Macroeconomic Factors Affect the Electricity Consumption: A Case of ASEAN Countries

Abstract

The ASEAN Centre of Energy (ACE) aims to improve electricity accessibility among all 10 members. Electricity consumption is concerned globally, since it is main intermediate input of production in pursuing economic growth in this era Industrial Revolution 5.0. The motivation of this study is to examine the key elements that derives the electricity consumption in all Association of Southeast Asian Nations (ASEAN) countries from year 2000 to 2018. A panel data is utilized to investigate the relationship between urban population, industrial structure and financial development towards electricity consumption (kWh) using linear regression model (Pooled OLS, Random Effect, and Fixed Effect models). Results found that rapid growth of urban population gives a great impact to electricity consumption. Thailand and Vietnam have the highest positive interception using Fixed Effect model estimation. The findings of this research suggests the government to explore new energy sources to meet the increased demand of electricity while balancing the environmental sustainabilit.