IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v142y2015icp407-425.html
   My bibliography  Save this article

Temperature effects on firms’ electricity demand: An analysis of sectorial differences in Spain

Author

Listed:
  • Moral-Carcedo, Julián
  • Pérez-García, Julián

Abstract

Distinct responses of electricity demand to temperature changes are usually assumed for residential, industrial, and service sectors. However, available empirical studies on the temperature effect of electricity demand provide only partial evidence or evidence at a very aggregate level. Our paper aims to partially fill this existing gap in the literature. Using disaggregated data by sectors, we carry out a comprehensive analysis of 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 because such responses represent a potential source of demand price inelasticity, one of the main obstacles for developing adequate demand response planning mechanisms. 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. We show that the aggregate insensitiveness of firms’ electricity demand to temperature is mainly due to a demand composition effect.

Suggested Citation

  • Moral-Carcedo, Julián & Pérez-García, Julián, 2015. "Temperature effects on firms’ electricity demand: An analysis of sectorial differences in Spain," Applied Energy, Elsevier, vol. 142(C), pages 407-425.
    • Handle: RePEc:eee:appene:v:142:y:2015:i:c:p:407-425
    DOI: 10.1016/j.apenergy.2014.12.064
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S030626191401321X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2014.12.064?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Radhi, Hassan & Sharples, Stephen, 2013. "Quantifying the domestic electricity consumption for air-conditioning due to urban heat islands in hot arid regions," Applied Energy, Elsevier, vol. 112(C), pages 371-380.
    2. Xu, X.Y. & Ang, B.W., 2014. "Analysing residential energy consumption using index decomposition analysis," Applied Energy, Elsevier, vol. 113(C), pages 342-351.
    3. Bessec, Marie & Fouquau, Julien, 2008. "The non-linear link between electricity consumption and temperature in Europe: A threshold panel approach," Energy Economics, Elsevier, vol. 30(5), pages 2705-2721, September.
    4. Sandels, C. & Widén, J. & Nordström, L., 2014. "Forecasting household consumer electricity load profiles with a combined physical and behavioral approach," Applied Energy, Elsevier, vol. 131(C), pages 267-278.
    5. Hong, Tianzhen & Chang, Wen-Kuei & Lin, Hung-Wen, 2013. "A fresh look at weather impact on peak electricity demand and energy use of buildings using 30-year actual weather data," Applied Energy, Elsevier, vol. 111(C), pages 333-350.
    6. Zhou, Yuyu & Clarke, Leon & Eom, Jiyong & Kyle, Page & Patel, Pralit & Kim, Son H. & Dirks, James & Jensen, Erik & Liu, Ying & Rice, Jennie & Schmidt, Laurel & Seiple, Timothy, 2014. "Modeling the effect of climate change on U.S. state-level buildings energy demands in an integrated assessment framework," Applied Energy, Elsevier, vol. 113(C), pages 1077-1088.
    7. Pardo, Angel & Meneu, Vicente & Valor, Enric, 2002. "Temperature and seasonality influences on Spanish electricity load," Energy Economics, Elsevier, vol. 24(1), pages 55-70, January.
    8. Zachariadis, Theodoros & Pashourtidou, Nicoletta, 2007. "An empirical analysis of electricity consumption in Cyprus," Energy Economics, Elsevier, vol. 29(2), pages 183-198, March.
    9. Asadoorian, Malcolm O. & Eckaus, Richard S. & Schlosser, C. Adam, 2008. "Modeling climate feedbacks to electricity demand: The case of China," Energy Economics, Elsevier, vol. 30(4), pages 1577-1602, July.
    10. Lam, Joseph C. & Tang, H.L. & Li, Danny H.W., 2008. "Seasonal variations in residential and commercial sector electricity consumption in Hong Kong," Energy, Elsevier, vol. 33(3), pages 513-523.
