Conditional demand analysis as a tool to evaluate energy policy options on the path to grid decarbonization

• Published in: Renewable & sustainable energy reviews 2021-10, Vol.149, p.111300, Article 111300
• Main Authors: Papineau, Maya, Yassin, Kareman, Newsham, Guy, Brice, Sarah
• Format: Article
• Language: English
• Subjects: Climate change; Conditional demand analysis; Decarbonization; Energy regression models; Heat pumps; Residential electricity consumption; Space-heating
• ISSN: 1364-0321; 1879-0690
• DOI: 10.1016/j.rser.2021.111300

We implement a conditional demand analysis (CDA) using a large dataset of electricity consumers in a Canadian province with a high market share of electric heating technologies. In doing so we also provide a unifying review of the breadth of interdisciplinary applications of CDA, beginning from the earliest studies up to the present, and test for evidence of unobservable variable bias from random effects panel data estimators. We find that local (i.e. minisplit) heat pumps and thermostat setbacks show the largest electricity savings. Central heat pumps generally do not save heating electricity compared to electric baseboards, and exhibit higher cooling season consumption compared to local heat pumps. We also observe a consistent decline in electricity consumption for newer homes, with the largest effects in the post-2010 period. Our results can inform research to identify promising technologies that support a shift towards large-scale electrification and decarbonization of energy end-uses, on the basis of robust statistical analysis utilizing realized household consumption data. •We implement a CDA in a jurisdiction with a high market share of electric heating technologies.•We test for evidence of unobservable variable bias from the commonly used random effects model.•We reject the null hypothesis of no bias affecting our variables of interest.•Most coefficients show a small difference between estimates in the random vs. fixed effects model.•Two exceptions are the energy consumption effects of a pool pump and energy-related renovations.•A plausible reason for the differences between the two models is the impact of income level.•Local heat pumps consume less electricity annually than houses with electric baseboards.•Central heat pumps consume more annually than electric baseboards.