ANALYSIS OF ELECTRICITY CONSUMPTION IN THE AGRICULTURAL SECTOR IN

THE STATE OF SÃO PAULO

MONCLAR NOGUEIRA CHRISTOVÃO1

SANDRA CRISTINA DE OLIVEIRA2
MARIO MOLLO NETO3

ABSTRACT: Electricity is a basic and essential input in all economy sectors. Until 2018, diesel was
the most used form of energy in the agricultural sector in the state of São Paulo. However, due to the
increasing use of electricity, this became the most consumed form of energy in 2019 and 2020. This
study aims to generate a mathematical model to forecast energy consumption in the referred to sector
by using regression analysis concepts associated with the Microsoft Excel Regression tool. The result
was a multiple linear regression model with low interference of the variables ‘number of consumers’
and ‘generated electricity’, but with a significant inverse influence of diesel consumption, confirming
the substitution of such energy source for electricity. There was a growth trend in the consumption of
electricity, whose development requires improvements and expansions of the entire infrastructure
(generation, transmission, and distribution) that will consequently reflect on people’s social welfare
and economic development.

Keywords: Consumption forecast. Mathematical model. Energy demand. Rural energy consumption.
Demand forecast.

ANÁLISE DO CONSUMO DE ENERGIA ELÉTRICA DO SETOR AGROPECUÁRIO DO

ESTADO DE SÃO PAULO

Resumo: A eletricidade é um item básico e imprescindível em todos os ramos da economia. Até

2018, o óleo diesel foi a fonte energética mais utilizada no setor agropecuário paulista. Contudo,
devido ao crescente uso da eletricidade por esse setor, essa foi o energético mais consumido em 2019
e 2020. Pelo exposto, este trabalho teve como objetivo gerar um modelo matemático de previsão do
consumo de energia pelo referido setor, utilizando os conceitos de análise de regressão associados
com a ferramenta Regressão do Microsoft Excel. O resultado foi um modelo de regressão linear
múltipla com baixa interferência das variáveis “quantidade de consumidores” e “energia elétrica
gerada”, mas com uma significativa influência inversa do consumo de óleo diesel, confirmando a
substituição deste energético pela eletricidade. Constatou-se uma tendência de crescimento no
consumo da energia elétrica, cujos desdobramentos requerem melhorias e ampliações de toda
infraestrutura (geração, transmissão e distribuição) que refletirão, consequentemente, no bem-estar
social dos habitantes e no desenvolvimento da economia.

Palavras-chave: Previsão de consumo. Modelo matemático. Demanda de energia. Consumo de

energia rural. Previsão de demanda.

1
Master of Agribusiness and Development, monclar.christovao@ifsp.edu.br
2
Professor of Applied Statistics, sandra.oliveira@unesp.br
3
Professor of Digital Circuits, mario.mollo@unesp.br
IV SIMPÓSIO INTERNACIONAL DE AGRONÉGOCIO E DESENVOLVIMENTO – SIAD
“Desafios e soluções para a redução de perdas e desperdícios de alimentos”
Tupã – SP: 25 a 27 de outubro de 2022
1. INTRODUCTION
Electricity is an essential input for the progress of a nation, and its supply continuity concerns
government authorities of many countries (MARANGONI; MAGATÃO; DE ARRUDA, 2020).
According to Fan, Xiao, and Wang (2014), the global increase in energy consumption has
caused a worldwide concern due to uncertainties in electricity supply and environmental degradation,
in addition to geopolitical issues.
The issue abovementioned is worsened by the inevitable need for investments – a limiting
factor in poor or developing countries (TAGHIZADEH-YAZDI; MOHAMMADI-BALANI, 2020).
The energy consumption forecast is a crucial tool in electricity management, maintenance
planning and investment decisions in future markets (VU; MUTTAQI; AGALGAONKAR, 2015).
It is possible to categorize consumption forecasts by short, mid and long term analysis period
and, in this regard, mathematical models used in energy consumption forecasting are essential for the
operation and planning of companies in the electricity sector (ABDULKAREEM et al., 2019).
The total electricity consumption, per sector, in the state of São Paulo in 2020, also
encompassing the energy self-producers, was 145,451 Gigawatt hours (GWh), a 3,78% decrease
against the previous year, which was 151,120 GWh. The commercial (-12.34%%) and industrial (-
2.35%) sectors showed a decrease in such period. Conversely, the agricultural (1.62%) and residential
(3.08%) sectors had a consumption growth (SÃO PAULO, 2021).
In view of the foregoing, it is relevant to conduct studies related to energy consumption in the
agribusiness segment.

