Electric Heating and the Effects of Temperature on Household Electricity Consumption in South Africa

Abstract

How does temperature affect household energy demand in low-income countries? This paper uses 132,375,282 hourly electricity consumption observations from 5,975 households in South Africa to estimate the causal effects of short-term temperature changes on household electricity consumption. The estimates flexibly identify a constant log-linear temperature response—for every 1ଌ increase in temperature, electricity consumption decreases by 4.1% among temperatures below the heating threshold but increases by 8.1% among temperatures above the cooling threshold. This relationship is driven more strongly by seasonal than hourly temperature changes. Holding all else constant, a 3.25ଌ increase in temperatures would reduce electricity consumption by 1,093.4 kWh (6.2%) per year per household. Widespread use of electric heating due to limited residential gas heating infrastructure likely drives this. These results point to important regional heterogeneity in how temperature increases may affect household energy demand in the coming decades.