electricity use and economic development

Energy Policy 28 (2000) 923}934

Electricity use and economic development

Ross Ferguson!,*, William Wilkinson", Robert Hill#!Solar Network Centre, 135 Sandyford Road, Newcastle upon Tyne NE2 1QR, UK"Energy Audit Company, Wandylaw, Chathill, Northumberland NE67 5HG, UK

#Northumbria Photovoltaics Applications Centre, University of Northumbria, Ellison Place, Newcastle upon Tyne NE1 8ST, UK

Received 2 March 2000

Abstract

A study of the relationship between electricity use and economic development in over one hundred countries, constituting over 99%of the global economy has been undertaken. Correlations between electricity consumption/capita and GDP/capita have beenanalysed and compared with those between total primary energy supply/capita and GDP/capita. A supporting analysis has correlatedthe proportion of energy used in the form electricity, the &e/E ratio', with GDP/capita. The general conclusions of this research are thatwealthy countries have a stronger correlation between electricity use and wealth creation than do poor countries and that, for theglobal economy as a whole, there is a stronger correlation between electricity use and wealth creation than there is between totalenergy use and wealth. The study also shows that, in wealthy countries, the increase in wealth over time correlates with an increase inthe e/E ratio. The results imply that the energy ratio ($/toe) should be replaced by the electricity ratio ($/kWh) as a developmentindicator and, more precisely, by the e/E ratio (kWh/toe). ( 2000 Elsevier Science Ltd. All rights reserved.

Keywords: Electricity; Energy; Development

1. Introduction

A preliminary study (Ferguson et al., 1997) in a re-search programme on the bene"ts of electricity genera-tion showed that for the G7 group of countries as a whole(USA, Japan, Germany, France, UK, Italy and Canada),constituting two-thirds of the global economy, there wasa well correlated relationship between electricity use andwealth creation but no correlation between total energyuse and wealth. The latter conclusion is surprising be-cause the energy ratio, GDP/tonne oil equivalent ($/toe),is widely accepted as an important indicator of a nation'sstage of development and is used as such by The WorldBank (World Bank, 1999). Such "ndings indicate theessential role that electricity, rather than energy in gen-eral, plays in the development of modern society with itssubstantial associated market and non-market bene"ts.

A wider study has now been undertaken covering overone hundred countries, together constituting over 99%of the global economy. The analysis is for all the coun-tries for which data are available (IEA, 1997) and covers

*Corresponding author. Tel.: #44-0191-281-5309; fax: #44-0191-281-8430.

the period 1960 } 1995 for OECD countries, excludingthe newly joined members of Mexico, Hungary and theCzech Republic where, as for all the Non-OECD coun-tries, data are only available for 1971 } 1995. The 24original OECD member states (excluding Mexico,Hungary and the Czech Republic) constitute the AnnexII group of countries, under the Framework ClimateChange Convention.

The correlations between electricity consumption/capita and GDP/capita and between total primary en-ergy supply/capita and GDP/capita over the periodsspeci"ed have been examined individually for all thecountries covered. A supporting analysis has also beenundertaken correlating the proportion of total primaryenergy supply taken as electricity consumption, the &e/Eratio' (in kWh/toe), with GDP/capita, individually for allthese countries.

Total primary energy supply includes all combustiblerenewables and wastes such as the use of biomass andanimal products in the rural areas of developing econo-mies.

The form of Gross Domestic Product (GDP) used inthe analysis is GDPPPP compiled using purchasingpower parities (PPPs). PPPs are the rates of currencyconversion which eliminate the di!erences in price levels

0301-4215/00/$ - see front matter ( 2000 Elsevier Science Ltd. All rights reserved.PII: S 0 3 0 1 - 4 2 1 5 ( 0 0 ) 0 0 0 8 1 - 1

between di!erent countries that occur because of #uctu-ations in exchange rates. A given sum of money, whenconverted into di!erent currencies at PPP rates, buys thesame basket of goods and services in all countries. TheGDP "gures are in 1995 US dollars.

2. National analyses

Table 1 shows the correlation coe$cients resultingfrom the analysis of the relationship between electricityconsumption/capita and GDP/capita for all the coun-tries individually for the periods speci"ed.

All of the OECD countries (excluding the new mem-bers of Mexico and the Czech Republic for which dataare only available from 1971) correlate with a coe$cientof at least 0.9 to one signi"cant "gure, demonstratinga very close relationship. Over half of the countriesanalysed, including three quarters of the Non-OECDcountries, do not show this close relationship betweenelectricity use and wealth creation. It can be seen fromTable 2 showing the GDP/capita of all the countries in1995 that these OECD countries (constituting over threequarters of the global economy in conventional GDPterms) comprise 23 of the 37 countries with GDP/capitaover $10,000. Of the remaining 14 high-income Non-OECD countries in this group, all except four havecorrelation coe$cients of at least 0.9 for electricityuse/capita with GDP/capita. The four exceptions are theoil producers, UAE, Qatar and Kuwait and the Nether-lands Antilles who re"ne oil from Venezuela. In addition,it can be seen in Table 1 that the nine countries with thestrongest negative correlations ('!0.6) are all majoroil producers. There are probably two reasons for this.Firstly, in these countries the oil and gas resources are socheap they are not used as e$ciently as in other coun-tries. Secondly, substantial changes in the world oil mar-ket have had a dominant e!ect on oil producers'economies, leading to falling GDP/capita in the latterpart of the period analysed.

