Dynamic temperature dependence patterns in future energy demand models in the context of climate change

Energy demand depends on outdoor temperature in a ‘u’ shaped fashion. Various studies have used this temperature dependence to investigate the effects of climate change on energy demand. Such studies contain implicit or explicit assumptions to describe expected socio-economic changes that may affect future energy demand.This paper critically analyzes these implicit or explicit assumptions and their possible effect on the studies' outcomes. First we analyze the interaction between the socio-economic structure and the temperature dependence pattern (TDP) of energy demand. We find that socio-economic changes may alter the TDP in various ways. Next we investigate how current studies manage these dynamics in socio-economic structure. We find that many studies systematically misrepresent the possible effect of socio-economic changes on the TDP of energy demand. Finally, we assess the consequences of these misrepresentations in an energy demand model based on temperature dependence and climate scenarios. Our model results indicate that expected socio-economic dynamics generally lead to an underestimation of future energy demand in models that misrepresent such dynamics. We conclude that future energy demand models should improve the incorporation of socio-economic dynamics. We propose dynamically modeling several key parameters and using direct meteorological data instead of degree days.     

Television peaks in electricity demand

This paper discusses the effect that breaks in television programmes have upon the demand for electricity. The results of a study which correlates the pattern of household electricity consumption with the timings of commercial and end-of-programme breaks are summarized. A theory of audience release is developed and various policy implications are explored.     

The distributed lag between electricity demand and price

This paper investigates the lagged relationship between electricity price changes and consumer response. It finds some evidence that price rises can induce rather long-term effects with detectable influence up to a decade. This tentative conclusion is important because it implies that recent increases may have a greater effect on future demand than is normally supposed.     

Input-output table of electricity demand and its application

It is very important for electric utility to determine dominant sectors which have more impacts on electricity consumption in national economy system. In this paper, an input-output perspective and methodology is proposed to handle this issue. The input-output table of electricity demand (IOTED) is put forward based on the input-output table of national economy (IOTNE). The relevancy of electricity demand in various sectors is revealed by means of electricity consumption chains (ECCs), which are key components in the IOTED. Besides, a new concept, electricity demand multiplier (EDM), is presented to identify dominant sectors imposing great impacts on electricity demand quantitatively. In order to testify the effectiveness of the proposed methodology, a case based on provincial economy system in China is studied. Dominant sectors are identified and discussed.     

The price elasticity of electricity demand in South Australia

In this paper, the price elasticity of electricity demand, representing the sensitivity of customer demand to the price of electricity, has been estimated for South Australia. We first undertake a review of the scholarly literature regarding electricity price elasticity for different regions and systems. Then we perform an empirical evaluation of the historic South Australian price elasticity, focussing on the relationship between price and demand quantiles at each half-hour of the day.     

A seasonal hybrid procedure for electricity demand forecasting in China

Electricity is a special energy which is hard to store, so the electricity demand forecasting in China remains an important problem. This paper aims at developing an improved hybrid model for electricity demand in China, which takes the advantages of moving average procedure, combined method, hybrid model and adaptive particle swarm optimization algorithm, known as MA-C-WH. It is designed for making trend and seasonal adjustments which simultaneously presents the electricity demand forecasts. Four actual electricity demand time series in China power grids are selected to illustrate the proposed MA-C-WH model, and one existing seasonal autoregressive integrated moving average model (SARIMA) is selected to compare with the proposed model using the same data series. The results of popular forecasting precision indexes show that our proposed model is an effective forecasting technique for seasonal time series with nonlinear trend.     

How do energy & environmental policy goals and instruments affect electricity demand? A framework for the analysis

Several measures in the environment and energy realms are currently being implemented in the EU and its Member States. Three of these instruments, with an impact on the electricity market, are demand side management activities, promotion of electricity from renewable energy sources and measures aimed at the mitigation of Greenhouse Gas (GHG) emissions. The objective of this paper is to analyse the impact of these energy efficiency and environmental goals and instruments on electricity demand and costs to electricity consumers when electricity markets are either national or international and when those policies are implemented by a national or an international institution. The paper shows that the effectiveness and impact of those measures largely depends on the demand response in the electricity market. An additional conclusion is that, when either the electricity markets or the support policies are national, distortions may occur, i.e. the reductions in electricity demand in one country may be subsidised by consumers or taxpayers in another country.     

The impact of climate change on the electricity market: A review

Climate change will impact electricity markets through both electricity demand and supply. This paper reviews the research on this topic. Whereas there is much that remains unknown or uncertain, research over the last few years has significantly advanced our knowledge. In general, higher temperatures are expected to raise electricity demand for cooling, decrease demand for heating, and to reduce electricity production from thermal power plants. The effect of climate change on the supply of electricity from non-thermal sources shows great geographical variability due to differences in expected changes to temperature and precipitation. Whereas the research frontier has advanced significantly in the last few years, there still remains a significant need for more research in order to better understand the effects of climate change on the electricity market. Four significant gaps in the current research are regional studies of demand side impacts for Africa, Asia, the Caribbean and Latin America, the effects of extreme weather events on electricity generation, transmission and demand, changes to the adoption rate of air conditioning, and finally, our understanding of the sensitivity of thermal power supply to changes in air and water temperatures.     

