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Modelling electricity demand in Ghana revisited: The role of policy regime changes

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  • Adom, Philip Kofi
  • Bekoe, William

Abstract

As policy regime changes, demand elasticities are unlikely to be constant since individuals change how they form their expectations, and this will change the estimated decision rules. In this paper, the time-varying nature of electricity demand elasticities prior to and post the economic reform period in Ghana is analysed using the FM-OLS. Three different sample periods -pre-reform, post-reform, and full-period- was used in the analysis. The result from the full-sample period revealed that in the long-run electricity demand is significantly affected by industry efficiency, industry value added, and real per capita GDP. Urbanization rate, however, has no significant effect. The pre-reform estimate showed lower income, output, and urbanization elasticities but higher industry energy efficiency elasticity relative to the post-reform period. This suggests that technological change in the pre-reform period has been energy saving whilst technological change in the post reform period has been energy consuming. The result further showed evidence of changing structure of the economy from the more energy intensive sector to the less energy intensive sector after the reform. Government should renew her effort in promoting energy saving technologies in the industrial sector and adjust the industrial structure to encourage the expansion of low energy intensive industries or high technology efficient industries.

Suggested Citation

  • Adom, Philip Kofi & Bekoe, William, 2013. "Modelling electricity demand in Ghana revisited: The role of policy regime changes," Energy Policy, Elsevier, vol. 61(C), pages 42-50.
  • Handle: RePEc:eee:enepol:v:61:y:2013:i:c:p:42-50
    DOI: 10.1016/j.enpol.2013.05.113
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    Citations

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    Cited by:

    1. Adom, Philip Kofi & Amakye, Kwaku & Barnor, Charles & Quartey, George & Bekoe, William, 2016. "Shift in demand elasticities, road energy forecast and the persistence profile of shocks," Economic Modelling, Elsevier, vol. 55(C), pages 189-206.
    2. Mensah, Justice Tei & Marbuah, George & Amoah, Anthony, 2016. "Energy demand in Ghana: A disaggregated analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 924-935.
    3. Adom, Philip Kofi, 2017. "The long-run price sensitivity dynamics of industrial and residential electricity demand: The impact of deregulating electricity prices," Energy Economics, Elsevier, vol. 62(C), pages 43-60.
    4. Adom, Philip Kofi & Amuakwa-Mensah, Franklin, 2016. "What drives the energy saving role of FDI and industrialization in East Africa?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 925-942.
    5. Adom, Philip Kofi & Insaidoo, Michael & Minlah, Michael Kaku & Abdallah, Abdul-Mumuni, 2017. "Does renewable energy concentration increase the variance/uncertainty in electricity prices in Africa?," Renewable Energy, Elsevier, vol. 107(C), pages 81-100.
    6. Calcagnini, Giorgio & Giombini, Germana & Travaglini, Giuseppe, 2016. "Modelling energy intensity, pollution per capita and productivity in Italy: A structural VAR approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 1482-1492.
    7. Paul Adjei Kwakwa & Solomon Aboagye, 2014. "Energy consumption in Ghana and the story of economic growth, industrialization, trade openness and urbanization," Asian Bulletin of Energy Economics and Technology, Asian Online Journal Publishing Group, vol. 1(1), pages 1-6.
    8. Adom, Philip K. & Kwakwa, Paul Adjei, 2014. "Effects of changing trade structure and technical characteristics of the manufacturing sector on energy intensity in Ghana," Renewable and Sustainable Energy Reviews, Elsevier, vol. 35(C), pages 475-483.
    9. repec:eee:rensus:v:74:y:2017:i:c:p:1189-1209 is not listed on IDEAS
    10. Ishmael Ackah & Mcomari Asomani, 2015. "Empirical Analysis of Renewable Energy Demand in Ghana with Autometrics," International Journal of Energy Economics and Policy, Econjournals, vol. 5(3), pages 754-758.
    11. repec:eco:journ2:2017-02-28 is not listed on IDEAS
    12. Kwakwa, Paul Adjei, 2014. "Energy-growth nexus and energy demand in Ghana: A review of empirical studies," MPRA Paper 54971, University Library of Munich, Germany, revised 01 Apr 2014.
    13. Kwakwa, Paul Adjei, 2015. "An investigation into the determinants of hydropower generation in Ghana," MPRA Paper 68033, University Library of Munich, Germany.
    14. Khan, Muhammad Arshad & Abbas, Faisal, 2016. "The dynamics of electricity demand in Pakistan: A panel cointegration analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 1159-1178.
    15. Salisu, Afees A. & Ayinde, Taofeek O., 2016. "Modeling energy demand: Some emerging issues," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 1470-1480.
    16. Adom, Philip Kofi, 2016. "Electricity Supply and System losses in Ghana. What is the red line? Have we crossed over?," MPRA Paper 74559, University Library of Munich, Germany, revised 11 Nov 2016.

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