Apart from these high-income economies with 1995GDP/capita over $10,000, there are a further 12 coun-tries that have a correlation coe$cient over 0.9 for elec-tricity use/capita with GDP/capita. Table 3 shows thatall twelve of these countries have major economies with1995 GDP of at least $10 billion and that in seven ofthese it exceeded $100 billion. These include China andIndia who are the only Non-OECD countries with 1995GDP over $1000 billion. These major developing econo-mies have rapidly industrialising regions whose energy(and particularly electricity) consumption dominate na-tional statistics. By comparison, the energy consumptionof their larger rural populations are essentially negligible.These industrial regions therefore appear to behave likeseparate industrial economies with a high GDP/capita(see Table 4). The remaining seven countries with econo-

mies over $100 billion, but whose electricity use/capitaand GDP/capita have a correlation coe$cient of lessthan 0.9, all have economies that are dominated by oil orother natural resource production. The overwhelminggeneral conclusion from this "rst analysis, however, isthat wealthy countries have a stronger correlation be-tween electricity use and wealth creation than do poorcountries.

In contrast, in Table 5, analysis of the relationshipbetween total primary energy supply/capita andGDP/capita shows a much wider spread, with countriesconstituting over half of the total OECD GDP andnearly two-thirds of the total G7 GDP having correla-tion coe$cients below 0.9, including the USA at 0.72 andthe UK at 0.64. As far as the global economy as a whole isconcerned, therefore, there is a much stronger correlationbetween electricity use and wealth creation than there isbetween total energy use and wealth.

To check that there have not been any spurious resultsproduced by having two di!erent periods for the dataanalysis (1960 } 1995 for the OECD and 1971 } 1995 forthe Non-OECD countries) a further analysis has beenundertaken using only 1971 } 1995 data for all countriesand excluding 1960 } 1970 data for the OECD. Theresults of this are shown in Table 6, where it can be seenthat, for the relationship between electricity consump-tion/capita and GDP/capita, all of the correlation coe$-cients for OECD countries are the same to at least onesigni"cant "gure as those found in the previous analysisfor the 1960 } 1995 data set (and two-thirds of thecountries' correlation coe$cients are the same to at leasttwo signi"cant "gures).

As a further check that similar conclusions arefound about the relationship between electricity use andwealth if the population "gures are not included (toensure that problems do not arise from populations be-ing the denominators on both axes), an analysis hasbeen undertaken of the correlations between elec-tricity consumption and GDP. The results of this areshown in Table 7. Again, all of the old OECD countrieswere found to have correlation coe$cients over 0.9 forthe relationship between electricity consumption andGDP. Furthermore, these are all within at least onesigni"cant "gure of the correlation coe$cients foundbetween electricity consumption/capita and GDP/capita,two-thirds of these being the same to at least two signi"-cant "gures.

The results of the supporting analysis examining therelationship between electricity/energy proportions (e/Eratios) and GDP/capita are shown in Table 8. All of theOECD countries have correlation coe$cients close to 0.9or above except for Norway at 0.5 and Switzerland at 0.1.Both these countries have an exceptionally high propor-tion of hydroelectricity generation, supplying over 99%of Norway's and over 50% of Switzerland's total electric-ity demand. In both countries this manifests itself in high

924 R. Ferguson et al. / Energy Policy 28 (2000) 923}934

Table 1Correlation coe$cents: electricity use/capita vs. GDPPPP/capita 1971}1995 (1960}1995 where available)

LIBYA !0.926 YEMEN 0.805 THAILAND 0.997UAE !0.908 URUGUAY 0.818 CANADA 0.997SAUDIARABI !0.881 BRAZIL 0.822 AUSTRIA 0.998VENEZUELA !0.842 KENYA 0.833 CHINESETAIPEI 0.998QATAR !0.760 CUBA 0.858IRAN !0.706 PANAMA 0.870IRAQ !0.704 BULGARIA 0.872BRUNEI !0.658 LUXEMBOU 0.876 AFRICA !0.130NIGERIA !0.635 ZAMBIA 0.882 LATINAMERIC 0.803SENEGAL !0.565 EGYPT 0.889 ASIA 0.999ETHIOPIA !0.537 GIBRALTAR 0.898 NONOECDEUR 0.791LEBANON !0.509 ROMANIA 0.910 MIDDLEEAST !0.816SOUTHAFRIC !0.489 OMAN 0.937 OECD 0.998BAHRAIN !0.463 UK 0.942PERU !0.430 MOROCCO 0.950KUWAIT !0.416 GERMANY 0.956ELSALVADOR !0.313 MALTA 0.958GABON !0.274 BANGLADESH 0.961BOLIVIA !0.208 NEPAL 0.967TANZANIA !0.184 SWITLAND 0.968IVORYCOAST !0.161 NZ 0.969ARGENTINA !0.077 TURKEY 0.970ZIMBABWE !0.008 TUNISIA 0.974TRINIDAD 0.017 PORTUGAL 0.976SUDAN 0.075 FINLAND 0.977BENIN 0.097 CHILE 0.977GUATEMALA 0.121 FRANCE 0.979FORMERYUGO 0.126 ICELAND 0.979MOZAMBIQUE 0.169 GREECE 0.979NANTILLES 0.266 CYPRUS 0.980HAITI 0.273 ISRAEL 0.981JORDAN 0.275 IRELAND 0.983HONDURAS 0.356 USA 0.984NICARAGUA 0.388 NORWAY 0.985ALGERIA 0.444 MALAYSIA 0.986GHANA 0.483 INDONESIA 0.986FORMERUSSR 0.541 SPAIN 0.986POLAND 0.543 SWEDEN 0.987ZAIRE 0.585 CHINA 0.988SLOVAKIA 0.607 PAKISTAN 0.989JAMAICA 0.615 SRILANKA 0.990SYRIA 0.651 AUSTRALIA 0.990COSTARICA 0.659 COLOMBIA 0.991DOMINICANR 0.670 HUNGARY 0.991CONGO 0.677 SOUTHKOREA 0.993PHILIPPINE 0.684 SINGAPORE 0.993CZECH 0.688 INDIA 0.993CAMEROON 0.693 DENMARK 0.994MYANMAR 0.694 JAPAN 0.995ANGOLA 0.718 BELGIUM 0.996PARAGUAY 0.733 NETHLAND 0.996MEXICO 0.773 ITALY 0.997ECUADOR 0.776 HONGKONG 0.997

e/E ratios, Norway's "gure being nearly three times theaverage for the OECD (see Table 4).

