Decomposition analysis of electricity use in the Jordanian industrial sector

Industry is responsible for about 31% of total electricity demand in Jordan. This paper analyses the changes in industrial electricity demand during the years 1998-2005 and identifies the factors affecting this demand. In order to gain greater insight into past electricity use changes, a Laspeyers decomposition approach was used to disaggregate changes in the electricity demand of the Jordanian industrial sector into production, structural and efficiency effects. To accomplish the objectives of this paper, the Jordanian industrial sector was disaggregated into seven sub-sectors: mining of chemical and fertilizer minerals, paper, plastics, petroleum, cement, iron and steel, and other industries. A major finding of this paper is that, although increased industrial production caused electricity demand to increase between 1998 and 2005, significant improvements in energy efficiency and structural shift have contributed to reducing the rate of this increase.