Evaluation of the Sectoral Energy Development Intensity in the Euro Area Countries

National economic development largely depends on the development of the energy sector. Its condition is most commonly assessed based on the situation over the last year. An alternative approach, however, is to evaluate fluctuations in development that have occurred over a longer period. In this paper, both methodologies have been applied, in order to assess, based on the results, which of them is more accurate. The article hypothesizes that the second method is more accurate. To prove this empirically, values representing the energy development in various sectors (industrial, agricultural, transport, service and the other (miscellaneous) sectors) in various European countries over the 2009-2018 period were estimated. The development fluctuations that occurred during the period under consideration were evaluated according to two parameters-intensity and stability. The first parameter was taken to be the difference between the values representing energy development in a given sectors at the end and beginning of the period under consideration. The second parameter was taken as the aggregate change across consecutive time slots during which positive or negative fluctuations occurred. The value of energy development in a particular economic sector was estimated as the product of the latter coefficient and the development intensity indicator. Comparison of the results representing evaluation of energy development based on the methodology proposed, and the analysis of the situation in the last year for which data was available revealed that the results in both cases differed, with the values varying from 2% (for the transport sector) to 4.5% (for the agricultural sector). Taking into account the fact that the indicator representing energy development in particular economic sectors was estimated as a percentage of the total sectoral energy consumption, this difference was relatively significant (22.7 and 1.5% respectively). Thus, the findings suggest that application of the proposed methodology is relevant. The methodology provides a greater potential to adequately research issues related to national economic development.

Automated summary

The development of national economic development depends on the energy sector, and assessing its condition can be done in two ways. This study suggests that evaluating fluctuations over a longer period is more accurate than just looking at the situation over the last year. The empirical results show that the proposed methodology provides a more relevant approach to researching issues related to national economic development.