Analysis of Energy Demand and Its Determinant in Sugar Industry (Case study of Bisetoon Sugar Factory)

Sugar industry is an energy intensive industry. In this sub sector of economy energy is used as input. Allocation of a high quota of total energy consumption to sugar industry and distinction between determinant of energy demand in this sector and other economy sector appears the importance of analyzing of energy demand in sugar industry. So for analyzing of energy demand in sugar industry, in the first part of this paper explanatory variables which determine energy consumption in Bisetoon sugar factory are described briefly. At the second part a discussion take place on the stationary of variables. Then econometric models are specified and the elasticity of energy demand in Bisetoon sugar factory in respect to explanatory variables are estimated by using daily time series in 10/9/2004-20/12/2004. The finding of this paper reveals that the elasticity of energy demand in Bisetoon sugar factory in respect to all of the explanatory variable is low. the elasticity of energy demand in this factory in respect to raw juice Brix, Pulp Pressed, electricity, sugar beet and sugar production are. 12, -.098, -.308,. 052 and. 056 respectively. Non availability of substitute energy carrier, impossibility of substitution of energy with other production factors, impossibility of improvement in production technology because of shortage of study term, low quota of energy costs in respect to total production cost in factory, low quota of free demand for energy and high quota of captured demand for energy; are the major reasons for low energy demand elasticity in Bisetoon sugar factory.