Korean Energy Economic Review ISSN:1599-7057(Print) 에너지경제연구

This study examines volatility changes of electricity consumption in South Korea. The results of empirical analysis using quarterly data from 1970:1 to 2013:2 shows the volatility increase. Structural changes of conditional mean and variance result in this increase. Electricity use in industrial, commercial･service and residential sector are examined for identifying the main sources of the increase. With respect to the reasons of these changes, economic shocks, such as GDP and price of electricity, and temperature shock, such as HDD･CDD, are checked. The specific results show that the main source which have charge of the volatility increase is commercial･service sector whose electricity consumption has a relatively large proportion in its total energy use. In addition, increase in the effect of GDP, Price and temperature shock to the electricity use leads to the volatility expansion. These empirical results suggest that effective management in the volatility of electricity consumption should consider the effect of economic･climatic shock as well as the volatility of electricity use itself.