Post on 14-Dec-2015
Daylight Time and Energy Evidence from an Australian Experiment
Ryan Kellogg
Presentation October 2007
Department of Economics - University of Washington
Hendrik Wolff
Daylight Saving Time (DST):A tool for energy conservation?
• Several countries debate about DST:
- USA Energy Policy Act of 2005
”Title I Extends DST by four weeks to reduce energy consumption by the equivalent of 100,000 barrels of oil for each day of the extension.”
- Australia, UK, Japan, Korea and others are considering extending DST to curb GHG emissions
We use a quasi-experiment to assess whether extending DST saves electricity
• 2000 Sydney Olympic Games:- two states in Australia began to observe DST two
months earlier than usual
• Preview of main result: - Contrary to previous DST-literature:
Extending DST does not save electricity
“I say it is impossible that people lived so long by the
smoky, unwholesome, and enormously expensive light of candles,
if we had as much pure light of the sun for nothing.”
– Benjamin Franklin, Paris, 1784 –
“I say it is impossible that people lived so long by the
smoky, unwholesome, and enormously expensive light of candles,
if we had as much pure light of the sun for nothing.”
– Benjamin Franklin, Paris, 1784 –
Misallocation causes Paris to consume an additional
64 million pounds of tallow and wax annually.
Artificial Lighting
Sleep
Prior studies find: extending DST into “March” saves electricity by 0.6%-3.5%
Studies are directly used by Governments to decide on DST extensions USA: 1%
New Zealand: 3.5%
Australia: 1%-3.5%
California: 0.6%
Ontario, Canada: 2.2%
However, studies are based on simulations and extrapolations, rather than empirical evidence
Nixon 1973: Emergency DST Energy Conservation Act
• Observational Study finds 1% savings based on ‘73-’75 DST extension in the USA
• However……technology changed…potentially confounded
Yellow: Regions observing DST as of 2006
Road Map
• Background on the event and graphical results
• Treatment effect estimation
• Testing prior DST simulation models
• Conclusions
Typically 3 states observe DST
Western Australia
Queensland
South Australia
(SA)
Northern Territory
New South Wales (NSW)
Victoria
• Typically: SA, NSW, and VIC observe DST from October to March
VIC
Sydney
In 2000 NSW and VIC are “treated” with 2 months extended DST
Western Australia
Queensland
South Australia
(SA)
Northern Territory
New South Wales (NSW)
Victoria
• Typically: SA, NSW, and VIC observe DST from October to March
• In 2000:
NSW and VIC start DST two months earlier
VIC
Sydney
Policy change was not prompted by intent to conserve energy
Western Australia
Queensland
South Australia
(SA)
Northern Territory
New South Wales (NSW)
Victoria
Cited rationales• Fewer shadows on the
fields improve TV broadcasting
• Shift visitors between stadia in daylight
VIC
Sydney
Policy change was not prompted by intent to conserve energy
Western Australia
Queensland
South Australia
(SA)
Northern Territory
New South Wales (NSW)
Cited rationales• Fewer shadows on the
fields improve TV broadcasting
• Shift visitors between stadia in daylight
VICOlympic events confound NSW:– International tourism– Construction activities Treated state: VIC, Control state: SA
Control State
MelbourneAdelaide
Treated State
Time Line in 2000
August 27: DST starts in
VIC
September 15 – October 1: Sydney Olympics in NSW
October 29: DST starts in
SA
Time Line in 2000
August 27: DST starts in
VIC
September 15 – October 1: Sydney Olympics in NSW
October 29: DST starts in
SA
• The Olympic events present a potential confound in VIC– Increased TV ratings, Carnival events around public mega screens
• Drop Olympic period from treatment period in VIC
VIC: Treatment I VIC: Treatment II
SA (control state)shows no effect of DST extension
Average half hourly electricity demand during the treatment period
VIC (treated state) shows regular load pattern in control years
Average half hourly electricity demand during the treatment period
VIC 2000shows intra-day shift in electricity load
Dataset: 1999-2005 panel of
• half hourly electricity demand & wholesale prices
• hourly weather– Temperature, Precipitation, Wind, Pressure, Sunshine, Humidity
• Day of week, school-vacation, holidays, “transition vacation days”
• Employment, Gross-State-Product, population
“Difference in Differences” Mechanics
• Control structure is two-fold:
(a) spatial across states
controls for differences between states
(b) temporal over years
controls for any shock on the national level
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dStandard DID
Augment standard DID model by estimating “triple-DID” Treatment Effect Model
• Triple-DID control structure is three-fold:(a) Spatial across states(b) temporal over years(c) temporal within days using early afternoon hours k …12:00-14:30
as “within” controls
• With triple-DID: we don’t depend on – nearby months and – Seasonal variations – Model robust against shocks affecting the level of any day
(demand is function of 1800 variables)ln( ) - ln( ) idh id idh h idh idh idh idh h idhq q T S Y X W
Half hourly treatment effects of extending DST on electricity use
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The estimated effect of extending DST in VIC, disaggregated by half-hour, with 95% confidence intervals. Standard errors are clustered by day.
