Methods for Projecting UK Energy Demands Used in the Department of Energy

Wigley, K. J.; Vernon, Kristen

doi:10.1007/978-94-011-7355-1_11

Cited by 6 publications

(5 citation statements)

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“…For example, Wigley and Vernon (1982) find gas and petroleum to be price elastic in their estimation of a multinomial logit model, with magnitudes of the order -1-34 and -1.62 respectively. They report an extremely high solid fuel elasticity which appears biased upward by its low value in total fuel expenditure, whereas our long-run estimate is heavily weighted downward by the negative inff uence of changes in capital stock on the demand for coal.…”

Section: Resultsmentioning

confidence: 99%

“…Unfortunately, as in the case of capital-energy substitutability, the empirical evidence is mixed and the results difficult to interpret. Nordhaus (1976); Peterson (1979); Pindyck (1979); Uri (1979); and Wigley and Vernon (1982) agree that prices are important determinants of the pattern of energy demand in U.K. industry. However, estimates of the size and direction of influence, and the manner in which prices affect the process of adjustment of the stock of energy-using appliances through time, varies considerably.…”

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confidence: 93%

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The Demand for Energy by U.K. Manufacturing Industry *

Lynk

1989

The Manchester School

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The question of the degree to which industrial consumers respond to fluctuations in the relative prices of energy and non-energy inputs has received considerable attention in recent years. Until the first major oil price shock of 1973/74, attention had focused primarily on capital-labour substitutability, and the effect this has had in the determination of income shares and economic growth. In the past, energy was not seen as a potential constraint to future growth and was generally excluded from analyses of factor substitution and distribution. Along with raw materials, it was regarded as a separable input which could be ignored in growth forecasting and macroeconomic projections.' Not surprisingly this has now changed. The role of depletable resources in present and future production and consumption possibilities of firms and individuals is seen as increasingly relevant. In particular, the question of whether consumption eventually approaches zero as resources are depleted, or whether growth is always feasible, has been analysed by several writers under assumptions concerning, for example, production techniques, differential extraction costs and the probability of developing backstop technologies.2 Fundamental to this is the issue of capital-resource and capital-energy substitutability. Not surprisingly, the feasibility of continued growth under energy constraints depends largely on whether capital and energy are substitutes. However the relevant empirical evidence is inconclusive. The relationship between energy and capital has been analysed in both econometric and engineering contexts. Berndt and Wood (1975) and Berndt and Jorgenson (1973) for U. S. industry, Fuss (1977) for Canada, Magnus (1979) for the Netherlands, and Swain and Friede (1976) for West Germany, all report energy-capital complementarity. Yet, Griffin and Gregory (1976) and Pindyck (1979), for the OECD area, and Cowing (1974), Ohta (1975) and Halvorsen and Ford (1979), for the U.S., report energycapital substitutability. Naturally these studies differ in terms of model * Manuscript received 22.11.84; final version received 2.6.87. tThe author would like to thank Robert Bacon, David Pear-, Michael Webb and an anonymous referee for comments. Any errors or sins of omission are his own responsibility.'An exception to this is the study by Barnett and Morse (1969) which emphasizes the role of natural mources and the importance of substitutability in the production process. %ee, for example, Dasgupta and Heal (1974) and Solow and Wan (1976).

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Section: Resultsmentioning

confidence: 99%

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confidence: 93%

The Demand for Energy by U.K. Manufacturing Industry *

Lynk

1989

The Manchester School

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“…GDP; (ii) price; (iii) other variables, e.g. temperature; see Wigley and Vernon (1982) for a good example of this. Early Department of Energy models typically failed to include price (Ql of our key questions) so that present DOE methodology is a significant advance on this.…”

Section: Modelling Methodologymentioning

confidence: 99%

“…Freedman et al (1983) criticize the synthetic nature of much energy data, meaning that most numbers result from imputation rather than from measurement. The use of fuel efficiency factors: coal 0,5, coke/breeze 0'55, coke-oven gas 0,6, town gas 0,6, natural gas 0,65, electricity 0,9, and petroleum 0'55, in the Other Industry Sector of Wigley and Vernon (1982) deserve detailed comment. This is especially so since such constant measures are being applied to a diverse Other Industry Sector.…”

Section: Q2 What Factors Influence Energy Conservation?mentioning

confidence: 99%

Forecasts and Public Policy

Brown¹

1984

The Statistician

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Methods of long-range forecasting cover the spectrum from the simply naive to the over-sophisticated. The desire for forecasts presupposes an element of planning for the future and the existence of objectives and priorities for the years ahead. In appraising long-range energy forecasting methodology in the United Kingdom and the United States, a set of seven key questions are formulated. These relate to the role of price, levels of assumptions both hidden and explicit, sources of variability and data requirements. The need for data to be openly theory laden is emphasized and the ability of government to influence the future stressed and illustrated by Japanese energy conservation legislation. To this backdrop of government action or inaction are added approaches to model validation and a critique of econometric models. The virtue of "simple" models is scrutiuized in the context of recent findings in selection of subsets of variables in regression analysis. The paper ends with an emphasis on the desirability of good monitoring procedures of policy initiatives and speculates on the role that government agency structure may have in this.

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“…Sophisticated models came into being in the U.K. in the mid 1970s, the details of the first Department of Energy model being published in 1978 (Department of Energy 1978), while those of its successor have been partially released (Wigley and Vernon 1982). The situation in the early 1980s is that the highly simplistic energy-income relationships have largely been discarded for planning purposes, although observation of energy ratios and coefficients is still widespread in the analysis of developing countries where sophisticated modelling is sometimes limited by data.…”

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confidence: 99%