Living Smaller, Consuming More? The Energy Implications of Aging and Shrinking Households in Spain

Accurate projections of residential energy consumption are crucial for achieving decarbonization targets; however, most models overlook demographic dynamics—particularly changes in household composition—which significantly impact energy demand. This study addresses this gap by integrating demographic projections into bottom-up energy forecasts for Spain's residential sector from 2021 to 2039. Using microdata from the Household Budget Survey and disaggregating households into nine types based on size and age structure, the model captures heterogeneous energy use patterns and their evolution over time. Results show that the increasing prevalence of single-person and elderly households, which are less efficient due to reduced economies of scale, offsets much of the expected energy savings from technological improvements. Compared to aggregate models, this disaggregated approach yields more conservative estimates: while per-household and per-capita consumption decline, total residential energy use may increase slightly unless stronger efficiency gains are achieved. To meet Spain’s target of a 1.69% annual reduction in residential energy use by 2030, per-household energy consumption must decrease by over 3.4% annually—more than double the historical rate. These findings highlight the critical role of demographic structure in shaping energy demand and underscore the limitations of conventional modeling approaches. By incorporating household composition into projections, this research enhances the accuracy of energy scenarios and provides evidence for the need to align housing and energy policies with demographic trends. Targeted strategies—such as promoting smaller, energy-efficient dwellings and accelerating building retrofits—are essential for achieving climate goals in an aging and increasingly fragmented society.