Factors driving electricity demand in the Philippines
Date
2009-04
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Abstract
This paper examines the main factors that affect electricity demand here in the Philippines. The study used monthly time-series data from January 2005 to September 2008. The Augmented Dickey-Fuller (ADF) test was used on the variables to determine their stationarity, and the ones that contained unit roots were differenced in order to proceed with Ordinary Least Squares (OLS) Estimation. Several variables thought to be significant at first were dropped due to unfavorable results, which included GDP, population growth, and manufacturing production. From the results of the study, we can conclude that here in the Philippines, the main driver of electricity demand are not macroeconomic factors, but monthly temperature changes. This insight helped us conclude that Demand Side Management (DSM) is a key policy that should be implemented in managing electricity consumption.
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Electricity demand, Electric industry, Philippine energy sector, Urbanization, Industrialization