IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v81y2015icp146-158.html
   My bibliography  Save this article

The influence of price and non-price effects on demand for heating in the EU residential sector

Author

Listed:
  • Ó Broin, Eoin
  • Nässén, Jonas
  • Johnsson, Filip

Abstract

This paper models energy demand for space and water heating from 1970 to 2005 in the residential sector of four EU countries (France, Italy, Sweden, and UK) using index decomposition, ARDL (autoregressive distributed lag) econometric models and cointegration analysis. The partial and temporal influences on energy demand in each country of the number of households, floor area per household (m2) and unit consumption for space and water heating (kWh/m2/year) are disaggregated. The long-run price elasticity of demand at the unit consumption level is found to be low (around −0.25 over the four countries) while the long-run income elasticity of floor area per household is found to be around 0.25 for Italy, Sweden and the UK but insignificant for France. In an exercise using the model to estimate demand to 2050 under annual increases in energy prices of between 0% and 3% it is found that non-price effects such as building codes and autonomous technical progress (represented in the model as a time trend) are equally or more important than the price effect in reducing demand. Thus achieving significant reductions in EU residential sector energy demand by 2050 would require additional non-price policies and measures for success.

Suggested Citation

  • Ó Broin, Eoin & Nässén, Jonas & Johnsson, Filip, 2015. "The influence of price and non-price effects on demand for heating in the EU residential sector," Energy, Elsevier, vol. 81(C), pages 146-158.
    • Handle: RePEc:eee:energy:v:81:y:2015:i:c:p:146-158
    DOI: 10.1016/j.energy.2014.12.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544214013577
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2014.12.003?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.

