Abstract
This study builds non-linear econometric models to analyze the effects of temperature on electricity consumption in Taiwan by using the smooth transition regression (STR) model and the monthly time-series data from 1983 to 2012. The empirical results indicate that there is a non-linear relationship between electricity consumption and temperature in Taiwan. Furthermore, all the six estimated threshold temperatures are between 25.364°C and 27.156°C, and the average of threshold temperatures is 26.384°C. It implies that Taiwan’s electricity consumption has a non-linear growth if average temperature is higher than the threshold temperature. In addition, the estimated threshold temperature has policy implications for Taiwan’s policy makers, meaning that the threshold temperature in this study can serve as a reference for framing policies of managing electricity demand in Taiwan.
Highlights
Electricity consumption is contributed by many types of human activities, such as heating, air conditioning, lighting in both business and residential sectors, and major contributions come from operating equipment in industrial sectors
All the climate-change-related impacts on electricity demand and supply can be observed from the quantifiable effects of temperature on the use of heating and air conditioning, and these numbers are usually described by different measurements based on the concept of heating degree days (HDDs) and cooling degree days (CDDs)
This study discusses the relationship between electricity consumption and temperature in Taiwan for the period from 1983 to 2012
Summary
Electricity consumption is contributed by many types of human activities, such as heating, air conditioning, lighting in both business and residential sectors, and major contributions come from operating equipment in industrial sectors. Whilst lighting and operating equipment might not be directly linked to climate change, heating and air conditioning have a direct impact on air temperature [1]. All the climate-change-related impacts on electricity demand and supply can be observed from the quantifiable effects of temperature on the use of heating and air conditioning, and these numbers are usually described by different measurements based on the concept of heating degree days (HDDs) and cooling degree days (CDDs). If the air temperature is comfortable for humans, there will be less electricity consumption for heating or cooling
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