Electricity demand in primary aluminum smelting

Abstract

The demand for electricity by primary aluminum smelters is estimated econometrically. Cross section data is used, including plant data for the U.S. and Norway and a national average for Japan. The data are sampled for two periods, one before and one after the 1973-74 energy price increase. The paper estimates the elasticity of substitution between electricity and an aggregate of all other inputs, assumed to exist. The estimated value of 0.1 is low, but significantly different from zero. Large price in- creases, such as the equalization of hydro and other power prices are found to result in substantial energy savings.