RPR-2011-17 - ERIA

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However, if we consider the structure change in the relationship betweeneconomic growth and energy demand, the future scenarios would be different. Ashas been shown in Figure 4, in the advanced stage of development, the growth ofenergy demand would slow down. The change of relationship will change theregional energy outlooks significantly. Earlier developing countries, like China maydemand less energy in the future while later developing countries, like Cambodia,may demand more. The changes in policy implications could be: the region could berelatively easy about the demand from China; instead, it needs to pay more attentionto later developing countries; the later developing countries need to prepare for theirbooming demand of energy and consequent environmental impact. Improvement ofsupply capacity in those later developing countries thus should be a policy priority;In contrast, earlier developing countries should switch focus from the supply side tothe demand side, such as energy saving and energy productivity.Clearer understanding of energy trend, in particular, structure change, also helpsenergy modelers to improve their forecasting. Structural changes were deliberatelyomitted by energy modelers in predicting long run energy outlooks, which, however,play an important role in shaping future energy policy, and technical development.However, there is a general trend that the outlook of energy demand tends to extendrecent trend to the future, whilst avoiding structure change. One of the reasons forthis trend is that modelers themselves are not sure about the structure changes andthus tend to minimize their risks of predictions by not proposing scenarios that willsignificantly increase the level of acceptance of their outlooks (Matsui, <strong>2011</strong>).Considering the fact that EMI has been implementing in many regions, EMIstructural change would be popular and have impacts on a large scale. Therefore, adeep understanding of its impacts on energy trend is beneficial and necessary forfuture policy making.Another policy implication is that EMI can smooth the fluctuation of energydemand, which will improve energy security and thus should be firmly promoted. Inparticular, economies that are undergoing industrialization and commercializationshould adopt EMI, which can increase price elasticity of energy demand. Withincreased elasticity, the economy will be more resilient to price volatility.32
6. ConclusionThis study uses a dynamic panel regression technique to estimate a cross-countrydemand equation for energy products with 71-country and 45-year long data andexamines the cross-country income and price elasticities of energy consumptionduring the period of 1965-2010.The results show that countries in different stages of economic development andinstitutional arrangement associated with energy market would demonstrate differentlevels of demand for energy consumption and thus the energy consumption related toprice and income elasticities. In particular, we found that countries at specificeconomic development stages may have relatively higher income elasticity orrelatively lower price elasticities due to economic structural changes, which in turnmay impose additional pressure on the demand side of the international energymarket.Energy market integration can help to reduce such a pressure by improving thedomestic energy supply and thus reduce the price elasticity. This finding can be usedto shed light on explaining the recent boom in China’s and India’s ever increasingdemand for energy products in the East Asian Submit region, which has importantpolicy implication for assessing the role of EMI in the region to maintain sustainableregional economic development.ReferencesArellano, M. and S. Bond, S. (1991), 'Some Tests of Specification for Panel Data:Monte Carlo Evidence and an Application to Employment Equations', TheReview of Economic Studies 58, pp.277-297.Arellano, M. and O. Bover (1995), 'Another Look at the Instrumental VariableEstimation of Error Component Models' Journal of Econometrics 68, pp.29-51.Bernstein, M. A. and J. Griffin (2005), 'Regional Differences in the Price-Elasticityof Demand for Energy', Research Report, No. TR-2920NREL. Santa Monica:Rand Corporation.Blundell, R. and S. Bond (1998), 'Initial Conditions and Moment Restrictions inDynamic Panel Data Models', Journal of Econometrics 87, pp.115-143.33
Page 1: ERIA Research Project Report 2011,
Page 4 and 5: MR. GUMILANG ARYO SAHADEWO: Lecture
Page 6 and 7: studies, and energy sector subsidie
Page 8 and 9: faster growing energy demand when t
Page 10 and 11: in the core chapters are then summa
Page 12 and 13: developing optimal power generation
Page 14 and 15: utilities, encompassing generation,
Page 16 and 17: 7.36% (gas), 4.82% (paper & paper p
Page 18 and 19: “sectoral approach”, should be
Page 20 and 21: 1. IntroductionPrice and income are
Page 22 and 23: and how much benefit each country c
Page 24 and 25: Percentage of GrowthPrimary Energy
Page 26 and 27: logarithm of energy consumption per
Page 28 and 29: Based on the standard consumption f
Page 30 and 31: fossil fuel products increase (or d
Page 32 and 33: whereDitis a group of lagged indepe
Page 34 and 35: use immediately and later, in the l
Page 36 and 37: Energy consumption per capitadiffer
Page 38 and 39: coefficients in front of the dummy
Page 42 and 43: Bohi, D. R. and M. B. Zimmerman (19
Page 44 and 45: CHAPTER 3Power Generation and Cross
Page 46 and 47: of the Power Grid (Atchatavivan, 20
Page 48 and 49: instantaneous power demand levels.
