Measuring the Effects of Energy Efficiency Policies: Evidence from Turkish Manufacturing Industry

Abstract

This chapter aims to provide insight on the energy efficiency concept, which is getting progressively important with increased awareness on environmental issues and rising demand and costs of energy. Within the scope of energy efficiency, a contemporary approach is the energy management system (EnMS) that represents continuous and systematic efforts for energy improvements. After discussing the basics of both concepts, we conduct an empirical analysis in Turkish manufacturing industry firms that applied EnMS principles and carried out energy efficiency increasing activities between 2015 and 2017. In the empirical analysis, we make use of data collected in the scope of a recent project implemented by the Ministry of Energy and Natural Resources in cooperation with the United Nations Development Programme (UNDP) and United Nations Industrial Development Organization (UNIDO), with funding from the Global Environment Facility (GEF). The data includes information about several small-/medium-/large-scale manufacturing firms that have been carrying out energy efficiency activities at different sizes. We approach to the data from two perspectives and provide firm-based evaluations and activity-based evaluations. Our modeling scheme includes both energy-related (capacity, energy savings, emission savings) and financial indicators (cost, financial savings) to observe the performance of applied projects and applying firms. The aim of the empirical part includes providing evidence from a microlevel analysis of how EnMS policies can be efficient in line with identifying the prominent energy efficiency activities and determining the most efficient sub-sectors. We employ a well-known relative efficiency measurement methodology, data envelopment analysis, and present results at sub-sectoral level and identify the efficient sectors. The efficient projects are identified and discussed relying on their size. The evaluations on projects are also supported with a simulation model to observe the level of robustness in efficiency scores. All evaluations also consider two different subsets of the firms as ISO certification holders and small- and medium-sized enterprises (SMEs). We derive conclusions on EnMS applications at firm, sub-sectoral, and activity level.