IDEAS home Printed from https://ideas.repec.org/a/eco/journ2/2024-06-15.html
   My bibliography  Save this article

Modeling Electricity Demand in UAE: Revisit of Time Series Analysis

Author

Listed:
  • Salah Abosedra

    (School of Human and Social Sciences, Libyan International Medical University, Benghazi, Libya)

  • Abdulkarim Dahan

    (Department of Finance and Accounting, American University in the Emirates, UAE)

  • Sartaj Rasool Rather

    (Department of Management Studies, Birla Institute of Technology and Science Pilani, Dubai Campus, UAE)

Abstract

This paper explains the drivers of electricity demand in the UAE by applying the novel Autoregressive Distributive Lag model (ARDL). This model is well-suited for a small sample size, and it has a robust design in terms of lag selection and length, which mitigates issues of endogeneity and multicollinearity. In addition to GDP and real electricity prices, our model accounts for population, and weather as underlying variables affecting electricity demand in UAE. We employ up to date available time-series annual data for the country which covers the period from the year 1985 to 2022. The results suggest that in the short run, except temperature, no other factor seems to have any significant impact on electricity demand. However, in the long run, changes in income, temperature, and population are positively influencing the electricity demand in the UAE. Also, the electricity price appears to be negatively related to the demand for electricity. Overall, our findings show that policymakers' ability to change electricity consumption in the UAE is limited in the short run. Therefore, long-term policies that promote the use of alternative sources of energy and increase consumer awareness through programs that mitigate the impact of climate change factors seem more appropriate.

Suggested Citation

  • Salah Abosedra & Abdulkarim Dahan & Sartaj Rasool Rather, 2024. "Modeling Electricity Demand in UAE: Revisit of Time Series Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 14(6), pages 154-160, November.
    • Handle: RePEc:eco:journ2:2024-06-15
    as

    Download full text from publisher

    File URL: https://www.econjournals.com/index.php/ijeep/article/download/16963/8301
    Download Restriction: no
    File URL: https://www.econjournals.com/index.php/ijeep/article/view/16963
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Syed Ali Raza & Syed Tehseen Jawaid & Mohammad Haris Siddiqui, 2016. "Electricity Consumption and Economic Growth in South Asia," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 17(2), pages 200-215, September.
    2. Salah Abosedra & Abdulkarim Dahan & Sartaj Rasool Rather, 2024. "Modeling Electricity Demand in UAE: Revisit of Time Series Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 14(6), pages 154-160, November.
    3. Nihal Ahmed & Adnan Ahmed Sheikh & Farhan Mahboob & Muhammad Sibt e Ali & Elżbieta Jasińska & Michał Jasiński & Zbigniew Leonowicz & Alessandro Burgio, 2022. "Energy Diversification: A Friend or Foe to Economic Growth in Nordic Countries? A Novel Energy Diversification Approach," Energies, MDPI, vol. 15(15), pages 1-15, July.
    4. Pavlos Stamatiou, 2022. "Modeling Electricity Consumption for Growth in an Open Economy," International Journal of Energy Economics and Policy, Econjournals, vol. 12(2), pages 154-163, March.
    5. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    6. Abosedra, Salah & Dah, Abdallah & Ghosh, Sajal, 2009. "Electricity consumption and economic growth, the case of Lebanon," Applied Energy, Elsevier, vol. 86(4), pages 429-432, April.
    7. Mohamed, Zaid & Bodger, Pat, 2005. "Forecasting electricity consumption in New Zealand using economic and demographic variables," Energy, Elsevier, vol. 30(10), pages 1833-1843.
    8. Ghosh, Sajal, 2002. "Electricity consumption and economic growth in India," Energy Policy, Elsevier, vol. 30(2), pages 125-129, January.
    9. Atalla, Tarek N. & Hunt, Lester C., 2016. "Modelling residential electricity demand in the GCC countries," Energy Economics, Elsevier, vol. 59(C), pages 149-158.
    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. Salah Abosedra & Abdulkarim Dahan & Sartaj Rasool Rather, 2024. "Modeling Electricity Demand in UAE: Revisit of Time Series Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 14(6), pages 154-160, November.

