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Sectoral Electricity Demand and Direct Rebound Effect in New Zealand

Author

Listed:
  • Nepal, Rabindra

    (Faculty of Business, School of Accounting, Economics and Finance, Centre for Contemporary Australasian Business and Economics Studies (CCABES), University of Wollongong, Australia)

  • al Irsyad, Muhammad Indra

    (R&D Centre of Electricity, Renewables, and Energy Conservation Technology, Ministry of Energy and Mineral Resources, Indonesia)

  • Jamasb, Tooraj

    (Department of Economics, Copenhagen Business School)

Abstract

This paper is one of the limited studies to investigate rebound effects in sectoral electricity consumption and the specific case of New Zealand. New Zealand, like other OECD economies, has aimed for energy efficiency improvements and reduced electricity consumption from 9.2 MWh per capita in 2010 to 8.6 MWh per capita in 2015. However, following a significant decline since 2010, electricity consumption in the main New Zealand sectors is increasing. Energy conservation could play an important role in meeting the growing demand for electricity but rebound effect can affect the effectiveness of conservation policies. We decompose the sectoral electricity prices to capture the asymmetric demand response to electricity price changes and estimate electricity demand elasticity during 1980 and 2015 to estimate the sectoral rebound effects. We find partial rebound effects of 54% and 23% in the industrial and commercial sector respectively while we find no partial rebound effect at aggregate sectoral level. The rebound effect is insignificant in the residential sector. These findings lead to policy recommendations for more sector specific energy conservation measures and policies.

Suggested Citation

  • Nepal, Rabindra & al Irsyad, Muhammad Indra & Jamasb, Tooraj, 2020. "Sectoral Electricity Demand and Direct Rebound Effect in New Zealand," Working Papers 9-2020, Copenhagen Business School, Department of Economics.
    • Handle: RePEc:hhs:cbsnow:2020_009
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    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
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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