Energy demand in five major Asian developing countries

Abstract

The objectives of the present study are: 1) to examine the structures and trends in energy demand in five major developing countries of Asia (China, India, Indonesia, Korea, and Thailand) by sector and subsector; 2) to evaluate the energy policies of these countries; 3) to evaluate the extent to which energy conservation efforts could be undertaken; 4) to estimate through quantitative analysis key income and price elasticities and to project under several scenarios energy demand in the five countries, and 5) to explore practical policy measures and technical applications to promote efficient energy use in these countries. The study identifies the salient features of energy use in these countries as having: 1) high energy intensity; 2) high energy consumption in the industrial sector; 3) rapid growth in demand for electricity; 4) rapid motorization; 5) large losses in electricity generation and transmission; and 6) low energy prices. For the each of the five countries, econometric models to project energy demand were built, a process which included estimating income and price elasticities of demand for sectors and subsectors. The projections from the models show that the levels of energy demand of the five countries in 2005 will be 2.5 to 3 times as high as those in 1990 if no significant energy conservation measures are implemented. The authors suggest the the developing countries of Asia should begin to pay much more attention to energy conservation. Throughout all sectors, including both final energy consumption and energy conversions, energy is often wasted. The weighted average energy intensity to a physical unit of output of major industrial products such as iron and steel, cement, fertilizer, and pulp and paper, is estimated to be much higher in the five major Asian developing countries than in the industrialized countries. The analysis given in the paper suggests that energy prices are one of the key variables affecting the progress of energy conservation efforts. The study also suggests that regional and international cooperation and collaboration will be essential to attain efficient energy use in these Asian countries. This is partly because the impact from large incremental energy use in these countries will not be limited to them but will be regional and international in scale. The expected rapid increase in energy demand is likely to raise a number of other important issues. These include significant impacts on world energy markets and on local environmental problems.