    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. Nour Wehbe & Bassam Assaf & Salem Darwich, 2018. "Étude de causalité entre la consommation d’électricité et la croissance économique au Liban," Post-Print hal-01944291, HAL.
    2. Marques, António Cardoso & Fuinhas, José Alberto & Neves, Sónia Almeida, 2018. "Ordinary and Special Regimes of electricity generation in Spain: How they interact with economic activity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P1), pages 1226-1240.
    3. Al-Mulali, Usama & Ozturk, Ilhan, 2014. "Are energy conservation policies effective without harming economic growth in the Gulf Cooperation Council countries?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 38(C), pages 639-650.
    4. Nassir Ul Haq Wani & Farha Naz Khan & Faiq Naderi, 2024. "Electricity consumption and economic growth nexus in Afghanistan: impact, causality, projections, and policy implications," SN Business & Economics, Springer, vol. 4(10), pages 1-25, October.
    5. Kouakou, Auguste K., 2011. "Economic growth and electricity consumption in Cote d'Ivoire: Evidence from time series analysis," Energy Policy, Elsevier, vol. 39(6), pages 3638-3644, June.
    6. Kumar, Ronald Ravinesh & Stauvermann, Peter Josef & Patel, Arvind & Kumar, Nikeel, 2017. "The effect of energy on output per worker in the Balkan Peninsula: A country-specific study of 12 nations in the Energy Community," Renewable and Sustainable Energy Reviews, Elsevier, vol. 70(C), pages 1223-1239.
    7. Rashid Sbia & Muhammad Shahbaz & Ilhan Ozturk, 2017. "Economic growth, financial development, urbanisation and electricity consumption nexus in UAE," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 30(1), pages 527-549, January.
    8. Ronald Kumar & Peter Stauvermann & Arvind Patel, 2015. "Nexus between electricity consumption and economic growth: a study of Gibraltar," Economic Change and Restructuring, Springer, vol. 48(2), pages 119-135, May.
    9. Shahbaz, Muhammad & Lean, Hooi Hooi, 2012. "The dynamics of electricity consumption and economic growth: A revisit study of their causality in Pakistan," Energy, Elsevier, vol. 39(1), pages 146-153.
    10. Nepal, Rabindra & Paija, Nirash, 2019. "Energy security, electricity, population and economic growth: The case of a developing South Asian resource-rich economy," Energy Policy, Elsevier, vol. 132(C), pages 771-781.
    11. Minyoung Yang & Jinsoo Kim, 2020. "Revisiting the Relation between Renewable Electricity and Economic Growth: A Renewable–Growth Hypothesis," Sustainability, MDPI, vol. 12(8), pages 1-22, April.
    12. Sbia, Rashid & Shahbaz, Muhammad, 2013. "The Weight of Economic Growth and Urbanization on Electricity Demand in UAE," MPRA Paper 47981, University Library of Munich, Germany, revised 03 Jul 2013.
    13. Das, Anupam & McFarlane, Adian, 2019. "Non-linear dynamics of electric power losses, electricity consumption, and GDP in Jamaica," Energy Economics, Elsevier, vol. 84(C).
    14. Tang, Chor Foon & Shahbaz, Muhammad & Arouri, Mohamed, 2013. "Re-investigating the electricity consumption and economic growth nexus in Portugal," Energy Policy, Elsevier, vol. 62(C), pages 1515-1524.
    15. Hongyun, Han & Radwan, Amira, 2021. "Economic and social structure and electricity consumption in Egypt," Energy, Elsevier, vol. 231(C).
    16. Ozturk, Ilhan, 2010. "A literature survey on energy-growth nexus," Energy Policy, Elsevier, vol. 38(1), pages 340-349, January.
    17. Villanthenkodath, Muhammed Ashiq & Mahalik, Mantu Kumar, 2021. "Does economic growth respond to electricity consumption asymmetrically in Bangladesh? The implication for environmental sustainability," Energy, Elsevier, vol. 233(C).
    18. Shahbaz, Muhammad & Hoang, Thi Hong Van & Mahalik, Mantu Kumar & Roubaud, David, 2017. "Energy consumption, financial development and economic growth in India: New evidence from a nonlinear and asymmetric analysis," Energy Economics, Elsevier, vol. 63(C), pages 199-212.
    19. Al-mulali, Usama & Fereidouni, Hassan Gholipour & Lee, Janice Y.M., 2014. "Electricity consumption from renewable and non-renewable sources and economic growth: Evidence from Latin American countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 30(C), pages 290-298.
    20. Omri, Anis, 2014. "An international literature survey on energy-economic growth nexus: Evidence from country-specific studies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 38(C), pages 951-959.

    More about this item

    Keywords

    Electricity Consumption; ARDL Estimation; Policy Implication;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting

    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:eco:journ2:2024-06-15. 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: Ilhan Ozturk (email available below). General contact details of provider: http://www.econjournals.com .

    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.