    References listed on IDEAS

    as
    1. Dahl, Carol A., 1993. "A survey of energy demand elasticities in support of the development of the NEMS," MPRA Paper 13962, University Library of Munich, Germany.
    2. Milne, Geoffrey & Boardman, Brenda, 2000. "Making cold homes warmer: the effect of energy efficiency improvements in low-income homes A report to the Energy Action Grants Agency Charitable Trust," Energy Policy, Elsevier, vol. 28(6-7), pages 411-424, June.
    3. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    4. Bentzen, Jan & Engsted, Tom, 2001. "A revival of the autoregressive distributed lag model in estimating energy demand relationships," Energy, Elsevier, vol. 26(1), pages 45-55.
    5. Ó Broin, Eoin & Mata, Érika & Göransson, Anders & Johnsson, Filip, 2013. "The effect of improved efficiency on energy savings in EU-27 buildings," Energy, Elsevier, vol. 57(C), pages 134-148.
    6. Haas, Reinhard & Schipper, Lee, 1998. "Residential energy demand in OECD-countries and the role of irreversible efficiency improvements," Energy Economics, Elsevier, vol. 20(4), pages 421-442, September.
    7. Connolly, D. & Lund, H. & Mathiesen, B.V. & Werner, S. & Möller, B. & Persson, U. & Boermans, T. & Trier, D. & Østergaard, P.A. & Nielsen, S., 2014. "Heat Roadmap Europe: Combining district heating with heat savings to decarbonise the EU energy system," Energy Policy, Elsevier, vol. 65(C), pages 475-489.
    8. Athukorala, P.P.A Wasantha & Wilson, Clevo, 2010. "Estimating short and long-term residential demand for electricity: New evidence from Sri Lanka," Energy Economics, Elsevier, vol. 32(Supplemen), pages 34-40, September.
    9. Nässén, Jonas & Sprei, Frances & Holmberg, John, 2008. "Stagnating energy efficiency in the Swedish building sector--Economic and organisational explanations," Energy Policy, Elsevier, vol. 36(10), pages 3814-3822, October.
    10. Eoin Ó Broin & Érika Mata & Jonas Nässén & Filip Johnsson, 2015. "Quantification of the Energy Efficiency Gap in the Swedish Residential Sector," Post-Print hal-01219283, HAL.
    11. Bentzen, Jan & Engsted, Tom, 1993. "Short- and long-run elasticities in energy demand : A cointegration approach," Energy Economics, Elsevier, vol. 15(1), pages 9-16, January.
    12. Nassen, Jonas & Holmberg, John, 2005. "Energy efficiency--a forgotten goal in the Swedish building sector?," Energy Policy, Elsevier, vol. 33(8), pages 1037-1051, May.
    13. Filippini, Massimo & Hunt, Lester C. & Zorić, Jelena, 2014. "Impact of energy policy instruments on the estimated level of underlying energy efficiency in the EU residential sector," Energy Policy, Elsevier, vol. 69(C), pages 73-81.
    14. Chateau, B. & Lapillonne, B., 1978. "Long-term energy demand forecasting A new approach," Energy Policy, Elsevier, vol. 6(2), pages 140-157, June.
    15. Ang, B.W. & Zhang, F.Q., 2000. "A survey of index decomposition analysis in energy and environmental studies," Energy, Elsevier, vol. 25(12), pages 1149-1176.
    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. Balaras, Constantinos A. & Dascalaki, Elena G. & Droutsa, Kalliopi G. & Kontoyiannidis, Simon, 2016. "Empirical assessment of calculated and actual heating energy use in Hellenic residential buildings," Applied Energy, Elsevier, vol. 164(C), pages 115-132.
    2. Ott, Laurent & Weber, Sylvain, 2022. "How effective is carbon taxation on residential heating demand? A household-level analysis," Energy Policy, Elsevier, vol. 160(C).
    3. Guo, Xiaodan & Xiao, Bowen, 2022. "How can pricing strategy for district heating help China realize cleaner residential heating?," Energy Economics, Elsevier, vol. 110(C).
    4. Langevin, J. & Reyna, J.L. & Ebrahimigharehbaghi, S. & Sandberg, N. & Fennell, P. & Nägeli, C. & Laverge, J. & Delghust, M. & Mata, É. & Van Hove, M. & Webster, J. & Federico, F. & Jakob, M. & Camaras, 2020. "Developing a common approach for classifying building stock energy models," Renewable and Sustainable Energy Reviews, Elsevier, vol. 133(C).
    5. Eduardo M. G. Rodrigues & Radu Godina & Miadreza Shafie-khah & João P. S. Catalão, 2017. "Experimental Results on a Wireless Wattmeter Device for the Integration in Home Energy Management Systems," Energies, MDPI, vol. 10(3), pages 1-18, March.
    6. Hall, Lisa M.H. & Buckley, Alastair R., 2016. "A review of energy systems models in the UK: Prevalent usage and categorisation," Applied Energy, Elsevier, vol. 169(C), pages 607-628.
    7. Sofia Tsemekidi Tzeiranaki & Paolo Bertoldi & Francesca Diluiso & Luca Castellazzi & Marina Economidou & Nicola Labanca & Tiago Ribeiro Serrenho & Paolo Zangheri, 2019. "Analysis of the EU Residential Energy Consumption: Trends and Determinants," Energies, MDPI, vol. 12(6), pages 1-27, March.
    8. Huang, Lizhen & Bohne, Rolf André & Lohne, Jardar, 2015. "Shelter and residential building energy consumption within the 450 ppm CO2eq constraints in different climate zones," Energy, Elsevier, vol. 90(P1), pages 965-979.
    9. Laes, Erik & Mayeres, Inge & Renders, Nele & Valkering, Pieter & Verbeke, Stijn, 2018. "How do policies help to increase the uptake of carbon reduction measures in the EU residential sector? Evidence from recent studies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 234-250.
    10. Runst, Petrik & Thonipara, Anita, 2019. "Dosis facit effectum: Why the scope of the carbon tax matters - Evidence from the Swedish residential sector," ifh Working Papers 19/2019, Volkswirtschaftliches Institut für Mittelstand und Handwerk an der Universität Göttingen (ifh).

