Dynamics and Forecasting of Electricity Consumption in Portugal: A Comparative VAR Analysis

This paper analyzes electricity consumption dynamics in Portugal between 2012 8 and 2024, a period marked by unprecedented energy transition, the COVID-19 pan- 9 demic, and the 20212022 energy crisis. Using three complementary Vector Autore- 10 gressive approaches, the analysis compares forecast performance and identies the 11 main drivers of electricity consumption amid the rapid expansion of renewable capa- 12 city. All models achieve good forecasting accuracy, and impulse response functions 13 indicate that GDP shocks have signicant and persistent eects on electricity con- 14 sumption, with long-run cumulative eects ranging from 0.27 to 0.49. At the same 15 time, renewable capacity penetration shows ambiguous short-run eects, and con- 16 sumption remains highly price-inelastic. The results suggest that economic forecasts 17 will remain central to electricity system planning. However, declining elasticities 18 suggest a gradual decoupling between consumption and economic growth, driven by 19 energy transition factors such as energy eciency and self-consumption.