The purpose of this paper is to examine the causality relationship between production and energy of industrial manufacturing in Malaysia. Time series data for production (Q), capital (K), labour (L) and energy (E) for the 1978-2009 period, are applied. However, production theory was used to explore the characteristics of the capital, labour and energy within time series procedures. The results of the ADF and PP tests show that all variables are stationary in the first differences, except for energy, which is stationary at second differences. Meanwhile, all variables are cointegrated at 1% significance level using CRDW test. Results show that there is unidirectional causality in the long run running from energy to the production. Therefore, energy plays an important role in the production of industrial manufacturing in Malaysia. No significant relationship between all variables appears to be in the short run.
Background: In Malaysia, residential electricity consumption has shown a steady upward trend year by year. Due to this increase in energy consumption, it is important to forecast the value of electricity consumption until the year 2032 to accommodate the electricity demand. Methods: Three exponential smoothing models were compared to identify the most appropriate model in forecasting electricity consumption. The three exponential smoothing models are Simple, Holt, and Brown exponential smoothing. To identify the most appropriate model, a mean absolute percentage (MAPE) was chosen. Results: The results show that Holt’s exponential smoothing has the best performance with the lowest MAPE score of 2.299. Conclusions: Consequently, it was found that electricity consumption would substantially increase from 2647 ktoe (kilotonne of oil equivalent) to 3873 ktoe within the period of 2019 to 2032.
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