Living smaller, consuming more?: the energy implications of aging and shrinking households in Spain

Jesus Ramos-Martin and Shigeru Matsumoto

No 2025_02, UHE Working papers from Universitat Autònoma de Barcelona, Departament d'Economia i Història Econòmica, Unitat d'Història Econòmica

Abstract: Accurate projections of residential energy consumption are crucial for achieving decarbonization targets; however, most models overlook demographic dynamics, particularly changes in household composition, which significantly impact energy demand. This study addresses this gap by integrating demographic projections into bottom-up energy forecasts for Spain's residential sector from 2021 to 2039. By disaggregating households into nine types based on size and age structure, the model captures heterogeneous energy use patterns and their evolution over time. The results reveal a counterintuitive outcome: although projections indicate significant reductions in per-person and per-household energy consumption, total residential energy consumption is expected to increase by 0.80% over the 2024–2039 period. This is a direct consequence of the composition effect driven by sustained demographic change, specifically, the growing prevalence of smaller, higher-per-capita-use single-person and elderly households, which reduces economies of scale. These structural shifts effectively offset technical efficiency gains and behavioural changes, preventing an overall decline in energy demand. To meet Spain's target of a 1.69% annual reduction in residential energy use by 2030, per-household consumption must decrease by more than 3.4% annually, more than twice the historical rate. This research underscores the need to align housing and energy policies with demographic trends. Targeted strategies, such as promoting smaller, energy-efficient dwellings and accelerating building retrofits, are essential for achieving climate goals in an aging and increasingly fragmented society.

Keywords: Households; residential energy consumption; household type distribution; energy consumption scenarios; ageing; behavioral changes (search for similar items in EconPapers)
JEL-codes: D10 I31 J11 Q41 Q57 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2025-07
New Economics Papers: this item is included in nep-age and nep-ene
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