    11. Lam, Joseph C. & Wan, Kevin K.W. & Cheung, K.L., 2009. "An analysis of climatic influences on chiller plant electricity consumption," Applied Energy, Elsevier, vol. 86(6), pages 933-940, June.
    12. repec:dau:papers:123456789/8180 is not listed on IDEAS
    13. Blázquez, Leticia & Boogen, Nina & Filippini, Massimo, 2013. "Residential electricity demand in Spain: New empirical evidence using aggregate data," Energy Economics, Elsevier, vol. 36(C), pages 648-657.
    14. Moral-Carcedo, Julian & Vicens-Otero, Jose, 2005. "Modelling the non-linear response of Spanish electricity demand to temperature variations," Energy Economics, Elsevier, vol. 27(3), pages 477-494, May.
    15. Dergiades, Theologos & Tsoulfidis, Lefteris, 2008. "Estimating residential demand for electricity in the United States, 1965-2006," Energy Economics, Elsevier, vol. 30(5), pages 2722-2730, September.
    16. Psiloglou, B.E. & Giannakopoulos, C. & Majithia, S. & Petrakis, M., 2009. "Factors affecting electricity demand in Athens, Greece and London, UK: A comparative assessment," Energy, Elsevier, vol. 34(11), pages 1855-1863.
    17. Sailor, D.J & Pavlova, A.A, 2003. "Air conditioning market saturation and long-term response of residential cooling energy demand to climate change," Energy, Elsevier, vol. 28(9), pages 941-951.
    18. Sailor, David J, 2001. "Relating residential and commercial sector electricity loads to climate—evaluating state level sensitivities and vulnerabilities," Energy, Elsevier, vol. 26(7), pages 645-657.
    19. Torriti, Jacopo & Hassan, Mohamed G. & Leach, Matthew, 2010. "Demand response experience in Europe: Policies, programmes and implementation," Energy, Elsevier, vol. 35(4), pages 1575-1583.
    20. Halicioglu, Ferda, 2007. "Residential electricity demand dynamics in Turkey," Energy Economics, Elsevier, vol. 29(2), pages 199-210, March.
    21. Räsänen, Teemu & Voukantsis, Dimitrios & Niska, Harri & Karatzas, Kostas & Kolehmainen, Mikko, 2010. "Data-based method for creating electricity use load profiles using large amount of customer-specific hourly measured electricity use data," Applied Energy, Elsevier, vol. 87(11), pages 3538-3545, November.
    22. Hekkenberg, M. & Benders, R.M.J. & Moll, H.C. & Schoot Uiterkamp, A.J.M., 2009. "Indications for a changing electricity demand pattern: The temperature dependence of electricity demand in the Netherlands," Energy Policy, Elsevier, vol. 37(4), pages 1542-1551, April.
    23. Ahmed, T. & Muttaqi, K.M. & Agalgaonkar, A.P., 2012. "Climate change impacts on electricity demand in the State of New South Wales, Australia," Applied Energy, Elsevier, vol. 98(C), pages 376-383.
    24. Vassileva, Iana & Wallin, Fredrik & Dahlquist, Erik, 2012. "Analytical comparison between electricity consumption and behavioral characteristics of Swedish households in rented apartments," Applied Energy, Elsevier, vol. 90(1), pages 182-188.
    25. Mirasgedis, S. & Sarafidis, Y. & Georgopoulou, E. & Lalas, D.P. & Moschovits, M. & Karagiannis, F. & Papakonstantinou, D., 2006. "Models for mid-term electricity demand forecasting incorporating weather influences," Energy, Elsevier, vol. 31(2), pages 208-227.
    26. Tung, Ching-Pin & Tseng, Tze-Chi & Huang, An-Lei & Liu, Tzu-Ming & Hu, Ming-Che, 2013. "Impact of climate change on Taiwanese power market determined using linear complementarity model," Applied Energy, Elsevier, vol. 102(C), pages 432-439.
    27. Apadula, Francesco & Bassini, Alessandra & Elli, Alberto & Scapin, Simone, 2012. "Relationships between meteorological variables and monthly electricity demand," Applied Energy, Elsevier, vol. 98(C), pages 346-356.
