Estimating the Demand for Electricity

in Saudi Arabia

1425 2004 -

...........
...........
...........

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1420-1400

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Research Abstract
Estimating the Demand for Electricity in Saudi Arabia
By
Wael Mostafa Bahi

Electric sector in Kingdom of Saudi Arabia has witnessed a

remarkable progress over the last two decades, represented in
consumption at both residential and industrial levels, as a result of
economic development plans in the Kingdom .
The aim of the study is to estimate the demand for electricity
in residential sector for the period of 1400-1420H . This demand
depends on the number of subscribers, KWH price , the average
annual income per capita, the average annual temperature, and the
number of electric appliances in use. In addition , the demand for
electricity in industrial sector is to be estimated for the same
period of time .This demand depends on the number of
subscribers , KWH price ,the price of metric ton of natural gas
used and the average annual temperature.
The research used several economic relationship to estimate
the demand for electricity in residential and industrial sector. An
analysis is conducted for the used form, and the results show that
the most important variables in determining the demand for
electricity in both residential and industrial sectors . These
variables include the number of subscribers, the number of
appliances and the quantity of electricity consumed during the

previous period, for residential sector while the independent

variable affecting the demand for electricity in the industrial sector
is the number
of subscribers.

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_________________________________________________
R. Harlod Williams and Randall I. Mount : " OPEC and the U.S.

)(1

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Rivista Internazionale di science Economiche Commercial , Vol. 34, 1987,N1-2, PP. 147-158.
An Loh Lin , Elethrios N. Botasas and Scott A.Monore: "State

)(2

Gasoline Consumption in the U.S.A. " , Energy Economics, Jan., Vol .7,
No.1 , 1985, pp.29-36.

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1977 ).(2
___________________________________________________
____
(1)H.S Houthakker and M.Kennedy :Demand for Energy as a function of
Price , Energy Delta, Vol.1,1975.
(2)Lester Taylor :The Demand for Energy :A Survey of Price and Income
Elasticiesin William D. nordhaus ed., International studies of the
Demand for Energy . Amsterdam: North Holland Publishing Co.,1977 .

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Mohammed A. Al Sahlawi ,Gasoline Demand : The Case of Saudi

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Arabia , Energy Economics , Vol.10,No. 4 Oct .1988,pp.271-275

Keith D. willett and shahdad Naghshpour :Residental Demand for

)(2

Energy Commodities . Energy Economics , Vol.11, No.4, Oct.,1987

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Research Summery
Estimating the Demand
for Electricity in Saudi Arabia

Due to the increase in the development requirements in

Saudi Arabia , the demand for electricity occurs in both residential
and industrial sectors. The aim of this thesis is to estimate the
determinants of the demand for electricity in Saudi Arabia for the
period 1400-1420 H .
These determinants include : the average annual per capita
income, the average KWH price , the number of subscribers ,
average number of electricity appliances and the quantity of the
electricity consumed during the past period (delaying variable) in
the residential sector. In the industrial sector such determinants
include : the average electricity price, the number of subscribers,
the average price of metric ton of natural gas and the electricity
quantity consumed during the past period (delaying variable).
The estimated results show that the most important variables
affecting , the demand for electricity in the residential sector are
the number of subscribers , the number of appliances , and the
quantity of electricity consumed during the pervious period ,while
the most independent variables affecting the demand for electricity
in the industrial sector is the number
of subscribers .

1986) .( .
. . . .

1991).( .
. . .

1984).( . . .
. .

1997 ). ( .
- -
.

1999) .(
. . .

1409) .( . .
. . . .

1989).( . .
. ..

1994 ) . ( .
. .

1982).( . . : .
. .
1998).( .
. . .

2000 ). ( . :

- .

. . (1975 1970).
.

. 1980 1975).( .
.

. 1985 1980).( .
.

. 1990 1985).( .
.

. 1995 1990 ). ( .
.

. 2000 1995 ) . ( .
.

. 2005 2000). ( .
.

1996 - 1970).( . .
. .

1979 1879) .( .
. .

.
1979 . .

