A Decomposition Analysis of Algeria’s Residential Energy Consumption Change: (2000–2020)

Between 2000 and 2020, the residential sector’s share of Algeria’s final energy consumption was 62.20% and 46.05% respectively; this was much higher than the global average of 31%. This enables us to comprehend the factors that contribute to the rise in energy consumption in the residential sector and to carry out a quantitative analysis to determine the extent to which energy efficiency reduces energy consumption in the sector between 2000 and 2020. To accomplish this, we employ the decomposition analysis approach by using the Logarithmic Mean Divisia Index (LMDI). The results of the study showed that the energy subsidy factor had a strong impact on increasing residential energy consumption in Algeria, compared to the population growth factor. In addition, the energy intensity factor and the economic structure factor did not help reduce energy consumption levels. According to these findings, Algerian public policymakers should strictly implement the national energy program Horizon 2030 by rationalising energy use, eliminating subsidies gradually, and monitoring the implementation of energy efficiency measures in the residential sector.