Aggregate electricity demand in South Africa: Conditional forecasts to 2030

In 2008, South Africa experienced a severe electricity crisis. Domestic and industrial electricity users had to suffer from black outs all over the country. It is argued that partially the reason was the lack of research on energy, locally. However, Eskom argues that the lack of capacity can only be solved by building new power plants.The objective of this study is to specify the variables that explain the electricity demand in South Africa and to forecast electricity demand by creating a model using the Engle–Granger methodology for co-integration and Error Correction models. By producing reliable results, this study will make a significant contribution that will improve the status quo of energy research in South Africa.The findings indicate that there is a long run relationship between electricity consumption and price as well as economic growth/income. The last few years in South Africa, price elasticity was rarely taken into account because of the low and decreasing prices in the past. The short-run dynamics of the system are affected by population growth, tooAfter the energy crisis, Eskom, the national electricity supplier, is in search for substantial funding in order to build new power plants that will help with the envisaged lack of capacity that the company experienced. By using two scenarios for the future of growth, this study shows that the electricity demand will drop substantially due to the price policies agreed – until now – by Eskom and the National Energy Regulator South Africa (NERSA) that will affect the demand for some years.     

Aggregate demand for electricity in South Africa: An analysis using the bounds testing approach to cointegration

Electricity demand in South Africa has grown at a very rapid rate over the past decade. As part of reform initiatives to enhance long-term sustainability of the country's electricity industry, South Africa's authorities have in recent years sought to develop an electricity pricing framework that is cost reflective and forms the cornerstone of demand management schemes meant to foster changes in consumption behaviour and enhance efficiency in resource use. The effects of any pricing policy on aggregate electricity consumption will depend on a useful understanding of the factors that influence electricity demand, and the magnitude to which electricity demand responds to changes in such factors. In this context, this paper applies the bounds testing approach to cointegration within an autoregressive distributed lag framework to examine the aggregate demand for electricity in South Africa during the period 1960–2007. The results indicate that in the long run, income is the main determinant of electricity demand. With electricity prices having an insignificant effect on aggregate electricity demand, future pricing policies will need to ensure that electricity prices are cost reflective and enhance efficiency of electricity supply and use.     

Grey prediction with rolling mechanism for electricity demand forecasting of Turkey

The need for energy supply, especially for electricity, has been increasing in the last two decades in Turkey. In addition, owing to the uncertain economic structure of the country, electricity consumption has a chaotic and nonlinear trend. Hence, electricity configuration planning and estimation has been the most critical issue of active concern for Turkey. The Turkish Ministry of Energy and Natural Resources (MENR) has officially carried out energy planning studies using the Model of Analysis of the Energy Demand (MAED). In this paper, Grey prediction with rolling mechanism (GPRM) approach is proposed to predict the Turkey's total and industrial electricity consumption. GPRM approach is used because of high prediction accuracy, applicability in the case of limited data situations and requirement of little computational effort. Results show that proposed approach estimates more accurate results than the results of MAED, and have explicit advantages over extant studies. Future projections have also been done for total and industrial sector, respectively.     

Income and price elasticities of electricity demand: Aggregate and sector-wise analyses

Cointegration and vector error correction modeling approaches are widely used in electricity demand analysis. The study rigorously examines the determinants of electricity demand at aggregate and sectoral levels in Pakistan. In the backdrop of severe electricity shortages, our empirical findings give support to the existence of a stable long-run relationship among the variables and indicate that electricity demand is elastic in the long run to both income and price at aggregate level. At sectoral level, long-run income and price elasticity estimates follow this pattern except in agricultural sector, where electricity demand is found elastic to output but inelastic to electricity price. On the contrary, the coefficients for income and price are rather small and mostly insignificant in the short run. We employed temperature index, price of diesel oil and capital stock at aggregate and sectoral levels as exogenous variables. These variables account for most of the variations in electricity demand in the short run. It shows that mechanization of the economy significantly affect the electricity demand at macro level. Moreover, elastic electricity demand with respect to electricity price in most of the sectors implies that electricity price as a policy tool can be used for efficient use and conservation.     

Estimation of residential electricity demand function in Seoul by correction for sample selection bias

This paper attempts to estimate the residential electricity demand function in Seoul. To this end, we collected the data from a survey of households in Seoul and employed the bivariate model to rectify the undesirable impacts of non-response data. The results show that the size of family, the size of house, dummy for having a plasma display panel television, dummy for having an air conditioner, and the household's income have positive relationships with the residential electricity demand. On the other hand, electricity price contributes negatively to the residential electricity demand. In addition, the price and income elasticities were estimated as −0.2463 and 0.0593, respectively, implying that residential electricity demand in Seoul is price- and income-inelastic. Such useful information is expected to help policy-makers regulate the residential electricity supply and predict the effect of the price on the residential electricity demand in the future.     

