Fourteenth International Conference on Climate Change: Impacts & Responses

Abstract

We have studied the relationship between climate change and residential demand for electricity by regressing monthly residential electricity demand in the province of New Brunswick on average monthly temperature as well as on extreme temperatures captured by cooling and heating degree days (CDD/HDD). To control for standard demand factors, such as income and price, we also included New Brunswick’s real GDP as well as CPI in our regressions. Our results are consistent with the existing studies and indicate that both CDD and HDD are important factors in determining residential electricity demand. Particularly, coefficients associated with CDD and HDD are positive and significant across all specifications. Since the goal of the study was to understand climate change impacts on future residential demand for electricity in the province of New Brunswick, we evaluated some baseline projections. To arrive at these projections, we forecast future demand for residential electricity using estimated parameters and projections of future CDD and HDD presented in the Climate Atlas of Canada under two different emission scenarios. Our forecast based on the most aggressive scenario shows that residential demand for electricity in the province will grow significant to roughly 11 million megawatt-hours by 2095. Our forecast also suggests that as temperature continues to rise, changes in demand for residential electricity due to increased usage of cooling devices would override reduction in heating requirements. This forecast is useful for the future electricity capacity building in the province of New Brunswick in Atlantic Canada.