Energy Efficiency

, Volume 11, Issue 6, pp 1449–1464 | Cite as

Identifying energy inefficient industries vulnerable to trade dependence of energy sources

  • Dongsuk Kang
  • Duk Hee LeeEmail author
Original Article


Korea has transformed itself from a developing country to an Organisation for Economic Co-operation and Development member country and a donor for developing nations. It has ranked among the world’s top 10 energy-consuming countries. Its industrial sector depends heavily on the utilization of fossil fuels and consumes more than 45% of national energy expenditure. Plausible concerns about industrial energy inefficiency can upset the structural dependence of the whole Korean industry on the energy sector. Using Korea’s industrial input–output data from 2010 to 2012, this research conducts a simulation analysis on trade suspension resulting from shocks provided by each of the six energy industries. This study investigates the propagation of these shocks across 160 industries. We found that the petroleum, electricity, and town gas industries are the most influential energy industries in terms of diffusion of trade shocks to other industries, and the number of propagation steps of energy shocks decreases over time due to the industries’ unimproved energy inefficiency. Therefore, governments need to address this interdependence within energy sectors and between energy and non-energy industries, with integrated policies for energy efficiency and contingency plans.


Energy consumption Trade shocks Transactional interdependence Industrial inefficiency 


Compliance with ethical standards

Conflict of interest

The authors declare that they have no conflict of interest.


