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Title Evaluation of Energy Demand Management Programs in Industrial Sector

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 Korean government spent 66.7million US dollars, 25.5 percent of the total imports, on energy imports in 2005. As it shows, energy efficiency is directed linked not only with individual enterprise, but also with national competitive power.

Moreover, international community requires Korea to accept decisions from the Climatic Change Convention as Korea ranks 10th in the world in the consumption of energy. Therefore, energy demand management is more critical now. Because more than half of the total domestic consumption of energy has been consumed in industrial sector, the government has lent a low interest loan to businesses that have established energy saving facilities. In 2006, through a Special Energy Accounts, 4438millon Won has been supported for this program. Here, the Energy Demand Management Programs are evaluated by effectiveness and efficiency.

Results of evaluation point out that the efficiency of energy-efficient facilities has been decreased as the amount of energy saving per investment has been decreased since 2000. Moreover, performance management of greenhouse gases emission, one of the principal aims, is not sufficient. In detail, a voluntary agreement program increased dependence on government funds while the amount of private co-financing energy saving has been decreased. It is also found that the level of effects of this program is significantly low. Especially management of participant firms is insufficient because there is no restraint against those who fail to deliver on their decisions. A possible reason for these results is that energy efficiency in industrial sector has reached a certain level so that potential energy saving amount through energy efficient facility is grown smaller.

As the results showed above, it is necessary to have a remedy. First of all, middle and small size businesses should participate in energy efficiency program. Second, technical innovation is also important. It is also necessary to examine priority between technical development activities and facility supply activities since technical development activities are executed far fewer than facility supply activities. Lastly, performance management of emission of greenhouse gases should be enlarged in order to cope with the Climatic Change Convention.

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