The impact of climate change on electricity demand in Australia

Abstract

This study estimates the short- and long-term impacts of climate change on electricity demand in Australia. We used an autoregressive distributed lag (ARDL) model with monthly data from 1999 to 2014 for six Australian states and one territory. The results reveal significant variations in electricity demand. We then used long-term coefficients for climatic response to simulate future electricity demand using four scenarios based on the representative concentration pathways (RCPs) of the Intergovernmental Panel on Climate Change (IPCC). Our results show a gradual increase in electricity consumption due to warmer temperatures with the possibility of peak demand in winter; however, demand tends to decrease in the middle of the twenty-first century across the RCPs, while the summer peak load increases by the end of the century. Finally, we simulated the impact of policy uncertainty through sensitivity analysis and confirmed the potential benefits of climate change adaptation and mitigation.