Analysis of energy consumption by industry - based on a current database informing about specific enterprises. Phase 1

The overall purpose of this study is 1) to increase the understanding of which factors are influencing industrial energy comsumption and 2) to analyse the impact of Danish policy instruments targeting industrial energy consumption. Statistic analyses of micro level data will be used to fulfil this purpose. Nearly all Danish and international studies on energy consumption in industry have been based on aggregated data. Using data at the micro level (company level) has several advantages. One advantage is that data at company level are suited for analysis of policy instruments that are individual to each company, e.g. subsidy for investment in energy efficiency and the complicated Danish CO_2 tax system with five different tax levels for each fuel. Information about individual companies can be very rich - with many variables and with a large heterogeneity in these. Such information is often lost when aggregating data. The database has been constructed and the quality of the data has been controlled. The first econometric analyses of the data have been carried through. We have developed flexible models, where the elasticities of price and value added are allowed to vary with a number of characteristics of the industrial companies such as industrial subsector, company size, electricity and energy intensity of the company and type of ownership. We find that all these characteristics have an influence on the size of the elasticities with respect to price and/or value added. As an example it appears that the electricity demand in electricity intensive companies is (relatively) more sensible to changes in electricity price. The database and the estimations can be further developed and can enhance the understanding of industrial energy consumption. The elasticities can be used to qualify macro models and the results of the impact of policy instruments can be used to improve regulation