Pillai N., Vijayamohanan (2019): Measuring Energy Efficiency: An Application of LMDI Analysis to Power Sector in Kerala.

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Abstract
The traditional interest in energy efficiency has centred on a single energy input factor in terms of productivity that has become famous through the index method in terms of activity output per unit of energy use. The enquiry that has proceeded from the problems associated with this method has led to identifying the effect source of variation, in terms of decomposition analysis. A variant of factor decomposition analysis, index decomposition analysis takes energy as a single factor of production, and explores various effects on energy intensity changes, by decomposing these changes into pure intensity changes effect, structure changes effect and activity changes effect. The present paper seeks to measure energy efficiency in Kerala in terms of index decomposition analysis, using the Logarithmic Mean Divisia Index (LMDI) method. For the empirical exercise of decomposition, we consider two energy sectors of Kerala: power sector and petroleum sector. Since the petroleum consumption data is available only for the period from 200708 to 201617, we take this as our study period for the analysis. As the measure of activity, we have the usual real gross State domestic product (GSDP at 201112 prices). First we analyse the two sectors separately, and then the combined sector is analysed for decomposition. The petroleum consumption data relating only to the secondary and tertiary subsectors, the lessefficient petroleum sector is found to overweigh the combined energy sector of Kerala to such an extent that the energyefficiency potential of these two subsectors gets clouded. A sufficiently high degree of energy efficiency in the petroleum sector can indeed reverse this anomaly.
Item Type:  MPRA Paper 

Original Title:  Measuring Energy Efficiency: An Application of LMDI Analysis to Power Sector in Kerala 
Language:  English 
Keywords:  Energy efficiency, Kerala, Power sector, Index decomposition, Divisia index. 
Subjects:  C  Mathematical and Quantitative Methods > C1  Econometric and Statistical Methods and Methodology: General > C13  Estimation: General C  Mathematical and Quantitative Methods > C5  Econometric Modeling > C51  Model Construction and Estimation Q  Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4  Energy 
Item ID:  101981 
Depositing User:  Vijayamohanan Pillai N 
Date Deposited:  23 Jul 2020 02:20 
Last Modified:  23 Jul 2020 02:20 
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URI:  https://mpra.ub.unimuenchen.de/id/eprint/101981 