Page 50 and 51: The third constraint, shown in equa
Page 52 and 53: Table 1: Growth Rate of Power Deman
Page 54 and 55: egimes on cross-border power trade
Page 56 and 57: geothermal, and wind capacities and
Page 58 and 59: There are a few reasons why natural
Page 60 and 61: development paths of power generati
Page 62 and 63: Economic Consulting Associates (ECA
Page 64 and 65: Table A3: Energy Resources for Powe
Page 66 and 67: CHAPTER 4Electricity Market Integra
Page 68 and 69: Figure 1: World Electricity Consump
Page 70 and 71: Figure 3: Sources of Electricity Ge
Page 72 and 73: comparatively low and fairly respon
Page 74 and 75: Table 2: Electricity Demand in EAS
Page 76 and 77: The Australian electricity sector u
Page 78 and 79: deregulation of retail power supply
Page 80 and 81: (www.des.gov.bn) and Berakas Power
Page 82 and 83: million kWhfrom Thailand and 1162 m
Page 84 and 85: o consumer protection and safety st
Page 86 and 87: CTE (2011), ‘Thai Power Sector’
Page 88 and 89: PWC (2009), Electricity Industry in
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1. IntroductionIn the fifth EAS, le
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the same type located in the same r
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Figure 1: The Type of FDI in Electr
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usually running small power plants.
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Table 1: The Technical Efficiency o
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market which would determine the el
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electricity, power plants are place
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can directly negotiate deals. The g
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6. China’s Lesson and Policy Impl
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ReferenceZunfa C. (2010), ‘Six Ch
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1. IntroductionAll around the world
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Unbundling can reduce the disadvant
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intermediate structure at the initi
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well as reducing transmission and d
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Table 2: Split of ECNZYear ChangesA
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The reform promoted a wave of merge
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major generators may have significa
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4.3. TransmissionThe electricity tr
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to have defined geographic areas of
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Figure 3: Efficiency Scores (Consta
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Figure 6: kWh-transmitted Weighted
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Figure 8: Retail Electricity Prices
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energy affordability issues the eff
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distribution businesses may discrim
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generation, distribution and retail
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Furthermore, the unbundling does no
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Arestis, P. and M. Sawyer (eds.), C
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Tirole, J. (1988), The Theory of In
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1. IntroductionEnergy cooperation i
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physical infrastructure had been de
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Although the Electricity Authority
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According to the Asian Development
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Table 4: Electricity Tariff of EDC
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2008). Overall power loss for the c
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IPPs, REEs, and other licensees tha
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4.2.1. Ministry of Industry, Mines
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2. National Transmission License: g
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5. Regional Cooperation and Trade5.
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Cambodia joined ASEAN as the 10 th
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Table 11: Generation Master Plan 20
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various connections and currently a
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Regarding big energy investment (ov
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7. Concluding RemarksSources in the
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EDC (2010), EDC Annual Report 2010.
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1. IntroductionThis research starts
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Table 1: Subsidy Expenditure in Ind
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2. Literature Review2.1. Fuel subsi
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Chateau (2011) would bring both eco
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Chateau, 2011). Burniaux and Chatea
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linkage effect explains that decrea
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Table 3: Social Accounting Matrix F
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Changes in the output multipliers i
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Table 6: Multiplier Analysis of SAM
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Table 8: Priority Sectors for Reall
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impact are: 1) chemical and cement
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Figure 5: Distributional Effect of
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continuing compensation programs fo
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International Energy Agency (IEA) (
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AppendixSectoral Reallocation Impac
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1. IntroductionThe East Asian (EA)
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Table 1: Fuel Subsidy in Malaysia 1
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Key Reasons Why Subsidy Needs to Be
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particularly at the Malaysian borde
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Figure 4 shows different magnitudes
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The United Nations Environment Prog
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All these assumptions are less real
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Since ( I - A ) -1 ( I - A ) = I, t
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fuel located at the total intermedi
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taxes include output taxes or subsi
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Table 7: Database Component of MIER
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Table 8: Malaysia GDP from Expendit
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Figure 6: Price Increase by Removal
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symbol star, i.e.* represents augme
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Table 11: Effects of Subsidy Remova
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Figure 8: Change of 10 % Indirect T
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unchanged, (the introduction of dum
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matters because it is the autonomou
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some supply side bottlenecks in the
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greater social protection in develo
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Department of Statistics, Malaysia
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AppendixesTable A1: Estimated Resul
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ChangeSector CE SectorVeneer Sheets
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1. BackgroundVietnam’s high econo
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2. Methodology and Data Preparation
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2.2. Deriving electricity intensity
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For the modeling purpose, this stud
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Further, the indirect effect (total
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that a number of households in rura
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ADB (Asian Development Bank) (2012b
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