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The use of energy efficient technologies and energy conservation practices enhances the competitiveness of individual firms by minimizing production costs. Improved energy efficiency has also spillover benefits by reducing power outages caused by overburdened generation, transmission, and distribution infrastructure. Routine outages increase coping costs while reduced outages allow more customers to access power and may also improve customer satisfaction and payment rates. In this regard, the purpose of this proposed project is first to analyze the price elasticity of energy demand for manufacturing industries in Ethiopia and then to estimate the effect of energy conservation and energy efficient practices on firms’ energy consumption (demand).

Objectives of the project

The primary objective of this proposed study is to investigate the energy demand of manufacturing industries in Ethiopia and estimate whether energy efficient technologies and conservation practices are helping the firms to reduce their energy demand.   The main questions that the research project will address are the following:

1. Do adoption of energy efficient technologies and conservation practices help firms to reduce their energy demand?
2. What are the price elasticities of energy demand of manufacturing industries in Ethiopia?
3. How do price changes affect firms’ propensity to adopt energy efficiency measures?
4. To what extent can micro, small, and medium enterprises substitute between energy and other factors of production?
5. What are the other key factors that determine energy demand of manufacturing industries in Ethiopia?