Causal impact of severe events on electricity demand: The case of COVID-19 in Japan

TL;DR

This study uses Bayesian structural time-series modeling to analyze the long-term causal impact of COVID-19 on electricity demand in Japan, revealing seasonal increases despite initial decreases due to behavioral restrictions.

Contribution

It introduces a long-period causal analysis method for COVID-19's impact on electricity demand, accounting for seasonal fluctuations and behavioral changes.

Findings

COVID-19 behavioral restrictions decreased demand in April-May 2020

Electricity demand increased during hot summers and cold winters in 2020

Household demand increases exceeded business demand decreases in extreme seasons

Abstract

As of May 2022, the coronavirus disease 2019 (COVID-19) still has a severe global impact on people's lives. Previous studies have reported that COVID-19 decreased the electricity demand in early 2020. However, our study found that the electricity demand increased in summer and winter even when the infection was widespread. The fact that the event has continued over two years suggests that it is essential to introduce the method which can estimate the impact of the event for long period considering seasonal fluctuations. We employed the Bayesian structural time-series model to estimate the causal impact of COVID-19 on electricity demand in Japan. The results indicate that behavioral restrictions due to COVID-19 decreased the daily electricity demand (-5.1% in weekdays, -6.1% in holidays) in April and May 2020 as indicated by previous studies. However, even in 2020, the results show that the demand increases in the hot summer and cold winter (the increasing rate is +14% in the period from 1st August to 15th September 2020, and +7.6% from 16th December 2020 to 15th January 2021). This study shows that the significant decrease in electricity demand for the business sector exceeded the increase in demand for the household sector in April and May 2020; however, the increase in demand for the households exceeded the decrease in demand for the business in hot summer and cold winter periods. Our result also implies that it is possible to run out of electricity when people's behavior changes even if they are less active.