As with the correlations between electricity consump-tion/capita and GDP/capita, over half of the countriesanalysed (including over 85% of Non-OECD countries)do not show this close relationship between e/E ratiosand GDP/capita. The conclusion of this supporting anal-ysis is therefore that, in wealthy countries, the increase in

wealth over time correlates with an increase in the pro-portion of energy that is used in the form of electricity.

3. Regional analyses

To attempt to simplify the results of the study, andrepresent the conclusions in the clearest manner, the

R. Ferguson et al. / Energy Policy 28 (2000) 923}934 925

Table 21995 Annual GDPPPP/capita ($1000)

MOZAMBIQUE 0.201 FORMERUSSR 3.250 NZ 14.916SUDAN 0.419 MOROCCO 3.267 FINLAND 15.637ETHIOPIA 0.504 LITHUANIA 3.309 CHINESETAIPEI 15.809HAITI 0.526 INDONESIA 3.501 OECD 16.100TANZANIA 0.626 PERU 3.557 UK 16.920BENIN 0.642 LEBANON 3.571 GERMANY 17.233ZAIRE 0.659 BULGARIA 3.598 ITALY 17.476NICARAGUA 0.678 LATVIA 3.813 SWEDEN 17.477ZAMBIA 0.733 ECUADOR 4.066 AUSTRALIA 17.642HONDURAS 0.818 SOUTHAFRIC 4.153 BELGIUM 17.694ANGOLA 0.824 JAMAICA 4.155 AUSTRIA 17.795NEPAL 0.937 LIBYA 4.617 NETHLAND 17.812IRAQ 0.986 PANAMA 4.650 ICELAND 18.124TAJIKISTAN 1.012 RUSSIA 4.656 FRANCE 18.294BANGLADESH 1.045 TUNISIA 4.670 CANADA 18.933GEORGIA 1.083 BELARUS 4.705 DENMARK 19.418NIGERIA 1.184 JORDAN 4.803 JAPAN 19.718INDIA 1.186 COLOMBIA 5.024 SWITLAND 20.512IRAN 1.199 COSTARICA 5.215 KUWAIT 21.223KENYA 1.297 ESTONIA 5.221 NORWAY 21.333AZERBAIJAN 1.375 TRINIDAD 5.403 HONGKONG 21.485IVORYCOAST 1.391 BRAZIL 5.542 USA 23.377YEMEN 1.468 SLOVAKIA 5.546 SINGAPORE 26.154SENEGAL 1.542 GABON 5.556 LUXEMBOU 28.012KYRGYZSTAN 1.562 POLAND 5.560CAMEROON 1.578 HUNGARY 6.004ARMENIA 1.684 TURKEY 6.326ZIMBABWE 1.716 THAILAND 6.523GHANA 1.770 MEXICO 6.779MOLDOVA 1.859 ARGENTINA 6.783CONGO 1.905 VENEZUELA 7.461PAKISTAN 1.944 URUGUAY 7.704BOLIVIA 2.213 CZECH 7.765PHILIPPINE 2.219 MALAYSIA 8.168UZBEKISTAN 2.252 SAUDIARABI 9.096MYANMAR 2.458 BRUNEI 9.552TURKMENIST 2.475 BAHRAIN 9.707FORMERYUGO 2.506 UAE 10.370SRILANKA 2.657 GREECE 10.479EGYPT 2.692 CHILE 10.855CHINA 2.725 SOUTHKOREA 11.298GUATEMALA 2.812 PORTUGAL 11.317ELSALVADOR 2.820 GIBRALTAR 11.333UKRAINE 2.901 MALTA 11.568CUBA 2.912 NANTILLES 11.800ALGERIA 2.993 CYPRUS 12.767SYRIA 2.994 SPAIN 12.911DOMINICANR 3.092 QATAR 13.719PARAGUAY 3.114 ISRAEL 13.833KAZAKHSTAN 3.186 OMAN 13.895ROMANIA 3.227 IRELAND 14.806

countries that have been individually analysed have beengrouped into the IEA standard classi"cations of theOECD and the "ve Non-OECD regions of Africa, LatinAmerica (excluding Mexico), Asia (excluding China),Middle East and Non-OECD Europe. The average cor-relation coe$cients for these for the analyses of therelationships between electricity consumption/capita andGDP/capita, total primary energy supply/capita and

GDP/capita, and e/E ratios and GDP/capita are present-ed in the Summary Table 9 and in the following histo-grams.

