Chapter 2: Relation between Energy consumption & GDP 4-13
3.14 Overview of Thailand
security. Thus, energy diversification should be the prime goal to Thailand to ensure sustainable supply of energy in the country. As of 2014, 45% of primary energy comes from natural gas, 36% comes from oil, 16% comes from coal and 3% comes from hydro. Bioenergy is the dominant renewable energy source in Thailand's end use sectors with 15 TWh generated in 2015 (equal to about 75% of all renewable generation in Thailand. In 2016, 60% of Thailand's energy came from imports.
Therefore energy security with low energy price and environmental sustainability are the key priorities for Thailand and is document in the Thailand Integrated Energy Blueprint 2015-2036. The Blueprint was drafted in 2015 by merging five major energy plans into one documented. Thailand has also committed to reduce greenhouse gas emissions by 20-25% also set a renewable energy target of 30% of total final energy consumption. Alternative Energy Development Plan. Both the policy promotes highly efficient green alternatives in Thailand.
The average demand for electricity increased by 3.6% per year during 20014–2017.
Total electricity consumption in 2016 was 182,846 gigawatt-hours (GWh), a 4.6%
increase from the 2015 level of 174,834 GWh. Peak demand reached a record 29,619 MW in 2016, an 8.3% increase from 27,346 MW in 2015. The overall growth in electricity consumption resulted from the economic recovery (mainly increased manufacturing activities due to the government stimulus program), while the rise in peak demand was largely caused by hot summer weather. The Ministry of Energy expects electricity demand in 2017 to exceed the 2016 total by 2.9%. The trend in electricity consumption in the PEA area closely tracks but consistently exceeds the rate of growth of total electricity consumption.
Sl.No. Years
Energy Consumption
(TWh)
GDP
The Relation Between
Energy Consumption
and GDP Annual
GDP ($)
GDP Growth
(%)
01. 2017 3.403×10ˆ-6 460000.00 3.9
Feedback Hypothesis
02. 2016 3.002×10ˆ-6 411847.00 3.3
03. 2015 2.820×10ˆ-6 401370.00 3.0
04. 2014 2.539×10ˆ-6 407339.00 1.0
Table 3.14: Energy Consumption and GDP for Thailand [25], [24].
This paper tries to investigate the relationship between energy consumption and GDP for Thailand over the period from 2014 to 2017 and found the Feedback hypothesis Applying NARDL approach. The main finding from the NARDL evidence co integration among economic growth, energy consumption, capital formation and trade openness and found asymmetry is significant for both the long run and short run for economic growth, which implies that taking nonlinearity and asymmetry into account is important when studying the relationship between economic growth and energy consumption.
Chapter 4
Conclusion
Energy consumption is part of energy homeostasis. Energy consumption refers to all the energy used to perform an action, manufacture something or simply inhabit a building. The Gross Domestic Product (GDP) is one of the primary indicators used to gauge the health of a country's economy. It represents the total dollar value of all goods and services produced over a specific time period, often referred to as the size of the economy. It is important to understand the effects of increased energy consumption on GDP so that economic policy makers can predict the impacts of implementing energy policies on a country’s GDP. The existence of panel stationary for thirteen Asian countries and bidirectional causality between energy consumption and GDP in all sample countries. In this research, we found the various types of test by which it can be determined the relation between energy consumption and GDP such as
The standard test of Granger causality test.
Unit root test
The co integration test.
Vector error correction analysis
Non linear Autoregressive Distributed Lag.
To find long-run and short-run elasticity between energy consumption and GDP we found those types of tests which is used thirteen Asian countries. Using panel co- integration approach over the period 2014-2017 for Asian economies, this study investigates the dynamic linkages between energy consumption and GDP. The results show that, in the short run, feedback relationship holds between energy consumption and GDP and between energy consumption and exports. In the long run, the feedback relation holds between energy and GDP while unidirectional causality holds from export to energy. Thus, feedback hypothesis between energy and GDP holds in the short as well as in the long run. First, we applied a panel unit root test to determine the integration order of each variable. Second, we apply the panel co integration test to determine whether there is a long-run relationship between the model’s variables.
Finally, we found the panel co integration test which has used to determine the existence of a long-run relationship between variables, taking into account the cross- sectional dependence and possible structural breaks in the long-run relationship.We found Feedback hypothesis for three countries such as Bangladesh, Vietnam and Thailand which defines that if Energy consumption increases then GDP will be increased as the same direction. Again we found the Neutrality hypothesis for eight Asian countries such as Maldives, Nepal, Pakistan, Sri-Lanka, Afghanistan, Bhutan, China and Malaysia that defines there are no relationship between energy consumption and GDP. Further we found the Growth hypothesis and Conservation for India and Philippine respectively. The growth hypothesis refers the reverse relationship. And the Conservation hypothesis refers that a unidirectional causality relationship between energy consumption and GDP.
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