    28. Paulus, Moritz & Borggrefe, Frieder, 2011. "The potential of demand-side management in energy-intensive industries for electricity markets in Germany," Applied Energy, Elsevier, vol. 88(2), pages 432-441, February.
    29. Hondroyiannis, George, 2004. "Estimating residential demand for electricity in Greece," Energy Economics, Elsevier, vol. 26(3), pages 319-334, May.
    30. Rhodes, Joshua D. & Cole, Wesley J. & Upshaw, Charles R. & Edgar, Thomas F. & Webber, Michael E., 2014. "Clustering analysis of residential electricity demand profiles," Applied Energy, Elsevier, vol. 135(C), pages 461-471.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lu, Xin & Qiu, Jing & Lei, Gang & Zhu, Jianguo, 2022. "Scenarios modelling for forecasting day-ahead electricity prices: Case studies in Australia," Applied Energy, Elsevier, vol. 308(C).
    2. Trull, Oscar & García-Díaz, J. Carlos & Troncoso, Alicia, 2021. "One-day-ahead electricity demand forecasting in holidays using discrete-interval moving seasonalities," Energy, Elsevier, vol. 231(C).
    3. Bigerna, Simona, 2018. "Estimating temperature effects on the Italian electricity market," Energy Policy, Elsevier, vol. 118(C), pages 257-269.
    4. Tang, Wenliang & Yang, Mian & Duan, Hongbo, 2023. "Temperature and corporate tax avoidance: Evidence from Chinese manufacturing firms," Energy Economics, Elsevier, vol. 117(C).
    5. Lanlan Li & Xinpei Song & Jingjing Li & Ke Li & Jianling Jiao, 2023. "The impacts of temperature on residential electricity consumption in Anhui, China: does the electricity price matter?," Climatic Change, Springer, vol. 176(3), pages 1-26, March.
    6. Manh-Hung Nguyen, 2021. "A Resilient Energy System to Climate change," Post-Print hal-04044554, HAL.
    7. Anukoolthamchote, Pam Chasuta & Assané, Djeto & Konan, Denise Eby, 2020. "Net electricity load profiles: Shape and variability considering customer-mix at transformers on the island of Oahu, Hawai'i," Energy Policy, Elsevier, vol. 147(C).
    8. Ang, B.W. & Wang, H. & Ma, Xiaojing, 2017. "Climatic influence on electricity consumption: The case of Singapore and Hong Kong," Energy, Elsevier, vol. 127(C), pages 534-543.
    9. Mosquera-López, Stephanía & Uribe, Jorge M. & Manotas-Duque, Diego F., 2018. "Effect of stopping hydroelectric power generation on the dynamics of electricity prices: An event study approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 456-467.
    10. Zheng, Shuguang & Huang, Guohe & Zhou, Xiong & Zhu, Xiaohang, 2020. "Climate-change impacts on electricity demands at a metropolitan scale: A case study of Guangzhou, China," Applied Energy, Elsevier, vol. 261(C).
    11. Mukherjee, Sayanti & Vineeth, C.R. & Nateghi, Roshanak, 2019. "Evaluating regional climate-electricity demand nexus: A composite Bayesian predictive framework," Applied Energy, Elsevier, vol. 235(C), pages 1561-1582.
    12. Moral-Carcedo, Julián & Pérez-García, Julián, 2017. "Integrating long-term economic scenarios into peak load forecasting: An application to Spain," Energy, Elsevier, vol. 140(P1), pages 682-695.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chabouni, Naima & Belarbi, Yacine & Benhassine, Wassim, 2020. "Electricity load dynamics, temperature and seasonality Nexus in Algeria," Energy, Elsevier, vol. 200(C).
    2. Santágata, Daniela M. & Castesana, Paula & Rössler, Cristina E. & Gómez, Darío R., 2017. "Extreme temperature events affecting the electricity distribution system of the metropolitan area of Buenos Aires (1971–2013)," Energy Policy, Elsevier, vol. 106(C), pages 404-414.
    3. Salari, Mahmoud & Javid, Roxana J., 2016. "Residential energy demand in the United States: Analysis using static and dynamic approaches," Energy Policy, Elsevier, vol. 98(C), pages 637-649.