Fig. 1 shows the correlation coe$cients for electricityconsumption/capita and GDP/capita. The very strongnegative correlation for the Middle East oil producers isparticularly evident while there is essentially no correla-tion for the low-income African economies. In contrast,


Table 3Annual data for all countries (1995)

$ billion GWh ktoe

ALGERIA 83.7 14414 24346ANGOLA 8.9 645 959ARGENTINA 235.2 52819 53016ARMENIA 6.3 3049 1671AZERBAIJAN 10.3 13563 13033BAHRAIN 5.6 4269 5606BANGLADESH 125.2 6795 8061BELARUS 48.7 25312 23808BENIN 3.5 237 107BOLIVIA 16.4 2637 2939BRAZIL 882.4 256336 122928BRUNEI 2.8 1502 3240BULGARIA 30.3 28689 22878CAMEROON 21.0 2610 1556CHILE 154.5 24125 15131CHINA 3271.1 766552 850521CHINESETAIPEI 336.7 105171 64644COLOMBIA 184.9 34893 24120CONGO 5.0 544 367COSTARICA 17.7 4549 1971CUBA 32.1 8992 10437CYPRUS 9.3 2223 1952DOMINICANR 24.2 4603 3801ECUADOR 46.7 6872 6343EGYPT 155.6 52149 34678ELSALVADOR 15.9 2873 2322ESTONIA 7.8 4484 5126ETHIOPIA 28.4 1233 1178FORMERUSSR 951.1 948775 942619FORMERYUGO 56.1 56616 28478GABON 6.0 809 644GEORGIA 5.9 5720 1850GHANA 30.2 5435 1564GIBRALTAR 0.3 83 133GUATEMALA 29.9 2800 2191HAITI 3.8 227 357HONDURAS 4.8 1972 1401HONGKONG 133.0 29856 13615INDIA 1102.4 314844 241291INDONESIA 676.8 51015 85785IRAN 76.9 64774 84069IRAQ 19.8 29000 25061ISRAEL 76.4 26816 16650IVORYCOAST 19.5 2226 1362JAMAICA 10.5 5167 3003JORDAN 20.2 4778 4323KAZAKHSTAN 52.9 51602 55432KENYA 34.6 3278 2907KUWAIT 35.2 20371 14494KYRGYZSTAN 7.1 7524 2315LATVIA 9.6 4500 3702LEBANON 14.3 4904 4486LIBYA 25.0 18000 15781LITHUANIA 12.3 6355 8510MALAYSIA 164.5 39245 33252MALTA 4.3 1259 839MOLDOVA 8.1 6581 4177MOROCCO 86.8 10785 8253MOZAMBIQUE 3.3 1164 662MYANMAR 110.9 2343 2234NANTILLES 2.4 791 1852NEPAL 20.1 829 700

$ billion GWh ktoe

NICARAGUA 3.0 1192 1159NIGERIA 131.8 9436 18393OMAN 30.6 6173 4013PAKISTAN 252.5 39448 31536PANAMA 12.2 2866 1783PARAGUAY 15.0 3299 1487PERU 84.7 12502 10035PHILIPPINE 152.2 23673 21542POLAND 214.7 89691 94472QATAR 8.8 5607 7863ROMANIA 73.2 36354 44026RUSSIA 690.0 618330 604461SAUDIARABI 172.6 74127 82742SENEGAL 13.1 755 866SINGAPORE 78.2 17972 21389SLOVAKIA 29.8 21729 17447SOUTHAFRIC 172.2 143172 88882SOUTHKOREA 506.7 162250 145099SRILANKA 48.1 3767 2469SUDAN 11.2 999 1745SYRIA 42.2 9857 14121TAJIKISTAN 5.9 13811 3283TANZANIA 18.6 1553 947THAILAND 379.9 71226 52125TRINIDAD 7.0 3625 6925TUNISIA 42.0 5944 5314TURKMENIST 11.2 4999 13737UAE 25.5 19070 28454UKRAINE 149.6 143495 161586URUGUAY 24.5 5012 2035UZBEKISTAN 51.3 39450 46543VENEZUELA 161.7 55001 47140YEMEN 22.4 1505 2933ZAIRE 28.9 5790 2058ZAMBIA 6.6 5157 1302ZIMBABWE 18.9 8127 4673AUSTRALIA 318.5 145108 94200AUSTRIA 143.2 46673 26383BELGIUM 179.4 68448 52378CANADA 560.5 448563 233328CZECH 80.2 48082 39013DENMARK 101.5 31235 20481FINLAND 79.9 65304 28670FRANCE 1063.7 342577 241322GERMANY 1407.3 451209 339287GREECE 109.6 34087 23698HUNGARY 61.8 27441 25103ICELAND 4.8 4291 2143IRELAND 53.0 14841 11461ITALY 1000.8 238152 161360JAPAN 2476.0 870132 497231LUXEMBOU 11.5 4995 3378MEXICO 642.5 119524 133371NETHLAND 275.2 83079 73292NZ 53.4 30545 15409NORWAY 93.0 104171 23715PORTUGAL 112.2 28364 19245SPAIN 506.2 140911 103491SWEDEN 154.4 124482 50658SWITLAND 145.2 48693 25142TURKEY 390.0 65133 62187UK 991.7 297779 221911


Table 4Annual indicators for all countries (1995)

$1000/capita kWh/capita toe/capita kWh/toe

ALGERIA 2.993 516 871 0.592ANGOLA 0.824 60 89 0.673ARGENTINA 6.783 1523 1529 0.996ARMENIA 1.684 811 444 1.825AZERBAIJAN 1.375 1806 1735 1.041BAHRAIN 9.707 7360 9666 0.762BANGLADESH 1.045 57 67 0.843BELARUS 4.705 2448 2303 1.063BENIN 0.642 43 20 2.215BOLIVIA 2.213 356 397 0.897BRAZIL 5.542 1610 772 2.085BRUNEI 9.552 5179 11172 0.464BULGARIA 3.598 3411 2720 1.254CAMEROON 1.578 196 117 1.677CHILE 10.855 1695 1063 1.594CHINA 2.725 639 709 0.901CHINESETAIPEI 15.809 4938 3035 1.627COLOMBIA 5.024 948 655 1.447CONGO 1.905 207 140 1.482ZAIRE 0.659 132 47 2.813COSTARICA 5.215 1338 580 2.308CUBA 2.912 817 948 0.862CYPRUS 12.767 3045 2674 1.139DOMINICANR 3.092 589 486 1.211ECUADOR 4.066 599 553 1.083EGYPT 2.692 902 600 1.504ELSALVADOR 2.820 511 413 1.237ESTONIA 5.221 3009 3440 0.875ETHIOPIA 0.504 22 21 1.047FORMERYUGO 2.506 2530 1272 1.988GABON 5.556 749 596 1.256GEORGIA 1.083 1059 343 3.092GHANA 1.770 318 92 3.475GIBRALTAR 11.333 2767 4433 0.624GUATEMALA 2.812 264 206 1.278HAITI 0.526 32 50 0.636HONDURAS 0.818 333 237 1.408HONGKONG 21.485 4823 2200 2.193INDIA 1.186 339 260 1.305INDONESIA 3.501 264 444 0.595IRAN 1.199 1010 1311 0.770IRAQ 0.986 1443 1247 1.157ISRAEL 13.833 4858 3016 1.611IVORYCOAST 1.391 159 97 1.634JAMAICA 4.155 2050 1192 1.721

