The Economics of Energy (and Electricity) Demand
AbstractEconomic drivers, technologies and demand side management are keys in understanding the long-term trends of both energy and more specifically electricity consumption. This paper discusses some of the important economics foundations of energy demand in general, and electricity in particular. First, we look at the macro-economic context of energy. This reveals how energy and electricity consumption are subject to the same drivers - income and price - over long periods. However, energy demand (and carbon emissions) falls and energy prices rises in one country may have little effect at the world level. Next, we examine the features of energy service expenditures. Despite similarities over time, specific sectors are distinct from one another in terms of consumption profiles, and new sources of electricity demand may substantially change total demand and the way it is consumed. This leads us to a closer look at the micro-economic context of energy demand, and the tension between technically possible energy savings one one side, and the economics and behavioural dimensions on the other side. We conclude by highlighting the various unknowns and uncertainties that characterise the future of energy demand.
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Bibliographic InfoPaper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 1137.
Date of creation: 13 Apr 2011
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Web page: http://www.econ.cam.ac.uk/index.htm
Find related papers by JEL classification:
- Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
- Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
- D19 - Microeconomics - - Household Behavior - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-06-04 (All new papers)
- NEP-ENE-2011-06-04 (Energy Economics)
- NEP-ENV-2011-06-04 (Environmental Economics)
- NEP-IND-2011-06-04 (Industrial Organization)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Brophy Haney, A. & Jones, I.W. & Pollitt, M.G., 2009. "UK Retailers and Climate Change: The Role of Partnership in Climate Strategies," Cambridge Working Papers in Economics 0950, Faculty of Economics, University of Cambridge.
- Platchkov, L. & Pollitt, M. G. & Reiner, D. & Shaorshadze, I., 2011. "2010 EPRG Public Opinion Survey: Policy Preferences and Energy Saving Measures," Cambridge Working Papers in Economics 1149, Faculty of Economics, University of Cambridge.
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