Assessment of Effective Factors on Energy Intensity in Iran's Industrial Manufacturing

Due to the need for energy efficiency in industrial sector, assessment of the factors affecting energy intensity seems as an essential task. In this study, using panel data approach, the main factors affecting energy intensity in nine branches of Iran's industry during 1374-1389 period were examined. Results show that both energy price and technology are inversely related to the energy intensity. Meanwhile, the results also indicate that the speed of energy consumption (growth of energy consumption) is less than the speed of growing of value added in industries (growth of production) which in turn is indicative of the fact that bigger scale manufactures are more energy-efficient. Therefore, we recommende the use of bigger scale industies through integrating small scale ones. In addition, energy price adjustment, promotion of technology and inflation rate control, as the permanent policies to decrease energy intensity, could be effective.