Table 3 (continued)

$ billion GWh ktoe

USA 6149.5 3041786 2078265OECDTOT 17165.1 6925605 4606122WORLD 29560.3 10841019 8219879NONOECDTOT 12395.3 3915414 3613757AFRICA 1080.1 302841 225751LATINAMERICA 1992.0 499580 326800ASIA 4132.4 887746 762015NONOECDEUR 418.0 238669 211236MIDDLEEAST 550.6 271251 294815

the middle-income Non-OECD European and LatinAmerican economies both show a good correlation,whilst the Asian &Tiger' economies and high-incomeOECD economies are extremely well correlated.

In Fig. 2, showing the correlation coe$cients for totalprimary energy supply/capita and GDP/capita, the pic-ture is more complicated. The Middle East oil producershave a strong negative correlation, even for total energyuse with wealth, and the low-income African economiesstill show no correlation. However, a very strong correla-tion is seen for the relationship between energy use andwealth for the middle-income Non-OECD European andLatin American economies alongside the extremelystrong correlation shown by the Asian economies. In


Table 4 (continued)


JORDAN 4.803 1135 1027 1.105KAZAKHSTAN 3.186 3107 3337 0.931KENYA 1.297 123 109 1.128SOUTHKOREA 11.298 3618 3235 1.118KUWAIT 21.223 12272 8731 1.405KYRGYZSTAN 1.562 1665 512 3.250LATVIA 3.813 1786 1469 1.216LEBANON 3.571 1223 1119 1.093LIBYA 4.617 3327 2917 1.141LITHUANIA 3.309 1708 2288 0.747MALAYSIA 8.168 1949 1651 1.180MALTA 11.568 3403 2268 1.501MOLDOVA 1.859 1516 962 1.576MOROCCO 3.267 406 311 1.307MOZAMBIQUE 0.201 72 41 1.758MYANMAR 2.458 52 50 1.049NANTILLES 11.800 3955 9260 0.427NEPAL 0.937 39 33 1.184NICARAGUA 0.678 272 265 1.028NIGERIA 1.184 85 165 0.513OMAN 13.895 2806 1824 1.538PAKISTAN 1.944 304 243 1.251PANAMA 4.650 1090 678 1.607PARAGUAY 3.114 683 308 2.219PERU 3.557 525 421 1.246PHILIPPINE 2.219 345 314 1.099POLAND 5.560 2323 2447 0.949QATAR 13.719 8761 12286 0.713ROMANIA 3.227 1602 1940 0.826RUSSIA 4.656 4172 4079 1.023SAUDIARABI 9.096 3906 4359 0.896SENEGAL 1.542 89 102 0.872SINGAPORE 26.154 6011 7154 0.840SLOVAKIA 5.546 4046 3249 1.245SOUTHAFRIC 4.153 3453 2144 1.611SRILANKA 2.657 208 136 1.526SUDAN 0.419 37 65 0.572SYRIA 2.994 699 1001 0.698TAJIKISTAN 1.012 2365 562 4.207TANZANIA 0.626 52 32 1.640THAILAND 6.523 1223 895 1.366TRINIDAD 5.403 2810 5368 0.523TUNISIA 4.670 661 591 1.119TURKMENIST 2.475 1108 3046 0.364UAE 10.370 7752 11567 0.670UKRAINE 2.901 2784 3135 0.888URUGUAY 7.704 1576 640 2.463UZBEKISTAN 2.252 1733 2044 0.848FORMERUSSR 3.250 3242 3221 1.007VENEZUELA 7.461 2538 2175 1.167YEMEN 1.468 99 192 0.513ZAMBIA 0.733 574 145 3.961ZIMBABWE 1.716 738 424 1.739AUSTRALIA 17.642 8037 5218 1.540AUSTRIA 17.795 5800 3279 1.769BELGIUM 17.694 6752 5167 1.307CANADA 18.933 15151 7881 1.922CZECH 7.765 4654 3776 1.232DENMARK 19.418 5975 3918 1.525FINLAND 15.637 12785 5613 2.278FRANCE 18.294 5892 4150 1.420GERMANY 17.233 5525 4155 1.330GREECE 10.479 3261 2267 1.438


Table 4 (continued)


HUNGARY 6.004 2664 2437 1.093ICELAND 18.124 16071 8026 2.002IRELAND 14.806 4143 3200 1.295ITALY 17.476 4158 2818 1.476JAPAN 19.718 6929 3960 1.750LUXEMBOU 28.012 12183 8239 1.479MEXICO 6.779 1261 1407 0.896NETHLAND 17.812 5377 4744 1.134NZ 14.916 8532 4304 1.982NORWAY 21.333 23903 5442 4.393PORTUGAL 11.317 2860 1941 1.474SPAIN 12.911 3594 2639 1.362SWEDEN 17.477 14086 5732 2.457SWITLAND 20.512 6877 3551 1.937TURKEY 6.326 1057 1009 1.047UK 16.920 5080 3786 1.342USA 23.377 11563 7900 1.464OECD 16.100 7562 4317 1.642

