Turkey's dependence on electricity consumption and efficiency: Elasticity and var analysis

Electricity consumption is increased every passing day by increased technological advances, population and welfare with the influence of industrialization and globalization. While the electricity consumption in 2009 was at the level of 194 billion kWh with 2 % fall; it became 210 billion kWh in 2010 in Turkey. In 2011, electricity consumption rose to the level of 229, 3 billion kWh. The electricity consumption in the next ten year period is expected to increase by 7,5 % . It is also expected that the share of electricity sector in Turkish economy, which was only 2,5 % in 2010, would be 7 % by the year of 2018. In this study, first of all price and income elasticity of electricity consumption have been calculated for the years between 1980 and 2011. As dependent variable, the electricity consumption (gWh) has been used while electricity price (TL), population and GDP have been used as independent variables. The data have been obtained from Turkey Statistical Institute, Turkey Electricity Transmission Corporation, Eurostat and the World Bank. The elasticity analysis showed that Turkish economy has lower price and income elasticity. In the second part of the analysis Vector Autoregressive (VAR) Model has been applied, in order to find short and long term relationship between the variables.