Changes in energy intensities of Thai industry between 1981 and 2000: a decomposition analysis

Industrial demand accounts for about 30% of total final energy demand in Thailand, which experienced rapid increases in energy demand. This paper analyzes the changes in industrial energy intensities over a period of 20 years (1981-2000) and identifies the factors affecting the energy consumption using logarithmic mean Divisia decomposition technique. It is found that Thai industry has passed through four different phases of growth and energy consumption has closely followed the industrial growth pattern. Energy intensity of Thai industry decreased from 17.6 toe/million baht (constant 1988 prices) in 1981 to 15.8 toe/million baht (1988 prices) in 2000. Non-metallic mineral industry is the most intensive industry followed by basic metal, food and beverage, chemical and paper industries. The factor analysis indicates that both the structural effect and intensity effect contributed to a decline of aggregate intensity by 8% during 1981-1986 but in the rest of the periods, the two effects acted in opposite directions and thereby reducing the overall effect on aggregate intensity. Food and beverages, non-metallic mineral and chemical industries had significantly influenced the changes in aggregate intensity at sectoral level.