Table 5Correlation coe$cents: energy use/capita vs. GDPPPP/capita 1971}1995 (1960}1995 where available)

UAE !0.910 ISRAEL 0.769 FRANCE 0.987LIBYA !0.806 GIBRALTAR 0.776 HONGKONG 0.987BRUNEI !0.706 IVORYCOAST 0.777 ICELAND 0.988SAUDIARABI !0.654 FORMERUSSR 0.794 THAILAND 0.989IRAQ !0.586 ROMANIA 0.801 CYPRUS 0.990ETHIOPIA !0.581 ZAIRE 0.806 GREECE 0.991NIGERIA !0.556 CUBA 0.810 CHINESETAIPEI 0.992SUDAN !0.545 JAMAICA 0.814 SOUTHKOREA 0.993PANAMA !0.523 ANGOLA 0.824 SPAIN 0.993NANTILLES !0.511 GERMANY 0.828 INDONESIA 0.994LUXEMBOU !0.511 MOZAMBIQUE 0.859 PAKISTAN 0.995IRAN !0.487 HUNGARY 0.866 INDIA 0.995QATAR !0.323 DOMINICANR 0.867BOLIVIA !0.250 BRAZIL 0.877BAHRAIN !0.170 NETHLAND 0.879ELSALVADOR !0.155 YEMEN 0.884 AFRICA 0.063URUGUAY !0.119 TANZANIA 0.893 LATINAMERICA 0.933SOUTHAFRIC !0.090 MALTA 0.905 ASIA 0.998TRINIDAD !0.085 SLOVAKIA 0.915 NONOECDEUR 0.972VENEZUELA !0.070 CANADA 0.922 MIDDLEEAST !0.711KENYA !0.028 BELGIUM 0.922 OECD 0.705KUWAIT 0.121 MOROCCO 0.923LEBANON 0.188 NZ 0.925HAITI 0.249 ECUADOR 0.926ZIMBABWE 0.280 NEPAL 0.926BENIN 0.331 ITALY 0.928NICARAGUA 0.397 PERU 0.932HONDURAS 0.407 COSTARICA 0.936MYANMAR 0.423 IRELAND 0.938CONGO 0.454 CHILE 0.941SENEGAL 0.487 SINGAPORE 0.951POLAND 0.514 CHINA 0.954GABON 0.528 OMAN 0.954ARGENTINA 0.535 BANGLADESH 0.955JORDAN 0.560 MEXICO 0.955CZECH 0.573 AUSTRIA 0.958PHILIPPINE 0.585 JAPAN 0.958GHANA 0.594 NORWAY 0.966


Table 5 (continued)

FORMERYUGO 0.616 SWEDEN 0.968UK 0.638 AUSTRALIA 0.972SRILANKA 0.642 MALAYSIA 0.972CAMEROON 0.656 FINLAND 0.974ALGERIA 0.686 TURKEY 0.975BULGARIA 0.693 EGYPT 0.976DENMARK 0.696 COLOMBIA 0.977SYRIA 0.711 ZAMBIA 0.980USA 0.717 SWITLAND 0.981GUATEMALA 0.740 TUNISIA 0.982PARAGUAY 0.765 PORTUGAL 0.983

Table 6Correlation coe$cents: Electricity use/capita vs. GDPPPP/capita 1971}1995

LIBYA !0.926 MYANMAR 0.694 COLOMBIA 0.991UAE !0.908 ANGOLA 0.718 HUNGARY 0.991SAUDIARABI !0.881 PARAGUAY 0.734 FRANCE 0.991VENEZUELA !0.842 MEXICO 0.773 CANADA 0.992QATAR !0.760 ECUADOR 0.776 BELGIUM 0.992IRAN !0.706 YEMEN 0.805 ITALY 0.992IRAQ !0.704 URUGUAY 0.818 SOUTHKOREA 0.993BRUNEI !0.658 BRAZIL 0.822 SINGAPORE 0.993NIGERIA !0.635 KENYA 0.833 INDIA 0.993SENEGAL !0.566 CUBA 0.858 NETHLAND 0.993ETHIOPIA !0.537 PANAMA 0.870 AUSTRIA 0.994LEBANON !0.509 BULGARIA 0.872 HONGKONG 0.997SOUTHAFRIC !0.489 ZAMBIA 0.882 THAILAND 0.997BAHRAIN !0.463 EGYPT 0.889 CHINESETAIPEI 0.998PERU !0.430 GIBRALTAR 0.898KUWAIT !0.416 LUXEMBOU 0.900ELSALVADOR !0.313 GERMANY 0.904GABON !0.274 NZ 0.907BOLIVIA !0.208 ROMANIA 0.910TANZANIA !0.184 OMAN 0.937IVORYCOAST !0.161 SWITLAND 0.945ARGENTINA !0.077 FINLAND 0.948ZIMBABWE !0.009 MOROCCO 0.950TRINIDAD 0.017 UK 0.952SUDAN 0.075 MALTA 0.958BENIN 0.097 BANGLADESH 0.961GUATEMALA 0.122 SPAIN 0.965FORMERYUGO 0.126 NEPAL 0.967MOZAMBIQUE 0.169 ICELAND 0.969NANTILLES 0.266 TUNISIA 0.974HAITI 0.273 TURKEY 0.974JORDAN 0.275 CHILE 0.978HONDURAS 0.356 CYPRUS 0.980NICARAGUA 0.388 ISRAEL 0.981ALGERIA 0.444 SWEDEN 0.983GHANA 0.483 GREECE 0.984FORMERUSSR 0.541 NORWAY 0.984POLAND 0.544 AUSTRALIA 0.985ZAIRE 0.585 USA 0.985SLOVAKIA 0.607 JAPAN 0.985JAMAICA 0.615 DENMARK 0.985SYRIA 0.651 PORTUGAL 0.986COSTARICA 0.659 MALAYSIA 0.986DOMINICANR 0.670 INDONESIA 0.986CONGO 0.677 IRELAND 0.988PHILIPPINE 0.684 CHINA 0.988CZECH 0.688 PAKISTAN 0.989CAMEROON 0.693 SRILANKA 0.990


