Residential energy demand: a case study of Kuwait

This paper models and estimates energy demand by the household sector using the top-down or the two-level approach. The discussion has been developed to include a breakdown of household consumption by fuel type. It also simulates the developed model under three scenarios and presents analyses of the results. The empirical results indicate that short and long run energy consumption and the level of economic activity are interrelated. The model simulation shows that energy consumption varies directly with economic growth. It also illustrates that an increase of 200 per cent in all nominal energy prices will lead to a reduction in household energy demand of 29 per cent by the year 2015. The simulation results clearly demonstrate that the potential for energy conservation exists in Kuwait in the household sector and particularly in the consumption of electricity. Moreover, inter-fuel substitution will be in favour of electricity when energy prices increase.