Economic and Business Cycle Analyses with Electricity Consumption Data

Tasks

For political decision-makers and entrepreneurs, timely analyses of the (overall) economic situation are essential, e.g. in order to counteract a recession with adequate economic and corporate policy decisions. The recent economic crisis in the wake of the Corona pandemic underscores this necessity. However, a timely and up-to-date assessment of the overall economic situation is currently only possible to a limited extent, as official statistics are subject to considerable publication delays or are only collected with an insufficient frequency at the federal level. At present, qualitative indicators such as the ifo Business Climate Index for Bavaria, which are available at monthly intervals and are no longer subject to revision, provide a remedy.

With electricity consumption data, an alternative and high-frequency data source is available whose suitability for cyclical analysis and forecasting is to be tested in this research project. In addition, it will be examined whether this new data source can be used to identify changing trends in electricity consumption and demand and, against this background, to analyze the effects of energy policy measures.

Methods

The research project consists of three interrelated working packages (WP): WP 1: Energy Consumption and Energy Efficiency, WP 2: Energy and the Business Cylce, and WP 3: Assessment of the Forecasting Performance.

The focus of the first working package is on analyzing the influence of industrial structure and energy efficiency measures on electricity consumption. The findings on energy efficiency will then in turn be incorporated into the question of the relationship between electricity consumption and the business cycle. Likewise, the high-frequency data will be used to analyze whether measures such as the "Demand Side Management Bavaria" pilot project can bring about short-term shifts in demand.

In the second working package, the relationship between fluctuations in energy consumption and business cycle fluctuations of the Bavarian economy will be investigated. With the help of business cycle dating methods, cyclical fluctuations in energy consumption will be identified and compared with those resulting from official business cycle indicators.

The third working package serves to test the forecasting performance of the electricity consumption data. One focus is on the question of whether the electricity consumption data are able to  accurately forecast official economic indicators such as the Bavarian industrial production index.

Data and other sources

Bavarian Statistical Office
Federal Statistical Office
Bayernwerk Netz GmbH
LEW Verteilnetz GmbH
N-ERGIE Netz GmbH
SWM Infrastructure GmbH & Co KG