Reasons behind Energy Changes of the Jordanian Industrial Sector

In order to identify main drivers behind changes in electricity and fuel consumptions in the industrial sector in Jordan; a Laspeyers decomposition technique was used to identify the factors affecting this demand during 1998-2005 years Changes have been disaggregated into production, structural, and efficiency effects. Results of the decomposition analysis prove that rapid increases in industrial production output had the most important implications on increasing energy demand in this sector which causes an annual energy increase of 10.9% yr^-1. However, these increases were countered mainly by efficiency gains and to a lesser extent by structural changes in the industrial sector. The analysis showed that the structural effect contributes to an annual energy decrease of around 2.28% yr^-1 while the efficiency effect contributes to an annual energy decrease of 5.65% yr^-1.