Household energy responses to the introduction of increasing block tariffs on residential electricity in Kyrgyzstan

Abstract

This study examines the effects of the increasing block tariffs on residential electricity consumption introduced in Kyrgyzstan in January 2015. We use seven years of data from the Kyrgyz Integrated Household Survey and difference-in-differences analysis to show that the policy's effects varied across income groups and geographic locations. Most households are unaffected by the block tariffs' introduction, as their consumption is significantly below the 700 kWh per month threshold. Households with higher incomes and those in colder regions were impacted more by the policy than their lower-income and warmer-region counterparts. Furthermore, there was a noticeable increase in energy-stacking behaviors, with households utilizing coal, wood, and dung during the heating season. This increase was evident among households already using these alternative energy sources (intensive margin) and new adopters (extensive margin). The long-term effect of the block tariffs on energy stacking proved to be more pronounced than the short-term effects. These findings give insight into energy consumption under increasing block tariffs for residential electricity in a lower-middle-income country in Central Asia. They emphasize the need to consider variations in regional climates and the effect of energy stacking when designing energy policies.