Economic and social structure and electricity consumption in Egypt

Highlights: • Egypt facing an energy crisis after 2003 and in 2012 there was the worst condition. • GDP is the most important determinant of energy consumption in Egypt. • There is a short-term causality between electricity consumption and determinants. • Egypt's urban population is increasing rapidly and triggers energy consumption. • Government needs to invest more in renewable energy instead of natural resources. Energy plays an essential role in economic growth. It is expected that the electricity consumption projections in Egypt will exceed electricity generation capabilities for the upcoming years. Therefore, this research aims to examine the determinants of electricity consumption in Egypt. In this quantitative research, the secondary data, energy consumption, gross domestic product, total population, urban population, rural population, industry value-added GDP, inflation consumer price, and final consumption expenditure have been collected from 1997 to 2018. There is a long-run causality between electricity consumption and gross domestic product. Urbanization, industry value-added GDP, inflation consumer price, final consumption expenditure, and electricity consumption show the regression analysis's short-run causality. In this, the unit root test was run to know if the data is stationary or non-stationary. Johansen co-integration and vector error correction model (VECM) also used to find the result. The results revealed that as the gross domestic product increases, the electricity consumption would also increase, and short-run causality between electricity consumption and an increase in population. This study is limited to Egypt and merely focused on energy. Future studies can use this research to investigate renewable energy consumption from the perspective of other countries.