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Industrial Electricity Demand for Turkey: A Structural Time Series Analysis

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  • Zafer Dilaver

    ()
    (Surrey Energy Economics Centre (SEEC), Department of Economics, University of Surrey)

  • Lester C Hunt

    ()
    (Surrey Energy Economics Centre (SEEC), Department of Economics, University of Surrey)

Abstract

This research investigates the relationship between Turkish industrial electricity consumption, industrial value added and electricity prices in order to forecast future Turkish industrial electricity demand. To achieve this, an industrial electricity demand function for Turkey is estimated by applying the structural time series technique to annual data over the period 1960 to 2008. In addition to identifying the size and significance of the price and industrial value added (output) elasticities, this technique also uncovers the electricity Underlying Energy Demand Trend (UEDT) for the Turkish industrial sector and is, as far as is known, the first attempt to do this. The results suggest that output and real electricity prices and a UEDT all have an important role to play in driving Turkish industrial electricity demand. Consequently, they should all be incorporated when modelling Turkish industrial electricity demand and the estimated UEDT should arguably be considered in future energy policy decisions concerning the Turkish electricity industry. The output and price elasticities are estimated to be 0.15 and -0.16 respectively, with an increasing (but at a decreasing rate) UEDT and based on the estimated equation, and different forecast assumptions, it is predicted that Turkish industrial electricity demand will be somewhere between 97 and 148 TWh by 2020.

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Bibliographic Info

Paper provided by Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey in its series Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS) with number 129.

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Length: 42 pages
Date of creation: Sep 2010
Date of revision:
Publication status: Published in Energy Economics, 33(3), 2011, pp. 426-436. (Revised Version)
Handle: RePEc:sur:seedps:129

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Keywords: Turkish Industrial Electricity Demand; Energy Demand Modelling and Forecasting; Structural Time Series Model (STSM); Future Scenarios.;

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References

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Citations

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Cited by:
  1. Heshmati, Almas, 2012. "Survey of Models on Demand, Customer Base-Line and Demand Response and Their Relationships in the Power Market," IZA Discussion Papers 6637, Institute for the Study of Labor (IZA).
  2. Noel Alter & Shabib Haider Syed, 2011. "An Empirical Analysis of Electricity Demand in Pakistan," International Journal of Energy Economics and Policy, Econjournals, vol. 1(4), pages 116-139.
  3. Zafer Dilaver & Lester C Hunt, 2011. "Turkish Aggregate Electricity Demand: An Outlook to 2020," Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS) 132, Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey.
  4. Erol, İsmail & Sencer, Safiye & Özmen, Aslı & Searcy, Cory, 2014. "Fuzzy MCDM framework for locating a nuclear power plant in Turkey," Energy Policy, Elsevier, vol. 67(C), pages 186-197.
  5. Inglesi-Lotz, R., 2011. "The evolution of price elasticity of electricity demand in South Africa: A Kalman filter application," Energy Policy, Elsevier, vol. 39(6), pages 3690-3696, June.
  6. Abdessalem Abbassi & Ahlem Dakhlaoui & Lota D.Tamini, 2014. "Risk Aversion and Dynamic Games Between Hydroelectric Operators under Uncertainty," Cahiers de recherche CREATE 2014-4, CREATE.
  7. Roula Inglesi-Lotz, 2012. "The sensitivity of the South African industrial sector’s electricity consumption to electricity price fluctuations," Working Papers 201225, University of Pretoria, Department of Economics.
  8. Muhammad, Javid & Abdul, Qayyum, 2013. "Electricity consumption-GDP nexus: A structural time series analysis," MPRA Paper 47448, University Library of Munich, Germany.
  9. Olutomi I Adeyemi & Lester C. Hunt, 2013. "Accounting for asymmetric price responses and underlying energy demand trends in OECD industrial energy demand," Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS) 142, Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey.

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