Economic Research Forum (ERF)

The benefits of year-round daylight saving time: evidence from Turkey

340
Ever since Benjamin Franklin’s observation in the late eighteenth century that people wasted daylight by sleeping after sunrise and squandered wax by burning candles in the evening, energy conservation has been the main motivation for governments to follow ‘daylight saving time’ (DST). Using Turkey’s recent decision to extend DST to the whole year, this column summarises new evidence on how DST affects the consumption and generation of electricity, and related greenhouse gas emissions. The analysis suggests that while total consumption is unchanged, emissions may have gone down due to the policy change.

In a nutshell

After Turkey stopped turning back its clocks to standard time in October 2016, there has been neither an increase nor a decrease in the country’s energy consumption.

But there has been a strong intra-day redistributional effect of staying on daylight saving time all year round: while electricity consumption increases considerably in the morning, it decreases in the late afternoon and early evening.

The change in the intra-day distribution affects the fuel mix used for electricity generation, reducing the amount of electricity provided by coal- and gas-fired plants, and increasing electricity generation from renewable sources.

More than 70 countries follow daylight saving time (DST) in at least part of the country as a way to promote energy conservation and reduction of greenhouse gas emissions (Kellogg and Wolff, 2008; Choi et al, 2017). Moving the clock forward by one hour in the summer months (and reverting back to standard time in the winter months) creates an additional hour of daylight in the afternoon, which may shift people’s daily routine and hence reduce the demand for electricity (Aries and Newham, 2008).

While DST is widely used, it remains a subject of considerable controversy. The European Parliament, for example, recently called on the European Commission to conduct a thorough reassessment of the union-wide summer-time arrangement (Stearns, 2018).

Empirical research on this topic remains inconclusive about whether DST policy is an effective tool to reduce electricity consumption. For example, Belzer et al (2008) analyse the impact of a DST extension on national energy consumption in the United States: they estimate total electricity savings of about 0.5% per day of extended DST.

Similarly, studying the effect of DST on electricity consumption in southern Norway and Sweden, Mirza and Bergland (2011) find a 1% fall in annual energy demand for both countries.

In contrast, using a natural experiment in Indiana between 2004 and 2006 and data on household-level monthly consumption for over 200,000 residences, Kotchen and Grant (2011) find an overall increase in residential electricity use by about 1% due to DST. Other studies find a negligible effect of DST because evening reduction in demand for electricity is offset by increased electricity use in the morning (Kellogg and Wolff, 2008; Choi et al, 2017).

In a new study (Aksoy et al, 2019), we contribute to the body of evidence on DST policy and energy consumption by using a novel source of variation from Turkey. Having used DST continuously since the early 1980s, Turkey stopped turning back its clocks to standard time in October 2016 with the intention of making more use of daylight, effectively staying on DST all year round.

The exogenous change in the use of DST allows us to compare entire periods where winter time was implemented (November 2015 to March 2016) with those where it would have been applied if the policy change had not happened (October 2016 to March 2017).

In particular, we exploit the variation in energy consumption before and after the policy change as well as between hours affected and unaffected by DST to identify the impact of DST on hourly energy demand, using the analytical technique known as ‘difference-in-differences’.

We find that, overall, the policy change neither increases nor decreases energy consumption. But the results show that there is a strong intra-day redistributional effect of keeping summer time all year round: while electricity consumption increases considerably in the morning, it decreases in the late afternoon and early evening.

Besides having novel hourly data on electricity usage across the country, which covers both residential and industrial consumption, we collect information on sources of electricity production and average emission factors by fuel type for the Turkish electricity market.

Some studies have offered rough estimates for the environmental impact of DST by multiplying the estimated change in overall electricity consumption with emission rates of energy sources employed in the relevant electricity grid (Hill et al, 2010; Kotchen and Grant, 2011).

In contrast, we use the difference-in-differences technique to test directly how the one hour time shift influences electricity generation and social costs of emissions due to changes in the electricity load.

We find that the change in the intra-day load curve in turn affects the fuel mix used for electricity generation. In particular, the policy change significantly reduces the amount of electricity provided by coal- and gas-fired plants, especially during early morning hours. At the same time, electricity generation from renewable sources, such as hydro power, significantly increases.

This leads to a reduction in greenhouse gas emissions of about 36,560 tons per day. Hence, while the overall impact of the policy change on electricity use is negligible, it has important positive impacts on the distribution of the electricity load and therefore on Turkey’s electricity generation and greenhouse gas emissions.

Further reading

Aksoy, Cevat Giray, Çağatay Bircan and Elisa Wirsching (2019) ‘Daylight Saving All Year Round: Evidence from the Turkish Experiment’, mimeo.

