Applying ex-post index decomposition analysis to primary energy consumption for evaluating progress towards European energy efficiency targets

• Published in: Energy efficiency 2017-12, Vol.10 (6), p.1381-1400
• Main Authors: Reuter, Matthias, Patel, Martin K., Eichhammer, Wolfgang
• Format: Article
• Language: English
• Subjects: Decomposition; Economics and Management; Electric power generation; Electric power plants; Electricity; Electricity consumption; Electricity generation; Energy; Energy consumption; Energy conversion; Energy conversion efficiency; Energy Efficiency; Energy management; Energy Policy; Energy technology; Environment; Environmental Economics; Original Article; Power plants; Renewable and Green Energy; Renewable energy technologies; Sustainable Development; Thermal power; Thermal power plants
• ISSN: 1570-646X; 1570-6478
• DOI: 10.1007/s12053-017-9527-2

Monitoring the progress of the European Union and its Member States towards the EU’s energy efficiency target is a crucial part of the mandatory process as defined in the Energy Efficiency Directive 2012/27/EU. In this paper, we conduct index decomposition analyses to show the effects of both policies and autonomous developments driving the changes of primary energy consumption for the European Union (EU28) and its Member States for the time period of 2000 to 2014, with a comparative analysis of Germany and Poland. These analyses are based on the logarithmic mean Divisia index methodology and primarily on data compiled by Eurostat. They are carried out on two levels, i.e. on the level of total primary energy consumption as well as on the level of primary energy consumption related to electricity generation. The first level examines the influences of changes in final energy consumption and changes within the energy conversion sector on primary energy consumption. With the second level, we provide insights into the effects of changes in electricity consumption and production. According to our first-level analysis, the consumption of primary energy in the EU28 is primarily influenced by an increased share of electrical energy and the counteracting effect of rising efficiency in electricity generation, induced by an increasing share of renewable energies. Furthermore, the reduction of final energy consumption had a significant decreasing influence on primary energy consumption in the European Union. The second level of our analysis regarding electricity generation shows that the increasing effect on primary energy consumption due to the rising consumption of electricity was mainly compensated by substituting nuclear and thermal power plants by renewable energy technologies.