Ambient air pollution and meteorological factors escalate electricity consumption.

Abstract

The impact of climate change is evident in the variability of weather patterns, hence, affecting electricity generation and consumption. Existing literature examines the effect of humidity and temperature on energy, but suffers from omitted variable bias. Here, we adopt several parameters namely ambient air pollution, precipitation, surface pressure, dew-frost point, relative humidity, wind speed, earth skin temperature, cooling degree days, heating degree days, solar and wind generation, cumulative installed PV power, and wind turbine capacity, solar and wind electricity consumption, and energy price index to investigate the role of climatic and energy-related factors on households, industry sector, commercial and public service attributed electricity consumption in Norway. Our machine learning estimator accounts for climate change heterogeneity, and historical effects while controlling omitted-variable and misspecification bias. The empirical assessment shows the radiative forcing effect of ambient air pollution decreases electricity consumption. In contrast, the scavenging effect of rainfall intensity on ambient air pollution improves both wind and solar electricity consumption. Rising levels of earth skin temperature, and humidity increases solar and wind electricity consumption whereas dew-frost point drops temperature, and humidity to improve human comfort. Our study highlights that energy price index is critical to the adoption of solar and wind energy technologies.