The Boom of Electricity Demand in the Residential Sector in the Developing World and the Potential for Energy Efficiency

With the emergence of China as the world’s largest energy consumer, the awareness of developing country energy consumption has risen. According to common economic scenarios, the rest of the developing world will probably see an economic expansion as well. With this growth will surely come continued rapid growth in energy demand. This paper explores the dynamics of that demand growth for electricity in the residential sector and the realistic potential for coping with it through efficiency.

In 2000, only 66% of developing world households had access to electricity. Appliance ownership rates remain low, but with better access to electricity and a higher income one can expect that households will see their electricity consumption rise significantly. This paper forecasts developing country appliance growth using econometric modeling. Products considered explicitly - refrigerators, air conditioners, lighting, washing machines, fans, televisions, stand-by power, water heating and space heating– represent the bulk of household electricity consumption in developing countries.

The resulting diffusion model determines the trend and dynamics of demand growth at a level of detail not accessible by models of a more aggregate nature. In addition, the paper presents scenarios for reducing residential consumption through cost-effective and/or ‘best practice’ efficiency measures defined at the product level. The research takes advantage of an analytical framework developed by LBNL (BUENAS) which integrates end use technology parameters into demand forecasting and stock accounting to produce detailed efficiency scenarios, which allows for a realistic assessment of efficiency opportunities at the national or regional level.