    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. Eoin Ó Broin & Jonas Nässén & Filip Johnsson, 2015. "The influence of price and non-price effects on demand for heating in the EU residential sector," Post-Print hal-01219278, HAL.
    2. Erdogdu, Erkan, 2007. "Electricity demand analysis using cointegration and ARIMA modelling: A case study of Turkey," Energy Policy, Elsevier, vol. 35(2), pages 1129-1146, February.
    3. Lee, Chien-Chiang & Chiu, Yi-Bin, 2013. "Modeling OECD energy demand: An international panel smooth transition error-correction model," International Review of Economics & Finance, Elsevier, vol. 25(C), pages 372-383.
    4. Jeyhun I. Mikayilov & Fakhri J. Hasanov & Carlo A. Bollino & Ceyhun Mahmudlu, 2017. "Modeling of Electricity Demand for Azerbaijan: Time-Varying Coefficient Cointegration Approach," Energies, MDPI, vol. 10(11), pages 1-12, November.
    5. Erdogdu, Erkan, 2010. "Natural gas demand in Turkey," Applied Energy, Elsevier, vol. 87(1), pages 211-219, January.
    6. Ó Broin, Eoin & Nässén, Jonas & Johnsson, Filip, 2015. "Energy efficiency policies for space heating in EU countries: A panel data analysis for the period 1990–2010," Applied Energy, Elsevier, vol. 150(C), pages 211-223.
    7. Lee, Chien-Chiang & Chiu, Yi-Bin, 2011. "Electricity demand elasticities and temperature: Evidence from panel smooth transition regression with instrumental variable approach," Energy Economics, Elsevier, vol. 33(5), pages 896-902, September.
    8. Halim Tatli, 2019. "Factors affecting industrial coal demand in Turkey," Energy & Environment, , vol. 30(6), pages 1027-1048, September.
    9. Sayegh, M.A. & Danielewicz, J. & Nannou, T. & Miniewicz, M. & Jadwiszczak, P. & Piekarska, K. & Jouhara, H., 2017. "Trends of European research and development in district heating technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 68(P2), pages 1183-1192.
    10. Bernstein, Ronald & Madlener, Reinhard, 2011. "Responsiveness of Residential Electricity Demand in OECD Countries: A Panel Cointegation and Causality Analysis," FCN Working Papers 8/2011, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    11. Zhang, Yi & Ji, Qiang & Fan, Ying, 2018. "The price and income elasticity of China's natural gas demand: A multi-sectoral perspective," Energy Policy, Elsevier, vol. 113(C), pages 332-341.
    12. John Curtis & Brian Stanley, 2016. "Analysing Residential Energy Demand: An Error Correction Demand System Approach for Ireland," The Economic and Social Review, Economic and Social Studies, vol. 47(2), pages 185-211.
    13. Kanjilal, Kakali & Ghosh, Sajal, 2013. "Environmental Kuznet’s curve for India: Evidence from tests for cointegration with unknown structuralbreaks," Energy Policy, Elsevier, vol. 56(C), pages 509-515.
    14. John T. Cuddington and Leila Dagher, 2015. "Estimating Short and Long-Run Demand Elasticities: A Primer with Energy-Sector Applications," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    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. Ghosh, Sajal, 2010. "Examining carbon emissions economic growth nexus for India: A multivariate cointegration approach," Energy Policy, Elsevier, vol. 38(6), pages 3008-3014, June.
    17. Ouyang, Xiaoling & Lin, Boqiang, 2015. "An analysis of the driving forces of energy-related carbon dioxide emissions in China’s industrial sector," Renewable and Sustainable Energy Reviews, Elsevier, vol. 45(C), pages 838-849.
    18. Kim, Hyun Seok & Baek, Jungho, 2013. "Assessing dynamics of crude oil import demand in Korea," Economic Modelling, Elsevier, vol. 35(C), pages 260-263.
    19. De Vita, G. & Endresen, K. & Hunt, L.C., 2006. "An empirical analysis of energy demand in Namibia," Energy Policy, Elsevier, vol. 34(18), pages 3447-3463, December.
    20. Ahmed Raza ul MUSTAFA* & Mohammad NISHAT**, 2017. "ROLE OF SOCIAL PROTECTION IN POVERTY REDUCTION IN PAKISTAN: A Quantitative Approach," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 27(1), pages 67-88.

    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:energy:v:81:y:2015:i:c:p:146-158. 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.journals.elsevier.com/energy .

    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.