Page 4 - Driving Force for Energy Demand
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ving Forces for Energy Demand 2010
2. Driving Forces for Energy Demand
EIA and IEA uses three major input assumptions for energy demand: economic
growth, population, and energy policies. (National Petroleum Council: Raymond,
2007). For forecasting and comparison purposes, economic growth is shown
through Gross Domestic Product (GDP) and the effect of energy policy can for
example be shown through the change in the efficiency in the use of energy. GDP
provides a measure for the change in the demand for energy services reflecting
population growth, increased ownership levels of electric household appliances,
bigger houses, more personal travel by car, and other factors which drive up
energy use (Geller, Philip, Rosenfeld, Satoshi, & Fridtjof, 2006). Energy efficiency
on the other hand measures the effects of the combined effects of technological
advancement, education of consumers, and policy initiatives (National Petroleum
Council: Raymond, 2007) on the amount of energy used to provide the same
level of energy service. As can be seen in 2-1, the correlation between energy
demand and growth in GDP has been very strong for both OECD and non-OECD
2-1 Correlation of GDP and Energy Demand 1980 – 2030E
(ExxonMobil, 2009)
countries. However, as can be seen by the lower slope of the energy demand
graph for OECD countries, the relationship is less strong for OECD than non-OECD
countries. This is a result of improvements in energy efficiencies in these
countries. Energy efficiency improvement has been an important phenomenon
Posted by Etree Project Consultants Pvt Ltd only for knowledge sharing purpose. Page 4
2. Driving Forces for Energy Demand
EIA and IEA uses three major input assumptions for energy demand: economic
growth, population, and energy policies. (National Petroleum Council: Raymond,
2007). For forecasting and comparison purposes, economic growth is shown
through Gross Domestic Product (GDP) and the effect of energy policy can for
example be shown through the change in the efficiency in the use of energy. GDP
provides a measure for the change in the demand for energy services reflecting
population growth, increased ownership levels of electric household appliances,
bigger houses, more personal travel by car, and other factors which drive up
energy use (Geller, Philip, Rosenfeld, Satoshi, & Fridtjof, 2006). Energy efficiency
on the other hand measures the effects of the combined effects of technological
advancement, education of consumers, and policy initiatives (National Petroleum
Council: Raymond, 2007) on the amount of energy used to provide the same
level of energy service. As can be seen in 2-1, the correlation between energy
demand and growth in GDP has been very strong for both OECD and non-OECD
2-1 Correlation of GDP and Energy Demand 1980 – 2030E
(ExxonMobil, 2009)
countries. However, as can be seen by the lower slope of the energy demand
graph for OECD countries, the relationship is less strong for OECD than non-OECD
countries. This is a result of improvements in energy efficiencies in these
countries. Energy efficiency improvement has been an important phenomenon
Posted by Etree Project Consultants Pvt Ltd only for knowledge sharing purpose. Page 4
