Group 10: Electricity, Temperature and Industry

Group Number: 斯琪 Jack , 胡勝崴 Wayne Hu

1. Research Background
Taiwan has been facing huge power supply pressure. We wanted to determine, through research,
how local temperatures and local energy industry production would affect electricity sales in
Taiwan.
2. Data Description
（1）usage data

The data we use are Taiwan’s monthly electricity sales from 2017 to 2021, the year-on-year
growth rate of Taiwan’s monthly electricity sales from 2017 to 2021, and Taiwan’s monthly
average temperature from 2017 to 2021 (the average temperature of Kaohsiung, Taipei, Taichung,
and Hualien), and the 2017 - Taiwan's industrial growth value in 2021.

The power generation data comes from the Department of Statistics.

The temperature data comes from the "Main Temperature Data Query Page"
https://stat.motc.gov.tw/mocdb/stmain.jsp?sys=100&funid=b8101

The data on the industrial growth value of the electricity and gas supply industry comes
from the Department of Statistics, https://dmz26.moea.gov.tw/

（2）data processing

We did not find outliers during data collection.

There are no missing values in the collected data.

We define the average monthly electricity sales as AE, and the average monthly temperature data
as AT, Hydro-Coal Industry Growth Value as WG.

3. Regression Analysis
（1）Regression of Air Temperature (AT) and Taiwan's Monthly Electricity Sales (AE)
Display of results
a to
variable enter / remove
input removed
Model variable variable method
1 average . enter
temperature
b

a. Dependent variable: 10 million kWh of

electricity sold in total
b. All requested variables have been entered.

Model summary
 R -square Error in
after Standard
Model R R square adjustment Estimation
_
1 .780a .609 .602 116.262989562
a. Predictor variables: (constant), mean air temperature

R^ 2 is 0.609, indicating that the change in AT can explain about 60% of the change in AE.
This shows that Taiwan's electricity sales have a high correlation with the local temperature.

a
ANOVA
degrees of
Model sum of square freedom mean square F salience
b
1 return 1221060.390 1 1221060.390 90.335 .000
residu 783990.799 58 13517.083
al
total 2005051.189 59
a. Dependent variable: 10 million kWh of electricity sold in total
b. Predictor variables: (constant), mean air temperature

ANOVA test showed that the p-value was less than 0.005, rejecting the null hypothesis H 0
that there is no linear relationship between AT and AE. The linear relationship between the
two is very obvious. This shows that when Taiwan's temperature fluctuates, Taiwan's
electricity sales also fluctuate linearly.

a
coefficient
Unstandardized standardized
coefficients coefficient
standard
Model B error Beta t salience
1 ( constant 931.851 94.605 9.850 .000
)
average 36.040 3.792 .780 9.504 .000
temperatur
e
a. Dependent variable: 10 million kWh of electricity sold in total

The regression result of the intercept term shows that, according to the linear relationship
between A T and A E, when A T=0, the mean value of A E is 931.851, and the fluctuation
range is (742.64, 1121.06). This means that when Taiwan's temperature = 0, Taiwan's
electricity sales are about (742.64, 1121.06) ten million degrees. P≈0.
 This conclusion is significant, but it is not in line with realistic logic. Because the
temperature in Taiwan is generally maintained above 15 degrees, it will not encounter cold
and frigid weather, and heating is rarely required; but occasionally there will be high
temperatures, requiring the use of air conditioners. Therefore, the overall data shows a trend
that the lower the temperature, the lower the power consumption.
But this trend is bound to be broken when temperatures are cooler, as people need to use
electricity to heat themselves when the weather is cold and frigid.

The regression results of the coefficient AT show that Taiwan's electricity consumption will
increase by (28.456, 43.624) million degrees every time the average temperature in Taiwan
rises by 1 degree Celsius. P≈0,P<0.005 this conclusion is significant.

（2） Regression of Hydro-Coal Industry Growth Value (WG) and Taiwan's Monthly
Electricity Sales (AE)
a to
variable enter / remove
removed
Model input variable variable method
1 Growth value of . enter
hydropower coal
industryb
power
a. Dependent variable: 10 million kWh of
electricity sold in total
b. All requested variables have been entered.

Model summary
R -square Error in
after Standard
Model R R square adjustment Estimation
_
1 .465a .216 .203 164.612245338
a. Predictor variables: ( constant ), the growth value of
the hydropower industry

The explanatory power of WG for AE is about 20%, which is moderately low. This result
is not surprising, because Taiwan's energy self-sufficiency rate is extremely low, and 97.80%
of the energy supply in 2018 came from imports (wiki-Taiwan Energy). Although the impact
of the growth of the hydroelectric coal power industry on electricity sales should be less than
5%, the actual explanatory power is as high as 20%. From this, it is speculated that the impact
of AE on WG may be relatively active, while the impact of WG on AE may be relatively
passive.

a
ANOVA
degrees of
Model sum of square freedom mean square F salience
b
1 return 433414.092 1 433414.092 15.995 .000
residu 1571637.096 58 27097.191
al
total 2005051.189 59
a. Dependent variable: 10 million kWh of electricity sold in total
b. Predictor variables: (constant), the growth value of the hydropower industry

P is approximately equal to 0, indicating that the linear relationship between WG and AE is

significant at the level of 0.90. The linear relationship between the two is very strong.

coefficient a
Unstandardized standardized
coefficients coefficient
standard
Model B error Beta t salience
1 ( constant ) -517.980 584.885 -.886 .379
The growth value 23.009 5.753 .465 3.999 .000
of hydropower, coal
and power industry
a. Dependent variable: 10 million kWh of electricity sold in total

The p-value of the intercept is much larger than 0.05, and the H0 hypothesis that there is no
linear relationship between the intercept and AE is not rejected. This insignificant linear
relationship is worth pondering: when WG is 0, the value of AE is (-1687.74, 651.78). This is
consistent with our previous speculation that the relationship between the two is by no means
a one-way linearity only; at the same time, the extremely negative value that appears is
consistent with the fact that Taiwan's energy self-sufficiency rate is extremely low, even if
the two influence each other, there is no way cover up Taiwan's low energy self-sufficiency
rate.

The p-value of WG is approximately equal to 0, less than 0.05, rejecting the H0 hypothesis
that there is no linear relationship between WG and AE. When WG increases by 1 unit, AE
will increase (11.503, 34.515). That is to say, the growth of the hydroelectric coal power
industry will drive the increase in electricity sales. However, the response elasticity of
electricity sales is far less than 1, indicating that the growth of Taiwan's hydro-coal power
industry has a limited impact on Taiwan's power supply.

4. Conclusion
Taiwan's temperature and energy industry both have a significant impact on Taiwan's
electricity sales.
The higher the temperature in Taiwan, the greater the electricity sales. Generally, for every
1degree Celsius rise in temperature, the electricity sales will increase by (28.456, 43.624)
million degrees.
The more Taiwan's energy industry develops, the higher Taiwan's electricity sales
will be. Theoretically, if the growth rate of Taiwan's energy industry increases
by 1, Taiwan's electricity sales will increase by (11.503, 34.515) 10 million kWh.