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

Listed author(s):
  • Julien Fouquau

    ()

    (LEO - Laboratoire d'économie d'Orleans - CNRS - UO - Université d'Orléans)

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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Paper provided by HAL in its series Post-Print with number halshs-00360443.

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Date of creation: 19 Jun 2008
Publication status: Published in North American Summer Meeting of the Econometric Society, Jun 2008, Pittsburg, United States
Handle: RePEc:hal:journl:halshs-00360443
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00360443
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  1. González, Andrés & Teräsvirta, Timo & van Dijk, Dick, 2005. "Panel Smooth Transition Regression Models," SSE/EFI Working Paper Series in Economics and Finance 604, Stockholm School of Economics.
  2. Hansen, Bruce E., 1999. "Threshold effects in non-dynamic panels: Estimation, testing, and inference," Journal of Econometrics, Elsevier, vol. 93(2), pages 345-368, December.
  3. Gilbert Colletaz & Christophe Hurlin, 2006. "Threshold Effects in the Public Capital Productivity: an International Panel Smooth Transition Approach," Post-Print halshs-00257487, HAL.
  4. Xiao, Ni & Zarnikau, Jay & Damien, Paul, 2007. "Testing functional forms in energy modeling: An application of the Bayesian approach to U.S. electricity demand," Energy Economics, Elsevier, vol. 29(2), pages 158-166, March.
  5. Beenstock, Michael & Goldin, Ephraim & Nabot, Dan, 1999. "The demand for electricity in Israel," Energy Economics, Elsevier, vol. 21(2), pages 168-183, April.
  6. Theodoros Zachariadis, 2007. "Energy Policy in Cyprus: Outlook and Major Challenges," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 1(1), pages 27-48, June.
  7. 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.
  8. repec:dau:papers:123456789/120 is not listed on IDEAS
  9. Pardo, Angel & Meneu, Vicente & Valor, Enric, 2002. "Temperature and seasonality influences on Spanish electricity load," Energy Economics, Elsevier, vol. 24(1), pages 55-70, January.
  10. G. Destais & Julien Fouquau & Christophe Hurlin, 2006. "Economic Development and Energy Intensity: a Panel Data Analysis," Post-Print halshs-00257369, HAL.
  11. Gilbert Colletaz & Christophe Hurlin, 2006. "Threshold Effects of the Public Capital Productivity : An International Panel Smooth Transition Approach," Working Papers halshs-00008056, HAL.
  12. Moral-Carcedo, Julian & Vicens-Otero, Jose, 2005. "Modelling the non-linear response of Spanish electricity demand to temperature variations," Energy Economics, Elsevier, vol. 27(3), pages 477-494, May.
  13. Sailor, David J, 2001. "Relating residential and commercial sector electricity loads to climate—evaluating state level sensitivities and vulnerabilities," Energy, Elsevier, vol. 26(7), pages 645-657.
  14. Andrea Bigano & Francesco Bosello & Giuseppe Marano, 2006. "Energy Demand and Temperature: A Dynamic Panel Analysis," Working Papers 2006.112, Fondazione Eni Enrico Mattei.
  15. Henley, Andrew & Peirson, John, 1997. "Non-linearities in Electricity Demand and Temperature: Parametric versus Non-parametric Methods," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 59(1), pages 149-162, February.
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