Testing the Electricity Saving Hypothesis
Percentage change due to DST
New Zealand
Testing the Electricity Saving Hypothesis
Percentage change due to DST
New Zealand
Canada (Ontario)
Testing the Electricity Saving Hypothesis
Percentage change due to DST
New Zealand USACanada
Testing the Electricity Saving Hypothesis
Percentage change due to DST
New Zealand CaliforniaCanada USA
Testing the Electricity Saving Hypothesis
Percentage change due to DST
New Zealand Australia Canada USA California
Testing the Electricity Saving Hypothesis
Percentage change due to DST
New Zealand
Australia
Canada USA California
Testing the Electricity Saving Hypothesis
Percentage change due to DST
New Zealand
weekdays
Canada USA California
weekends
Value of results
• First quantitative study to show that DST does not decrease electricity consumption, contradicting prior research
• Australia considers extending DST to cut GHG emissions
• Can we transfer the results to the U.S.?
• San Francisco: latitude & climate similar to Melbourne
• Next we examine the “California Simulation model”
California identifies three benefits of extending DST
Extended DST… (1) …saves non-renewable resources
• Electricity use decrease
(2) …increases consumer welfare • Reduction in peak evening demand: price decreases • CA benefits up to $1.3 billion annually
(3) …helps to avoid extreme events • Likelihood of blackout decreases
CEC 2001 Simulation
Simulation unable to predict intraday-change in demand
4500
5000
5500
6000
6500
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nsu
mp
tion
in M
eg
aw
att
s
6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Hour (Clock Time)
1999 Actual 1999 Simulated
2001 Actual 2001 Simulated
2000 Actual
Treatment in Victoria 2000 leads to a price spike
------- …………
MW
Conclusions I...none of the “three benefits” of extended DST could be
confirmed. The extension: - does not save electricity- increases prices - increases the critical demand spikes
…findings are of policy interest since Australia considers re-introducing the 2000-DST-schedule to curb GHG emissions
…results suggest U.S. will not benefit from extending DST
…extending DST is not a quick fix for energy conservation.
U.S. Energy Bill of 2005: “If the study does not report adequate savings, Congress should consider to return to the original Daylight Savings Time schedule.”
Policy Recommendation: ….Pull out DST legislation from Energy Bills….Health Benefits? Business?
Conclusions II
Penetration trends of air conditioning by state
Characteristics of GeneratorsTwo Issues:
- “Is Real Time Pricing Green?: – Impacts of Demand Variance” (Holland & Mansur, 2004)
- Forecasting Error, DST learning
National Electricity Market, Australia
Settlement of electricity prices in VIC, NSW, QLD and SA
Table 2: Summary statistics of data used from 1999 to 2001, 27 August to 27 October
Selection of the afternoon hours
Equator
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Melbourne
Melbourne
Sleep
Artifical lighting
San Francisco
Melbourne