Table 7Correlation coe$cents: Electricity use vs. GDPPPP 1971}1995 (1960}1995 where available)

LIBYA !0.642 ZIMBABWE 0.889 KENYA 0.990IRAQ !0.621 BULGARIA 0.889 IRELAND 0.990ZAIRE !0.492 ETHIOPIA 0.895 MALAYSIA 0.990NICARAGUA !0.442 CONGO 0.898 CHINA 0.992LEBANON !0.232 DOMINICANR 0.898 SPAIN 0.992ZAMBIA !0.025 GIBRALTAR 0.898 SRILANKA 0.993KUWAIT 0.044 BAHRAIN 0.904 TUNISIA 0.993MOZAMBIQUE 0.065 CUBA 0.904 SOUTHKOREA 0.993FORMERYUGO 0.266 URUGUAY 0.907 USA 0.993GEORGIA 0.278 ALGERIA 0.914 CHILE 0.993ANGOLA 0.392 LUXEMBOU 0.916 INDIA 0.994GABON 0.446 BOLIVIA 0.917 ISRAEL 0.994TRINIDAD 0.532 ROMANIA 0.921 PAKISTAN 0.994BRUNEI 0.563 PARAGUAY 0.923 DENMARK 0.995ARMENIA 0.564 MYANMAR 0.927 AUSTRALIA 0.995MOLDOVA 0.572 SYRIA 0.938 THAILAND 0.996NANTILLES 0.575 SENEGAL 0.944 SINGAPORE 0.996ELSALVADOR 0.590 EGYPT 0.948 NEPAL 0.996SAUDIARABI 0.626 YEMEN 0.950 BELGIUM 0.996RUSSIA 0.626 UK 0.954 JAPAN 0.996FORMERUSSR 0.640 GERMANY 0.958 ITALY 0.997IRAN 0.664 PHILIPPINE 0.962 COLOMBIA 0.998ESTONIA 0.705 MALTA 0.963 AUSTRIA 0.998AZERBAIJAN 0.744 MEXICO 0.965 NETHLAND 0.998LITHUANIA 0.748 BRAZIL 0.965 HONGKONG 0.998CZECH 0.753 QATAR 0.965 CANADA 0.999BENIN 0.753 GUATEMALA 0.966 CHINESETAIPEI 0.999LATVIA 0.753 ECUADOR 0.969IVORYCOAST 0.755 TANZANIA 0.970JAMAICA 0.762 HONDURAS 0.973GHANA 0.764 SOUTHAFRIC 0.974PERU 0.766 SWITLAND 0.976UKRAINE 0.778 FINLAND 0.981SUDAN 0.780 PANAMA 0.981UAE 0.807 MOROCCO 0.982HAITI 0.809 COSTARICA 0.982POLAND 0.811 PORTUGAL 0.983UZBEKISTAN 0.814 TURKEY 0.984KYRGYZSTAN 0.814 FRANCE 0.984TURKMENIST 0.815 CYPRUS 0.986NIGERIA 0.830 GREECE 0.986SLOVAKIA 0.830 INDONESIA 0.986BELARUS 0.832 OMAN 0.987KAZAKHSTAN 0.842 NZ 0.987ARGENTINA 0.864 ICELAND 0.987JORDAN 0.865 SWEDEN 0.988VENEZUELA 0.872 NORWAY 0.989TAJIKISTAN 0.878 BANGLADESH 0.989CAMEROON 0.879 HUNGARY 0.989

contrast, the correlation for the high-income OECDeconomies is good, but substantially lower than thatfor the middle-income economies, suggesting thattotal energy use is not as important for the moreadvanced (post-industrial) stages of economic devel-opment.

Fig. 3 shows the correlation coe$cients for e/E ratiosand GDP/capita. This analysis essentially combines theprevious two and provides the clearest illustration of therelationship between electricity use and wealth creation.

The Middle East oil producers still show a very strongnegative correlation, whilst the low-income African econ-omies are fairly strongly negatively correlated. No cor-relation is seen for the former centralised economies ofNon-OECD Europe, though the middle-income econo-mies of Latin America are well correlated. Finally, therapidly industrialising &Tiger' economies of Asiashow a very strong correlation, only surpassed by theextremely strong correlation of the high-income OECDeconomies.


Table 8Correlation coe$cents: Electricity/energy proportions vs. GDPPPP/capita 1971}1995 (1960}1995 where available)

