Determinants of Commercial Energy Demand: An Empirical Study of Medical Facilities in NY State

The purpose of this master thesis is to (i) estimate a model of commercial energy demand using unique micro-level data, (ii) examine the determinants of energy demand , fossil and electric, from a pool of building characteristics and exogenous variables, and (iii) and explore whether incorporating price volatility, exogenous prices and energy efficiency investment decisions improves forecasting results. We perform our study on 24 commercial medical facilities in NY State between 2002 and 2010. The price elasticity of fossil demand was estimated to be approximately -0.14 in the short run, while that of electricity demand was estimated to be -0.11. Estimates of price volatility were found to be negative significant for fossil demand, but insignificant for electricity. and significant impact on energy consumption. Exogenous prices, when used in the OLS models, did not seem to improve forecasting results