Structural Times Series Modelling of Energy Demand.

The derived demand for energy comes from the desire to consume energy services such as lighting, heating, and transportation. Consequently, in addition to the economic drivers (income and price), there are number of exogenous factors that drive energy demand. This research therefore uses the Structural Time Series Model to estimate energy demand relationships for Turkish electricity, OECD-Europe natural gas and US per capita gasoline and these relationships are then used to project future demand. The main findings are: •Estimated long run Turkish industrial energy demand output and price elasticities of 0. 15 and -0. 16 respectively, with a generally increasing UEDT. Estimated long-run Turkish residential electricity demand income and price elasticities of 1. 57 and -0. 38 with highly stochastic estimated UEDT with increasing (energy using) and decreasing (energy saving) periods. Estimated Turkish aggregate electricity demand long run income and price elasticities of 0. 17 and -0. 11 respectively with a generally upward sloping (energy using) estimated UEDT, but at a generally decreasing rate. - Based on these estimates it is projected that for Turkey in 2020 industrial electricity demand will be between 97 and 148 TWh; residential electricity demand will be between 48 and 80 TWh; and aggregate electricity demand will be between 259 and 368 TWh. •Estimated long run OECD-Europe natural gas demand income and price elasticities of 0. 95 and -0. 18 respectively with an increasing and decreasing an estimated UEDT over the estimation period. - Based on this relationship OECD-Europe natural gas demand is projected to be between 442 and 531 mtoe in 2020. •Estimated long run US per capita gasoline demand income, price maximum, price recovery and price cut elasticities of around 0. 42, -0. 31, -0. 17, and zero respectively with a generally increasing estimated UEDT from 1949 to 1976, but generally declining from 1977 to 1996, and generally increasing from 1997 until 2008. - Based on this relationship US per capita gasoline demand is projected to be between 10 and 13 barrels (1590 litres and 2067 litres) in 2020.