Berkouwer, Susanna “Electric Heating and the Effect of Temperature on Household Electricity Consumption in South Africa” (February 2019) | WP-299 | Non-Technical Abstract
Household energy consumption in developing countries is expected to surge in the coming decades. Yet little is known about how temperature drives household energy demand in developing countries. This paper uses 132,375,282 hourly electricity consumption observations from 5,975 households in South Africa to estimate the effects of temperature on household electricity consumption. The estimates flexibly identify a constant log-linear temperature response: for every 1 degree C increase in temperature, electricity consumption decreases by 4.1% among temperatures below the heating threshold but increases by 12.2% among temperatures above the cooling threshold. This relationship is driven more strongly by seasonal than hourly temperature changes. Holding all else constant, a 3.25 degree C increase in temperatures would reduce electricity consumption by 1,093.4 kWh (6.2%) per year per household. Widespread use of electric heating due to limited residential gas heating infrastructure likely drives this. These results point to important regional heterogeneity in how temperature increases may affect household energy demand in the coming decades.