Relationship between extreme temperature and electricity demand in Pakistan

Ali et al. International Journal of Energy and Environmental Engineering 2013, 4:36 http://www.journal-ijeee.com/content/4/1/36 ORIGINAL RESEARCH Open Access Relationship between extreme temperature and electricity demand in Pakistan Muhammad Ali1*, Muhammad Jawed Iqbal2 and Muhammad Sharif3 Abstract Nowadays, different sectors of the economy are being significantly affected by the weather vagaries. Electricity market is one of the most sensitive sectors, due to the fact that electricity demand is connected to the numerous climatic variables, especially the atmospheric temperature. In this paper we have deduced the link between electricity consumption and mean monthly maximum temperature index in Pakistan, as a case study. ARIMA time series forecast model is developed for the temperature index. The forecast values of mean monthly maximum temperature shows an increasing trend. Linear trend model for electricity consumption is also developed as a function of temperature. Electricity consumption reveals a significant trend due to increase in temperature and socio- economic factors. The monthly behavior of our forecast values depicts that the electricity consumption is more for summer season, and this demand will be highest (6785.6 GWh) in July 2020, due to rise in temperature. Forecast model reveals that the electricity consumption (EC) and mean monthly maximum temperature are increasing with the passage of time. Keywords: Maximum temperature index; Electricity consumption; Time series modeling; Forecast model Background It is well-known that electricity plays a critical role in economic growth, technological development and planning of a country. A study report of World Bank [1], states that no country in the world has succeeded in financial system, without using contemporary technology to produce energy [2]. Smith and Tirpak [3], showed the possible effects of climate change on the USA, across a range of sectors including electricity and that for Colombo by Andrew [4]. Many researchers estimated the impact of global warming on the energy expenditures in a region by Rosenthal [5]. Numerous economical activities have presented climatic changes, so that the predictable revenues may be seriously affected by extreme weather events. Extreme weather events are the infrequent or rare conditions of weather intensity in a locality, like heat waves, cold waves, tropical cyclone, flood, thunderstorm etc. The power sector is one of the most vulnerable to extreme weather, predominantly electricity consumption. Since electricity cannot be stored so the produced electricity must immediately be consumed, this implies * Correspondence: 1 Mathematical Sciences Research Centre, Federal Urdu University of Arts Science and Technology, Karachi, Pakistan Full list of author information is available at the end of the article that an appropriate model is needed to forecast future electricity demand by Valor [6]. In developin’g countries, there is a powerful positive correlation among wealth and energy especially electricity utilization. Though, the method of electricity production and consumption may generate air pollution and greenhouse gas which results global warming (Lee and Chiu [2], Ferguson [7]). Earlier studies mostly apply time-series or cross-sectional datasets to examine the appropriate topic of energy (Wolde-Rufael, [8,9]). Investigators have also started to utilize panel data to investigate the issues on energy (Lee and Lee [10]). Economic derivatives, such as future and alternative agreement on electricity, are usually engaged with this objective [11]. As electricity has become the basic need for survival in Pakistan. Unfortunately our country has been in deficit regarding electricity. Only 16% of rural population have grid-connected electricity, compared with 85% of the urban population [12]. The government called 2nd National Energy Conference on 9th April, 2012 and discussed critical issues and compelled to decide two holidays a week to recover the energy crises. Now it has become a big challenge for new government in Pakistan. Prime minister calls energy © 2013 Ali et al.; licensee Springer. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/2.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. Ali et al. International Journal of Energy and Environmental Engineering 2013, 4:36 http://www.journal-ijeee.com/content/4/1/36 conference immediately, after taking over his responsibility. To overcome these problems an appropriate analysis of the link between electricity consumption and climatic variables, particularly air temperature, must be undertaken. The current work is an attempt to study the above relationship in Pakistan. This communication is planned as, "Data description and methodology" gives an account of the data used in the study, and "Test for stationarity of temperature series" gives the estimates of the constancy test for temperature data. The time series model of temperature is constructed in "Time series modeling", while "Results and discussion" shows the forecast values of EC using regression technique. Finally, "Conclusion" summarizes the conclusions drawn from this investigation. Data description and methodology Electricity consumption in Pakistan Currently Pakistan is facing severe energy crisis and power failures. The trend of power shortages has increased about 5000 MW, load shedding has been increased from 8 to 14 hours daily. Industrial growth has been decelerated and ultimately the whole economy has crashed down [13], so investigation of electricity consumption is an important study. A series of monthly electricity consumption (EC) of Pakistan in GWh, across the period from January 1990 through December 2010, has been used in this study. The data was recorded by Department of Federal Bureau of Statistics Pakistan. This data consists of electricity consumption in all economic sectors such as industrial, Page 2 of 7 housing, and commercial sectors of Pakistan, because regional or sector wise disaggregated data was not available. Figure 1 shows that electricity demand has a considerable, growing trend that can be associated to demographic, community, and economic aspect, while a gradual increment in maximum temperature has also been observed. The series of electricity demand shows seasonal effect, that can be examined with the monthly seasonal variation index (MSVI) and can be defined as; MSVIij ¼ MECij MAEj ð1Þ where MSVIij is the index value for month i in year j, MECij is the monthly electricity consumption for month i in year j, and MAEj is the monthly average electricity load for year j [6]. Figure 2 illustrate the average, maximum, and minimum MSVI values for each month of the year. Here the average values confirm the relative behavior of electricity consumption between di (...truncated)