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How does daylight saving time affect electricity demand? An answer using aggregate data from a natural experiment in Western Australia

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  • Choi, Seungmoon
  • Pellen, Alistair
  • Masson, Virginie

Abstract

Daylight saving time (DST) affects the lives of more than 1.6 billion people worldwide, with energy saving being the original rationale for its implementation. This study takes advantage of natural experiment data from September 2006 to March 2013 in Western Australia in which DST was observed from December 2006 to March 2009, to estimate the effect of DST on electricity demand. Using the difference-in-differences (DD) approach, we find that DST has little effect on overall electricity demand and electricity generation costs. However, it has a strong redistributional effect by reducing electricity demand substantially in the late afternoon and early evening. This redistributional effect of DST may be of particular interest for policymakers who are interested in controlling high demand and the short term energy market price.

Suggested Citation

  • Choi, Seungmoon & Pellen, Alistair & Masson, Virginie, 2017. "How does daylight saving time affect electricity demand? An answer using aggregate data from a natural experiment in Western Australia," Energy Economics, Elsevier, vol. 66(C), pages 247-260.
  • Handle: RePEc:eee:eneeco:v:66:y:2017:i:c:p:247-260
    DOI: 10.1016/j.eneco.2017.06.018
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    References listed on IDEAS

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    7. Verdejo, Humberto & Becker, Cristhian & Echiburu, Diego & Escudero, William & Fucks, Emiliano, 2016. "Impact of daylight saving time on the Chilean residential consumption," Energy Policy, Elsevier, vol. 88(C), pages 456-464.
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    Cited by:

    1. repec:eee:juipol:v:51:y:2018:i:c:p:12-17 is not listed on IDEAS
    2. Shaffer, Blake, 2017. "Location matters: daylight saving time and electricity use," MPRA Paper 84053, University Library of Munich, Germany.
    3. Bergland, Olvar & Mirza, Faisal, 2017. "Latitudinal Effect on Energy Savings from Daylight Savings Time," Working Paper Series 08-2017, Norwegian University of Life Sciences, School of Economics and Business.

    More about this item

    Keywords

    Daylight saving time; Electricity demand; Electricity Generation Costs;

    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • 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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