Common Tragedies

Thoughts on Environmental Economics

Does extending daylight saving time conserve energy?

Posted by Daniel Hall on November 4, 2007

Energy conservation was the rationale used for extending daylight saving time (DST) a total of 4 weeks in the Energy Policy Act of 2005 (DST started 3 weeks earlier this year, and ended one week later). A paper from earlier this year by Ryan Kellogg and Hendrik Wolff [non-gated version here] suggests that at the margin the DST extension is unlikely to save energy. Their study focused on a fascinating quasi-experiment: Australia’s decision to extend DST in some states during the 2000 Olympic Games in Sydney. The authors report:

Typically, three of Australia’s six states observe DST beginning in October (which is seasonally equivalent to April in the northern hemisphere). However, to facilitate the 2000 Olympics in Sydney, (located in New South Wales), two of these three states began DST two months earlier than usual. Because the Olympics can directly affect electricity demand, we focus on Victoria—which did not host Olympic events—as the treated state, and use its neighboring state, South Australia, which did not extend DST, as a control. We also drop the two-week Olympic period from the two month treatment period to further remove confounding effects. Using a detailed panel of half-hourly electricity consumption and prices, as well as the most detailed weather information available, we examine how the DST extension affected electricity demand in Victoria. This experimental setting and rich dataset obviate the need to rely on simulations in our study.

Our treatment effect estimation strategy is based on a difference in differences (DID) method that exploits, in both the treatment state and the control state, the difference in demand between the treatment year and the control years. We augment the standard DID model in several innovative ways. Most notably, we take advantage of the fact that DST does not affect electricity demand in the afternoon; we can therefore use changes in relative afternoon consumption to control for unobserved shocks that are not related to DST. …

Our results show that the extension failed to conserve electricity. The point estimates suggest that energy consumption increased rather than decreased, and that the within-day usage pattern changed substantially, leading to a high morning peak load.

The typical thinking about energy savings and DST has been that by providing more daylight in the late afternoon and early evening clock hours there will be less energy use in these periods. The authors show that at the margin, by moving DST into parts of the year where the days are already short, the afternoon energy savings is wiped out by more energy use in the morning, as people need more lights, heat, etc. on cold and dark mornings in the early spring or late fall.

Note that while many previous news stories about this paper reported that the DST extension resulted in more energy use, this is only what the authors’ point estimates showed, and these were not in statistically significantly different than zero. Thus the proper claim is that extending DST had no net effect on energy use.

Note that this doesn’t mean DST does not save energy for the parts of the year where it is already used, merely that it likely cannot be extended at the margin for increased energy savings.

Further, energy savings are only one reason to have DST. I personally much prefer having extra clock hours in the late afternoon and evening; I would not mind if DST were moved to year round. Since it is not, you must excuse me, I need to go do something out of doors before the daylight fades.

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2 Responses to “Does extending daylight saving time conserve energy?”

  1. Evan Herrnstadt said

    I was discussing DST with my grandfather, who lives in DST-less Arizona. Apparently when Iowa was first experimenting with DST, it was made a county-level decision. Many were opposed to tinkering with “God’s time” (um, right…), so a one hour drive from Ames to a meeting in Fort Dodge spanned six time zones. Not really pertinent to the energy issue, but a nice anecdotal reminder of how arbitrary DST really is.

  2. Daniel Hall said

    a nice anecdotal reminder of how arbitrary DST time really is.

    FYP

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