IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v131y2024ics0140988324001087.html
   My bibliography  Save this article

Impacts of electricity price reform on Saudi regional fuel consumption and CO2 emissions

Author

Listed:
  • Darandary, Abdulelah
  • Mikayilov, Jeyhun I.
  • Soummane, Salaheddine

Abstract

Saudi Arabia enacted two waves of energy price reforms in 2016 and 2018 to effectively gauge their impact to curb historically fast-growing electricity demand. We quantify the effects of these policy measures on regional fuel consumption and carbon emissions. We model the resulting emissions and fuel savings on the supply side using an optimization model representing Saudi Arabia's power generation sector. We estimate that between 2016 and 2019, electricity demand decreased by 8.8% per year on average following price reforms, resulting in USD 1.4 billion in fuel savings. International oil prices would bring the total savings up to USD 9.8 billion. Moreover, we show that the two waves of reforming electricity prices avoided 81–102 million tons of carbon dioxide emissions, i.e., a potential increase of 8.2%–10.4% of the power sector's emissions. Our results for Saudi Arabia demonstrate the benefits of reforming energy prices for countries with administered tariffs as an effective tool to reduce inefficient demand and carbon emissions to achieve climate pledges.

Suggested Citation

  • Darandary, Abdulelah & Mikayilov, Jeyhun I. & Soummane, Salaheddine, 2024. "Impacts of electricity price reform on Saudi regional fuel consumption and CO2 emissions," Energy Economics, Elsevier, vol. 131(C).
    • Handle: RePEc:eee:eneeco:v:131:y:2024:i:c:s0140988324001087
    DOI: 10.1016/j.eneco.2024.107400
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988324001087
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eneco.2024.107400?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 search for a different version of it.

    More about this item

    Keywords

    Energy price reform; Electricity demand modeling; Carbon emissions; Saudi Arabia; Power system modeling;
    All these keywords.

    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • O21 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

    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:eneeco:v:131:y:2024:i:c:s0140988324001087. 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.

    We have no bibliographic references for this item. You can help adding them by using 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/locate/eneco .

    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.