The impact of Singapore’s residential electricity conservation efforts and the way forward. Insights from the bounds testing approach

Abstract

This article provides fresh empirical evidence of residential electricity demand in Singapore over the period of 1980–2014, using the bounds testing procedure to cointegration. The residential electricity demand comprises of income, price, temperature, rainy days, old-age dependency and the impact of energy efficiency policies. Our results are consistent with previous studies, where income and price elasticities are inelastic. Hence, from a policy perspective, subsidies will not be effective in reducing electricity demand. We also found that old-age dependency is an important determinant that reduces electricity consumption at least in the short-run, suggesting that policies that target the younger population may bring more savings.The model findings suggest that in general, energy efficiency interventions introduced after 2007, which comprises of both informational strategies and efficiency standards, were effective in reducing household electricity consumption. However, in order to realise greater electricity reduction potential, policy efforts have to intensify into the future, with the main objectives being to permanently change energy habits, and consider the role of hassle ‘costs’ when rolling out energy saving measures.