ó Gallachóir, Brian P., 2012. "Decomposition analysis of gas consumption in the residential sector in Ireland," Energy Policy, Elsevier, vol. 42(C), pages 19-36.
    11. Xianrui Liao & Wei Yang & Yichen Wang & Junnian Song, 2019. "Uncovering Variations, Determinants, and Disparities of Multisector-Level Final Energy Use of Industries Across Cities," Sustainability, MDPI, vol. 11(6), pages 1-16, March.
    12. Huang, Yun-Hsun, 2020. "Examining impact factors of residential electricity consumption in Taiwan using index decomposition analysis based on end-use level data," Energy, Elsevier, vol. 213(C).
    13. Zhang, Wei & Li, Ke & Zhou, Dequn & Zhang, Wenrui & Gao, Hui, 2016. "Decomposition of intensity of energy-related CO2 emission in Chinese provinces using the LMDI method," Energy Policy, Elsevier, vol. 92(C), pages 369-381.
    14. Cahill, Caiman J. & Ó Gallachóir, Brian P., 2012. "Combining physical and economic output data to analyse energy and CO2 emissions trends in industry," Energy Policy, Elsevier, vol. 49(C), pages 422-429.
    15. Schlomann, Barbara & Reuter, Matthias & Lapillonne, Bruno & Pollier, Karine & Rosenow, Jan, 2014. "Monitoring of the "Energiewende": Energy efficiency indicators for Germany," Working Papers "Sustainability and Innovation" S10/2014, Fraunhofer Institute for Systems and Innovation Research (ISI).

    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. 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.
    2. Cahill, Caiman J. & Ó Gallachóir, Brian P., 2012. "Combining physical and economic output data to analyse energy and CO2 emissions trends in industry," Energy Policy, Elsevier, vol. 49(C), pages 422-429.
    3. Fernández González, P. & Landajo, M. & Presno, M.J., 2014. "Tracking European Union CO2 emissions through LMDI (logarithmic-mean Divisia index) decomposition. The activity revaluation approach," Energy, Elsevier, vol. 73(C), pages 741-750.
    4. Ang, B.W. & Huang, H.C. & Mu, A.R., 2009. "Properties and linkages of some index decomposition analysis methods," Energy Policy, Elsevier, vol. 37(11), pages 4624-4632, November.
    5. Fernández González, P. & Landajo, M. & Presno, M.J., 2013. "The Divisia real energy intensity indices: Evolution and attribution of percent changes in 20 European countries from 1995 to 2010," Energy, Elsevier, vol. 58(C), pages 340-349.
    6. Fernández González, P., 2015. "Exploring energy efficiency in several European countries. An attribution analysis of the Divisia structural change index," Applied Energy, Elsevier, vol. 137(C), pages 364-374.
    7. Lenzen, Manfred, 2006. "Decomposition analysis and the mean-rate-of-change index," Applied Energy, Elsevier, vol. 83(3), pages 185-198, March.
    8. Fernández González, P. & Presno, M.J. & Landajo, M., 2015. "Regional and sectoral attribution to percentage changes in the European Divisia carbonization index," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 1437-1452.
    9. Wang, H. & Ang, B.W. & Su, Bin, 2017. "Assessing drivers of economy-wide energy use and emissions: IDA versus SDA," Energy Policy, Elsevier, vol. 107(C), pages 585-599.
    10. Wang, Yanqiu & Zhu, Zhiwei & Zhu, Zhaoge & Liu, Zhenbin, 2019. "Analysis of China's energy consumption changing using the Mean Rate of Change Index and the logarithmic mean divisia index," Energy, Elsevier, vol. 167(C), pages 275-282.
    11. Bor, Yunchang Jeffrey, 2008. "Consistent multi-level energy efficiency indicators and their policy implications," Energy Economics, Elsevier, vol. 30(5), pages 2401-2419, September.
    12. Carlino, Laurent & Coppens, François & González, Javier & Ortega, Manuel & Pérez-Duarte, Sébastien & Rubbrecht, Ilse & Vennix, Saskia, 2017. "Decomposition techniques for financial ratios of European non-financial listed groups," Statistics Paper Series 21, European Central Bank.
    13. Seck, Gondia Sokhna & Guerassimoff, Gilles & Maïzi, Nadia, 2016. "Analysis of the importance of structural change in non-energy intensive industry for prospective modelling: The French case," Energy Policy, Elsevier, vol. 89(C), pages 114-124.
    14. de Freitas, Luciano Charlita & Kaneko, Shinji, 2011. "Decomposition of CO2 emissions change from energy consumption in Brazil: Challenges and policy implications," Energy Policy, Elsevier, vol. 39(3), pages 1495-1504, March.
    15. Ma, Chunbo, 2014. "A multi-fuel, multi-sector and multi-region approach to index decomposition: An application to China's energy consumption 1995–2010," Energy Economics, Elsevier, vol. 42(C), pages 9-16.
    16. Fernández, Esteban & Fernández, Paula, 2008. "An extension to Sun's decomposition methodology: The Path Based approach," Energy Economics, Elsevier, vol. 30(3), pages 1020-1036, May.
    17. Banie Naser Outchiri, 2020. "Contributing to better energy and environmental analyses: how accurate are decomposition analysis results?," Cahiers de recherche 20-11, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    18. Lin, Boqiang & Ouyang, Xiaoling, 2014. "Analysis of energy-related CO2 (carbon dioxide) emissions and reduction potential in the Chinese non-metallic mineral products industry," Energy, Elsevier, vol. 68(C), pages 688-697.
    19. Das, Aparna & Paul, Saikat Kumar, 2014. "CO2 emissions from household consumption in India between 1993–94 and 2006–07: A decomposition analysis," Energy Economics, Elsevier, vol. 41(C), pages 90-105.
    20. Vaninsky, Alexander, 2014. "Factorial decomposition of CO2 emissions: A generalized Divisia index approach," Energy Economics, Elsevier, vol. 45(C), pages 389-400.

    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:enepol:v:38:y:2010:i:11:p:6910-6918. 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/locate/enpol .

    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.