2. OBJECTIVES
This study aims to generate a mathematical model to forecast electricity consumption in the
agricultural sector in the state of São Paulo. Specifically, it intends to identify the variables or the
combination of them that contribute to the energy consumption estimate in this sector.

3. METHODOLOGICAL PROCEDURES

3.1 Data collection

This is descriptive research in terms of the objectives, with a quantitative approach. We
collected the data from the digital annual energy balance report Balanço Energético do Estado de São
Paulo (BEESP) 2021 provided by the Infrastructure and Environment Secretariat of the state of São
Paulo (SIMA).
The collected data produced historical series between 2012 and 2021. However, the data on
electricity consumption in 2020 and 2021 was affected by the COVID-19 pandemic.
We applied a multiple regression analysis tool, which is widely used in analytical studies,
particularly for forecasting. The objective is to build a statistical model to forecast responses from a
dependent variable (Y) as a function of an independent variable (X) or more variables (X1, X2, ... and
Xn), establishing a mathematical relationship between them (MARTINS; DOMINGUES, 2014).
The regression is simple when there is only one independent variable. When there are two or
more independent variables, the regression model is multiple.
In this study, we considered the dependent variable Y (electricity consumption in the
agricultural sector in the state of São Paulo, in GWh) as a function of variables X 1 (number of
consumers) and X2 (diesel consumption in 103 m3), which are related to the agribusiness, as well as
variable X3 (electricity in GWh), which is related to the state of São Paulo.

IV SIMPÓSIO INTERNACIONAL DE AGRONÉGOCIO E DESENVOLVIMENTO – SIAD

“Desafios e soluções para a redução de perdas e desperdícios de alimentos”
Tupã – SP: 25 a 27 de outubro de 2022
3.2 Building a multiple linear regression model
The multiple linear regression model is used to forecast and explain the behavior of variable
Y as a function of variables X1, X2, ..., Xn, according to Equation (1).

Y = β0 + β1 . X1 + β2 . X2 + … + βn . Xn + Ɛ (1)

where: β0: linear coefficient (line intercept); β1, β2, ..., βn: angular coefficient or regression coefficient
(line slope); and Ɛ: Y experimental error (points outside the line).
Based on sampling data, Ŷ is the result of Y forecast for X observations, according to the
adjusted model of Equation (2). Thus, from paired samples of three or more variables, we obtain the
values of b0, b1, b2, ..., and bn.

Ŷ = b0 + b1 . X1 + b2 . X2 + … + bn . Xn (2)

where: b0: β0 estimator; and b1, b2, ..., bn: β1, β2, ..., βn respective estimators.

3.3 Testing the coefficient significance, the existence of regression and analysis of results
The significance of independent variables is tested individually. The test checks whether each
regression parameter βi is equal to zero (hypothesis H0). Thus, if p-value is less than or equal to the
significance level, we reject hypothesis H0 and conclude that βi ≠ 0 for a risk α.
Then, we check the existence of linear regression considering the F-test (Analysis of Variance
- ANOVA). If p-value (significance F) is less than or equal to the test significance level, we reject
hypothesis H0 that all regression parameters βi are equal to zero, and conclude there is regression,
that is, the adjusted model can explain and forecast Y.
The Determination or Explanation coefficient (R2) is a measurement of the proportion of
variation in Y (response) that is explained by X (explanatory) by the linear model adjustment, thus
being a descriptive measurement of the adjustment quality. This coefficient value is between 0 < R2
< 1, and the closer to the unit value, the better the quality of the adjustment of this linear model to the
data.
It is recommended to check some residual distribution attributes, such as:
a) Check whether the residual average is approximately equal to zero; and
b) Check the normality of variable Ɛ probability distribution by using the Shapiro-Wilk Test. If p-
value ≤ α, we reject hypothesis H0 of data normality existence for a risk (significance level) α.
It is also recommended to investigate the correlation between independent variables, two by
two, by using the Pearson Correlation Test to check the multicollinearity effect, that is, if there are
model redundant variables. The test checks if the linear correlation between two variables is null
(hypothesis H0). Thus, if p-value is less than or equal to α (test significance level), we reject
hypothesis H0 and conclude there is a significant linear correlation between the two variables.
In this study, we used the Excel Data Analysis supplement to adjust the regression model to
the data and a 10% significance level (α) for the applied hypothesis tests.

