Trends, Investment Behaviour and Policy Design
Edited by Raymond J.G.M. Florax, Henri L.F. de Groot and Peter Mulder
Chapter 4: Using Physical Indicators to Monitor Energy Efficiency in Energy-Extensive Sectors
4. Using physical indicators to monitor energy efficiency in energy-extensive sectors Andrea Ramírez, Martin K. Patel and Kornelis Blok 1 INTRODUCTION Defining and measuring energy efficiency as well as devising specific programmes encouraging energy efficiency constitute challenging tasks. Energy efficiency improvement refers to using less energy for producing the same amount of services or useful output. The measurement of (technical) energy efficiency at the lowest level of aggregation, for instance a machine, is simple and straightforward. However, policy-makers are generally interested in higher levels of aggregation, such as energy efficiency of an industrial sector or a country. In this case, energy efficiency cannot be measured directly and it therefore has to be analysed by the use of surrogate measures or indicators. An energy efficiency indicator should be easily observable with little or no time lag, close to the policy actions in the sense that it is quickly affected by the policy undertaken, and related to the target and goal variables. There is general consensus that an energy efficiency indicator should relate the amount of energy use to the useful output or activity by means of a ratio.1 Specifically, an efficiency indicator equals the amount of energy use divided by the amount of activity. Activity can be measured in economic or physical terms (for example, value-added or tonnes of product, respectively). In the first case, the indicator is referred to as economic energy intensity, in the second case as physical energy intensity. In the literature, energy efficiency is often analysed...
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