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Assessing the impact of Brazilian economic growth on demand for electricity

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  • Maluf de Lima, Lilian
  • Piedade Bacchi, Mirian Rumenos

Abstract

This study analyzes the effect of increased Gross Domestic Product (GDP) on demand for electricity in Brazil from 2004 through 2018 using a transfer function model. The data was derived from a time series of monthly Brazilian GDP and from a monthly series of total Brazilian energy consumption. As an increase in GDP is considered a proxy for economic growth, the study indicates that a 1% increase in Brazilian GDP results in a 0.475% increase in total electricity consumption in Brazil. In addition, electricity consumption forecasts were obtained for the 2018–2023 period using two procedures: the “standard” and “one-step-ahead” procedures. Two quantity indexes were also calculated for this period: one based on consumption forecasts obtained in this study and another based on estimates of installed capacity provided by the EPE. Growth was observed in both indexes, but the series for consumption had a very conservative growth in relation to that recorded for installed capacity. This analysis intends to provide an important contribution to existing literature by assessing the impacts of different GDP growth rates on demand for electricity.

Suggested Citation

  • Maluf de Lima, Lilian & Piedade Bacchi, Mirian Rumenos, 2019. "Assessing the impact of Brazilian economic growth on demand for electricity," Energy, Elsevier, vol. 172(C), pages 861-873.
    • Handle: RePEc:eee:energy:v:172:y:2019:i:c:p:861-873
    DOI: 10.1016/j.energy.2019.01.154
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    2. Silva, Tatiane C. & Pinto, Gabriel M. & de Souza, Túlio A.Z. & Valerio, Victor & Silvério, Naidion M. & Coronado, Christian J.R. & Guardia, Eduardo Crestana, 2020. "Technical and economical evaluation of the photovoltaic system in Brazilian public buildings: A case study for peak and off-peak hours," Energy, Elsevier, vol. 190(C).
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    4. Koščak Kolin, Sonja & Karasalihović Sedlar, Daria & Kurevija, Tomislav, 2021. "Relationship between electricity and economic growth for long-term periods: New possibilities for energy prediction," Energy, Elsevier, vol. 228(C).
    5. Ruan, Fang-Li & Yan, Liang, 2022. "Interactions among electricity consumption, disposable income, wastewater discharge, and economic growth: Evidence from megacities in China from 1995 to 2018," Energy, Elsevier, vol. 260(C).

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    More about this item

    Keywords

    GDP; Electric power; Transfer function; Time series; Installed capacity;
    All these keywords.

    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
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • 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

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