Structural Change, Sector Disaggregation and Electricity Consumption in uk Industry

Abstract

This paper discusses the decomposition technique for identifying the relative contributions of output growth, structural change and energy intensity to changes in industrial energy consumption. Apart from providing a deeper understanding of evolving patterns of energy consumption, such studies may have a role to play in assessing the degree to which policies and measures have contributed to the achievement of energy and environmental goals. However, there are a number of problems associated with the technique that the analyst needs to be aware of in using it and in interpreting the results it gives. These problems are discussed through analyzing the data on electricity consumption in UK industry. In particular, the problem associated with sector disaggregation is dealt with in detail.