Testing viability of cross subsidy using time-variant price elasticities of industrial demand for electricity: Indian experience

Indian electric tariffs are characterized by very high rates for industrial and commercial classes to permit subsidized electric consumption by residential and agricultural customers. We investigate the viability of this policy using monthly data for 1997–2003 on electric consumption by a few large industrial customers under the aegis of a small distribution company in the state of Uttar Pradesh. For a given price/cost ratio, it can be shown that if the cross-subsidizing class’ electricity demand is sufficiently elastic, increasing the class’ rates fail to recover incremental cross-subsidy necessary to support additional revenues for subsidized classes. This suboptimality is tested by individually estimating time-variant price-elasticities of demand for these industrial customers using Box-Cox and linear regressions. We find that at least for some of these customers, cross-subsidy was suboptimal prior to as late as October 2001, when rates were changed following reforms.     

江西省电力需求预算与邻省的比较研究

本文通过对江西省周边发达省份过去和现在的国民经济发展和能源消费情况的研究,利用横向比较法来校核江西省电量预测的结果和数学模型。     

The theory of maximum kW demand charges for electricity

The kilowatt (kW) demand charge characterizes most electricity price schedules for industrial customers, yet it has not been analysed thoroughly (compared with time-of-use rates). This article shows how such charges complicate interpretations of past estimates of the industrial demand for electricity. Using a utility maximization (cost minimization) model, we derive consistent demand curves, which are shown potentially to be subject to discontinuities.     

Ownership unbundling in electricity distribution: The case of The Netherlands

This paper addresses the merits of ownership unbundling of distribution networks, as exemplified in the case of The Netherlands. In essence, this problem concerns the question of whether the operation and management of electricity distribution networks in this country will evolve into a market-driven commodity business or remain a genuine public utility task. In order to deal with this problem, a framework is developed that enables the classification of different institutional regimes. Depending on the nature of the institutional regime, this case of the Netherlands illustrates how certain aspects of the liberalisation of the electricity sector can become vitally important to the continuing process of restructuring.     

The potential for segmentation of the retail market for electricity in Ireland

We estimate the gross margin that is earned from the supply of electricity to households in Ireland. Using half hourly electricity demand data, the system marginal price (also called the wholesale price) and the retail price of electricity, we analyse how the gross margin varies across customers with different characteristics. The wholesale price varies throughout the day, thus, the time at which electricity is used affects the gross margin. The main factor in determining gross margin, however, is the level of demand.The highest gross margins are earned from supplying customers that have the following characteristics: being aged between 46 and 55, having a household income of at least €75,000 per annum, being self-employed, having a third-level education, having a professional or managerial occupation, living in a household with seven or more people, living in a detached house, having at least five bedrooms or being a mortgage holder.An OLS regression shows that gross margin is partly explained by the energy conservation measures which are present in a household; the number of household members; the number of bedrooms; age; occupation; and accommodation-type.     

Regulatory road maps for the integration of intermittent electricity generation: Methodology development and the case of The Netherlands

The envisaged increase in the share of electricity generation from intermittent renewable energy sources (RES-E) like wind and photovoltaics will pose challenges to the existing electricity system. A successful integration of these sources requires a cost-efficient use of system flexibility. The literature on the options to improve system flexibility, and thus the costs of successfully integrating intermittent electricity generating units, is still growing but what is lacking is an overarching systematic view on when to adopt which option in particular energy systems. This paper aims to bridge this gap in literature. We use existing insights on market and network integration of intermittent electricity sources within a regulatory road map framework. The framework allows policy makers and other electricity system stakeholders to arrive at a consistent strategy in dealing with integration issues over a longer period of time. In this contribution we present and explain the framework and apply it for the case of The Netherlands.     

The effects of electricity pricing on PHEV competitiveness

Plug-in hybrid electric vehicles (PHEVs) will soon start to be introduced into the transportation sector, thereby raising a host of issues related to their use, adoption and effects on the electricity sector. Their introduction has the potential to significantly reduce carbon emissions from the transportation sector, which has led to government policies aimed at easing their introduction. If their widespread adoption is set as a target it is imperative to consider the effects of existing policies that may increase or decrease their adoption rate. In this study, we present a micro level electricity demand model that can gauge the effects of PHEVs on household electricity consumption and the subsequent economic attractiveness of the vehicles. We show that the electricity pricing policy available to the consumer is a very significant factor in the economic competitiveness of PHEVs. Further analysis shows that the increasing tier electricity pricing system used in California will substantially blunt adoption of PHEVs in the state; and time of use electricity pricing will render PHEVs more economically attractive in any state.