Impact of inter-fuel substitution on energy intensity in Ghana
Boqiang LIN1(), Hermas ABUDU2
1. School of Management, China Institute for Studies in Energy Policy, Collaborative Innovation Center for Energy Economics and Energy Policy, Xiamen University, Xiamen 361005, China 2. School of Management, China Institute for Studies in Energy Policy, Collaborative Innovation Center for Energy Economics and Energy Policy, Xiamen University, Xiamen 361005, China; Belt and Road Research Institute, Xiamen University, Xiamen 361005, China
Energy intensity and elasticity, together with inter-fuel substitution are key issues in the current development stage of Ghana. Translog production and ridge regression are applied for studying these issues with a data range of 2000–2015. The current energy dynamics reveal the expected inverse relationship: higher energy intensity and lower elasticity with economic growth. There are evidences of energy-economic challenges: high energy cost, inefficiency and backfire rebound effect. The implications are higher energy losses in the system, more consumption of lower-quality energy together with low energy technology innovation. Energy is wasted and directly not productive with economic activities. It is observed further that the higher energy intensity invariably increases CO2 emission because approximately 95% of total energy is derived from hydrocarbons and biomass. An inter-fuel substitution future scenario design was further conducted and the results were positive with growth, lower energy intensity, and improved energy efficiency. Therefore, government and energy policymakers should improve energy efficiency, cost, and productiveness. That is, they should change energy compositions and augment energy technology innovation, thus, increasing renewable share to 15% by 2026, reducing wood and charcoal by about 69%, and increasing natural gas to about 776%. Energy policymakers should enhance the installation of smart energy, cloud energy solution, tokenization of energy system and storage.
Increasing renewable energy (RE) consumption from the current 5% to 15% and reduce electricity losses to 18%. Electricity is made of both hydro and other renewables.
1296.24
Total
7085.6
11693.39
Year
GDP
Capital
Labor
Energy
2016
$ 42690000000
$ 10170781235
12134966
11693.39
2026
2% projected
1.5% projected
2% projected
14% projected
Tab.7
Variable
Ridge coefficient
VIF
lnK
0.162154
0.0000
lnL
0.160244
0.0000
lnE
0.161517
0.0022
lnK·lnL
0.161206
0.0000
lnK·lnE
0.161570
0.0080
lnL·lnE
0.161497
0.0114
(lnK)2
0.010145
0.0011
(lnL)2
0.090123
0.0015
(lnE)2
0.070418
0.0003
R-Square= 0.998911, F-statistic= 0.85067
Tab.8
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