Al Sahlawi , Mohammed ,Gasoline Demand : The Case of Saudi

Arabia , Energy Economics , vol.10,No. 4 Oct .1988,pp.271-275

An Loh Lin , Elethrios N. Botasas and Scott A.Monore: "State
Gasoline Consumption in the U.S.A. " , Energy Economics, Jan.,
vol .7, No.1 , 1985, pp.29-36.
Baxter , R.E " Analysis of The Industrial demand for electricity "
The Economic Journal , 75,No.310(June , 1968)
Fisher , F.M and C.A Kaysen , " A study in Econometrics " The
Demand for Electricity in the united states (Amsterdam , North
Holland Publishing Co. , 1962 .

Harlod, R. Williams and I. Mount Randall : " OPEC and the U.S.
Demand for Motor Gasoline : Short run and long run Price
Elasticities " , Rivista Internazionale di science Economiche
Commercial , vol. 34, 1987,N-1-2, PP. 147-158

Houthakker , H.S " Consumer Demand in Britain " 2nd . ed .

Cambridge , Mass : Harvard university Press . 1951
Houtthakker H.S. and M. Kennedy :Demand for Energy as a function
of price , Energy Delta, vol.1,1975.
Kamerschen, D.R., and D.V Porter,. " The demand for residential,
industrial and total electricity " Department of Economics, Terry
College of Business , The University of Georgi, USA , 2004 .
Kaysen , C.A , Demand of Electricity of Industrial Section in U.S.A
Cambridge Univ. ,1962 .

Taylor , L.D " Consumer Demand In The United States " 2nd . ed. (Cambridge : Harvard Univ. press. 1970) .

 Taylor, Laster: The Demand for Energy :A survey of price and

Income Elasticiesin William D. nordhaus ed., International studies
of the demand for Energy . Amsterdam: North Holland publishing
co.,1977 .
Velrger P.K. Dynamic Demand Analysis for Residential Electricity
Lexington , mass: date Resources . Inc .1973 .
willett, Keith D. and Shahdad Naghshpour, :Residental demand for
Energy commodities . Energy Economics , vol.11, No.4, Oct.,1987

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F
D.W

0.997
1145.514
1.665

0.989
346.732
1.813

0.997
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1.683

0.989
354.083
2.188

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0.997
1008.663
1.758

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0.996
790.118
2.272

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0.358
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963.706
2.141

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F
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919.265
1.507

0.987
229.528
1.653

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1493.884
1.603

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314.179
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2.0000000
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0.202
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0.998
1057.297
1.649

11.868
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0.468
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0.273
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405.493
1.864

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0.293
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0.996
521.869
1.753

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27000000
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12000000
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6.655
)(1.802
0.237
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0.0333)(0.425-
-0.332
)(-0.704
-0.0851
)(-0.172

-0.973
)(-1.939

2981717
)(30138

0.516
)(3.016

0.515
)(3.122

0.456
)(2.536
0.997
719.342
1.748

0.685
)(9.721
0.997
646.441
2.448

0.686
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0.997
833.506
2.417

__

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0.996
720.662
1.147

0.975
115.047
0.773

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)(2.519-
0.221
)(1.164
0.0514)(0.520-
-0.300
)(-0.718

7.508
)(1.494
0.629
)(1.860
0.443
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1.091
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____

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0.971
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0.975
153.340
0.756

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) (4-1

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5.193

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3.815

5.536

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6640.545

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1.300

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5588.798

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0.997

)(25.150
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562.982
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407.386
1.735

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365.648
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268.039
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0.986
344.997
2.071

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462.946
0.875

0.995
953.360
1.284

0.993
681.013
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0.997
1607.577
2.074

0.997
1218.339
1.858

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1959.513
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2.370

Research Summery
Estimating the Demand
for Electricity in Saudi Arabia
Due to the increase in the development requirements in Saudi Arabia ,
the demand for electricity occurs in both residential and industrial sectors.
The aim of this thesis is to estimate the determinants of the demand for
electricity in Saudi Arabia for the period 1400-1420 H .
These determinants include : the average annual per capita income, the
average KWH price , the number of subscribers , average number of
electricity appliances and the quantity of the electricity consumed during the
past period (delaying variable) in the residential sector. In the industrial
sector such determinants include : the average electricity price, the number
of subscribers, the average price of metric ton of natural gas and the
electricity quantity consumed during the past period (delaying variable).
The estimated results show that the most important variables affecting ,
the demand for electricity in the residential sector are the number of
subscribers , the number of appliances , and the quantity of electricity
consumed during the pervious period ,while the most independent variables
affecting the demand for electricity in the industrial sector is the number
of subscribers .