D
MTEC
Departement
Management, Technology,
and Economics
Residential Electricity Demand for Spain: New Empirical Evidence R
id i l El
i i D
d f S i N E i i l E id
using Aggregated Data
using Aggregated Data
Leticia Blázquez
Leticia
Blázquez , Nina Boogen
Nina Boogen, Massimo Filippini
Massimo Filippini* 
 University of Castilla‐La Mancha, Department of International Economics
 Swiss Federal Institute of Technology, Centre for
Swiss Federal Institute of Technology Centre for
* Università
Energy Policy and Economics (CEPE)
Energy Policy
and Economics (CEPE)
della Svizzera Italiana, Institute of Economics (IdEP) Problems and Goals
Problems and Goals
From 1990 to 2008, Spanish residential energy demand increased by 73%. , p
gy
y
• Increasing population and the number of new houses
• Decreasing household size
• Convergence with the EU in household equipment
• Long lasting policy of low tariffs
The goal is to estimate Spanish residential electricity demand using an econometric approach:
• Short and long run price and income elasticities?
• Impact of climate on electricity consumption?
p
electricityy residential demand. This is the
There are scarce studies on Spanish
first work using aggregated data.
THE EMPIRICAL MODEL
• Household production theory: household combines electricity with capital
equipment to produce energy services
• Dynamic partial adjustment model: Electricity consumption may differ from the
long‐term equilibrium.
lnEit  P   EP lnEi,t-1  PP lnPEit  Y lnYit  POP lnPOPit   HS lnHSit
 GAS GASit   HDD lnHDDit  CDD lnCDDit   DT DTt   it
Estimation with:
i Conventional Fixed effects, i.
Conventional Fixed effects
ii. OLS model, and
iii. One‐step system GMM estimator (Blundell and Bond, 1998)
DATA
•
•
•
•
RESULTS
Aggregated panel data 47 provinces in Spain
Period of analysis: 2000‐2008
Usage of average price: Endogeneity?
Model B
L.Lnq
VARIABLES
Electricity consumption (kWh) (Eit)
Average electricity Price (€/kWh) (Pit)
Average electricity Price (€/kWh) (P
Disposable Household Income (2006 €) (Yit)
Population (POPit)
Household size (HSit)
Penetration Gas (%) (GASit)
Heating degree days (HDDit) Heating degree days (HDD
)
Cooling degree days (CDDit)
OLS
GMM‐BB
t‐val
Coef.
t‐val
0.156**
3.08
0.780*** 23.29
Coef.
t‐val
0.547***
4.24
Lnp
‐0.049
‐1.79
‐0.056**
‐3.10
Lny
0.021
0.14
0.072*
2.21
0.135**
Lnpop
0.784***
5.28
0.161***
3.95
0.349***
3.23
‐0.174***
0.174
‐3.79
3.79
‐0.355***
0.355
‐3.22
3.22
2.98
Lnhs
Lnhdd
‐0.134
0.134
0.066*
‐0.8
0.8
‐0.112*
1.98
0.006
0.56
0.034**
Lncdd
‐0.005
‐0.52
0.007*
2.00
0.011*
GAS
‐0.152
0 152
‐1.39
1 39
‐0.141**
0 141**
‐3.06
3 06
cons
5.959
1.88
0.770
1.84
‐2.07
3.14
2.19
‐0.265***
0 265***
‐4.30
4 30
1.460
1.80
legend: *p≤0.05; ** p≤0.01; *** p≤0.001
CONCLUSIONS
IMPACT OF CLIMATE
The response of electricity demand to the outside temperature: clearly non‐linear.
The
response of electricity demand to the outside temperature: clearly non‐linear
Even more pronounced in Southern countries like Spain.
• Several methods to measure the effect of climate:
•
•
1. Average outside temperature : easy to use, but non‐linear effect not captured
2. Dummy for climatic zones: easy to use, but might also capture other factors
3. HDD/CDD: captures non linear effect, but there is no unique threshold T*
HDD  T* -T
HDD=
Tt ; 0
Model A: T*= 18°C
Model B: T*= 15°C and 22°C
nd
CDD=
LSDV
Coef.
 Tt -T ; 0
*
• Increase in electricity prices will have a modest impact on the residential
electricity demand: price elasticity = ‐0.112
→ Higher energy efficiency standards for electrical appliances are necessary.
• Income elasticity
l
= 0.135
• Relatively higher sensitivity of electricity demand to cold than to hot days.
→ Low impact of HDD on electricity demand: only a small share of houses have
electrical heating systems.
→ Low impact of CDD on electricity demand: a small fraction of Spanish
households are using air conditioning.
•
High impact of gas penetration on electricity consumption.
nd
900
1800
comfort zone
500
15
0
2
4
6
8
22
10 12 14 16 18 20 22
Average daily temperature (°C)
North Coast
24
26
28
Figure: Estimating the T* for Spain
Published as CEPE Working Paper No. 82, February 2012.
www.cepe.ethz.ch
30
North Medi‐
terranean
Continental North Continental South West Continental South East
South Medi‐
terranean
Residential electricity consu
umption [kWh/ccap]
Total electricityy demand (GWh
h)
600
700
7
800
1700
1600
1500
1400
1300
1200
1100
1000
2000
2001
2002
2003
Figure: Climatic zones in Spain and their electricity consumption
2004
2005
2006
2007
2008