Temperature sensitive electricity demand and policy implications for energy transition: a case study of Florida, USA

Abstract

The demand for electricity is soaring, propelled not only by population and GDP growth but also the pressing effects of climate change. This study seeks to address the uncertainties surrounding future electricity demand by projecting monthly consumption in Florida, USA, taking into account diverse climate scenarios and their potential impacts. Our approach involves utilizing the degree-day method and constructing an energy consumption regression model grounded in historical data. Key variables, including population, employment, GDP, electricity prices, temperature, and daylight hours, are systematically analyzed. This model acts as the fundamental basis for forecasting future electricity needs in residential, commercial, and industrial sectors across the state of Florida up to the year 2050, considering different climate scenarios. Under the Representative Concentration Pathway (RCP) 4.5 scenario, the residential sector foresees a substantial 63% increase in electricity demand from 2001–2019 to 2050. Under the more extreme RCP 8.5 scenario, this surge climbs to 65%. Meanwhile, the commercial and industrial sectors are expected to witness a 47% and 54% upswing in demand under RCP 4.5 and RCP 8.5, respectively. Intriguingly, heightened demand for cooling during scorching summers outweighs the reduced need for heating in winter, particularly in the residential sector. The current renewable energy policies fall short of addressing the impending climate-driven surge in electricity demand. To combat this, our recommendation is the implementation of a Renewable Portfolio Standard, aimed at significantly enhancing the proportion of renewables in Florida's electricity mix. This paper concludes with a set of crucial policy recommendations, imperative for steering a sustainable transition to renewable energy and effectively managing the impacts of extreme heat on people's lives. These recommendations serve as a strategic roadmap for navigating the evolving landscape of electricity demand amidst the complex challenges posed by climate change.