    4. Nnaemeka Vincent Emodi & Taha Chaiechi & ABM Rabiul Alam Beg, 2018. "The impact of climate change on electricity demand in Australia," Energy & Environment, , vol. 29(7), pages 1263-1297, November.
    5. Psiloglou, B.E. & Giannakopoulos, C. & Majithia, S. & Petrakis, M., 2009. "Factors affecting electricity demand in Athens, Greece and London, UK: A comparative assessment," Energy, Elsevier, vol. 34(11), pages 1855-1863.
    6. Tyralis, Hristos & Karakatsanis, Georgios & Tzouka, Katerina & Mamassis, Nikos, 2017. "Exploratory data analysis of the electrical energy demand in the time domain in Greece," Energy, Elsevier, vol. 134(C), pages 902-918.
    7. Bašta, Milan & Helman, Karel, 2013. "Scale-specific importance of weather variables for explanation of variations of electricity consumption: The case of Prague, Czech Republic," Energy Economics, Elsevier, vol. 40(C), pages 503-514.
    8. Gallo Cassarino, Tiziano & Sharp, Ed & Barrett, Mark, 2018. "The impact of social and weather drivers on the historical electricity demand in Europe," Applied Energy, Elsevier, vol. 229(C), pages 176-185.
    9. Hekkenberg, M. & Moll, H.C. & Uiterkamp, A.J.M. Schoot, 2009. "Dynamic temperature dependence patterns in future energy demand models in the context of climate change," Energy, Elsevier, vol. 34(11), pages 1797-1806.
    10. Wang, Yaoping & Bielicki, Jeffrey M., 2018. "Acclimation and the response of hourly electricity loads to meteorological variables," Energy, Elsevier, vol. 142(C), pages 473-485.
    11. Apadula, Francesco & Bassini, Alessandra & Elli, Alberto & Scapin, Simone, 2012. "Relationships between meteorological variables and monthly electricity demand," Applied Energy, Elsevier, vol. 98(C), pages 346-356.
    12. Jose M. Garrido-Perez & David Barriopedro & Ricardo García-Herrera & Carlos Ordóñez, 2021. "Impact of climate change on Spanish electricity demand," Climatic Change, Springer, vol. 165(3), pages 1-18, April.
    13. Li, Jianglong & Yang, Lisha & Long, Houyin, 2018. "Climatic impacts on energy consumption: Intensive and extensive margins," Energy Economics, Elsevier, vol. 71(C), pages 332-343.
    14. Moral-Carcedo, Julián & Pérez-García, Julián, 2019. "Time of day effects of temperature and daylight on short term electricity load," Energy, Elsevier, vol. 174(C), pages 169-183.
    15. Harish, Santosh & Singh, Nishmeet & Tongia, Rahul, 2020. "Impact of temperature on electricity demand: Evidence from Delhi and Indian states," Energy Policy, Elsevier, vol. 140(C).
    16. Akihiro Otsuka, 2019. "Natural disasters and electricity consumption behavior: a case study of the 2011 Great East Japan Earthquake," Asia-Pacific Journal of Regional Science, Springer, vol. 3(3), pages 887-910, October.
    17. Salari, Mahmoud & Javid, Roxana J., 2017. "Modeling household energy expenditure in the United States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 822-832.
    18. Hu, Wenxuan & Scholz, Yvonne & Yeligeti, Madhura & Deng, Ying & Jochem, Patrick, 2024. "Future electricity demand for Europe: Unraveling the dynamics of the Temperature Response Function," Applied Energy, Elsevier, vol. 368(C).
    19. Hirano, Y. & Fujita, T., 2012. "Evaluation of the impact of the urban heat island on residential and commercial energy consumption in Tokyo," Energy, Elsevier, vol. 37(1), pages 371-383.
    20. Kang, Jieyi & Reiner, David M., 2022. "What is the effect of weather on household electricity consumption? Empirical evidence from Ireland," Energy Economics, Elsevier, vol. 111(C).

    More about this item

    Keywords

    Sectorial electricity demand; Temperature effect; Cooling degree-days (CDD); Heating degree-days (HDD); Electricity demand;
    All these keywords.

    JEL classification:

    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:142:y:2015:i:c:p:407-425. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.