Decomposition of energy consumption. Fundamentals and applications

The decomposition analysis of energy consumption is a crucial tool for understanding economic development trends, environmental impact and global sustainability. This method allows policymakers, researchers and industry stakeholders to evaluate the effectiveness of energy policies, assess economic influences on consumption and examine climate-related impacts. By disaggregating total energy consumption into its fundamental components, decomposition techniques provide insights into the drivers behind changes in energy demand. This chapter explores index decomposition analysis (IDA), highlighting its applications in energy studies. A detailed case study illustrates how this method can be applied to analyse the total energy consumption trend in Italy. The same approach can be applied to other countries or regions. The analysis contributes to a deeper understanding of how different factors interact to shape energy consumption patterns over time.