Economic growth and global warming effects on electricity consumption in Spain: a sectoral study

Abstract

This paper analyzes the effect of certain factors on electricity consumption in Spain at a sectoral level. An electricity consumption function has been estimated by using panel data, depending on gross value added (GVA), temperatures, capitalization, and human capital. This function is obtained for total productive electricity consumption and for the agricultural, construction, industrial, service, and public administration sectors, referring to the 17 Autonomous Communities of Spain for the 2000–2013 period. The obtained results show important sectoral differences in the effect that GVA has on electricity consumption, indicating a positive and increasing effect of temperatures above 22 °C in the total economy and in the tertiary sector, and a negative effect of temperatures below 18 °C in some sectors. These results may indicate that global warming may induce an electricity demand growth in Spain, especially related to cooling needs. The results also highlight the positive effects of capitalization in all sectors, and the negative effects of human capital, except for the public administration sector. In this context, it may be appropriate to carry out policies that mitigate this consumption growth, reinforcing energy efficiency measures, and human capital investments.