Natural Gas Demand in the European Household Sector

Asche, Frank; Nilsen, Odd Bjarte; Tveterås, Ragnar

doi:10.5547/issn0195-6574-ej-vol29-no3-2

Cited by 63 publications

(39 citation statements)

References 20 publications

(67 reference statements)

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“…For comparison, a review of studies by Espey and Espey (2004) found a mean shortrun elasticity of -0.35 (median -0.28) for electricity; a study by Asche et al (2008) found short run elasticities of household natural gas demand to be -0.25 or less; and a review of studies by Goodwin et al (2004) found a mean short-run elasticity for vehicle fuels of -0.25.…”

mentioning

confidence: 99%

Living up to expectations: Estimating direct and indirect rebound effects for UK households

2015

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confidence: 99%

Living up to expectations: Estimating direct and indirect rebound effects for UK households

2015

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“…The fact that natural gas demand tend to be seasonal (Asche et al, 2008) together with limited pipeline capacity, imply that seasonal peak load pricing can occur. While electricity markets experience extreme price peaks of short duration, the storability of natural gas suggests less extreme price movements in general and smoother seasonal pricing.…”

Section: Discussionmentioning

confidence: 99%

“…During the last decades, demand for gas in Europe has more than doubled (Asche et al, 2008). This is largely due to increased use of natural gas in the power sector.…”

Section: Introductionmentioning

confidence: 99%

Modeling UK Natural Gas Prices when Gas Prices Periodically Decouple from the Oil Price

Asche¹,

Øglend²,

Osmundsen³

2017

The Energy Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Modeling UK Natural Gas Prices when Gas Prices Periodically Decouple from the Oil Price Abstract When natural gas prices are subject to periodic decoupling from oil prices, for instance due to peak-load pricing, conventional linear models of price dynamics such as the Vector Error Correction Model (VECM) can lead to erroneous inferences about cointegration relationships, price adjustments and relative values. We propose the use of regime-switching models to address these issues. Our regime switching model uses price data to infer whether pricing is oildriven (integrated) or gas-specific (decoupled). We find that UK natural gas (ICE) and oil (Brent) are cointegrated for the majority of the sample considered (1997)(1998)(1999)(2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010)(2011)(2012)(2013)(2014). Gas prices tend to decouple during fall and early winter, when they increase relative to oil consistent with heating demand for natural gas creating gas-specific pricing. Using the model to infer relative values when evidence favors integrated markets, we find that the industry 10-1 rule-of-thumb holds, meaning that the value of one barrel of oil is 10 times the value of one MMbtu of natural gas. Terms of use: Documents inJEL-Code: F130, Q270, Q480, Q350, Q410.

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“…Many studies including Baker and Blundell (1991) and Berkhout et al (2004) find that the elasticity of demand for gas in the residential sector is inelastic. We use an elasticity of -0.16, estimated by Asche, Nilsen and Tveterås (2008). We also carry out a sensitivity analysis in which we decrease the elasticity to -0.5 as this is the elasticity estimated for UK households (Baker and Blundell, 1991).…”

Section: Consumer Surplusmentioning

confidence: 99%

The cost of natural gas shortages in Ireland

Leahy¹,

Devitt²,

Lyons³

et al. 2012

Energy Policy

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This paper investigates the economic implications of disruptions of one to ninety days to the supply of natural gas in Ireland. We assess the impact of a hypothetical gas supply disruption in both winter and summer in 2008 (with observed market characteristics) and in 2020 (with projected market characteristics). The cost of a natural gas outage includes the cost of natural gas being unavailable for heating and other purposes in the industrial and commercial sectors, lost consumer surplus in the residential sector, the cost of lost electricity in all sectors and lost VAT on the sale of gas and electricity. Ireland produces much of its electricity from natural gas and the loss of this electricity accounts for the majority of the cost of a natural gas outage. Losing gas-fired electricity would cost 0.1 to 1.0 billion euro per day, depending on the time of week, the time of year, and rationing of electricity. Industry should be rationed before households to minimize economic losses, but current emergency protocols favour industry. If gas-fired electricity is unavailable for three months, the economic loss could be up to 80 billion euro, about half of Gross Domestic Product. Losing gas for heating too would add up to approximately 8 billion euro in economic losses. We also discuss some options to increase Ireland's security of supply, and find that the cost is a small fraction of the avoided maximum damage. ESRI working papers represent un-refereed work-in-progress by researchers who are solely responsible for the content and any views expressed therein. Any comments on these papers will be welcome and should be sent to the author(s) by email. Papers may be downloaded for personal use only.

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Natural Gas Demand in the European Household Sector

Cited by 63 publications

References 20 publications

Living up to expectations: Estimating direct and indirect rebound effects for UK households

Living up to expectations: Estimating direct and indirect rebound effects for UK households

Modeling UK Natural Gas Prices when Gas Prices Periodically Decouple from the Oil Price

The cost of natural gas shortages in Ireland

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