  1. Aldasoro, I., & Angeloni, I. (2015). Input-output-based measures of systemic importance. Quantitative Finance, 15(4), 589–606. Scholar
  2. Andrew, R. M., & Peters, G. P. (2013). A multi-region input-output table based on the Global Trade Analysis Project database (GTAP-MRIO). Economic Systems Research, 25(1), 99–121.CrossRefGoogle Scholar
  3. Bank of Korea (BOK) (2014a). Economic statistics system: input-output tables (2010–2012).Google Scholar
  4. BOK (2014b). Interpretation on input-output analysis (written in Korean): Bank of Korea (BOK).Google Scholar
  5. Burgherr, P., & Hirschberg, S. (2014). Comparative risk assessment of severe accidents in the energy sector. Energy Policy, 74, S45–S56.CrossRefGoogle Scholar
  6. Cetin, T. (2014). Structural and regulatory reform in Turkey: lessons form public utilities. Utilities Policy, 31, 94–106.CrossRefGoogle Scholar
  7. Chappin, E. J. L., & van der Lei, T. (2014). Adaptation of interconnected infrastructures to climate change: a socio-technical systems perspective. Utilities Policy, 31, 10–17.CrossRefGoogle Scholar
  8. Chopra, S. S., & Khanna, V. (2015). Interconnectedness and interdependencies of critical infrastructures in the US economy: implications for resilience. Physica A-Statistical Mechanics and Its Applications, 436, 865–877. Scholar
  9. Chun, H. M., Munyi, E. N., & Lee, H. (2010). South Korea as an emerging donor: challenges and changes on its entering OECD/DAC. Journal of International Development, 22(6), 788–802. Scholar
  10. Chung, W. S., Tohno, S., & Shim, S. Y. (2009). An estimation of energy and GHG emission intensity caused by energy consumption in Korea: an energy IO approach. Applied Energy, 86(10), 1902–1914. Scholar
  11. Contreras, M. G. A., & Fagiolo, G. (2014). Propagation of economic shocks in input-output networks: a cross-country analysis. Physical Review E, 90(6).
  12. Cooremans, C. (2011). Make it strategic! Financial investment logic is not enough. Energy Efficiency, 4(4), 473–492.CrossRefGoogle Scholar
  13. IEA (2014). Key World Energy Statistics 2014: energy balances of OECD countries 2014. International Energy Agency (IEA).Google Scholar
  14. Kang, D., & Lee, D. H. (2016). Energy and environment efficiency of industry and its productivity effect. Journal of Cleaner Production, 135, 184–193.CrossRefGoogle Scholar
  15. Kang, D., & Lee, D. H. (2017). Energy shocks and detecting influential industries. Energy, 125, 234–247.CrossRefGoogle Scholar
  16. Kang, D., & Park, M. J. (2017). Competitive prospects of graduate program on the integration of ICT superiority, higher education, and international aid. Telematics and Informatics, 34(8), 1625–1637.CrossRefGoogle Scholar
  17. Kang, D., Park, M. J., Lee, D. H., & Rho, J. J. (2017). Mobile services with handset bundling and governmental policies for competitive market. Telematics and Informatics, 34(1), 323–337.CrossRefGoogle Scholar
  18. KEEI (2013). Frequently asked energy statistics 2013. Korea Energy Economic Institute (KEEI).Google Scholar
  19. KEEI (2014). Yearbook of energy statistics in 2014. (Vol. Korea Energy Economic Institute (KEEI)). Seoul, Korea.Google Scholar
  20. Kerschner, C., & Hubacek, K. (2009). Assessing the suitability of input-output analysis for enhancing our understanding of potential economic effects of peak oil. Energy, 34(3), 284–290.CrossRefGoogle Scholar
  21. Kerschner, C., Prell, C., Peng, K. S., & Hubacek, K. (2013). Economic vulnerability to peak oil. Global Environmental Change-Human and Policy Dimensions, 23(6), 1424–1433. Scholar
  22. Korea Energy Statistics Information System (KESIS) (2015). Final energy consumption (1990-2013). Korea Energy Economic Institute (KEEI).
  23. Korean Statistical Information System (KOSIS) (2014). National supply portions of renewable energy sources in the OECD member countries (2000-2012).
  24. Lee, K. M., Yang, J. S., Kim, G., Lee, J., Goh, K. I., & Kim, I. M. (2011). Impact of the topology of global macroeconomic network on the spreading of economic crises. PLoS One, 6(3).
  25. Lee, D. H., Kang, D., Rzayeva, I., & Rho, J. J. (2017). Effects of energy diversification policy against crude oil price fluctuations. Energy Sources, Part B: Economics, Planning, and Policy, 12(2), 166–171.CrossRefGoogle Scholar
  26. Liddle, B. (2012). The importance of energy quality in energy intensive manufacturing: evidence from panel cointegration and panel FMOLS. Energy Economics, 34(6), 1819–1825. Scholar
  27. Liu, Z., Geng, Y., Lindner, S., Zhao, H. Y., Fujita, T., & Guan, D. B. (2012). Embodied energy use in China’s industrial sectors. Energy Policy, 49, 751–758. Scholar
  28. Lopes, M., Antunes, C., & Martins, N. (2012). Energy behaviours as promoters of energy efficiency: a 21st century review. Renewable and Sustainable Energy Reviews, 16(6), 4095–4104.CrossRefGoogle Scholar
  29. Lutz, C., Lehr, U., & Wiebe, K. S. (2012). Economic effects of peak oil. Energy Policy, 48, 829–834.CrossRefGoogle Scholar
  30. Martel, J. C. (2016). Exploring the integration of energy efficiency and disaster management in public policies and programs. Energy Efficiency, 9(2), 533–543.CrossRefGoogle Scholar
  31. Oh, I., Wehrmeyer, W., & Mulugetta, Y. (2010). Decomposition analysis and mitigation strategies of CO2 emissions from energy consumption in South Korea. Energy Policy, 38(1), 364–377. Scholar
  32. Okuyama, Y., & Santos, J. R. (2014). Disaster impact and input-output analysis. Economic Systems Research, 26(1), 1–12. Scholar
  33. Park, M. J., Kang, D., Rho, J. J., & Lee, D. H. (2016). Policy role of social media in developing public trust: Twitter communication with government leaders. Public Management Review, 18(9), 1265–1288.CrossRefGoogle Scholar
  34. Sovacool, B. K. (2008). The costs of failure: a preliminary assessment of major energy accidents, 1907-2007. Energy Policy, 36(5), 1802–1820.CrossRefGoogle Scholar
  35. Tanaka, K. (2011). Review of policies and measures for energy efficiency in industry sector. Energy Policy, 39(10), 6532–6550.CrossRefGoogle Scholar
  36. Worrell, E., Bernstein, L., Roy, J., Price, L., & Harnisch, J. (2009). Industrial energy efficiency and climate change mitigation. Energy Efficiency, 2(2), 109–123.CrossRefGoogle Scholar
  37. Xia, X. H., Huang, G. T., Chen, G. Q., Zhang, B., Chen, Z. M., & Yang, Q. (2011). Energy security, efficiency and carbon emission of Chinese industry. Energy Policy, 39(6), 3520–3528. Scholar
  38. Zhu, Z., Puliga, M., Cerina, F., Chessa, A., & Riccaboni, M. (2015). Global value trees. PLoS One, 10(5).Google Scholar

Copyright information

© Springer Science+Business Media B.V., part of Springer Nature 2018
corrected publication [May 2018]

Authors and Affiliations

  1. 1.Future Research Center (FRC)Gwangju Institute of Science and Technology (GIST)GwangjuRepublic of Korea
  2. 2.Advanced Photonics Research Institute (APRI)Gwangju Institute of Science and Technology (GIST)GwangjuRepublic of Korea
  3. 3.School of Business and Technology Management (BTM), College of BusinessKorea Advanced Institute of Science and Technology (KAIST)DaejeonSouth Korea

Personalised recommendations