Analysing the Industrial Electricity Demand for Turkey
Abstract
This study analyses the effects of some selected parameters on Turkey’s industrial electricity demand by using annual data between 1978 and 2018. In this regard, the Autoregressive Distributed Lag (ARDL) Bounds Testing method is utilized for establishing the models. The variables that used in the models of this study are electricity consumption, industrial value added, price of electricity, urbanization rate and average air temperature. According to the empirical findings, the price elasticities are estimated negative as expected which are -0.14 and -0.18 for the short and long term, respectively. On the other hand, the income elasticities have positive signs and computed as statistically significant. The short and long run income elasticities of industrial electricity demand are found as 0,15 and 0,35, respectively. Additionally, the urbanization rate and air temperature positively affect the industrial electricity demand of Turkey. These results indicate that the estimated price and income elasticities for the Turkish industrial electricity demand are very low and smaller than 1 in absolute terms. Therefore, it can be said that an increase and/or decrease in price and income as percentage is more than increase in electricity consumption for the industrial sector. In addition, these results imply that since the electricity usage in Turkey’s industrial sector is a necessity, consumers are not changing their consumption behaviour easily with respect to the price and income movements.
Keywords
Elasticity Estimates , Industrial Electricity Demand , ARDL Bounds Testing , Turkey
References
- Akay, D., & Atak, M. (2007). Grey prediction with rolling mechanism for electricity demand forecasting of Turkey. Energy, 32(9), 1670-1675.
- Arisoy, I., & Ozturk, I. (2014). Estimating industrial and residential electricity demand in Turkey: A time varying parameter approach. Energy, 66, 959-964.
- Beenstock M., Goldin E., & Nabot D. (1999). The demand for electricity in Israel. Energy Economics, 21(2), 168-183.
- Bilgili, M., Sahin, B., Yasar, A., & Simsek, E. (2012). Electric energy demands of Turkey in residential and industrial sectors. Renewable and Sustainable Energy Reviews, 16(1), 404-414.
- Campbell, A. (2018). Price and income elasticities of electricity demand: Evidence from Jamaica. Energy Economics, 69, 9-32.
- Cialani, C., & Mortazavi, R. (2018). Household and industrial electricity demand in Europe. Energy Policy, 122, 592-600.
- Dilaver, Z., & Hunt, L. C. (2011a). Industrial electricity demand for Turkey: A structural time series analysis. Energy Economics, 33(3), 426-436.
- Dilaver, Z., & Hunt, L. C. (2011b). Modelling and forecasting Turkish residential electricity demand. Energy Policy, 39(6), 3117-3127.
- Dilaver, Z., & Hunt, L. C. (2011c). Turkish aggregate electricity demand: An outlook to 2020. Energy, 36(11), 6686-6696.
- Ediger, V. S., & Tatlidil, H. (2002). Forecasting the primary energy demand in Turkey and analysis of cyclic patterns. Energy Conversion and Management, 43(4), 473-487.