Investigating the effects of freeing the price of energy carriers on the intensity of energy consumption in the country's electricity industry

Number of pages: 90 File Format: Not Specified File Code: 29624
Year: Not Specified University Degree: Not Specified Category: Industrial Engineering
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    Master's thesis in the field­ Industrial Engineering - Socio-Economic Systems

    February 2013

    Abstract

    In recent decades, electric energy has played a decisive role in the economic growth of countries along with other production factors, and its importance is still increasing, and the increasing dependence of industries on electric energy has caused the interaction of this sector with other economic sectors and has made the speed of economic growth and development dependent on the level of consumption of this energy, so that during the decade Recently, the economic growth of the world and the process of industrialization have increased the demand and consumption of energy in the industrial sector. The issue of the intensity of energy consumption and freeing the price of energy carriers is one of the important topics for all policymakers and economic planners. If a significant relationship can be found between these two variables, the price can be used as an effective policy tool to control and increase the efficiency of energy consumption. In this research, it tries to find the effects of freeing the price of energy carriers on the intensity of energy consumption, especially in the electricity industry. The findings of the research showed that after the liberalization of the price of energy carriers, the energy intensity decreases, so that the largest decrease was in the first year of the implementation of the liberalization policy, and in the following years, the amount of energy intensity reduction decreased, but the effect of production factors on energy intensity cannot be definitely determined, and production factors have an uncertain effect on the intensity of energy consumption, in some cases it causes a decrease in consumption and in some cases it causes an increase in consumption.

     

    Key words: liberalization The price of energy carriers, the intensity of energy consumption, the electricity industry, self-explanatory vector models, vector error correction model. Preface: One of the policies that will help to create an interaction between the supply and demand of electric energy is the targeting of subsidies, which by controlling the increasing consumption of electricity in the industry sector, optimizes the consumption pattern in the industry sector according to economic conditions. Previous studies and experiences of many of these countries have proven that the increase in the price of energy carriers due to the liberalization of the price of energy carriers is not stable and after one or more periods, this consumption increases and reaches the previous level. Therefore, the intensity of energy consumption, which is one of the productivity indicators, is very important. In this research, an attempt was made to find the effects of freeing the price of energy carriers on the intensity of energy consumption in the electricity industry, and then the effects of the implementation of this plan in future periods will be mentioned through suggestions. research method and statistical population and the importance and necessity of the research are stated.

    In the second chapter   with a brief introduction of the factors affecting the energy intensity index, an overview of countries' experience in freeing the price of energy carriers and the targeting of subsidies, as well as  Previous studies in three  The section of studies related to price liberalization of energy carriers and the targeting of subsidies and studies related to the intensity of energy consumption in various industries with an emphasis on electricity consumption and in the final section a review of the empirical literature on price liberalization and intensity of energy consumption.

    In the chapter Third, the research method includes the full introduction of the self-explanatory approach, and at the end, the theoretical foundations of the research as well as the research on the research model are presented. Also, appropriate tests will be conducted on the model and shocks of the price liberalization of energy carriers will be conducted. The fifth chapter, summary. The research is expressed and the conclusion is presented. At the end of this chapter, some suggestions for future research are proposed. 1- Chapter 1: Overview of the research Introduction: In this chapter, the general framework of the research is discussed. At first, the description and statement of the problem is mentioned, and then the importance of the issue, research objectives, hypotheses, innovation aspect and limitations of the research are briefly stated. In the following, the research method, which includes the type of study and the method of examining the hypotheses, the statistical population, the data collection tool, and the data analysis tool and the results, will be explained and finally the key words will be defined.The intensity of energy consumption has been achieved in proportion to the amount of consumption added to the energy, and the government is obliged to reduce the intensity of electricity consumption until the end of the fifth plan, and the liberalization of the country's energy carriers will lead to reducing the intensity of consumption. The high level of energy consumption in the country and its growing trend caused the necessary measures to be taken to reduce this consumption growth. Studies show that the country's factories and industries are energy-intensive, as well as the high energy consumption of electrical equipment used, the high loss of electrical energy in electricity transmission and distribution lines, the lack of development of the culture of optimal energy consumption, and the low price of energy carriers are the main reasons for the high intensity of energy consumption in the country, especially in manufacturing enterprises. In parallel, some measures were implemented to reduce the growth of energy consumption in the country, including the gradual liberalization of the price of energy carriers in the form of a plan to target the payment of subsidies. The plan to implement the price liberalization of energy carriers, which was approved by the Islamic Council in January 2018, is a very broad plan that has many effects on economic, cultural, social and other sectors and factors. will put All economic enterprises, directly and indirectly, will be affected by the plan, and the energy used was not excluded from this effect. According to the surveys conducted on the amount of electrical energy consumption leading to the year of the implementation of the law on the targeting of subsidies and comparing it with  The same period in the year after the implementation of the law shows that in addition to the growing trend, electric energy consumption has decreased by 10.8% in total.

