Industrial Electricity Demand in Selected Provinces of Iran: A Dynamic Panel Data Model

In this study, we have used panel data to estimate the demand for electrical energy in industrial sector for selected provinces (Tehran, Isfahan, Khuzestan, Markazi and Hormozgan) during period 2001-2013. Variables used in this model include real value added of industrial sector in the selected provinces, real price of petroleum products as a substitute variable, real price of electricity and number of industrial subscribers. The results of the model indicate that in the short run by increasing electricity price by one percent, the electricity demand is reduced by five percent. Petroleum products act as complementary goods for electricity. There is a significant positive relationship between electricity demand and number of subscribers and value added of the industrial sector