Temperature effects on firms’ electricity demand: an analysis of sectorial differences in Spain
Entity
UAM. Departamento de Análisis Económico, Teoría Económica e Historia EconómicaDate
2014-04Serie/Num.
Economic analysis working papers series.1/2015Subjects
Sectorial electricity demand; Temperature effect; “cooling” and “heating”; Electricity demand; EconomíaAbstract
Global warming, intermittent production, and efficient use of energy require adequate demand
response policies. The price inelasticity of electricity demand represents the main obstacle for
developing adequate measures. A potential source of demand inelasticity is the temperature
effect ‐ the reaction of electricity demand to variations in temperature. Studies using aggregate
data show that temperature‐driven electricity demand is growing in most countries. Using
disaggregated data by sectors, we analyze the sectorial breakdown of temperature effects on
firms’ electricity demand. In‐depth knowledge of sectorial demand responses to temperature
changes is fundamental for improved energy planning. If electricity consumption in a sector
heavily reacts to temperature, “flattening” electricity demand will eventually become infeasible.
Our findings indicate that in Spain firms’ aggregate electricity demand is rather insensitive to
temperature. However, there are marked differences among sectors, with the highest sensitivity
found for firms in the service sector.
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Google Scholar:Moral Carcedo, Julián
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Pérez García, Julián
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