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Exploring the critical demand drivers of electricity consumption in Thailand

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  • Uddin, Gazi Salah
  • Hasan, Md. Bokhtiar
  • Phoumin, Han
  • Taghizadeh-Hesary, Farhad
  • Ahmed, Ali
  • Troster, Victor

Abstract

In this study, we explore the critical demand drivers of electricity consumption in Thailand based on monthly data from 2002 to 2020. Using Autoregressive Distributed Lag (ARDL), cross-quantile correlation (CQC), Generalized Method of Moments (GMM), and Granger-causality-in-quantile approaches, we find that industrial production and oil production positively contribute to next month's aggregate and provincial energy consumption in Thailand, both in the short and long run. We also find that industrial production positively affects current electricity consumption, whereas electricity prices negatively affect current electricity consumption. Oil production, however, has no effect on current electricity consumption. Moreover, the CQC analysis finds evidence of cross-predictability running from industrial production and electricity prices to next month's electricity consumption at the extreme and median quantiles of the distribution. Further, industrial production, electricity prices, and oil production Granger-cause energy consumption at the extreme and median quantiles of the distribution. Nevertheless, we show that the Thai government's energy policies are ineffective for reducing electricity consumption. Our findings have crucial policy implications for the electricity market efficient allocation and its reform.

Suggested Citation

  • Uddin, Gazi Salah & Hasan, Md. Bokhtiar & Phoumin, Han & Taghizadeh-Hesary, Farhad & Ahmed, Ali & Troster, Victor, 2023. "Exploring the critical demand drivers of electricity consumption in Thailand," Energy Economics, Elsevier, vol. 125(C).
    • Handle: RePEc:eee:eneeco:v:125:y:2023:i:c:s0140988323003730
    DOI: 10.1016/j.eneco.2023.106875
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    More about this item

    Keywords

    Electricity markets; Demand drivers; Policy reforms; Thailand; ARDL; Cross-quantilogram;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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