Natural disasters and electricity consumption behavior: a case study of the 2011 Great East Japan Earthquake

Abstract

A better understanding of the price mechanisms behind electricity demand fluctuations could help develop effective tools to forecast energy demand after natural disasters. To this end, this study empirically analyzed the price elasticity of residential electricity demand in Japan over the 1990–2015 period using regional data. In particular, it attempted to shed light on the price mechanisms behind demand fluctuations by analyzing the effects of both price increases and decreases on power demand. The results showed that households tend to consume electricity according to past patterns. Given this electricity consumption behavior, once the habit of saving electricity is established, it persists. The results also show that changes in the power supply configuration associated with natural disasters may alter people’s electricity consumption behaviors. Consumer responses seem to be more sensitive to price rises than to price falls. This suggests the possibility that residential electricity demand will further decrease if the trend of rising electricity rates continues in the future.