The non-linear link between electricity consumption and temperature in Europe: a threshold panel approach

This paper investigates the relationship between electricity demand and temperature in the European Union. We address this issue by means of a panel threshold regression model on 15 European countries over the last two decades. Our results confirm the non linearity of the link between electricity consumption and temperature found in more limited geographical areas in previous studies. By distinguishing between North and South countries, we also find that this non linear pattern is more pronounced in the warm countries. At last, rolling regressions highlight the significant impact of climate change on electricity use in Europe. JEL Classification: C23, Q41