SAUDIARABI !0.901 MEXICO 0.495 PAKISTAN 0.978LIBYA !0.889 NANTILLES 0.517 USA 0.980ZAMBIA !0.858 NORWAY 0.521 INDIA 0.984VENEZUELA !0.833 SYRIA 0.538 BELGIUM 0.984QATAR !0.831 CONGO 0.559 AUSTRALIA 0.987PERU !0.794 NEPAL 0.579 GERMANY 0.988IRAN !0.759 URUGUAY 0.624SENEGAL !0.708 CHILE 0.632IRAQ !0.690 PANAMA 0.636UAE !0.682 MALTA 0.677 AFRICA !0.410LEBANON !0.651 BULGARIA 0.689 LATINAMERIC 0.739SOUTHAFRIC !0.651 EGYPT 0.692 ASIA 0.948TANZANIA !0.647 KENYA 0.707 NONOECDEUR 0.039GIBRALTAR !0.605 BRUNEI 0.722 MIDDLEEAST !0.836FORMERYUGO !0.590 MALAYSIA 0.723 OECD 0.988IVORYCOAST !0.584 CYPRUS 0.730KUWAIT !0.554 PARAGUAY 0.735ELSALVADOR !0.540 BRAZIL 0.762CAMEROON !0.498 THAILAND 0.785GABON !0.491 BANGLADESH 0.809FORMERUSSR !0.451 ISRAEL 0.810BAHRAIN !0.441 CUBA 0.813GUATEMALA !0.421 LUXEMBOU 0.846ARGENTINA !0.328 NZ 0.847ALGERIA !0.289 ROMANIA 0.854BENIN !0.213 ITALY 0.869ZAIRE !0.208 TURKEY 0.878MOZAMBIQUE !0.206 ICELAND 0.892ZIMBABWE !0.154 OMAN 0.900COSTARICA !0.047 HONGKONG 0.901HAITI !0.037 SPAIN 0.904NICARAGUA !0.028 PORTUGAL 0.909SLOVAKIA 0.058 HUNGARY 0.914POLAND 0.059 SOUTHKOREA 0.925NIGERIA 0.064 NETHLAND 0.935DOMINICANR 0.087 MOROCCO 0.937ETHIOPIA 0.108 FRANCE 0.940BOLIVIA 0.112 SRILANKA 0.943SWITLAND 0.113 SWEDEN 0.946GHANA 0.165 IRELAND 0.949PHILIPPINE 0.172 CANADA 0.950JORDAN 0.206 CHINESETAIPEI 0.952TRINIDAD 0.212 TUNISIA 0.952HONDURAS 0.256 GREECE 0.953ANGOLA 0.267 FINLAND 0.960SINGAPORE 0.289 UK 0.962CZECH 0.306 JAPAN 0.964SUDAN 0.360 DENMARK 0.966JAMAICA 0.382 CHINA 0.967ECUADOR 0.436 AUSTRIA 0.967MYANMAR 0.440 COLOMBIA 0.970YEMEN 0.481 INDONESIA 0.973

Table 9Summary Table. Correlation Coe$cients for OECD and Non-OECD Regions

Electricity consumption/capita vs.GDPPPP/capita

Total primary energy supply/capita vs.GDPPPP/capita

Electricity/energy (e/E)ratios vs. GDPPPP/capita

Middle East !0.816 !0.711 !0.836Africa !0.130 0.063 !0.410Non-OECD Europe 0.791 0.972 0.039Latin America 0.803 0.933 0.739Asia 0.999 0.998 0.948OECD 0.998 0.705 0.988


Fig. 1. Correlation coe$cients for electricity consumption/capita vs.GDPPPP/capita

Fig. 2. Correlation coe$cients for total primary energy supply/capitavs. GDPPPP/capita

Fig. 3. Correlation coe$cients for electricity/energy (e/E) ratios vs.GDPPPP/capita

4. Conclusions

A study has been undertaken of the relationship be-tween electricity use and economic development for overone hundred countries constituting over 99% of theglobal economy. The general conclusions of this researchare that:

1. Wealthy countries have a stronger correlation be-tween electricity use and wealth creation than do poorcountries.

2. For the global economy as a whole, there is a strongercorrelation between electricity use and wealth creationthan there is between total energy use and wealth.

3. In wealthy countries, the increase in wealth over timecorrelates with an increase in the proportion of energythat is used in the form of electricity, the e/E ratio.

This research does not prove that there is a causalrelationship between electricity use and economic devel-opment and it is possible that this may not be provable.However, the study does show that, in the technologicalworld of the late 20th Century, economic developmentoccurred &hand in hand' with electricity consumptionand, in particular, with an increase in the proportion ofenergy used in the form of electricity.

The &link' that was historically assumed to exist be-tween energy consumption and economic growth wasbrought into question with the improvements in energye$ciency and intensity that occurred following the oilcrises of the 1970s. The &uncoupling' e!ects of these cha-nges are clearly seen in the lower correlation betweenenergy and wealth for the OECD &post-industrial' econo-mies. These results suggest that the relationship withwealth creation would be more appropriately attributedto electricity consumption than energy use in general.They also imply that the energy ratio ($/toe) should bereplaced by the electricity ratio ($/kWh) as a develop-ment indicator and, more precisely, by the e/E ratio(kWh/toe).

Protecting the environment and improving the stan-dard of living for the world population requires expen-sive resources. At this current time, as attempts are beingmade to develop internationally agreed policies to tackleclimate change, it appears that the need to support thewidespread availability of low-carbon electricity generat-ing technologies with the lowest associated environ-mental costs is of overriding importance.

Acknowledgements

The authors would like to thank George Barrett, IanTeasdale, Tony Robson, Bill Turner, Dave Thomas,Michael Jones-Lee, Nick Eyre, Carolyn Craggs, TimBarmby and Martin Robson for their valuable com-ments, and PowerGen and the Westlakes Research Insti-tute for their support.Professor Bob Hill has sadly diedsince this study was undertaken. He played a leading rolein the development of photovoltaics worldwide and sawthis research as an important argument for the wide-spread adoption of solar powered electricity generation.

References

Ferguson, R et al. 1997. Bene"ts of electricity generation. IEE Engineer-ing Science and Education Journal 6(6), 255}259.

IEA, 1997. Energy Statistics and Balances for OECD countries 1960} 1995 and Non-OECD Countries 1971 } 1995. OECD, Paris.

The World Bank, 1999. World Development Report 1998/99. OxfordUniversity Press, New York.


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