Bank Of Spain Believes That Electricity And Fuel Demand Fell Less Than Expected, Despite Their Prices & More Latest News Here

Madrid, 27 (European News)

Spanish financial institutions have confirmed that demand for electricity and natural gas, especially gasoline, in Spain did not fall as expected in the first half of the 12-month period, despite sharply higher costs.

In a report titled “Preliminary assessment of Spain’s electricity consumption to increase in cost sensitivity”, which will be included in subsequent quarterly reports on the Spanish economy, the agency stressed that the tutorial literature implies value elasticity in Spain in the short term. Demand for diesel and gasoline may be between -0.20 and -0.25, and over longer time frames (from 12 months) may be between -0, 7 and -0.9.

For half of it, it believes the elasticity of overall electricity demand can reach around -0.2 in the short term and rise to -0.7 in 12 to 24 months.

increase fuel consumption

As far as fuels are concerned, the report noted that despite their marked rise in value, their consumption in the current quarter not only did not fall, but rose, especially in the case of gasoline, which is the segment where residential consumption is. concentrated.

In this particular case, it noted that current habits may be particularly affected by the pandemic’s impact on liquidity, which fell sharply in 2020 and has been gradually recovering since.

Due to this fact, it estimates that it may be more applicable to examine the monthly consumption range through the first half of 2022, which were noted in the same time interval in 2019.

In this case, this comparability means that fuel demand has recently been shown to be less cost elastic than traditional estimates from the tutorial literature.

On this approach, the report highlights that while gasoline and diesel costs were 30.9% and 33.5% higher, respectively, in the first half of 2022 average, gasoline consumption in the first half of 2019 was higher during the same time period in 2019. The 12-month half was up 6.7% from 2019, while diesel consumption fell 6.5%.

Nonetheless, using the short-run elasticity of -0.25, he estimates that the decline in consumption of these goods due to rising costs should be around 8%.

Electricity.

In electricity, the report also highlighted that its consumption has decreased reasonably, although the total value of electricity has risen “very significantly” from the past 12 months.

In this regard, it noted that while the combined value of electricity for companies and households has risen substantially since 2021 began, electricity consumption has barely fallen, falling by 3.7% compared with the 2019 study of lecturers, which is expected to drop by 6.7%.

The report by the Spanish financial institution argues that the decline in electricity consumption may be due to changes in expected costs for households and companies that may be non-permanent, and in fact some compensation measures have been taken in terms of benefits for the teams that are basically the most vulnerable, or provide Massive financial savings collected through the highest incidence of the pandemic.

Also, in the case of electrical energy, he believes that {a} higher spend optimizations based primarily on hourly charges or higher demand for residential electrical energy due to increased telecommuting may even help keep consumption in scope.

In any case, he assured that “it is still too early” to accurately assess the quantitative correlation of any of these elements, even concluding that there has been a very structural change in the value sensitivity of Spain’s electricity demand.