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Regional Electricity Demand Impacts in Saudi Arabia: A Study on the Government Sector

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  • Jeyhun I. Mikayilov
  • Abeer Al Ghamdi

Abstract

This research presents a comprehensive analysis of electricity demand factors in Saudi Arabia, focusing on the government sector across different regions. The findings show that income statistically impacts government sector electricity demand in all regions of Saudi Arabia. This impact aligns with regional development characteristics. Notably, more established regions exhibit smaller electricity demand responses to income changes, indicating a stabilization effect. This observation is consistent with economic reasoning and suggests that as regions develop economically, the increase in energy demand reaches a saturation point. The research discovers no significant correlation between price changes and government sector electricity demand across all regions. This may be attributed to a commitment to maintaining high-quality working circumstances despite price fluctuations. Furthermore, it acknowledges the influence of the saying "what belongs to everyone belongs to no one." Temperature conditions significantly impact public electricity consumption in the central region, where hotter weather increases electricity usage, potentially due to the availability of appliances like air conditioners in public facilities. Notably, the central region, hosting many government institutions, is the highest electricity consumer in the government sector. By calculating region-specific weighted income and price elasticities, the study distinguishes the Southern region as the most responsive to changes in income. On the other hand, the Western region demonstrates the highest responsiveness to price changes. These results align with regional development levels and support the research findings. In conclusion, this research offers valuable insights into the intricacies of electricity demand determinants in Saudi Arabia, particularly the government sector. It points out the importance of considering regional variations and sector-specific characteristics when framing energy policies and strategies to implement economic and environmental sustainability in the country.

Suggested Citation

  • Jeyhun I. Mikayilov & Abeer Al Ghamdi, 2023. "Regional Electricity Demand Impacts in Saudi Arabia: A Study on the Government Sector," Journal of Sustainable Development Issues (JOSDI), SDIjournals, vol. 1(1), pages 63-74, December.
    • Handle: RePEc:arv:journl:v:1:y:2023:i:1:p:63-74
    DOI: 10.62433/josdi.v1i1.14
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    References listed on IDEAS

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    1. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    2. Mikayilov, Jeyhun I. & Darandary, Abdulelah & Alyamani, Ryan & Hasanov, Fakhri J. & Alatawi, Hatem, 2020. "Regional heterogeneous drivers of electricity demand in Saudi Arabia: Modeling regional residential electricity demand," Energy Policy, Elsevier, vol. 146(C).
    3. Jeyhun Mikayilov & Abdulelah Darandary, 2023. "Modeling and Projecting Regional Electricity Demand for Saudi Arabia," Methodology Papers ks--2023-mp01, King Abdullah Petroleum Studies and Research Center.
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    Keywords

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    JEL classification:

    • 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
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • 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

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