The influence of price and non-price effects on demand for heating in the EU residential sector

Eoin Ó Broin (), Jonas Nässén () and Filip Johnsson ()
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Eoin Ó Broin: CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique, Chalmers University of Technology [Göteborg]
Jonas Nässén: Chalmers University of Technology [Göteborg]
Filip Johnsson: Chalmers University of Technology [Göteborg]

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Abstract: This paper models energy demand for space and water heating from 1970 to 2005 in the residential sector of four EU countries (France, Italy, Sweden, and UK) using index decomposition, ARDL econometric models and cointegration analysis. The partial and temporal influences on energy demand in each country of the number of households, floor area per household (m2) and unit consumption for space and water heating (kWh/m2/year) are disaggregated. The long-run price elasticity of demand at the unit consumption level is found to be low (around -0.25 over the four countries) while the long-run income elasticity of floor area per household is found to be around 0.25 for Italy, Sweden and the UK but insignificant for France. In an exercise using the model to estimate demand to 2050 under annual increases in energy prices of between 0% and 3% it is found that non-price effects such as building codes and autonomous technical progress (represented in the model as a time trend) are equally or more important than the price effect in reducing demand. Thus achieving significant reductions in EU residential sector energy demand by 2050 would require additional non-price policies and measures for success.

Keywords: Heating; Residential; Scenarios; Price and non-price effects (search for similar items in EconPapers)
Date: 2015-01-16
Note: View the original document on HAL open archive server: https://hal.science/hal-01219278v2
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Citations: View citations in EconPapers (6)

Published in Energy, 2015, 81, pp.146-158. ⟨10.1016/j.energy.2014.12.003⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01219278

DOI: 10.1016/j.energy.2014.12.003

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