Energy Demand, Substitution and a Potential for Electrification: An econometric analysis of eight Danish subsectors

Niels Møller ()

MPRA Paper from University Library of Munich, Germany

Abstract: This research contains an econometric analysis of energy demand in trade and industry which allows for substitution between electricity and other energy carriers when relative prices change. Long-run substitution towards electricity is a means of electrifying energy demand and therefore contributes to paving the way for a renewable-based energy sys-tem. For eight subsectors of the Danish economy, time series (1966-2011) are modeled by means of partial Cointegrated VARs. Long-run demand relations are identified for all subsectors and robust price elasticities are supported in five cases. The results are used in a small impulse-response experiment which suggests a potential for taxation to move energy consumption away from fossil-based fuels and towards electricity.

Keywords: Energy Demand; Electrification; Energy substitution; Industrial energy consumption; Cointegrated VAR; Electricity demand; Impulse-response analysis. (search for similar items in EconPapers)
JEL-codes: C01 C32 Q4 (search for similar items in EconPapers)
Date: 2015-12-04
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