4. RESULTS AND DISCUSSIONS

In order to explain how much of the change in the annual electricity consumption in the
agricultural sector in the state of São Paulo results from the considered set of independent or
explanatory variables, we adjusted a multiple linear regression model from the data, where only
variable X3 (generated electricity), with p-value = 0.522 was not deemed significant. Thus, for a 10%
IV SIMPÓSIO INTERNACIONAL DE AGRONÉGOCIO E DESENVOLVIMENTO – SIAD
“Desafios e soluções para a redução de perdas e desperdícios de alimentos”
Tupã – SP: 25 a 27 de outubro de 2022
significance level, the final regression model adjusted to the data, according to Table 1, is given by
Equation (3):

Ŷ = 11958.88 − 0.03 . X1 − 2.15 . X2 (3)

Table 1 - Multiple linear regression analysis summary

Regression Statistics
R Square 81.70%
Adjusted R Square 76.47%

Analysis of Variance (ANOVA)

P-value
Variation df SS F
(Significance F)
Regression 2 768782.6 15.62 0.003
Residual 7 172221.02
Total 9 941003.6

Predictors Coefficients t Stat P-value

Intercept 11958.88 2.90 0.023
X1 -0.03 -1.91 0.098
X2 -2.15 -5.29 0.001
Source: Prepared by the authors.

With respect to the regression model significance, as p-value is less than 10% (Significance F
and respective p-value in the ANOVA in Table 1), there is evidence that the model can explain and
forecast the response variable Y. Similarly, as p-values of X1 and X2 are less than 10% (please see t-
statistic and respective p-values in Table 1), the parameters of such variables were significant to the
model.
Additionally, the model adjustment level was assessed based on the multiple determination
coefficient (R Square and Adjusted R Square in Table 1), whose values 81.70% and 76.47%,
respectively, establish acceptable percentages of Y variation explained by the significant independent
variables (X1 and X2). Also, the Shapiro-Wilk test for residuals confirmed their normality, since p-
value is equal to 0.639 and hypothesis H0 is not rejected. Then, there is an indication that the
distribution of residuals is normal.
Both variable X1 (number of consumers) and variable X2 (diesel consumption in 103 m3)
showed negative coefficients, indicating these move in the opposite direction to the response variable
Y (annual electricity consumption in the agricultural sector in the state of São Paulo), when observing
one of them and keeping the other variable constant.
Actually, the number of consumers was growing until 2018, when it suddenly decreased the
following year, and even with the increase seen in 2020, its amount was higher compared to the years
prior to 2016. In regard to diesel, it was the most consumed form of energy in the agricultural sector
in the state of São Paulo until 2018, with its decrease from 2007 and electricity becoming the most
consumed energy in 2019 and 2020 in the sector (SÃO PAULO, 2021).

IV SIMPÓSIO INTERNACIONAL DE AGRONÉGOCIO E DESENVOLVIMENTO – SIAD

“Desafios e soluções para a redução de perdas e desperdícios de alimentos”
Tupã – SP: 25 a 27 de outubro de 2022
5. FINAL CONSIDERATIONS
This study achieved its objectives and identified the variables that contributed to the estimate
of this consumption: the ‘number of consumers’ with little influence, the ‘generated electricity’, with
very little influence, which was eliminated for not being significant, and the ‘diesel consumption’
(with high influence) in the electricity consumption estimate in the agricultural sector in the state of
São Paulo.
We verified that diesel consumption was the most significant studied variable, however with
inverse action – negative sign in the adjusted linear regression model – thus evidencing its substitution
for electricity as the main source of energy in the studied sector.
Another aspect to be considered in future studies is the inclusion of climate and meteorological
parameters to obtain the estimated energy consumption curve in a certain period. It is evident that
climate conditions influence the electricity consumption, as the main cause of the greenhouse effect
is the temperature increase, which in turn causes the increased use of a wide range of types and sizes
of electric refrigerators.
The study intends to recognize the growth trend in energy consumption in the agricultural
sector in the state of São Paulo, helping public policymakers and electricity generation, transmission
and distribution companies better estimate investments so that to give sustainability to development
in the short, mid and long term.

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Tupã – SP: 25 a 27 de outubro de 2022