Estimating the influential impact share of reducing household energy consumption across different sectors aimed at increasing cumulative profits in Iran: A non-linear programming optimization approach

Abstract

Energy intensity is one of the most important energy feature that has a dramatic value in energy system of Iran. Indeed, Iran is one of the most energy intensive countries in the world and its main reason is related to high energy consumption in household section. In this article, we present a non-linear model that considers three scenarios in management of household energy demand reducing. Therefore, a rational percentage of energy consumption reduction in the household sector, which firstly eliminates the imbalance between energy production and consumption, and secondly, derives a rational amount of profit from various reduction scenarios, will be presented. The mentioned rational profits in this article are obtained from three scenarios. In the first scenario, it is assumed that the percentage reduction in household energy consumption will be allocated to reducing energy demand in the industrial sector, resulting in profits from value-added creation in this sector. In the second scenario, all benefits from reducing energy consumption in the household sector will be devoted to energy exports, yielding profits from this source. Finally, in the third scenario, the reduction in energy consumption will lead to a decrease in energy supply and consequently a reduction in energy supply costs. To conduct a comprehensive study, a combination of the mentioned scenarios has also been modeled and investigated. The model results indicate that with a 25% reduction in household energy consumption in the 2024-2034 timeframe, the energy imbalance will be eliminated, and allocating 5% of this reduction entirely to the industrial sector will result in profits equivalent to $164.18 billion. However, it should be noted that in the considered combined scenarios, the greater the share of the first scenario, the higher the resulting profit, and the optimal point is achieved in the first scenario.

Keywords

• Household energy demand
• Industrial sector
• GDP
• Energy export
• Energy supply costs
• Modelling