Aries, Myriam, and Guy Newham (2008) ‘Effect of Daylight Saving Time on Lighting Energy Use: A Literature Review’, Energy Policy 36: 1858-66.

Belzer, David, Stanton Hadley and Shih-Miao Chin (2008) Impact of Extended Daylight Saving Time on National Energy Consumption, US Department of Energy.

Choi, Seungmoon, Alistair Pellen and Virginie Masson (2017) ‘How does Daylight Saving Time Affect Electricity Demand? An Answer Using Aggregate Data from a Natural Experiment in Western Australia’, Energy Economics 66: 247-60.

Franklin, Benjamin (1784) An Economical Project, Journal de Paris.

Hill, S, F Desobry, E Garnsey and Y-F Chong (2017) ‘The Impact on Energy Consumption of Daylight Saving Clock Changes’, Energy Policy 38(9): 247-60.

Kellogg, Ryan, and Hendrik Wolff (20008) ‘Daylight Time and Energy: Evidence from an Australian Experiment’, Journal of Environmental Economics and Management 56: 207-20.

Kotchen, Matthew, and Laura Grant (2011) ‘Does Daylight Saving Time Save Energy? Evidence from a Natural Experiment in Indiana’, Review of Economics and Statistics 93(4): 1172-85.

Mirza, Faisal, and Olvar Bergland (2001) ‘The Impact of Daylight Saving Time on Electricity Consumption: Evidence from Southern Norway and Sweden’, Energy Policy 39: 3558-71.

Stearns, Jonathan (2018) ‘Now Brussels Wants to Take Away Your Summer Time’, Bloomberg, 8 February.

Most read

The Egyptian economy is still not creating good jobs

Growth in Egypt has recovered substantially since the downturn following the global financial crisis and the political instability following the 2011 revolution – but what has happened to jobs? This column reports the results on employment conditions from just released data in the 2018 wave of the Egypt Labor Market Panel Survey.

Arab countries are caught in an inequality trap

Conventional wisdom, based mainly on surveyed household income distribution statistics, suggests that inequality is generally low in Arab countries. At the same time, little attention has been devoted to social inequalities, whether in terms of outcomes or opportunities. This column introduces a forthcoming report, which offers a different narrative: based on the largest research project on the subject to date and covering 12 Arab countries, the authors argue that the region is caught in an inequality trap.

How Egyptian households cope with shocks: new evidence

Managing risks and reducing vulnerability to economic, social, environmental and health shocks enhances the wellbeing of households and encourages investment in human capital. This column explores the nature of shocks experienced by Egyptian households as well as the coping mechanisms that they use. It also examines the relationship between such risks and job formality and health status.

An appeal for Sudan’s future

Sudan today is on a knife-edge: it can evolve toward peace and democracy – or spiral into instability and violence. As this Project Syndicate column argues, vital and timely international assistance can make the difference between success and failure for the new government.

Egypt’s labour market: facts and prospects

An ERF policy conference on the Egyptian labour market in late October 2019 focused on gender and economic vulnerability. This column summarises the key takeaways from the event.

Has international migration reduced internal migration in Egypt?

Urbanisation is key for economic development, yet Egypt has been lagging behind most other North African countries in this respect in recent decades. This column reports that the country’s lack of urbanisation is partly explained by very low internal migration rates, which in turn seem to have been dampened by high rates of international migration by Egyptians.

Reinforcing the re-emergence of the “missing middle” in Egypt

The more rapid growth of employment in small and medium-sized businesses compared with both micro enterprises and large firms in the Egyptian private sector presages the re-emergence of the ‘missing middle’. This column explains why this is a positive phenomenon that needs to be promoted and reinforced.

Political settlement scenarios for Arab conflicts

Millions of refugees from the Arab conflicts want to return to their countries, rebuild their homes and get their lives back – but what kind of political settlements might support that prospect? This column explores types of political settlements, what happened in the past after conflicts in Algeria and Lebanon, and scenarios for future political settlement in Syria.

Repatriation: scenarios for conflict resolution and reconstruction

What are the prospects for conflict resolution in Syria and other war-torn Arab countries, for reconstruction of their broken economies and societies, and for repatriation of the many refugees that have fled for their lives? This column discusses the notion of inclusive political settlements as a precondition for safe refugee repatriation and reconstruction plans for devastated communities.

Tackling multidimensional poverty in MENA

What does most recent multidimensional poverty assessment of the Middle East and North Africa reveal about health, education, living standards and social security in the region. This column outlines the evidence and potential policy responses.