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The Non-Linear Link between Electricity Consumption and Temperature in Europe: a Threshold Panel Approach

Author

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  • Julien Fouquau

    (LEO - Laboratoire d'économie d'Orleans [2008-2011] - UO - Université d'Orléans - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper investigates the relationship between electricity demand and temperature in the European Union. We address this issue by means of a panel threshold regression model on 15 European countries over the last two decades. Our results confirm the non-linearity of the link between electricity consumption and temperature found in more limited geographical areas in previous studies. By distinguishing between North and South countries, we also find that this non-linear pattern is more pronounced in the warm countries. Finally, rolling regressions show that the sensitivity of electricity consumption to temperature in summer has increased in the recent period.
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Suggested Citation

  • Julien Fouquau, 2008. "The Non-Linear Link between Electricity Consumption and Temperature in Europe: a Threshold Panel Approach," Post-Print halshs-00360442, HAL.
    • Handle: RePEc:hal:journl:halshs-00360442
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    References listed on IDEAS

    as
    1. González, Andrés & Teräsvirta, Timo & van Dijk, Dick & Yang, Yukai, 2005. "Panel Smooth Transition Regression Models," SSE/EFI Working Paper Series in Economics and Finance 604, Stockholm School of Economics, revised 11 Oct 2017.
    2. Ghislaine Destais, 2007. "Economic development and energy intensity : a panel data analysis," Post-Print halshs-00178438, HAL.
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    8. Sailor, David J. & Muñoz, J.Ricardo, 1997. "Sensitivity of electricity and natural gas consumption to climate in the U.S.A.—Methodology and results for eight states," Energy, Elsevier, vol. 22(10), pages 987-998.
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    10. Jan Horst Keppler & Régis Bourbonnais & Jacques Girod (ed.), 2007. "The Econometrics of Energy Systems," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-62631-7, March.
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    12. Ghislaine Destais & Julien Fouquau & Christophe Hurlin, 2007. "Economic Development and Energy Intensity: A Panel Data Analysis," Palgrave Macmillan Books, in: Jan Horst Keppler & Régis Bourbonnais & Jacques Girod (ed.), The Econometrics of Energy Systems, chapter 5, pages 98-120, Palgrave Macmillan.
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    More about this item

    Keywords

    Non-Linear; Link; Electricity; Consumption; Temperature; Europe; Threshold; Panel; Approach;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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