Estimation of electricity demand function for Algeria: Revisit of time series analysis

Abstract

This paper aims to empirically re-examine whether economic growth has effect on electricity consumption for Algerian economy. We have incorporated urbanisation and trade openness in electricity demand function as additional determinants of electrictyy consumption for the period of 1971-2012. For empirical purpose, we have applied the recently developed combined cointegration test proposed by Bayer and Hanck (2013) and bounds testing approach to cointegration by Pesaran et al. (2001) for establishing the cointegration between the variables by accomodating structural breaks.The results expose that income growth leads to higher electricity demand along with urbanization being another major contributing factor of rising electricity demand. In contrast, trade openness leads to reduce electricity demand. The causal association between the variables is further exmained with the application of innovation accounting approach of Vector Autoregressive (VAR). The empirical evidnce inidactes the presence of the neutral effect between income growth and electricity use. Urbanization causes electricity use and electricity use causes urbaniation in Granger sense.

Electricity consumption, economic growth, urbanisation and trade nexus: empirical evidence from Iceland

“…This also implies that a 1% rise in economic growth leads electricity usage by 1.41% by keeping other factors constant. These empirical findings are in concordance with the studies by Zhao and Wang (2015) for China, Khraief et al (2016), Smyth (2009), Odhiambo (2009b) and Solarin and Shahbaz (2013). This suggests that more economic growth has been achieved with more electricity consumption over time.…”

“…Bento and Moutinho (2016) argued that these indicators not only encourage domestic economic activities at a local level, but also cause an upsurge in the volume of exports and imports. On the basis of the above-mentioned discussion, an empirical model was identified by Khraief et al (2016), which includes trade and urbanisation, and can be written as:…”

“…However, to the authors' knowledge, no study in the literature exists that has analysed the electricity demand function for Iceland, together with urbanisation and trade. Thus far, Khraief, Shahbaz, Mallick, and Loganathan (2016) estimated the electricity demand function using urbanisation and trade in their study on Algeria. The relationship between E.C.…”

Supply optimization based on society’s cost of electricity and a calibrated demand model for future renewable energy transition in Niger

“…Other GDPs are defined in this work as GDPs related to service and agricultural economic activities. The net change in electricity demand each year from the previous year due to the aforementioned influences can be represented by a linear function [37]. [21] α − 0.0047 K −1 [22] p 0 0.0072 [23] η AC, c 99% [22] η DC, c 99% [22] η d 98.5% [22] η di 99% [22] η m 98% [22] Accordingly, each year's net electricity demand (NED) in Niger can be determined from the rate of change of total electricity demand (ED) as…”

Developing a new model for predicting global solar radiation on a horizontal surface located in Southwest Region of Algeria

“…Algeria possesses an exceptional solar resource in the Mediterranean basin, which is estimated at 60 times of the need for European countries of electric power (Khraief et al (2018)). The insolation time over the Algerian Sahara of the national territory exceeds 2000 hours annually and may reach a maximum of 3900 h (Bailek et al 2017a).…”