Scenario analysis of nonresidential natural gas consumption in Italy

Objective The aim of the present paper is to develop a model for the long term forecasting of nonresidential gas consumption in Italy. The influence of economic and climatic data, as well as the impact of regulatory changes are considered. Methods The model is developed by using a regression model and, to this scope, the necessary explaining variables are determined. A successful validation of the model is performed, showing that it guarantees a satisfactory level of accuracy. Results Short and long run elasticities are estimated, highlighting that Gross Domestic Product (GDP) per capita has a much greater influence on gas consumption with respect to price. Twenty-four consumption scenarios are presented, underlining that in 2030 nonresidential gas consumption in Italy is expected to be between about 32 and 46 bcm (billions of cubic meters). Conclusions It can be concluded that the increase of nonresidential gas consumption is strongly linked to the GDP evolution and according to the GDP growth scenario, nonresidential gas consumption might largely change. Practice implications The outcomes of the present analysis can be successfully utilized by energy managers to design appropriate energy management policies. Particularly, the determination of the elasticities has practical relevance in setting up adequate pricing policies, whereas the long term forecast represents a useful support to estimate the volume of the necessary supply contracts and to plan new infrastructures.