Decomposition of industrial energy consumption: The energy coefficient approach

We introduce a new approach to industrial energy consumption decomposition to study the impacts of structural change and changes in sectoral energy efficiencies. This is an extension of the energy consumption approach reported in earlier studies and built upon the concept of energy coefficients and elasticities. The idea is to measure the impacts in terms of energy coefficients. Several ways of estimating these coefficients and some related statistical issues are described. An advantage of this approach is that the decomposition results obtained can be readily used to extrapolate possible future trends in energy demand. The results of application studies using the data of Singapore and Taiwan are presented.