Gas and electricity demand in Spanish manufacturing industries: An analysis using homogeneous and heterogeneous estimators

A comparative analysis of electricity and gas demand in the industrial sector over a long period of time appears to be absent in the literature. In fact, unlike electricity demand, natural gas demand in the industrial sector has not been well researched. Our paper aims to cover this gap. It analyses...

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Bibliographic Details
Published in:	Utilities policy 2017-04, Vol.45, p.45-60
Main Authors:	Peñasco, Cristina, del Río, Pablo, Romero-Jordán, Desiderio
Format:	Article
Language:	eng
Subjects:	Demand Economics and Finance Electricity Environmental Sciences Gas Homogeneous and heterogeneous estimators Humanities and Social Sciences Manufacturing sector
Online Access:	Get full text
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Summary:	A comparative analysis of electricity and gas demand in the industrial sector over a long period of time appears to be absent in the literature. In fact, unlike electricity demand, natural gas demand in the industrial sector has not been well researched. Our paper aims to cover this gap. It analyses electricity and gas consumption patterns by the Spanish manufacturing sector, between 1995 and 2010. A novel and innovative quantitative approach based on, both, homogenous and heterogeneous estimators was used for this purpose. The results of the no-spurious estimations (the Augmented Mean Group Estimator) show that the price elasticity of gas demand is significantly negative and within the −0.44 to −0.48 range. In contrast, the price elasticity of electricity demand is not statistically significant. The income elasticities show the opposite pattern: those of natural gas are not statistically significant, whereas the income elasticities for electricity are statistically significant and within the 0.22 to 0.29 range. Compared to previous findings, our preferred estimation shows some variation regarding price elasticities of natural gas demand. •Electricity and gas consumption patterns by the Spanish manufacturing sector are analysed.•This analysis follows an innovative approach based on homogenous and heterogeneous estimators.•Income elasticities for electricity are statistically significant and within the 0.22 to 0.29 range.•Price elasticities for gas demand are significantly negative and within the −0.44 to −0.48 range.
ISSN:	0957-1787 1878-4356