## Electricity Consumption and Temperature: Evidence from Satellite Data

_IMF Working Papers, February 5, 2021_

## Source details

**Canonical URL:** [Electricity Consumption and Temperature: Evidence from Satellite Data](https://www.imf.org/en/publications/wp/issues/2021/02/05/electricity-consumption-and-temperature-evidence-from-satellite-data-50031)

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## Bibliographic details
- Authors: Jiaxiong Yao
- Published: February 5, 2021
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513568539.001

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### Overview
- Research objective: Study the relationship between electricity consumption and temperature on a global scale using grid-level night light and temperature data to overcome data constraints that limited prior country-level studies.
- Rationale: Night light, mostly generated by electricity and recorded by satellites, has a strong linear relationship with electricity consumption and is correlated with both its extensive and intensive margins.

### Data and Method
- Proxy: Night light used as a proxy for electricity consumption at the grid level.
- Scope: Global grid-level analysis (study spans 38 pages).
- Series and identifiers: Working Paper No. 2021/022; Issue 022; Volume 2021; DOI: https://doi.org/10.5089/9781513568539.001; ISBN: 9781513568539; ISSN: 1018-5941; Stock No: WPIEA2021022.

### Key Findings
- U-shaped relationship:
  - There is a U-shaped relationship between electricity consumption and temperature.
- Critical temperature:
  - The critical point of temperature for minimum electricity consumption is around 14.6°C for the world.
  - The critical point is higher in urban and more industrial areas.
- Persistence:
  - The impact of temperature on electricity consumption is persistent.
- Vulnerability of Sub-Saharan Africa:
  - Sub-Saharan African countries are particularly vulnerable: a 1°C increase in temperature is estimated to increase their electricity demand by 6.7% on average.
- Empirical justification:
  - Night light has a strong linear relationship with electricity consumption and correlates with both extensive and intensive margins of electricity use.

### Implications and Considerations
- Global applicability:
  - Grid-level satellite night light enables analysis in regions previously understudied due to data constraints, allowing assessment of temperature–electricity links across diverse geographies.
- Urban and industrial infrastructure:
  - Higher critical temperatures in urban and more industrial areas imply differing temperature sensitivity and potential adaptation needs across space.
- Climate change risk:
  - Temperature-driven increases in electricity demand (e.g., 1°C → 6.7% increase for Sub-Saharan Africa) underscore climate change pressures on already large electricity deficits in vulnerable regions.
- Persistence of effects:
  - Persistent temperature impacts suggest planning for sustained shifts in electricity demand rather than temporary spikes.

*Jiaxiong Yao, "Electricity Consumption and Temperature: Evidence from Satellite Data", IMF Working Papers 2021, 022 (February 5, 2021).*

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_Source: https://www.imf.org/en/publications/wp/issues/2021/02/05/electricity-consumption-and-temperature-evidence-from-satellite-data-50031_