# Frontiers in Energy

 Front. Energy    2020, Vol. 14 Issue (1) : 27-41     https://doi.org/10.1007/s11708-019-0656-5
 RESEARCH ARTICLE
Impact of inter-fuel substitution on energy intensity in Ghana
Boqiang LIN1(), Hermas ABUDU2
1. School of Management, China Institute for Studies in Energy Policy, Collaborative Innovation Center for Energy Economics and Energy Policy, Xiamen University, Xiamen 361005, China
2. School of Management, China Institute for Studies in Energy Policy, Collaborative Innovation Center for Energy Economics and Energy Policy, Xiamen University, Xiamen 361005, China; Belt and Road Research Institute, Xiamen University, Xiamen 361005, China
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 Abstract Energy intensity and elasticity, together with inter-fuel substitution are key issues in the current development stage of Ghana. Translog production and ridge regression are applied for studying these issues with a data range of 2000–2015. The current energy dynamics reveal the expected inverse relationship: higher energy intensity and lower elasticity with economic growth. There are evidences of energy-economic challenges: high energy cost, inefficiency and backfire rebound effect. The implications are higher energy losses in the system, more consumption of lower-quality energy together with low energy technology innovation. Energy is wasted and directly not productive with economic activities. It is observed further that the higher energy intensity invariably increases CO2 emission because approximately 95% of total energy is derived from hydrocarbons and biomass. An inter-fuel substitution future scenario design was further conducted and the results were positive with growth, lower energy intensity, and improved energy efficiency. Therefore, government and energy policymakers should improve energy efficiency, cost, and productiveness. That is, they should change energy compositions and augment energy technology innovation, thus, increasing renewable share to 15% by 2026, reducing wood and charcoal by about 69%, and increasing natural gas to about 776%. Energy policymakers should enhance the installation of smart energy, cloud energy solution, tokenization of energy system and storage. Corresponding Authors: Boqiang LIN Online First Date: 25 December 2019    Issue Date: 16 March 2020
 Cite this article: Boqiang LIN,Hermas ABUDU. Impact of inter-fuel substitution on energy intensity in Ghana[J]. Front. Energy, 2020, 14(1): 27-41. URL: http://journal.hep.com.cn/fie/EN/10.1007/s11708-019-0656-5 http://journal.hep.com.cn/fie/EN/Y2020/V14/I1/27
 Tab.1  Primary and final energy mix in Ghanain 2016 Tab.2  Pearson correlation and variance inflation factor (VIF) for multicollinearity test Fig.1  Ridge trace plot (Y-axis represents the standard coefficient/VIF and X-axis represents k values (Source: EViews software generated, 2018). Tab.3  Ridge regression results Tab.4  Total output elasticity of factor inputs Tab.5  Contribution of labor, capital, energy, and residual factor Tab.6  Elasticity substitution possibilities for capital and labor Tab.7  Scenario data: inter-fuel substitution possibility and enhancement electricity losses Tab.8  New results for energy intensity after inter-fuel substitution scenario design