Electricity demand in industrial and service sectors in Taiwan
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The electricity demand in the industrial and service sectors in Taiwan is estimated using a panel dataset, covering 23 industries in the industrial and 9 in the service sectors from 1998 to 2015. Static and dynamic models are studied. Industries are reclassified based on the national accounts and the energy balance sheets. Estimated results indicate the price elasticity is − 0.14 in the short term and − 0.82 in the long term, while the income elasticity is 0.08 in the short term and 0.47 in the long term. The influence of cooling degree days was positive, and substitution effect of electricity with respect to petroleum was proven. In addition, the scenario analysis reveals the gap between the current situation and the policy target of electrical efficiency. This gap can be bridged by economic development and adjustment of industrial structure if Taiwan chooses to stick with low electricity prices.
KeywordsPanel data model Price elasticity Income elasticity Electrical efficiency Industrial structure
JEL classificationQ41 C23
I thank the editor and six anonymous reviewers for constructive comments. The errors, idiocies, and inconsistencies remain my own.
Compliance with ethical standards
Conflict of interest
The author declares that she has no conflict of interest.
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