Industrial companies’ demand for electricity: evidence from a micropanel

Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Drivers of Energy Efficiency in German Manufacturing December 2017 AbstractIncreasing energy efficiency is one of the main goals in current German energy and climate policies. We study the determinants of energy efficiency in the German manufacturing sector based on official firm-level production census data. By means of a stochastic frontier analysis, we estimate the cost-minimizing energy demand function at the two-digit industry level using firm-level heterogeneity. Apart from the identification of the determinants of the energy demand function, we also analyze potential drivers of energy efficiency. Our results suggest that there is still potential to increase energy efficiency in most industries of the German manufacturing sector.Furthermore, we find that in most industries exporting and innovating firms as well as those investing in environmental protection measures are more energy efficient than their counterparts. In contrast, firms which are regulated by the European Union Emissions Trading System are mostly less energy efficient than non-regulated firms.

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“…Woodland, 1993;Bjørner et al, 2001;Arnberg and Bjørner, 2007;Boyd and Lee, 2016;Lundgren et al, 2016;Abeberese, 2017.…”

Section: Resultsmentioning

confidence: 99%

Drivers of Energy Efficiency in German Manufacturing: A Firm-Level Stochastic Frontier Analysis

et al. 2017

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“…After the contribution of Bohi and Zimmerman (1984), the next review was Griffin (1993), which focused less on demand price elasticity and more on the new methodologies for econometric modeling of the electricity demand, both on the demand for electricity and its relation to the choice in domestic appliances. In the years following those reviews there were a few studies, and those that were closer to the present study in terms of data structure and methodology are Bjorner et al (2001), and Filippini (1995), which used microdata to estimate the elasticity in the industrial demand for electricity, in the first study, and residential demand in the second. In Bjorner et al 2001, we observe elasticities of around -0.5, and even lower in models which incorporate non-observable heterogeneity such as fixed effects.…”

Section: Literature Reviewmentioning

confidence: 90%

Non-linear Demand and Price: An Empirical Analysis of the Brazilian Industrial Electricity Consumption

Lucinda

Neto

2014

Brazilian Review of Econometrics

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In this paper we proposed an econometric model for industrial electricity demand in Brazil. Differently from residential customers, industries in Brazil, in addition to purchasing energy and capacity, also face a tariff menu with Time of Use pricing. Each item in this menu also has different components and price discrimination structure. All these characteristics pose an empirical problem that, so far, has not been faced together in the literature. This methodology was applied in a non-experimental micro data sample of 646 large Brazilian industrial customers (with demands over 300 KW) between January 2002 and December 2006. The results indicate demands for the various services (capacity and energy, separated between peak and non-peak hours) are price elastic, and at least in the AZUL tariff, there is complementarity between energy and capacity in the different periods. Thus, policies on tariff structures based on assumptions of an inelastic aggregate electricity demand could have effects that are quite different from what was intended.

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“…Electricity has an enormous effect on the modern world (Forrester, 2016). Also, Bjørner (2001) stated that electricity is the most flexible and clean source of energy that constitutes one of the vital infra-structural and regarded as input in production in the same way as labor, capital etc. in industrial sector.…”

Section: Electricity Industrial Production and Willingness To Pay Fomentioning

confidence: 99%

“…Through rationalizing the tariff structure, efficiency improvement and demand side management of electricity in industry, it helps in curtailment the wastage of electricity and thereby reduce the consumption of electricity without affecting the end-use benefits (Ghosh, 2002). Ghaderi et al (2006) found that the number of factories and level of economy activity have greater impact in energy consumption by the industry than the price changes of electricity but (Bjørner et al, 2001) say that considerably lower price and production elasticity are the estimators of electricity demand where industry with a high intensity of electricity have own-price elasticity. On the other hand, Alcorta et al (2013) point out that energy efficiency (EE) has become the new topic of interest for the manufacturing industry as it can reduce both economic and environmental impacts related to the energy consumption whereas Liu et al(2012) identified that industry's involvement level of electricity saving activities (ESAs) in significant and positive influences by energy management level of competitors and internal training on energy saving.…”

Section: Introductionmentioning

confidence: 99%

Industry Willingness to Pay for Adequate Electricity Supply: A Discourse on Sustainable Industrial Development

Devkota

Gautam

et al. 2019

Quest J. Mgt Soc. Sci.

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Background: Hopefully, if rest of things work as expected, the adequate supply of electricity, as one of the major industrial energy inputs, plays vital role in determining the industrial production, at large. In this paper, the present researchers assumed that the present state of scarcity of electricity may reveal their higher level of willingness to pay for higher energy efficient ratio as a pay-off of their improved industrial productivity. It is a proven fact that as one of the dominant indicators of national economic development and prosperity, effective electricity management procedures for industry increases significantly the productivity and operational efficiency. Objectives: The present paper attempts to explore the willingness of industrialists to pay more for adequate electricity supply for the industrial purpose in the present context of Nepal. Methods: Extensive desk review was carried out with a directed intension to develop insights on effective management of energy supply-related activities in industrial sector by analyzing the advances and trends as well as synergies in different intervention areas. Findings: A large number of academic and professional research works are carried out by different researchers on electricity management, with focus on identification of energy management models, corresponding to the industrial sector that shows individual attributes, social contexts, as well as participation and knowledge, which can have cumulative effect on WTP.WTP for adequate electricity is one of the key measures for sustainable economic growth for reliable and sensible management of forecasted energy demand. Conclusions: In spite of plethora of literature on electricity management and WTP, the solutions presented by different researchers are limited in scope. Still many researchers are working on tool contributions, but most of them are only providing solutions for specific regions and communities. There is a need to develop a generic electricity management system with tracing the industrialists’ willingness to pay for adequate electricity supply in a customized manner as a generic solution. The present researcher is hopeful that this work accomplishes this need. Implications: Required strict policy regulations at governing level and effective programming at implementation at industry level.

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Industrial companies’ demand for electricity: evidence from a micropanel

Cited by 44 publications

References 16 publications

Drivers of Energy Efficiency in German Manufacturing: A Firm-Level Stochastic Frontier Analysis

Drivers of Energy Efficiency in German Manufacturing: A Firm-Level Stochastic Frontier Analysis

Non-linear Demand and Price: An Empirical Analysis of the Brazilian Industrial Electricity Consumption

Industry Willingness to Pay for Adequate Electricity Supply: A Discourse on Sustainable Industrial Development

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