     Given that one of the important goals of freeing the price of energy carriers was to improve productivity, manage energy consumption and modify the pattern of energy consumption in economic and manufacturing enterprises, therefore, in this research, we try to investigate and estimate the effects of freeing the price of energy carriers on the intensity of energy consumption in The electricity industry of the country is mentioned as a prerequisite for the implementation of this policy in the future periods. In addition, the estimation of the effect of the first phase of targeting subsidies on the intensity of energy consumption in the electricity industry will also be calculated and estimated in the research. The reform of the price of energy carriers increases the intensity of energy consumption in the country's electricity industry. 1-3 Research questions and hypotheses The hypotheses of this research are: Examining the price liberalization of energy carriers will reduce the intensity of energy consumption in Iran's electricity industry. They are:

    - To what extent has the liberalization of the price of energy carriers affected the reduction of energy consumption intensity in the electricity industry?

    1-4) Research method

    Scientific research can be divided into two categories, descriptive research (non-experimental) and experimental research based on how they are conducted. This thesis is a descriptive research. Descriptive research includes a set of methods whose purpose is to accurately describe the conditions or phenomena under investigation. The implementation of descriptive research can be simply to know more about existing conditions or to help the decision-making process about conditions or phenomena. Descriptive research can be divided into the following categories: survey research [1], observational research [2], historical research [3], retrospective (causal-comparative) research [4], correlational research [5], experimental research [6], research and development, evaluation research [7], action research (research). practical) [8],  case study research[9].

    This dissertation can be counted in the category of action research, solidarity and such a case study. In the action of research, the goal is to describe the conditions or phenomena related to the system and the relationships between them. In correlation analysis, we try to use statistical techniques to compare and the degree of correlation between variables. Correlational research is similar to causal-comparative research in many ways. The major advantage of correlational research is that it enables the researcher to discover and examine a large number of different relationships in a single study. In the case study, the results of the ‏research for  The expression of the relationship between the energy consumption intensity index and the price liberalization of the energy carrier has been used in the electricity industry in Iran.

  • Contents & References of Investigating the effects of freeing the price of energy carriers on the intensity of energy consumption in the country's electricity industry

    1- The first chapter. 1

    Introduction. 2

    1-1) Description and expression of the problem. 2

    1-2) research objectives. 3

    1-3) Research questions and hypotheses. 3

    1-4) research method. 3

    1-4-1) Self-explanatory vector model. 4

    1-5) statistical population, sampling method and sample size. 6

    1-6) Definition of concepts and specific words of the plan. 7

    1-6-1) Electricity. 7

    1-6-2) Freeing the price of energy carriers. 7

    1-6-3) Energy intensity. 7

    1-6-4) Self-regression model. 8

    1-6-5) Error correction pattern 8

    2- Second chapter. 8

    Introduction. 10

    2-1) Concepts of energy intensity. 10

    2-2) The main influencing factors on the energy intensity index. 11

    2-2-1) Energy intensity in Iran and the world. 11

    2-3) What is subsidy? 12

    2-4) types of subsidies. 13

    2-4-1) Division of subsidies based on the government's goals in paying them: 13

    2-4-2) Division based on the stage at which goods or services are subsidized (production to consumption): 13

    2-5) Subsidy payment background. 14

    2-6) Global experiences, to reform subsidies 15

    2-6-1) Poland. 16

    2-6-2) Bulgaria. 16

    2-6-3) China. 17

    2-6-4) Türkiye 17

    2-7) Effects of energy subsidies. 18

    2-7-1) Economic effects of paying subsidies 18

    2-7-2) Social effects of energy subsidies. 20

    2-7-3) Environmental effects of energy subsidies. 20

    2-8) An overview of studies conducted 22

    2-8-1) Studies conducted on the effects of liberalization and targeting of subsidies 22

    2-8-2) Studies conducted on the intensity of energy consumption. 23

    2-8-3) Studies on the release and intensity of energy consumption. 30

    2-9) chapter summary. 32

    3- The third chapter. 33

    3-1) Model estimation method. 34

    3-1-1) Self-explanatory vector model. 34

    3-1-2) Determination of optimal intervals 36

    3-1-3) Instant reaction function. 37

    3-1-4) Johanson convergence method. 40

    3-1-5) Error correction model 41

    3-1-6) Vector error correction model. 42

    3-1-7) Presentation of the model. 43

    3-1-8) Theoretical foundations of the model. 44

    3-2) Research model. 46

    3-2-1) Introduction of model variables. 49

    3-3) research data. 50

    3-3-1) Model data. 50

    3-4) chapter summary. 50

    4- The fourth chapter. 51

    Introduction. 52

    4-1) Statistical characteristics of variables 52

    4-2) Determining the collective degree of variables 53

    4-3) Estimation of vector self-explanatory model and interpretation of stimulus response functions. 57

    4-3-1) Choosing the optimal interval of the model. 57

    4-3-2) Self-explanatory vector test results. 58

    4-3-3) Examination of stimulus response functions. 60

    4-4) Estimation of long-term relationship. 63

    4-4-1) extraction of homo‏ collective vectors by Johanson method – Joselius. 63

    4-4-2) normalization of the co-joint vector. 65

    4-5) Estimation of vector error correction model. 66

    4-6) chapter summary. 67

    5- The fifth chapter. 68

    Introduction. 69

    5-1) Discussion and conclusion. 69

    5-2) Research limitations. 70

    5-3) suggestions. 71

    6- Sources and references 72

Investigating the effects of freeing the price of energy carriers on the intensity of energy consumption in the country's electricity industry