Stretching the Duck's Neck: The effect of climate change on future electricity demand

Nicholas Rivers and Blake Shaffer

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examines how climate change will affect both the level and timing of future electricity demand across Canada. Using an original dataset of hourly electricity demand across all Canadian provinces combined with household-level microdata on air conditioner ownership, we estimate temperature responsiveness including both the direct effect of temperature on demand for cooling services, as well as the indirect effect of increasing the stock of temperature-sensitive durables, such as air conditioners. We find only a small increase in total demand by end-century, although the result differs across provinces. The small aggregate result reflects the mitigating effect of rising temperature in a cold country such as Canada, whereby increases in electricity demand for air conditioning as summer temperatures rise is largely offset by reduced winter heating demand. Although we project limited change in overall electricity demand, we do project changes in the timing of demand, both seasonally and diurnally. In particular, we find seasonal peaks shift from winter to summer in most regions, as well as a large increase in intraday ramping requirements—the difference between minimum and maximum demand within a day—suggesting electricity systems of the future will place an even greater value on storage and flexibility.

Keywords: Climate change; future electricity demand; diurnal shape (search for similar items in EconPapers)
JEL-codes: Q40 Q47 Q54 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-ene, nep-env, nep-knm and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:87309

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