Unveiling the Impact of Weather and Calendar Patterns on Electricity Demand in Off-grid Regions: An Empirical Study
Unveiling the Impact of Weather and Calendar Patterns on Electricity Demand in Off-grid Regions: An Empirical Study

Author(s): Gualter Fernandes Martins Câmara, Francisco José Ferreira Silva, José António Cabral Vieira
Subject(s): Economy, Energy and Environmental Studies
Published by: Институт за икономически изследвания при Българска академия на науките
Summary/Abstract: The Azores archipelago, located in the middle of the Atlantic Ocean, offers a unique setting to study the determinants of energy consumption. Its isolation from the mainland grid makes it a natural experiment where energy production is directly linked to consumption, providing an opportunity to analyze the determinants of energy consumption in archipelagos or isolated regions. This study aims to investigate the relationship between energy consumption and climate variables in an off-grid region, using the island of São Miguel in the Azores archipelago as a case study, from 2018 to 2022. Hourly data on total energy consumption and renewable energy consumption on São Miguel were collected, along with climate data (temperature, solar radiation, humidity, precipitation, and wind speed) and calendar variables (day of the week and holidays). The analysis was performed using panel data methodology with fixed effects, for total energy emission and for renewable energy emission separately. The results show that total energy consumption and renewable energy consumption are influenced by climate variables, albeit with impacts of different magnitudes and directions. The day of the week and holidays also had a significant negative effect on energy consumption. The study's findings can be used to develop policies to promote a more efficient and sustainable energy management in islands and other regions with limited access to the electricity grid.

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